Today we went to Boeing’s China headquarters and met with Kenneth Taka, who is in charge of business development. Ken had a lot of interesting things to say about China. He’s lived here for 14 years total and spent the last ten straight as a resident of Beijing working for Boeing. He pointed out many interesting facets of doing business in China as a large company trying to gain market share. He talked a lot about guanxi and about making sure you understand at least a little that doing business in China requires understanding the general differences between Chinese and American cultures. He pointed out that over the past 14 years he has come to learn enough about Chinese culture to understand and accept that he will never be fully accepted as equal. There is just too much of a gap and so much of it depends on understanding the language and culture in a way only someone who has grown up here can do.
He also discussed the challenges Boeing faces in the future and how they are trying to deal with them. Boeing is always facing competition from Airbus, but now China is hoping to build its own airplane, and many other countries are starting up smaller factories themselves. He also discussed the difficulty of competing with Airbus (Boeing currently has over 50% of the market share, I believe he said around 62%) when the EU political leaders come to China to discuss business contracts but George Bush and other American political leaders do not seem interested in discussing business with China. I found myself agreeing with his view that the Americans are saying such things more to position themselves favorably to the American press than for any other reason.
Overall it was a very eye-opening experience, allowing us to see how a really large western company operates in an environment where changes in political views can strongly affect their business.
In the afternoon we met with Jun Liu of Google. The meeting was delayed for a few minutes before the start, so we had a chance to play pool and foosball while we waited, as the Google headquarters in China are very similarly structured to those in the US.
Jun discussed the successes Google has had and the improvements to their search engine that they attained by utilizing the programs invented by the local talent they sourced. He was an engineer and very passionate about Google’s success, so we had some trouble getting opinions on competition in the marketplace or his thoughts on the differences between running Google in China and running Google in the states. But we still came away from it with another view of how a different business functions in this huge new market.
The next day was our free day in Beijing. We got up and headed for the Forbidden City, only a few blocks from the Beijing Hotel where we were staying.
I’ve been to the Forbidden City four times now, and I have to admit that I was not looking forward to wandering around a big empty castle for the emperor. I could think of countless things to do as I entered the gates. Once I got in, I accepted the fact that I’d be wandering this big palace again and started trying to find other ways to occupy myself. This is when the Forbidden City again got interesting to me.
I did not expect to see any changes to a 600-year-old palace. Especially one where the government has taken pains to keep it exactly the same as it was originally. But I saw a very large change. The people taking the tour of the Forbidden City had grown in size and national origin.
The first three times I saw this city it was not nearly as crowded and most of the tourists were from North America, the EU or former British Colonies. This time there was a decidedly heavier amount of tourists from mainland China. I met with groups from Hunan, Shanxi, Sichuan, and Zhejiang. The group from Hunan was especially interesting, as they were a rather large group (all wearing matching hats and following a guide with a red flag) and they were mostly blue-collar Chinese.
Hunan is not known as the greatest recipient of the economic successes China has enjoyed since opening up to the world. And these people looked like they were factory workers and taxi drivers. They had the skin and hands of Minnesota farmers, and looked like the walk through the city would not be giving them new aches in their feet. I was impressed with this because although we have been studying a lot about the disparity in earning power between urban eastern coast Chinese and the rest of the country, we have ignored some numbers that I believe Ken Taka brought up.
Once a country’s per capita GDP hits about $1,000 USD per year, that population, no matter what country they are in, generally begins to develop dispensable income. This is important to Boeing because once a population gets to that point, its citizens can begin saving up for a plane ticket and can start traveling around the country for shorter tours in places farther away. The Forbidden City was proof that people who do not own their own businesses in Shanghai can still get out and take a tour of Tian’anmen Square. I was very touched by this, having learned to speak Chinese in the working class city of Chongqing in the southwest of the country.
So finally I learned something from the ancient Forbidden City. I learned that commerce is doing good things at all levels of the Chinese economy.