Shanghai'd!

I always learn new things on business trips, and this trip to Shanghai has been no different.First, after a day at a tradeshow I love to break the bank and fork over the big money and have a $10 two-hour foot massage. But this time I got more than the foot massage, I got an education. The 24-year-old girl that massaged my feet was a recent college graduate. She had a degree in Computer Science and had very very good English—good enough that for the entire two hours we could talk about everything: politics, economics, Shanghai pop culture and why she was rubbing feet instead of working elsewhere. Why? She explained that she can get 3x the money every month doing massages (even with no “special” services for customers) than she could working for a computer company, doing retail sales or even selling real-estate; all of which she’s done in the two years since graduation. The glut of (sometimes unqualified) college graduates and the uncontrolled migration into Shanghai have, predictably, made a buyers market for college graduates here. The going monthly rate in Shanghai is somewhere around $250 for someone with a college degree, decent English and some specialized skills (accounting, computers, etc.)This should be a warning for America! How long do you think that 1-2 million college grads each year are going to be satisfied rubbing feet? Even with good money my bet is not for long. Due to this glut, there is a huge opportunity for entrepreneurialism in China’s immediate future. This has been one of the biggest critiques of China “they just aren’t creative or independent thinkers.” And I agree. But as an American I also believe that necessity is the mother of invention. There just aren’t going to be millions and millions of satisfied college educated graduates every year, year on year. Is not going to happen. You’re been warned.Second, the Shanghai Global Sources Show that I was just speaking at had a very different demographic than the Hong Kong Shows I spoke at in Oct. The majority of buyers here were Chinese. Many overseas Chinese to be sure, but I’ll bet 20 to 1 Chinese to foreign buyers. I don’t know the show stats, but I’ll guess that the Hong Kong show is more like 3 or 4 to 1. Significant, I think, in that it says the domestic market is growing out of the Shanghai area while the international market is still being feed mostly out of the South. The export stats would bear with out—the Shanghai/Ningbo area move about 28.8 million (TEU) containers while the Guangzhou/Shenzhen/Hong Kong area moves about 48.3 million (TEU) containers annually (numbers from Schenker Int'l).Singapore, Hong Kong, Shanghai, Shenzhen, Pusan and Kaoxiong (Taiwan) are the top 6 ports in the world, in terns of TEU exported per year. Do you speak Chinese yet? Maybe you should learn.Third, you think that it’s risky to do business in China? Maybe so. But how much riskier are you making it yourself? If you are coming here on your own, that’s fine. But that shouldn’t mean that you just jump in with your eyes closed. Do some DD (yes, either Due Diligence or David Dayton, I hear I’m great!) and check up on the factories that you’re working with. Yes there are problems here, but there are problems everywhere. So just because the system is dangerous you don’t stop doing DD altogether. You should be taking MORE precautions, not less. For example, if a hospital in (any region of the world) was known to be unsanitary, but you were sick and had to go there anyway, would you just say “what the hell, I’ll take my chances” or would you take your own syringes? Is there even a question as to what you’d do? Of course not. So why, would you consider not taking precautions when coming to China?!?!Fourth, A few thoughts about Shanghai. There is very little bling in Shanghai. It is a much more sophisticated city than Shenzhen. The average car on the street can’t compete with Shenzhen’s Bentleys, Audis, BMW’s, and Porsches and maybe the size of the city (twice the size of SZ) just water’s the money down. But I think the MWM, (as Diligence China calls them) are much more flashy with their cash in SZ than in SH. It’s more of a subdued wealth here; it’s not “new money.”I found the city to be much more "international" than Shenzhen. There were more Western BBQ restaurants in Shanghai than all foreign restaurants in the Shenzhen together. Many more foreigners in all parts of the city than I typically see in Shenzhen; much more like Hong Kong (except for at the trade show).But the subway was a mess. Packed to overflowing from 4pm till closing. No electronic location signs. you know, the little red LED's that tell you where you are. So if you can't hear the PA system, which no one can from 4pm till close, you'd better have a clear view out the window to know where you are. And it closes at 11PM--what's up with that?!Finally, Had a great dinner with Steve Dickinson of CLB fame two days ago. He first came to China in 1974—nine-teen-seventy-four!! That’s almost longer than I’ve been alive! Steve has serious history, serious war stories and amazing experience and endless knowledge. He quoted Chinese poetry, Chinese law and dropped the names of judges, foreign companies and threw out more than one Chinese book that I ‘should read” in our time together. Our business-over-drinks meeting turned into a 7-hour (4pm till 11pm) rip-roaring ride through the history of Modern China and the inner workings of business and law in China. I asked him when he’s writing “the book” on China. He responded “which one?” Just amazing. If you’ve not talked with the CLB guys, you need to. They know China. Thanks, Steve!Oh, yea, the Shanghai weather and pollution are really really awful!