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Notes from China

The highlight of the past two months (during which this blog went quiet) was my first visit to mainland China.   I was filled with much anticipation as we landed in Hangzhou on a cold afternoon in March but  I had no misconceptions about the city I was visiting.

Hangzhou is the tenth largest city in China (purportedly), scenically set on the Yangtze River, historically significant for having been a seat of power, and has developed as the equivalent of the Hamptons for wealthy Shanghainese to use for weekend homes.   More recently it has grown into a high-tech hub.

There were symbols of affluence everywhere – Lamborghini and Ashton Martin cars driven by young men and women from American style coffeeshops to villas dotting West Lake.  In short, this was surely not representative of mainstream China!   But yet my experiences here were powerful and enlightening.

China’s much touted world-class infrastructure was in evidence everywhere.   Highways, bridges, high-speed rail and airports are being designed to be not just world class but the world’s best in class.  What is less obvious is how these projects get executed.

  • Capital: To begin with, the government has made capital “freely” available.  As long as competent developers show up and bid to develop a project, government backed funding schemes make capital available at almost no cost.  There are strong incentives for developers to do a good job.
  • Execution: We met property developers who had executed large scale commercial projects (like a mall) from conception to full-scale operations in less than 20 months
  • Red tape: In India, it takes about 80 licenses to execute a typical construction project.  China has whittled this down to less than 20; getting these licenses can be cumbersome but it is a predictable, well-understood process.
  • Work ethic: The lay person is industrious, and singularly focused on doing his/her job well (I am generalizing of course).

Generational Change

  • Consumption: although luxury brands were conspicuous in the city, there was a palpable trend among the youth towards more western-style consumption of small luxuries like ready to wear clothes, eating out, partying, etc.  Hangzhou has  a disproportionate number of luxury cars, but the automobile has now displaced the bicycle as the symbol of China’s mobility.
  • Technology was evident everywhere.  Mobile phones are a mainstay for voice and data services.  But computers, wi-fi, electronic signage, cable and satellite services, Imax screens, automation of civic services, etc., are taken for granted.
  • Gastronomic preferences are changing.  I had several memorable meals around the city.  There is more acceptance of non-Chinese food of course but even within their own cuisines, affluence is prompting the locals to eat more meat, seafood and vegetables.  Most “special ” meals rarely include traditional noodle or rice fillers.
  • “Westernization” of the youth was inevitable but local traditions endure.  Restaurants and nightclubs are replete with NBA logos, baseball caps worn backwards, rap music, and hip-hop dance moves; I could have been in any city in the world, except for the local touches.   We played a very local drinking game with friendly strangers dressed in western couture.  Dice were rolled to determine who drinks from a pitcher of top-shelf Scotch laced with sweetened iced-tea, and as Eminem lyrics drowned out any possible conversation, “Google Translate” on our mobile phones allowed us to exchange pleasantries across the language divide.  All this along with the food accompaniment of choice when drinking in this part of China: a platter of sliced melons, cucumbers,  and spiced duck-tongue.

I was fortunate to meet some world class entrepreneurs in China.  They displayed the same traits I have seen in America, Europe or India: vision, charismatic leadership, an appetite for risk, and a strong drive to “create.”  A visit to the Alibaba campus was particularly inspiring; we were early investors in the business that Jack Ma has built to be a lifeline of the Chinese economy.

From China I came away impressed (and awed) – by a nation obsessed with progress and aspiring to world domination in the next few decades.  As I have previously opined, some would like to compare India to China but for some years now it will remain a game of catch up.

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