Responding To Opportunity

When college football season ends in Ohio people get the shakes. They will have to wait eight long months before seeing the Buckeyes next season.

In the meantime, the snow brings out the fan in all of us.

All the recent discussion on “stimulus” recently has made for a disastrous degradation in common sense and rational economic theory.

First, it is a myth that government can spend money and spur the economy. This myth is based on Keynesian economics, and more specifically, the Keynesian multiplier. This states that for every dollar the government spends, it has a positive effect worth 1.5 times the initial investment. Simply put, if this were true, why don’t we spend a few more trillion and we’ll be set for life? This is where the argument falters.

Next, increased fuel standards for vehicles are going to be made mandatory if President Obama gets his way. All cars and trucks made in the year 2020 will need to get 35 mpg, or else. This after the the auto industry has one if its worst years in recent history. Now it must shoulder the cost of reengineering its cars and trucks to meet a government imposed standard. I could understand if Putin, Castro, or Chavez made such an order, but we are supposed to live in the United States and shielded from anything remotely close to a planned economy, right?

Finally, the democrat controlled Ohio state government has made clear its intentions to consider a mileage tax. It seems, Ohioans have cut back on their fuel consumption and government revenue from gas taxes is sinking. In order to make up for the lost revenue, they are considering placing a gps device on EVERY vehicle that tracks the mileage and accrues a tax that one pays while at the pump (after your gps device beams the data to the receiver on the pump). I am sure this scheme will bring in LOTS of money, but it will cost Ohioans real dollars. The implementation costs alone are staggering, hundreds of millions of dollars. Not to mention the technological hurdles and equipment upkeep that must be taken into consideration. I thought reducing our fuel consumption was something the government wanted us to do?

Why is it that when a government revenue generating vehicle like the gas tax doesn’t bring in as much revenue we must find a way to replace it with another, government revenue generation vehicle? When there is a retail boom, is there ever a consideration to reduce the sales tax because it brings in more than expected revenues? The answer is no. The government simply finds more ways to spend it.

For an American traveling to China on business for the first time there are some things you should know ahead of time to make your trip more of a success.

1) Tea Drinking

The Chinese love tea. Do not be surprised if you are served tea at a business meeting. I highly suggest you drink it because it is Chinese tradition to share tea in a small ceremony. Not accepting places a cloud over the meeting.

2) Smoking

In America, most states are smoke free. Meaning, no smoking in public buildings, restaurants, etc. China is extremely smoke friendly. Another tradition is to share a cigarette with your host after a meal. Again, this is Chinese tradition and I suggest you take a few puffs no matter if you don’t smoke. This is one more way to connect with your host and ensure good business relations.

3) Traveling

I suggest air travel for all long distance trips within China. The bus and train are not conducive to long distance travel. They are uncomfortable and unsanitary. When traveling within the city, travel by taxi. It is cheap and is the quickest.

4) Hotel

In China, a “5 star” hotel is what we might think of as 3 or 4 star in the US. With that said, I recommend paying a little extra and staying at a familiar name like Hilton, The Four Seasons, etc.

5) Translator

We were lucky enough not to need a translator. When traveling by taxi we simply pointed to a spot on the map and we got there. Our host also spoke English, which was a plus. In another business meeting where our host did not speak English, he provided the translator.

6) Sourcing services and products

I recommend doing this ahead of time via the internet. Sites like EC21 and Ali Baba can help you find companies and businesses of interest. Once you are in country, your internet access might be limited and your time is short.

I just returned from a two week trip in China. The majority of the time we spent in Shanghai and then a few surrounding cities. As an American visiting for the first time, I had a few preconceived notions of what China might be like, but I was wrong.

1) China is communist and capitalism is viewed as evil

In China, I couldn’t believe the entrepreneurial nature of the people. In Shanghai, there were so many shops, street vendors, bars, restaurants, etc. This is not a government excercising control over business. Although communist, China has decided to open up their economic system to some free market controls. The keyword is “some.” They will manipulate their currency and/or duty tariff levels to protect their businesses more than many other countries.

This is the scene inside a clothing wholesale mall. This is where clothes were sold in bulk to be resold in smaller shops. As you can see, the consumer culture lives. It seemed as though every store carried the same style clothing.

Chinese Clothing Wholesale Mall

2) China must be clean because of all the government oversight

Again, wrong. China is a very dirty place. The air, the streets, the insides of buildings. If you are outside for a few hours, you feel filthy.

If I were a global warming protester, I would set up shop in China. The smog is THAT bad.

The level of protection when it comes to food is non-existent. I didn’t dare eat at a street vendor’s stand. I can remember walking down an alley one night after dinner and came across a man going through garbage. I asked our host what he was doing and our host replied, “He is gathering food for his pig.” In the middle of an 8-million person city, livestock is quite common on the streets.

We were going to breakfast at our hotel one morning and out of no where we hear, “Cock a doodle do!” A rooster was preparing to meet his maker back in the kitchen. They like “fresh” food in China. Needless to say, I lost my appetite.

I’ll have more on the trip in future posts.

Since we have arrived in China we had the opportunity to eat all sorts of food and travel several ways. Each is an interesting and remarkable experience.

Chinese Food

Chinese food is not like what we eat in America. First of all, the Kung Pao chicken has bones in every piece of chicken. We asked our host if we are to eat the bones and their answer was that if it is too big, “no”…and if it is small, “yes.”

There is also a focus on seafood as that is the local specialty. The locals seem to like raw food whether it be fish, crab, eel, turtle, or some other disgusting creature.

We actually walked through our hotel buffet and heard a rooster “cock-a-doodle-doo” back in the kitchen. It was a little unsettling.

Travel

Traveling in China is a little different than in America. First of all, it is crowded and secondly it entails very poor conditions and hygiene.

We made our way from Shanghai to a final location by commuter train. We bought the most expensive ticket thinking it would be luxurious, but it was far from it. We slept in a small room with two sets of bunk beds. This meant we had two strangers sleeping in our little room. It worried us a bit, but we began to trust our guests a little more as the trip went on.

On the way back to Shanghai we took a commuter bus. It was $30 American and again we thought it would be luxury because it had beds instead of seats. In reality the beds were made for small people (sub 5′). I have not been so uncomfortable since the military. I think seats would have been more comfortable.

All things considered, it has been a very adventurous trip full of stories and experiences. I’ll be blogging more frequently about it once we arrive back in the United States.

We arrived in Shanghai, China yesterday afternoon, China time and then made our way to the Holiday Inn Express via the Mag Lev and taxi.

The Holiday Inn is a brand new hotel situated on the East side of Shanghai. The section of town is not very developed as there are shanty houses next to large unkept condominium towers all over the place.

Street vendors are everywhere along with what seems like a cell phone store, KFC, and cigarette shop on every corner. Some pics of the iPhone Air(obviously fake) we found on the streets below:

The iPhone Air

iPhone Air, Front

The iPhone Air came in pink and black.

The fake iphone was very slow although most of the functionality seemed to be close to the real think. The vendor wanted 1000rmb for it, which is about $166 dollars. If anyone wants one I’ll buy it and you can send me the money when we return to the US.

Lots more pics to follow with a funny story. Also, video of our MagLev ride(fastest commuter train in the world).