Walter Hutchens’ Blog

Last week my Doing Business in China class for MBA students travelled to China. The group spent a week visiting companies, hearing from government officials, and meeting with experts from top legal, consulting, banking and research firms.

As last year a significant focus of the course was on China’s financial sector. The students were very fortunate to meet with Stephen Green of Standard Chartered, one of the world’s leading economists specializing in China.

They also met, as last year’s class did, with economist Situ Danian at the Shanghai Stock Exchange. He gave them a very informative and candid assessment of some issues the SHSE is confronting.Afzal Tarar, a managing director at BearingPoint also spoke to the students, discussing his interesting work leading the firm’s financial services efforts in China.

A new focus of the course this year was the real estate sector. We were privileged to meet with J. Scott Kilbourn, a vice president of the global architectural firm RTKL which has done some important projects in China, including the Shanghai Science and Technology Museum in Pudong.

We also met with Linda Liu, a principal in Oxford & Associates Property Consultants. She gave the students an informative presentation on Shanghai’s property sector. Linda is also in the Smith School’s EMBA program in Shanghai.

As another part of the real estate segment the students toured Shanghai’s impressive Urban Planning Exhibition Hall. Like every group I’ve taken there, they were impressed by the scale of Shanghai’s development plans.

For overview material (to supplement their extensive pre-trip readings and the lectures on Chinese history, culture and current issues that I gave before the group left the US), the group met with Jonathan Heimer from the Commercial Section of the US Consulate in Shanghai.

They also got a briefing from Prof. Zhou Dunren, a retired Fudan University professor and excellent comparativist of US and PRC political and economic issues.

We spent one night in Hangzhou, one of my favorite places in China.

In Hangzhou we had lunch as guests of Wang Zhongde, head of the commission on foreign trade and economic cooperation. The restaurant was located in the impressive complex where the Zhejiang Provincial People’s Congress meets. My lectures on Chinese culture in DC had included material on Chinese banquets, and I was glad the student got to enjoy a somewhat formal one.

In Hangzhou we also visited two listed firms—the first a PRC IT firm named Hundsun (listed on the Shanghai Stock Exchange) and the other UT Starcom which is listed on Nasdaq.

In Shanghai we also visited Alcatel Shanghai Bell where Kang Wuping, an HR vice president, told us about some of their challenges in integrating PRC, European and now with the Lucent acquisition US practices.

Besides these three listed telecom/IT firms, we also met with Sage Brennan, general manager of Pacific Epoch, a research firm covering China’s internet, online gaming and telecom sectors.

To give the students a better sense of the regulatory environment, we met with Yingxi Fu-Tomlinson, a partner at the law firm Kaye Scholer. She gave the students an excellent talk, highlighting some of the macro-level differences between the Chinese and US legal environments and sharing some observations about how M&A is changing in China (and some of its distinctive features).

We also met with Jim Healy, president of the China divisions of WR Grace.

As last year, we also toured the Shanghai GM factory. We also attended an acrobatics show and visited a temple. The students also worked in some shopping and an exploration of some of Shanghai’s night life. The final night the students had a dinner with some local alumni and current students in our Shanghai EMBA program.

I believe the course was a great success; the students were active and engaged and got an excellent introduction to China.

Jim Curtis from the Maryland China Center again provided great assistance all week.

I again required the students to work in teams to produce daily content for a course blog while we were in China.

Last week I was in Shanghai, China’s most modern city, to lead a week-long course for MBA students on doing business in China. When the course ended Saturday I took an overnight train back to Beijing, arriving in the city about 7 am.

Later that morning my wife and I took a car to the Great Wall. We hiked from the Jin Shan Ling section of the Wall in Hebei province to the Si Ma Tai section (which is technically back in Beijing).

The contrast between walking on Shanghai’s Nanjing Lu one day and then the Great Wall the next was striking. It captures some of the diversity and dynamism of what’s now happening in China.

Pedestrian portion of Nanjing Road in Shanghai, Friday night.

Great Wall, Sunday morning.

I’ll post more photos from the Shanghai course here and some from our Great Wall excursion here.

The hike from Jin Shan Ling to Si Ma Tai is popular, but it’s an arduous excursion. It crosses large sections of the Wall that haven’t been fully restored. Also, much of it is steep going. We probably only covered about 10 kilometers from the spot where the driver dropped us at Jin Shan Ling to where he picked us back up at Si Ma Tai, but the hike took us around five hours. At the end we didn’t need more exercise. But it was a lovely day and the scenery was tremendous. I was glad I made the trip.

Shanghai is an entirely different part of China geographically, culturally and economically. Yet Shanghai, like hiking along the Great Wall, is both delightful and grueling. Shanghai pulses with life and has been transformed by new construction in recent years. It has the best retail and dining in China. There are lots of interesting people there. Business opportunities seem to abound. Shanghai’s traffic and air quality are better than Beijing’s, too (not great, but better).

However, Shanghai crowds can be overwhelming, and the rudeness common in daily life is difficult to accept.

Despite 1) instructions about where to stand printed on the platform where subway car doors open, 2) audio broadcasts in the station and 3) propaganda posters on the station walls, most people simply refuse to let commuters get off the subway cars before trying to barge on themselves. The result is an unpleasant and inefficient scrum each time a train pulls in.

I also find many Shanghainese speak in a comically loud manner. It sounds to me like they are having an intense argument, but actually they are just chatting with friends and family.

Also, while China is filled with good-hearted people who are often extremely hospitable to foreigners (usually treating us better than they treat their compatriots), China is also filled with people trying to rip you off, and Shanghai seems to have a particularly high concentration of them.

A foreigner walking down Nanjing Lu is guaranteed to encounter someone hawking fake luxury brand watches, a Uighur whispering “hashish?” and a young woman, probably a succession of them (or, more annoyingly, their male agents) trying to entice you into a “lady bar” or massage parlor (I understand some of these women get kickbacks from the cafes, bars and karaoke halls where they lure unsuspecting customers for wildly overpriced drinks).

I found another annoyance at the Shanghai rail station. The first class waiting room for trains to Beijing is on the third floor. The train platform is on a lower level. Consequently, every day thousands of people head towards the train (after a line-less scrum to get their tickets checked), then pile-up in a bottleneck as people stop at the stairs, pick up their wheeled bags and lug them down to the platform. I was overburdened with luggage this trip, having spent a month in the US and a week in Shanghai, so I really struggled to get down the stairs with all my bags. There are porters where taxis drop off passengers under the rail station, but they can only accompany you to the security checkpoint, not all the way to the train. So where’s the ramp or elevator? In the same place as the cooler for the shop that sells drinks in the first class waiting hall—gone, non-existent. Train service in China is often excellent, but as an architect speaking to my class last week pointed out, train stations are usually awful. (Though, thankfully, there were ramps when I got back to Beijing).

Despite some of the frustrations, I’ve been infatuated with China for nearly two decades now. It still never fails to seduce, infuriate and mesmerize me. I feel fortunate to be able to experience its contrasts and changes up close.

The juggernaut IPO of the Bank of China (BOC) is trundling forward. Like the massive IPO of China Construction Bank (CCB) last year, the BOC IPO will break records. It’s not just the largest ever IPO out of China but likely one of the world’s largest IPOs, period, certainly over the last several years.

This will mean two of the PRC’s big four commercial banks are now listed companies—and, significantly, listed in jurisdictions outside of the PRC mainland. Industrial & Commercial Bank of China (ICBC) and Agriculture Bank of China (ABC) are the two remaining in line.

The Washington Post publishes AP’s coverage of the BOC IPO here.

Fortune covers the scramble of foreign banks to underwrite these Chinese bank IPOs here.

Yesterday I downloaded Maxthon, a browser developed in China but with an excellent English website, American v.c. backing and a look and feel much better than even the next edition of Internet Explorer (still in beta version).

My current browser preferences in rank order are: Opera, Firefox, Sea Monkey (which is Firefox plus) and then in a distant last place IE (which, alas, you have to have, since Microsoft’s websites for downloads will, annoyingly, work only with Microsoft’s IE, and the web interface for LotusNotes that my employer uses doesn’t work smoothly with much else).

I’ll see how Maxthon works into this mix. I already like it better than IE 7 and Firefox for the simple reason that its default setting for the “new” command is to open a new tab, not a new, screen-cluttering window. This is a simple but important thing. I don’t want to create desktop clutter or lose the page I was on when I bring up a new page. With Firefox and IE you hit ctrl-t to bring up a new tab/page within the same browser window (or right click on a hyperlink then select “Open Link in New Tab”). I much prefer the Opera and Maxthon approach that defaults to a new tab. Ctrl-N means “new” and I want a new tab/window within my existing browser session. I don’t want to have to think about it. I don’t want to right-click or have to recall a different command. Opera and Maxthon get this right.

But to knock Opera off the top of my browser preference mountain, Maxthon will need to do more. For example, I really like Opera’s right click option to “Open in a Background Page” so that I can call up info but continue reading the page I was on. Maxthon doesn’t seem to have this feature.

Opera’s integrated mail, notes and RSS functions are also good.

Maxthon has something like a notes feature. I found a button on the bottom of a Maxthon browser screen labeled “Simple Collector.” It brought up a text entry space that I’m using to draft this post. That function may provide many of the benefits I get from Opera’s Notes function.

But what about Maxthon’s RSS features? When I clicked on a “Subscribe to this blog’s feed” link on Maxthon own friggin’ site, instead of getting a dialog box asking me to confirm the RSS subscription (as I do in Opera), I got a request to go on the web to look for a file extension! Below are the results of clicking on this link in Maxthon, Firefox and Opera, respectively:

I am a novice user of all these browsers (except perhaps Opera) and there may be simple work-arounds to the issues mentioned. But the point is I don’t want to think about the browser. I want it to be transparently useful, not something I have to put at the forefront of my attention. A browser is a window to other content, a portal to the online world. It should be transparent like a physical world window—beautiful if you pay attention to it but normally something that lets you see other stuff without calling attention to itself.

After spending a month in the U.S. I returned to China yesterday.

I flew from Baltimore to Chicago and then on to Shanghai where I’ll be all next week for the second annual iteration my MBA-level Doing Business in China course.

Twenty-two students are participating this year (we limit the class size partly because too big a group makes it unwieldy to visit some places). The class includes students originally from Africa, Russia, China and the US. All of them are currently enrolled in US-based MBA programs of the University of Maryland (most of them in the part-time program, so they work demanding professional jobs in addition to being graduate students).

The class met twice already in the US. I gave them a crash, half-day course on Chinese culture then a full-day lecture on Chinese history and some contemporary business issues.

Besides the pre-departure lectures, I’ve been emailing them news clippings about China for several months. Also, each student will have read at least one book on China (selected from a list I complied) before arrival. They have, I hope, some basis for appreciating a lot of what they will see.

It seems like a great group and I’m looking forward to exploring Shanghai with them this week. I imagine they will be as enthralled as I was on my first trip (and remain these many years later).

We’ll visit a number of leading firms, including a multinational corporate law firm, investment bank, architectural firm, consulting firm and several interesting and important companies that make products here.

The students will produce a course blog, hosted here.