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The end of cheap China

The End of Cheap China - Shaun Rein Although the book is not out yet, I already look forward to reading Shaun Rein‘s upcoming publication The End of Cheap China. Shaun is a fellow Shanghai entrepreneur as founder and MD of the China Market Research Group. Next to that he is also a well-know columnist for among others CNBC, Forbes, and BusinessWeek. Although I don’t always agree with his opinion, I enjoy reading his columns and I think this book will also be a very interested read.

In “The End of Cheap China” Shaun argues that China’s days as a low cost production center are numbered, something I believe in as well. China is changing quickly into an economy with a huge middle class that wants (and can afford) to buy foreign goods, instead of only producing them for export.

A more detailed description on the Amazon site for this book:

The End of Cheap China is a fun, riveting, must-read book not only for people doing business in China but for anyone interested in understanding the forces that are changing the world.

Many Americans know China for manufacturing cheap products, thanks largely to the country’s vast supply of low-cost workers. But China is changing, and the glut of cheap labor that has made everyday low prices possible is drying up as Chinese seek not to make iPhones, but to buy them. Shaun Rein, Founder of the China Market Research Group, puts China’s continuing transformation from producer to large-scale consumer – a process that is farther along than most economists think – under the microscope, examining eight megatrends that are catalyzing change in China and posing threats to Americans’ consumption-driven way of life.

Rein takes an engaging and informative approach to examining the extraordinary changes taking place across all levels of Chinese society, talking to everyone from Chinese billionaires and senior government officials to poor migrant workers and even prostitutes and drawing on personal stories and experiences from living in China since the 1990s as well as hard economic data. Each chapter focuses on a different aspect of China’s transformation, from fast-improving Chinese companies to confident, optimistic Chinese women to the role of China’s government, and at the end breaks down key lessons for readers to take away.

The book will come out on March 27, 2012 but is now already available for pre-order at USD 12.86, an almost 50% discount on the original price. There is no ebook version (yet), I hope the publisher will make that available as well before the publication date.

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A business trip with a bad start and a bad ending

Driving to the terminal in my private bus at Moscow airport

Sunday night around midnight I arrived home after an exhausting business trip that took me to Russia, Cyprus and Amsterdam. The start of the trip was not the best one you can have, first missing my flight and then an adventurous stay in a Moscow hotel room. I was not too happy with Moscow airport and the way they treat their customers there, but after flying back through Moscow on Sunday my dislike of the place turned to hating it.

What happened? Well, actually during the stop over most things went well. In the lounge the employees were rude and not service oriented as usual: they were sitting in the leather chairs eating and drinking the lounge food and drinks, and trying to ignore the few customers. When I turned on the light in the hallway to the toilets they screamed something to me in Russian, and when I came back they had turned the light off again. Not sure why, but I didn’t ask and just ignored them as well.

First class lounge "Klassik" at Moscow Sheremetyevo airport

Boarding the flight was also uneventful. Everybody was trying to get on board as soon as possible, there were no boarding privileges for business class but that’s just Aeroflot I guess (in Shanghai airport while checking in they didn’t even open the biz class counters, so I just went to the front of the economy line). On board the flight attendants could not find my coat anymore upon landing, and just told me that they didn’t know where it was, instead of looking for it. So then I had to look for it myself – and I found it in between their coats in a compartment with flight attendant coats… I have to assume it was an honest mistake.

But the thing that really pissed me off about the airport and Aeroflot is when I came home and realized the lock of my suitcase was broken. When I opened it I realized someone had broken into my luggage and stolen things! Among others I am missing 2 bottles of wine that I bought in Amsterdam and a lot of Sinterklaas candy for the kids. I am not sure if other things were missing as well, but because I never put valuables in my suitcase probably nothing expensive. This sucks and makes me really angry, and of course I shared my feelings on social media.

It turns out that this is quite normal in Moscow, several of my Facebook and Twitter followers had had the same experience there. A journalist gave me the contact details of the Aeroflot CEO, so I contacted him. I also mentioned what happened to the airline itself on Twitter, but of course no reaction from either the CEO or Aeroflot (Note: Aeroflot checks Twitter, because when I said something nice about them a few days ago they immediately thanked me). The terminal where it happened (Terminal F) is only in use by Aeroflot, and I am sure they are aware of this but just don’t care. The same attitude that all the Aeroflot staff has, from the transit desk people to the lounge staff, and from the ground stewardesses during boarding to the flight attendants. Not sure whether Aeroflot is still a state-owned company, but if it’s not the staff still acts like it. Service oriented? What’s that?

Leaving grey and snowy Moscow, happy to be back home in Shanghai in 12 hours

This won’t be the last time I fly to Moscow because I am doing business there, but from now on I will avoid Aeroflot and Moscow as much as possible. A company and an airport like this don’t deserve my money. I prefer to pay more money and fly a different route from now on. And as for my kids, I will bring them extra candy next time I’ll be in Holland.

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Occupy Amsterdam…

Occupy Amsterdam

Last Thursday night I walked by the Occupy Amsterdam camp on the Beursplein in Amsterdam. It was very similar to the Occupy Wall Street camp that I visited 2 weeks earlier (before the people were kicked out), just a bit smaller and a bit less crowded.

I had some sympathy for the ideas of the people at Occupy Wall Street, but I totally don’t understand the occupants in Amsterdam. Holland is so completely different from the US, with an excellent social system for everyone (health care, guaranteed minimum income etc.), that I don’t understand what these people are protesting for. They don’t even know it themselves it seems, they say they just want to change the world. And how or why? To quote the site: When asked to define a simple goal that defines WHY, supporters worldwide, offen struggle to answer because, “Our dreams and expectations are too much to fit in a single ‘sound bite’ …”

Occupy Amsterdam IMG_2872

It feels more like a summer camp in autumn, and if you check their website that feeling becomes even stronger. Among the most important news on the front page of their site are a wedding in the camp and several posts about a group that makes others laugh going on a tour in The Netherlands. The mission of this group (this is not joke!): In its mission team X uses a non-violent technique that requires its “victims” to be non-violent and completely give in to the moment. This creates a minute of laughter giggling and an increase of blood flow that helps to keep people warm and thus happy.

Occupy Amsterdam

I don’t think they can make me laugh, but what did make me laugh was when I saw the banner they hung up a the entrance to the camp with the banks that made this Occupy camp possible. I wonder who was too stupid to understand that this is sarcasm, the tourists walking by or the occupants themselves?

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Short trip to Cyprus

View from my room at the Londa in Limassol (Cyprus)

After a stop-over in Moscow that lasted 24 hours longer than planned I am now on the island of Cyprus. I had planned to be here a day longer, but luckily I could rearrange my meetings here after yesterday’s adventure. The Aeroflot flight from Moscow to Cyprus went smoothly and I was very happy that I even got my suitcase back!

Approach to Larnaca airport (Cyprus)

Cyprus reminds me a bit of Turkey, but that’s not something you should tell the people here (Cyprus was partly occupied by Turkey in 1974 and that was never resolved, so the island is now split into two parts). It’s a very dry island, and when you land here the first thing you see is a brown landscape.

Approach to Larnaca airport (Cyprus)

The island is located in the Eastern Mediterranean and therefore very warm with not too much rain. But today that’s different, it’s been raining off and on since I arrived.

Next to my meetings I don’t have a lot of time (just enough to check my email and quickly write this post actually), but it’s nice to be here for a few hours. Next time I will try to stay a few days longer (e.g. adding a weekend) to explore the countryside and the culture of the island.

Great room at the Londa in Limassol (Cyprus)

The hotel that I chose is one of the better ones that I have stayed in in Europe, it’s the Londa in Limsassol. It’s a luxurious design boutique hotel directly on the Mediterranean, with its own small beach and a nice swimming pool. No time to try them out this time, but this is a certainly good place to stay for a holiday as well.

View from my room at the Londa in Limassol (Cyprus)

The only problem is that they charge for wifi, something that I hate. I thought I had seen on their website that they had free wifi and that’s why I chose this hotel over the Meridien, but I likely made a mistake. I mentioned at the front desk upon check in that I normally don’t stay in hotels with paid wifi (explaining that wifi to me is something like electricity and water, you also don’t pay separately for those things) and they generously gave me free wifi for my stay here. A very nice gesture!

Great room at the Londa in Limassol (Cyprus)

The rooms are very nicely designed, with a great bed and a small balcony. There is also a beach bar and a covered terrace bar, plus a nice restaurant (where I will have a business dinner later). If only they would have free wifi I would certainly come back, now I might try another hotel next time. Or maybe I will just try to make a deal with them to include free wifi in the rate for my next stay.

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Locked up in a Russian hotel prison – because of my iPhone…

Driving over the tarmac at Moscow airport

If someone would tell me a story like this, I probably would not believe it. But what follows really happened to me today.

I landed early this morning in Moscow on an overnight flight from Shanghai. I had a lay-over of a couple of hours for a flight to Larnaca, so I sat in the lounge and wrote some emails and worked on a blog post about online games for the Business Insider. My flight would be boarding at 11:15, so at 10:50 I decided to pack my stuff and walk to the gate.

When I left the lounge I looked on the board to verify the gate number and to my astonishment it said that the gate had closed already. I thought I was looking at the wrong flight, but I double checked and then realized that the time on the board was one hour later than the time on my watch, my iPhone and my MacBook Pro. I didn’t understand this, both my iPhone and my laptop automatically switch to the right time when I land in a different time zone, so I never have to think about manually changing the time. I changed my watch on the plane with the official time on the flight tracking system, so that should be correct as well. I was flabbergasted, but decided to run to the gate anyway to see what was going on and if I could still board.

Well, bad luck. The plane had just left the gate and I was left stranded in Moscow Sheremetyevo airport. I asked the lady at the gate if there would be another plane to Larnaca, but she first tried to ignore me and then told me rudely that looking that up was not her job. Welcome to Russia…

So I went to look for the Aeroflot transfer desk. For the whole international terminal F there was only one transfer desk and at that desk there was only 1 computer with a seat, but there was nobody sitting there. Some other people were waiting in line, so I decided to wait as well. I guess waiting is part of life in Russia, because nobody complained when a girl appeared 10 minutes later from the back room.

Aeroflot Transfer Desk at Moscow Sheremetyevo airport

After waiting another 15 minutes it was my turn, I explained my situation, but the girl did not believe me. She told me it was an hour later than I thought. Yes, I had figured that out as well, but my phone and laptop told me differently. She had no idea of course how that could be (neither did I yet at that point), but she went to talk to her manager. I was lucky, probably because I flew business class her manager (sitting in the back drinking a coffee) was willing to help and rebook me on a different flight. I just had to wait 20 minutes for the rebooking.

Okay, seemed reasonable, so I started to change my scheduled meetings and then did a quick online search about what may have happened. Well, it only took me 2 minutes until I found this article in Pravda: http://english.pravda.ru/russia/economics/31-10-2011/119477-winter_time_russia-0/. Putin had decided to abolish winter time earlier this year, but Apple and many other computer makers did not get that message. Everybody who owns an iPhone or Apple computer suddenly had the wrong time on the screen. And apparently Apple did nothing to solve the issue over the past 2 weeks! I am sure I am not the only one with this problem, and I am almost 100% sure that the inflight tracking system of Aeroflot also still showed the wrong time.

Of course this did not help me in any way, but at least I now understood what the problem was. After 30 minutes the girl came back and told me there were no other flights to Cyprus anymore today, but she could book me on the flight for tomorrow. I didn’t have much choice of course so I agreed. At least I would be able to leave tomorrow. But then there was another problem, I could not leave the airport because I didn’t have a Russian visa. And there is no airport hotel on Moscow Sheremetyevo…

I asked if I could get a transit visa, but the girl told me that’s not possible. However, she then asked me how much money I had on me, and I told her no cash but that I have a credit card. She told me she may have another solution, she had to make a phone call and I had to wait another 20 minutes. Sure, I had nothing else to do anyway. After 20 minutes she told me she had a hotel room for me if I was willing to pay USD 170. Great, I thought, a bit expensive but better than a chair in the terminal for the night. Then a big lady who spoke no English told me to follow her. I did so and we went to a side door to the empty transit area. We waited for a while and then a custom person came out of another door to inspect my passport. After that the big lady took me down the stairs to passport control, but instead of going through there we took a side door and we were suddenly outside on the tarmac of Moscow aiport!

In the bus on Moscow airport

A large bus pulled up and I was asked to board it. I had no clue what was happening, but I found it interesting so boarded of course. The big bus was completely empty except for the driver, the big lady and me. We drove all around the airport to a side entrance where security opened the gate for us without asking.

In the bus - tired and no idea where we were going...

We then drove for a couple of minutes until we came to a Novotel. The hotel looked nice and I was quite happy. But we did not drive to the main entrance, but to the side. The big lady went in first and came over with a security guy that escorted me to check in. I found this a bit strange, but hey, this is Russia. So I checked in and then was told that I would be escorted to a special room and that I was to remain in the room until 9 AM tomorrow, when someone would come to get me!

At first I thought, fine. But when I was escorted through the personnel lift to my room and I saw that a big guard was sitting in front of it with a TV I felt less happy about the whole situation. But not much you can do I guess. I am now in my room, which is quite spartan. The window can’t be opened and there is a second glass window on the inside. I can see people walking outside, but I can’t go outside myself. This feels very very strange. I am basically a prisoner here and have to wait until 9 AM tomorrow to leave this hotel room.

View from my Russian prison hotel room

Luckiy I have Internet (although that disconnects every 30 minutes or so), so I can work and make calls over Skype. But it feels very awkward. I guess I am lucky, but I now understand a little bit how it must feel to be in a real prison. This is a luxury prison for sure, but the fact that you can’t leave makes me feel uncomfortable. I can’t even go down to the lobby to eat something or work out in the gym (I don’t have my suitcase with my running gear here anyway). I just have to stay in the room and call if I want to eat something.

I am not sure if this is standard procedure, or whether the USD 170 went into several pockets to get this arranged. Why would they let me out through a side door and then have a big bus transport me to the side entrance of the hotel? I don’t really want to know. It’s at least better than spending the night on a chair in the departure lounge of Moscow airport and it makes for a nice story. But I will be happy when it’s 9 AM tomorrow morning. And Apple, if someone reads this please solve this bug!

 

Update next morning 10:30 AM: I made it out without any real problems. No knock on the door in the middle of the night to check my visa in order to obtain some bribes. They let me wait another 10 minutes before they let me out at 9:10 AM (“Come go, quick quick!”), then a security guard led me through the hotel lobby to the emergency exit where a bus was waiting (Why the emergency exit? I still think the whole thing was illegal, otherwise they could let me use the main entrance, right?)

The drive back to the airport took a bit longer than planned. First we ended up in a traffic jam and then the driver drove the wrong way and we had to drive back again. Eventually we ended up at the side gate of the airport where they let us in without inspecting my bags or passport. Another tour of the airport followed and 10 minutes later I was at another side entrance where someone was waiting for me to open the door. Two minutes later I was back in the terminal, without anybody checking my passport. 

Entering Moscow airport through a side gate

I am now in the lounge having a coffee and apple cake. Getting into the lounge was a small problem, they refused to let me in without an invitation (despite flying business class and having all kinds of frequent flyer cards). They were extremely rude, first sending me to the wrong place to get an invitation and then telling me to go back to my “friends” at the transfer desk. I don’t give up easily and I eventually managed to get the invitation, but not after another lesson in Russian arrogance and rudeness. China may not be perfect, but this is 10 times worse. I look forward to being in the air in 1 hour. Too bad I will be flying through Moscow again on Sunday…

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New York Marathon 2011

New York Marathon course through Brooklyn

This morning my dad, my sister and I ran the New York Marathon, it was an incredible experience.

 

Because my dad and sister were staying at the Waldorf-Astoria Hotel and I was staying at Times Square, I first had to jog over there in the very early hours of the morning. The bus left at 5:45 from their hotel, so I left my hotel at 5 AM to make sure I would be on time. It was dark and almost freezing in the city, and the only people you saw were runners on their way to buses to the start at Staten Island.

 

The ride to the start was less than 30 minutes, so at 6:15 we entered the start area of the marathon. It was so cold that the grass was still frozen white at certain areas, but there was no place to sit inside. There were a few open tents, but the temperature there was just as low as outside. Because the start was only at 9:40 (and for Sonja only at 10:40) we decided to make the best of it, wear plastic overcoats over our running clothes and try to stay warm with free coffee and tea.

Sonja wearing several layers before the start of the New York Marathon

The atmosphere was very nice despite the cold and despite the long wait, but I was glad when we could enter our starting corral at 8:20 AM. My dad and I were in the same starting corral, so we had some energy food and drinks together and then took off all the additional clothing. You could put that in bags and pick it up after the race, but if you left it in the starting corral it would be giving to charity, so that’s what we did. Now somebody will receive some nice long running pants and a Tommy Hilfiger sweater.

Lex and Marc before the start

We were almost at the back of the starting corral, but we did not mind too much because we did not plan to run a fast race. We just wanted to finish in a decent time, I hoped to finish between 3:40 and 3:50. My dad and I would run together, just like we did in the Macau marathon a couple of years ago.

Verrazano bridge right after start of New York Marathon

After the start we went onto the Verrazano bridge right away, a nice climb to start the run. I enjoyed the view from there over the water with the Manhattan and New Jersey skyline in the background. After the Verrazano we ran through Brooklyn for quite some time. It was very busy along the streets in Brooklyn, thousands and thousands of spectators and bands everywhere. It was really cool to hear them cheer for you and it helped to motivate you to run even faster.

New York Marathon course through Brooklyn

Our speed was quite good and for the first 25 kilometers we were running at a schedule of about 3:36. I felt great and could have run faster, but there were just too many people to be able to run at a faster pace. My dad hurt his achilles tendon at 15 km, but he only admit that to me 10 km later when I noticed that he was in pain. Things suddenly got worse at 30 km, when I suddenly heard him call my name behind me. I looked around and saw that he could hardly walk anymore, let alone run. He told me to continue on my own, which I was very reluctant to do. But looking at the way he walked I realized he would probably have to give up the race, so I then decided to run the remaining 12 kilometers alone.

5th Avenue

Those were also the hardest kilometers, but not as hard as in previous marathons. I felt good during the whole run, there was not one moment that I wanted to stop or wanted to walk. My legs hurt of course, but in previous marathons I had a much harder time. One key difference is that I trained hard for this marathon, much harder than previous ones. Another big difference is that I drank Gatorade and water at almost every drink stop, and that I had energy gels to eat when I started to feel hungry.

Entering Central Park at 90th Street

The last part of the race was the nicest. Coming back from the Bronx to Manhattan and then turning into 5th Avenue through Harlem was a great part of the race. You know it is just another 6-7 kilometers and the crowds were 5 rows thick. Great bands along both sides made these kilometers (always the hardest of the race) much easier.

Exit from Central Park at the Plaza Hotel

At 90th Street we turned into Central Park for the final stretch. Two more hills (and of course 2 more downhills), then a right at the Plaza Hotel onto Central Park South to Columbus Circle. From there we turned right into Central Park again and then the finish came in sight. I sped up the last 500 meters, I felt like I could have run much longer if I had needed to. My final time (net): 3:42:33. I am quite happy with that, I could have ran a couple of minutes faster if I had wanted to, but for me it was more about the experience than about the result.

Marc in the final stretch to the finish line

One reason why I lost some time is because I tweeted several times during the race, not an easy thing to to do with a touchscreen keyboard! I also took about 50 pictures (although some of them were not sharp because of moving during running) with my iPhone, and I posted several on Facebook as well. I love Social Media!

 

After crossing the finish line I called Grace, who told me that my dad had actually started running again (she could see our progress online) and he came in only 9 minutes after me! I felt bad that I had not waited for him, I should have known that he never gives up. But at 30 km he looked so bad, that I could not imagine him even walking the rest of the course. But he did! However, it came at a price, because after the finish line the medical people immediately took him aside and checked him up. He could not walk anymore because of the severe pain, but after medical treatment he managed to get out of the park on his own and then into a taxi to the Waldorf-Astoria. From there he called me to tell his story. Dad, I am very proud of you and I hope you will recover soon.

After the finish line

My sister Sonja ran her first marathon and she did a great job as well. Her final finishing time was 4:51, well within her target of 5 hours. Excellent Sonja, especially considering the fact that you did not walk a single meter during the race. A good start of your marathon career!

 

I loved the New York Marathon and can imagine to run this one again. The atmosphere is amazing and the course very nice. However, the huge running crowd made it less enjoyable because you can’t really run your own speed. Even after 21 kilometers there were still too many people around you to run without thinking. So it’s not a marathon to run fast times, but it’s a marathon to enjoy. And that’s what I did today!

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A visit to Occupy Wall Street

Checking out Occupy Wall Street (Nov. 4, 2011)

This morning after watching Groupon do its IPO on the NASDAQ (and being flabbergasted by the crazy valuation – but that’s a different story), my dad and I decided to check out the people who are against the excesses happening in the financial world.

After reading online about the Occupy Wall Street movement over the past 6 weeks I had a bit of sympathy for some of their points of view, but most of their demands and ideas are quite different from mine. I am not sure if I am part of the 99% that they claim to represent, but after today’s visit I have the feeling they only represent 1% of the population instead of 99%.

Checking out Occupy Wall Street (Nov. 4, 2011)

Maybe the movement has changed since they started on September 17, but when I went to their camp I was disappointed with what I saw there. Not intellectuals with interesting ideas, but mainly a bunch of hippies making music and holding up signs. Some still hailed from the flower power era it seemed, and others would have fit right into the 60s. The way they spread their messages about upcoming demonstrations, one person announcing something and the whole group repeating it, felt like something you would do in primary school. It’s probably functional, but I almost had to laugh when several people could not even correctly remember and repeat a single sentence.

Checking out Occupy Wall Street (Nov. 4, 2011)

To me they felt like a group of misfits, who find meaning in their lives by being part of a group that is against society. But these are not the people who will be able to change the world. I almost felt sorry for them: it was quite cold and windy in Zuccotti Park and the spirit of ‘changing the world’ seems to have long gone. Maybe I visited at the wrong moment, but in my opinion this group does not deserve the attention it gets in the press. They may have started the Occupy movement, but if this is the core of the organization I think the whole operation will be over sooner rather than later.

Checking out Occupy Wall Street (Nov. 4, 2011)

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Last run before the New York Marathon

At the finish line of the New York Marathon

This morning my dad, my sister and I did our last run before the New York marathon, that will take place in 2 days (start Sunday morning at 9:40 AM). We all flew in on Wednesday night, Grace and I from China, my dad and sister from Europe.

Our start numbers for the New York Marathon

Yesterday we started the day by getting our start number at the marathon fair, we decided to go there the moment it opened to beat the crowds. Probably a good idea, we only had to wait 20 minutes or so, it went very quickly. Then I spent a couple of hours working in my hotel room and in the afternoon we did some shopping together on 5th Avenue. We had a nice dinner in the Meatpacking District before going to bed early. Although I am so used to jet lags that it does not really bother me anymore, the 12 hour time difference between the NY and Shanghai is still a hard one during the night of the first day.

Apple Store on 5th Ave will be reopened today

This morning I got up at 3 AM to work, so at least I would have some overlap with China. And at 7 AM my dad, my sister and I went for a run. We met at the Apple Store at 5h Avenue (that was renovated and will be reopened again, they were in the process of finalizing everything), and from there we ran up 5th until the Guggenheim, where we entered Central Park.

Exploring the New York Marathon route in Central Park

That’s also the point where the marathon enters, so we ran the last 4.2 km from there to the finish line. We were not the only ones, it was much more busy than usual. Every now and then groups of up to 100 runners passed by, all checking out the final stretch of Sunday’s big run.

Exploring the New York Marathon route in Central Park

The finish stretch was already completely finished, including the grand stands for the public. Standing there I realized I would be running there in 2 days, very cool! So far I am more focused on work and my mind was not really with the run yet, but after seeing the final stretch and the finish line I realize that the main reason I am here is for the run. I am looking forward to it and I feel ready for the race!