China: March 2009 Archives

More photos from Sichuan here.

The US is nationalizing banks, China is fighting to maintain a strong USD. We live in interesting times.

The National Centre for Performing Arts in Beijing. More on my Flickr Archive.

Albert Einstein once said that everything should be made as simple as possible, but not simpler. A couple of millennia earlier, Lao Zi taught us that those who know do not speak and those who speak do not know. We'll get back to these two in a minute.

As a regular user of most of Google's services - Search, Gmail, Analytics, Finance, Reader, etc. - I am often amused by the targeted ads I am served. The ads are a testament to how well Google knows me, and provide a general idea of the assumptions Google makes regarding people of "my kind".

Being a young western man in China, I normally receive ads promoting massage and escort services while reading my mail online or while searching for legitimate restaurants or government offices (as much as these are legitimate...). Such ads normally carry a standard format, stating the name of the vendor, their rates or hours of operation, and offering a link for further information.

China is full of massage parlors, KTVs, "hair" salons, and various other platforms that offer  sexual services. In such a competitive market, service providers that do not differentiate themselves get lost in the clutter. While checking my Gmail this morning, I came across one of the simplest and most elegant ads I have ever seen. It had three words - girl, beijing, shanghai. A click on the ad leads to a landing page with photos of beautiful Chinese girls and links to the web sites of massage and escort service providers in Beijing and Shanghai.

It seems that 21st Century China, eastern simplicity and western technology come together to create surprising results. And indeed, despite the ad's spare prose, it does not take an Albert Einstein to understand what services are being offered.

Now that Bush is gone and blaming America for all of the world's troubles is (slowly) falling out of fashion,  more and more pundits recognize China's role in creating the mess we're in.

More accurately, the current financial crisis is a result of shared "efforts" by China and the US. China provided artificially cheap products due to an undervalued currency, the US provided willing buyers, China used the profits from these sales to buy US Treasury Bonds, and the US in turn kept its interest rates low and continued to buy Chinese goods. The results of these "efforts" were exacerbated by traditions in both countries: In the US - spend like there's no tomorrow; in  China - save like today is as good as it gets.

The combination of cheap goods and cheap money (low interest rates) created excess capacity in corresponding sectors in both China and the US, and gave rise to an interesting social phenomenon -  mis-allocation of talent.
 

An article in The Economist from this morning looks at how China's move towards privatisation of its strategic industries is being reversed. Many of China's largest corporations - including banks and airlines - received capital injections from the Central Government and/or had their shares purchased in the open market by China's sovereign wealth funds.

It is easy to liken this move to the recent nationalization of banks in the West. However, it is important to keep a few things in mind:

Over the last few years, I have been involved in branding, positioning, and marketing of retail projects in different parts of China. Recently, while most retailers and entertainment operators are scaling down their expansion plans and seeking better terms for new and existing locations, one group seems to be an exception - cinema operators.

The market is awash with a variety of cinema companies,  each hoping to open between 20 to 1,000 new cineplexes over the next 5 years. The list includes state-owned players (Zhongying, Shangying ) who plan to upgrade their existing locations and open new ones, private local players such as (Jingyi, Dadi, Stellar),  joint-ventures led  by operators from the region (Korea's CGV, Megabox, and Hong Kong's Golden Harvest), foreign-funded joint-ventures (APEX), as well as local media companies (Huayi Borhters) that plan to start operating their own venues, such as Huayi Brothers Media.