Last night we went to a social evening for the Shanghai Boat and Yacht Club. As always, we had a lot of interesting conversations with people doing fascinating jobs in China. One guy, Jordi, works for a supplier for automotive parts. He mentioned that he went to an auto show in Beijing last week where literally 18 out of the 20 Chinese cars on display were almost direct copies of foreign cars. He joked that the game was “name that original” and then figure out the slight modifications that had been made for the Chinese version. So much for intellectual property! He mentioned that he will be moving back to Germany in a few months and is looking forward to working on some of the cool new designs being brainstormed and that he is tired of working on components that are not innovative. Every country needs their differentiation.
Another friend was explaining business in China. She works as an accountant, CFO-type for a company who makes software for semiconductor businesses. A native Taiwanese, she speaks Mandarin fluently and even that does not make the business environment any easier to unravel. Some of her key learnings that she shared include the fact that the corporate tax rate is negotiable. There is no online table that you can decipher your tax rate. In fact, it varies between 18 and 33 percent. She said when she was working for the same company in the states, she never believed her Chinese counterparts when they would not be able to forecast their taxes for the coming year. Now she understands and has been practicing bargaining in the streets in order to improve her negotiations with tax officials as a one percent improvement saves her company millions of dollars.
She also said that things such as the money transfer fees can be completely waived if you have a relationship (guanxi) with the bank. Before, she was charged one percent or something like $1M to transfer money for the business and now that she knows the people involved, they waive the fee completely.
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There is not too much else to report. We are busy doing many “normal” things like meeting friends for dinner, working, etc. Our friend Patrik was in town this week so it was really great to see him, however briefly. I have been working crazy hours in my new job. Two nights a week I have meetings until 2AM including a meeting I lead that starts at 12:30AM to accommodate the people in Boise and a key team member in Denmark. Most mornings I start at 6AM as well. Luckily I do not have to keep this up too long because it is really not sustainable. I was functioning fine the first two weeks but once the adrenaline wore off, it started to get old fast. I do love my new job though!
Chrissy and Erin (Andy’s sisters) come into town in about an hour. We are super excited to have them as visitors and are looking forward to taking them around Shanghai.
They closed the lake to sailing last weekend and this weekend so all of the sailors are in withdrawal. There is an Olympic trial of some sort for rowing and the speculation is that the Chinese government is being cautious and do not want any uninvited people loitering around and potentially protesting. The visa policies are changing to get a tighter control on the foreignershttp://www.nytimes.com/2008/04/24/world/asia/24china.html?ref=world and we have even heard that they are kicking out all of the foreign students studying in China for the summer. In recent Chinese history students have served as an important catalyst for change starting revolutions, etc. so I think that they do not want to take any chances…
Speaking of history, I will close with a timeline of foreigners in Shanghai, as passed on by a friend:
Foreigners in Shanghai:
•1842 onward: Brits, Sephardie Jews, many other nationalities, mostly businessmen, start arriving
•Turn of the century: Russian Jews fleeiing pogroms arrive via Harbin
•1917: White Russians fleeing Soviet forces’ occupation ” “ ”
•1933: First wave of German Jews (mostly professionals) fleeing Nazis arrive
•1935: Nuernberg Laws passed by Nazis, escalating persecution of the Jews follows
•1938: Spring, annexation of Austria by Nazis, Nov. 9-10, Crystal Night Pogrom creates waves of Jewish refugees
•1939, Sept. 1: invasion of Poland by Nazis, beginning of World War II (1000 Polish Jews escape thru Russia)
•1941, Dec. 8: Attack on Pearl Harbor, Japanese occupation of Shanghai
•1942, late: Japanese create internment camps for civilians
•1943, Jan.: Col. Josef Meisinger (SS man, Butcher of Warsaw) liaises with Japanese re Final Solution for Jews here
•1943, Feb.: “Designated Area for Stateless Persons” (Jewish ghetto) created by Japanese in Hongkou District
•1945, July 17: Allied bombing raid hits ghetto, 34 Jews and many Chinese killed
•1945: August: Atomic bombs dropped in Japan, Japanese surrender
•1946 and 1947: Many refugees and some Old China Hands leave Shanghai as communist forces gain victories
•1948: KMT’s currency reform destroys remaining businesses, more and more Shanghailanders leave Shanghai
•1949, spring: Communists march into Shanghai unopposed, KMT flees to Taiwan
•1949, Oct. 1: People’s Republic of China created. Shanghai starts to decline, residents to (forced) departures.
•1949-1979 (roughly): China closes to outside world (Cultural Revolution rages, 1966-76)
•1980: American Consulate (and others) reopen, foreigners begin to return
•2008: The circle completes, Shanghai booms again.
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