Shanghai-Suzhou

How to sum up the last couple of days? First and foremost, gotta say the kids have been great. After our 'hard landing' 6000 miles from home (or should I say 10,000 kilometers), jetlagged, first time in Asia. I've always subscribed to what I call the "shark school of overcoming jet lag". It's sort of a hard core jet lag cure, as like with a shark, you gotta keep moving, and also like with a shark, if you stop moving you die (metaphorically speaking). So we've kept moving, made easier by the frenetic pace of China.

My first visit to China was about ten years ago, and I've been here 6-8 times in the last ten years. My last trip to Shanghai was three years ago. All on business, I've basically seen nothing of the country but airports, hotels, and meeting rooms. What little tourism I've done here was of the fly by variety. I'm not going to bore anyone with descriptions of the cool temples, pagodas, museums, etc, but I will be putting in some photos along the way. What I'm going to try and capture is just what is going on here.

When I was in Shanghai in the late 90's, it was said that a huge percentage of the world's heavy lift cranes were in China at the time, with Shanghai being the main culprit. Three years ago, most of the 'new area', Pudong, was mainly complete, and I stayed in the 88 story high Hyatt hotel, which looks like a cross between the Empire State Building in New York and something out of a postmodern Ghostbuster's movie.

That aside, what is remarkable to me is that somewhere between my last business visit here, and my family trip this week, Shanghai has gone from Emerging to Emerged. I'm going to have a bunch to say about this (there's a surprise ;-), but first some photo Support…

Shanghai Before:

Shanghai After:

 

Shanghai Before(actually Suzhou for this pix, but let's not quibble) :

Shanghai After:

China Before:

China After (my wife took this one):

Now the next photo, you gotta think about this photo for a while…think it through. This ain't our parent's China!

Or this one:

And before getting back to commentary, I just had to add this one:

I asked my two girls to compare London and Shanghai. London was pulled out of the blue, as I wanted them to compare Shanghai to another city. Some choice quotes: "Shanghai is newer", "Shanghai has much more modern buildings", "London's buildings are so small". To them, Shanghai is just another major city, it's not part of the 'emerging world'. I know I was staying in the 'good part of town', but in three days here it all feels more like a European Capital than China. I know there are terrible parts of town, but hey, there are terrible parts of town in LA, or London. I know that they are probably reading my posts (even before I post them), and that our conversations in our Van are probably taped, but hey, I doubt the tens of thousands of people we have seen or driven past in the last three days really care. They are prospering, they have money, and they can skip the rice dish at their meals.

A couple of other data points. The newspapers, although they are the English language papers and probably get cut more slack, have critical articles. The last two days have talked about the terrible shape of China's major rivers. There have been numerous articles on a crackdown on pirated DVD's, and a headline article on how an HIV drug developed in China has promise, touting the Patent protection that the company developing the drug has obtained globally. I've been saying for years that the minute that Chinese Companies IPR (intellectual property) gets to 50.1% of a given product area, the Chinese will move from knockoff's to being the staunchest global defender of Intellectual Property Rights! Another interesting point here is that the knockoff DVD's and watches are now shunted off to the alleyways, and I think they will be gone completely at some point. Interestingly, the scale of high-end brands in Shanghai is vast. Basically, for the folks who have moved up the economic scale, buying a 'knockoff' or copy doesn't cut it anymore, they want the 'real thing', even with the vast margins made by the 'brands'.

Tourism. Let me start this one with a Hong Kong example. When I went to Hong Kong for the first time in the mid-90's, almost all the tourists were foreigners. In the last few years, when I would do my harborside runs on the Hong Kong Waterfront, the vast majority of tourists snapping photo's of the harbor were Chinese. In Shanghai,t he degree of Chinese tourism of the Chinese New York City is vast. Mass tourism by definition implies a great deal of disposable income, and the hordes of tourists moving about Shanghai on their Chinese made buses or Chinese made vans or cars are a testament to that change.

Breakfast. This might sound like something off topic, but bear with me. Breakfast in an Asian business hotel was always the most international meal. Butter from Switzerland, yogurt from France, Cheese from Holland, Jam from France, Oranges from the US etc. It was the U.N. at a meal. Now, it's all Chinese. The butter is Chinese, as is the yogurt, jam, etc.

Brands: Take this to the next level. The major global brands are still 'aspirational', as described above. However, I think we are only starting to see the beginning of Chinese brands that will not only dominate their local market, but ultimately globalize. There is a brand (don't remember the name, there were a lot of Chinese characters ) that seems to be a cross between Nike and Reebok. Beautiful stores, looks like high end merchandise. Along Nanjing road, as pedestrian shopping street that is right out of many European city cores, there are bunches of local brand stores, not selling knock off's, not selling 'cheap', but high end branding, high end merchandising. When you start to combine the cost structure of Chinese companies, plus a domestic market that will scale rapidly, I think this dynamic, like a lot of other ones at work in China, is relatively unstoppable. Probably not this decade, but after the Olympics, after 2010, it's inevitable.

Suzhou: We did a day trip to the City of Suzhou, about two hours out of Shanghai. I had never heard of it, but it is a city of over six million people! Great pagoda's, temples, gardens. A silk factory that was actually pretty cool. If anybody out here has done a winery tour, a silk factory tour is sort of like a winery tour with worms. The point of Suzhou in relation to the comments above is that thy dynamic was identical. Not an "international city" like Shanghai, but the Armani store was going in, the City's infrastructure was brand new and functional, the tourist infrastructure was world class. What we saw happening in Shanghai is not an anomaly.

I could go on here, and I will another day. Again, I all is not perfect her, to say the least, as this country still has a lot of issues, and still has Mao on most of their currency. But the fact is the transformation of Shanghai is one of the more boggling things I've seen in my life. This is a happening place, and if it means that folks on the edges of the bell curve can't say or do certain things, it also means that a vast number of folks between those edges have a chance to have the type of life that their parents or grandparents couldn't even conceive of.

We're off to Guilin tomorrow, and I think Guilin will show us a different side of China, but we'll have to wait and see!

 

 

Comments

[Bill Davidson]

Jeff:
Great juxtaposition in the photos! I'm glad you all arrived safely. When I read your words it's as if you are stnading in my office talking to me. Safe travels! Bill Davidson

[bill g]

Jeff,
Glad to see family made it safe. You've missed almost 1" of rain yesterday and overnight 4/20-21.
Naturally, people are crashing cars all over the place.
Keep us posted.
Bill G.