What did I learn while travelling in China and India? Business opportunities are everywhere and it takes ingenuity and perseverance to recognize and capitalize on them. Each country has its quirks or idiosyncrasies, weaknesses, strengths, and lessons to be learned — especially in business. Knowing which to capitalize on and when is what will proverbially bring home the bacon.

China

China is an infrastructure powerhouse. They build what they need and in record time without any red tape. The bridge to the Yangshan deep sea port is a prime example of China’s speed and efficiency when they need something. They built a 20 mile bridge in just one year. The design and sheer size of the project left me awestruck. And the bridge is just one example. Everywhere you look in China there are projects like the Yangshan deep sea port and none more so than the preparations for the Olympics.

China’s leveraging their infrastructure engine to build up Beijing for the 2008 Olympics. I still have doubts about whether the air quality will be improved, but none about China’s ability to build and prepare their infrastructure for the Olympics and the crowds of people it will bring. If you doubt my assertions, they’ve instituted a driving reduction by only allowing cars that have license plates that end in even numbers to come into Beijing on every other day and plates that end in odd numbers on the alternate days. This effectively halved their traffic, pollution and all without any red tape or time involved in a bureaucratic process. Ingenious.

The Chinese handle most of their business like they handle life: with an importance relationships or more complexly: guanxi. What is guanxi? In the simplest form: a gift. Someone gives you a simple gift and then in time you’re required to give a gift in return when needed or most appropriate (but not right away). This builds relationships and favors between people who can then leverage these relationships and favors to move ahead. In our trip, a few of the companies we visited were able to give us visits with more companies just by calling in a little guanxi. By receiving these visits, I now have some guanxi to give back to the companies who helped me. Make sense? If not, don’t worry, it is a bit confusing until you experience it firsthand.

If you are going to do business in China, be prepared to do favors and bring gifts to everyone you do business with. You don’t need expensive gifts, just thoughtful ones. I believe this practice comes about from the sheer amount of people in China. In order to get anything done, to move up the corporate ladder, or just to do general business you need people and you need to make yourself unique from everyone else. Guanxi is the Chinese answer.

India

India was a different beast entirely. The media refers to India as a tiger straining against a leash and the leash is India itself. The tiger is represented by the young Indians and their desire to succeed and show the world how powerful and driven they are. The leash represents the Indians who are clinging to tradition and don’t want to grow or move forward. India is divided and united at the same time. Confused? It is difficult to grasp and can be compared to the traffic in India. Do a search on youtube.com for Indian traffic and you’ll see the kind of controlled chaos that I’m referring too.

At first glance the traffic looks daunting and it should be, as it’s also very dangerous to drive in India. But the danger is not what we are concentrating on. Rather we are looking at the simple fact that Indian’s are moving three times the amount of cars as Los Angeles on very old infrastructure with half the traffic. I am more than likely making a few generalizations but my point is that the will and determination of the Indian people is what is the most impressive. The government is extremely democratic and as such as placed an extremely high value on education. Even in the most rural of cities there were signs advertising engineering, commerce, business, and hotel management schools. All the signs promised good scores and high paying jobs. Can you imagine that in the United States?

Best Practices

Service, service, service. Both India and China had many successful businesses all making a lot of money. What did they all have in common? Quality service. Each business treated their customers with respect and concentrated on the service aspect of the business. If westerners could learn anything from the Chinese and the Indians it would be that while anyone can copy a product quite easily (especially the Chinese) it is much more difficult to copy quality service. I was able to glean a lot of useful knowledge on the jewelry business from Adora Jewelers. Their views on the market may have differed greatly from my own but on one thing we can agree: service to the customer. They treat the customer to champagne and delicious food and pamper them in any way possible. This kind of treatment entices customer to come back and buy jewelry again rather than from their competitors. Of course this could be applied to any business but it was easy for me to understand as my father owns a few jewelry shops in San Luis Obispo.

Comfort Zone

I had been to China before in 2000 for a government sanctioned cultural exchange and the culture shock hit me very hard then. This year I was prepared and accepted the travelling like a breath of fresh air. Maybe not fresh air as this year it was exceptionally smoggy in China but the euphemism still holds true. My comfort zone was definitely tested in India. Personal space is attacked regularly and lines and courtesy seemed to be at the bottom of everyone’s list of priorities. At McDonalds, four men cut in line before me by physically pushing me away and out into the mob of people in “line”. While this was extraordinarily rude, it was the status quo in India. Maybe it is not rude to cut in front of people in India. Either way, I didn’t let it get to me. I’ve come to realize that when travelling to another country it is best to try and be as polite as possible and if they are rude to you, accept it until you can respond appropriately for the culture. I’d rather have a bruised ego than leave a bad impression as a “stupid American”.

Conclusion

If I could sum up the trips experiences into one statement that represented everything I learned I’d have to say: Business is all about relationships. Everyone has heard it before, but it becomes very real the more you experience it, and especially in China and India.

What’s this about?

Rivoli recounts a time in her life when she mapped out the family tree of a T-shirt (one she sees on vacation in Florida) based on an urge born from a 1999 World Trade Organization protest question: “Who made your T-shirt?” She does a wonderful job engaging the reader by constantly instilling a question of “Where does the T-shirt really come from?” First we think it’s from China, then Texas’s cotton farms, and maybe Tanzania. Along the way she answers each question that arises almost as if she’s having a conversation with us as we turn each page.

You may be wondering by the end of the first chapter, “Wait, why would we use cotton from Texas instead of cotton from China?” I’ll bet you didn’t know that slavery is a big part of why and from there it was hard for anyone else to catch up. Interested yet? Economics may sound dull, but who doesn’t like a good mystery novel? I love economics which was why I picked up this book… but it’s STILL good. I promise.  Even if you don’t like economics.

Why should I care?

Did you know that the US cotton industry is so heavily subsidized that the US cotton farmers get more than twice what the price is in the global economy?  The US cotton industry is the only industry that gets paid twice what the item they are selling is worth, are insured if it fails, insured if the price drops, paid before it’s consumed and even paid in the off seasons.  Third world countries can’t compete.  The US cotton industry makes sure of it.  Sounds odd for a country that prides itself on helping other countries right?  Well if you care about what I’ve just said, that’s why you should care about this book.

[edit]

As I read back over this report I was emboldened to answer this question “Why should I care?” not as if you’re asking me but rather as if I’m asking myself — Why should I care?  I care because I want to know why are people inspired to protest.  Why are businesses driven by the bottom line?  Some of these seem so easy to me, but this book definitely introduced a new view point.  The truly free market in Africa, where the T-shirt ends up, inspired me as an entrepeneur and future businessman.  I always donate my clothes whenever I’m tired of them, and to know where they end up and how they are bought and sold  is that much more interesting to me.  Especially seeing how polluted the market is by governments and politicians along the way.

Are there any weaknesses?

Rivoli didn’t leave many weaknesses in the book.  While I found myself agreeing with all of her conjectures if we look at the book objectively she does exert bias towards politicians and specifically to the Bush family.  I think Bush is “up” to around 75% disapproval rating but regardless an author of an economic book should try and be as objective as possible and non biased towards the subject.  As she didn’t need to add in these opinions, I’m assuming the book was as much for her as it was for us.  When I’m in agreement with someone it is much harder to see the other side of the discussion and in this case I had to really think about how I would tear holes in this books logic.  The problem is that Rivoli didn’t do much to interview politicians or lobbyists involved in the farming and textile industry.  In order to mount a stronger argument for her cause, she would definitely need to interview the politicians allowing them to defend themselves.

Further Thoughts

I was very happy with each book I selected and as my last book before China, Travels of a T-shirt was just as enjoyable as Collapse.  I wasn’t as eager to read The World is Flat.  I think that was mainly due to the frustration I had with how often Friedman mentioned “flatteners”.  Travels was on par with Collapse as far as entertainment and business value.  I love economics and this book didn’t disappoint me.  The trip around the world and personal view through the history of US cotton and textile industry was new to me.

Since this book was read to prepare me for my travels to India and China I feel it noteworthy to mention that China is discussed in the book.  China’s constantly under fire for offering cheaper wages and polluting the environment.  Normally we see a focus on those two areas (or have in Collapse and The World is Flat) but in Travels of a T-shirt, Ravoli concentrates on the individuals.  A refreshing view and one that is truly inspirational.  The prospect of improving someone’s life, whether their human rights are violated or not, their life now is still better than what they had before and it is a step in the right direction.

What’s this about?

Jared Diamond looks into how societies fail or “collapse”.  And by collapse he means “…a drastic decrease in human population size and/or political/economic/social complexity, over a considerable area, for an extended time.”  Straight to the point and extremely engaging to read as I was hoping.  I was impressed by Jared Diamond’s Guns, Germs and Steel and couldn’t wait to read his incites on societies as a whole and their proverbial “lives.”  My first draw to the book was the section on Easter Island as I knew nothing about the area other than there were giant rock sculptures possibly put there by aliens.  My curiousity was peaked.  It also contains a section on China which was relevant to me as I’ll be traveling with my Cal Poly MBA class to China and India this summer on a business exchange.

The book covers a few example societies that fall into one or all of the environmental damaging categories:

• Deforestation and habitat destruction
• Soil problems (erosion, salinization, and soil fertility losses)
• Water management problems
• Overhunting
• Overfishing
• Effects of introduced species on native species
• Human population growth
• Increased per-capita impact of people

All societies that have collapsed over time have exhibited some of these environmental problems.  Interestingly enough all of the collapses are always due to some form of environment damage.  By environment we’re told by Diamond not to assume just natural environment but also economic as they are tied together quite closely.  He does an amazing job of providing rigorous historical evidence to explain each societies collapse in the book.

Here’s a list of the societies covered in the book.  Maybe one of them will spark your interest as Easter Island and China did for me.

• Contemporary Montana: Bitterroot Valley
• Easter Island
• Pitcairn and Henderson Islands
• The Anasazi and Chaco
• Maya’s Collapse
• Viking’s and Iceland
• Norse Greenland
• Rwanda’s Genocide
• The Dominican Republic and Haiti
• China
• Australia

All of these societies are used to illustrate different concepts of collapse.  Once they’ve all been outlined and the concepts have been made clear a section on practical lessons applies them to our current American society and the world as a whole.  How do we prevent our own collapse?  What areas of business can we look at to prevent this and how we as consumers we prevent our own demise?  The book covers it all and in very entertaining and enthralling stories that you can pay attention too and identify with.

Why should I care?

Well if you haven’t been bitten by the sustainability bug this book gives a good smart chomp.  We see examples about how the Norse ultimately died off in Greenland because they brought their European practices to an environment that could not support nor had the weather to support their agriculture habits that worked back on Iceland.  Or how the Easter Islanders slowly cut down all the forest on their island and without even realizing it condemned themselves to starvation.  Not only was it not as if one of them went out and chopped down the last palm tree but rather that slowly the new palms were not growing back in fast enough for their societies need.  If they had known to manage their tree population much more efficiently they would have survived and prospered on the island until now.

China’s chapter was one of the most eye opening chapters I read.  We are all aware of the cheap labor they provide as well as the benefits to business and the bottom line.   But were we all aware that we send all our trash there?  That not only are they producing enough pollution to condemn the rest of the world but we’re helping them and encouraging them to do so.  As an MBA heading out into the business world I found this especially inspiring.  How can we do business with China and make them realize the damage their doing to the environment is not sustainable.  That in a few more years they will be beyond repair and not only will they personally be close to collapse, but the rest of the world will see the drastic effects as well.  Their air, water and soil quality is already dangerously low.  I’m hoping that their government realizes how important their environment is during the next couple of months and the upcoming 2008 Olympics. We’ve seen a few candidates drop out due to not wanting to perform in the horrid air in Beijing.

Diamond goes on to put a price on these environmental sacrifices that China is supposedly making to make money and do business with the west.

• $72 million per year to battle alligator weed (introduced from Brazil and is damaging crops)
• $250 million per year (and rising) for factory closures due to water shortages
• $540 million per year in Xian for sand storm damages on buildings and crops
• $730 million per year damage to crops from acid rain
• $6 billion a year for damages to the “green wall” of trees being built to shield Beijing against sand and dust
• $7 billion a year for the losses created by other species other than the alligator weed
• $27 billion for floods
• $42 billion for for desertification and loss of water
• $54 billion for air pollution

The later two make up 14% of China’s GDP.  Hopefully this is starting to sink in to a few of you and inspire you to check out this book.  We all need to know how to become sustainable and live in the environment we have without damaging it.  Both economically as well as ecologically.

Are there any weaknesses?

I’ve read a few reviews online that complained of not enough detail for the concentrated eye.  I didn’t run across this problem but I’m not an expert on the subject so I could see someone who’s well versed in the field wanting more evidence.  The book provided me with more than enough examples but the lack of pure data could be seen as a downfall.  In my opinion I wouldn’t have been able to have paid as much attention as I did if it had more raw numbers.

I would suggest the little bit of optimism that Diamond tries to inject into the book doesn’t serve any purpose other than to try and sugar coat something that doesn’t need to be sugar coated.  This topic needs to impact people.  We can’t think things will be okay if we ignore them.  It’s almost too late to fix our situation so in order to repair what we’ve damaged, we need to work extra hard to be sustainable.

Further Thoughts

I think I will read this book again.  It’s not very many books I wish to re-read but this and Guns, Germs and Steel have left a mark on me.  They provide many business incites into how to communicate with those around you as well as how to profit from optimizing your business and life.  Things that didn’t sink in entirely the first time I read them and will most likely require a review later on.  I think the title of the book could be made to be less harsh and hopefully more encouraging.  So more people will read it with the mindset that they need to be listening, not just enjoying the story and then continue on with their lives as normal.  As we learn in the book, as a society we really only get one chance.  If you knock down all your trees you can’t just buy more.  They’re gone.  For good.  I say trees when really I’m just using them as a symbol to encompass everything that’s important to us as a species and to the earth as a whole.  We only have one earth.  It may sound very “hippyish” or tree-hugger but we really do need to protect our environment to survive.

What’s this about?

Thomas L. Friedman originally captured my attention on the Daily Show with Jon Stewart. He talked briefly about the book and what it covered: How the world is becoming flat through the sharing of information. He proposes that there are many “flattener’s” that make sharing information easier. Ten to be exact:

1. The Berlin wall comes down
2. Netscape goes public
3. Work flow software
4. Open sourcing
5. Outsourcing
6. Offshoring
7. Supply-chaining
8. Insourcing
9. In-forming
10. Digital, mobile, personal and virtual or “The Steroids”

Friedman goes into detailed examples of how each of these affected the flattening of the world. He also doesn’t hold back in using the catch phrase “flattening” over and over in all his examples. It’s like a one sided conversation with someone who’s trying to get you to adopt their cool phrase.  Except instead of enticing you to use it, it only annoys you. In respect to individuals who will be reading this, I’ll make an effort to use the “flattening” terms as little as possible throughout this review.

Is the book only about those ten factors and how they increase the sharing of information?  No, however they do define the platform for which Friedman launches his chronological journey through the globalization of the world. He defines how they converge on each other and act as a singular flattening force on our world. Through short stories of companies, societies, human interaction, and all of them entertaining, Friedman explains the importance of globalization and why it’s a force to be respected.

I think there are some very common misconceptions about this book that should be cleared up immediately.  This book does not go into great detail about any one “flattener” and instead hits upon everything generically.  This definitely keeps the reader engaged as you’re never really challenged by any of Friedman’s ideas.  More to the point it’s like having your eyes opened to an obvious fact that you didn’t see before: Globalization.

Why Should I Care?

In all honesty the book is written very well. It’s an all encompassing look into the history of globalization. The examples are entertaining and engaging. If you haven’t had any experience with them in the past this is a great introduction.  But as I said before it’s pretty generalized for the sake of entertainment and sensationalism.  The entire theme can be summed up with the fact that the internet came into existence and became popular and flattened the world.  All the other factors play off this root concept of which for whatever reason Friedman doesn’t look at in great detail but instead brushes over with many examples.  Google is a great example that he applies quite often throughout the book.  Friedman explains that a flattener is much like Google in that when we didn’t have it, we didn’t much care.  However, once Google came into our lives, we have a hard time living without it.  We rely on it in many ways to make our lives easier and to communicate with the rest of the world.  It’s that type of simple example that is repeated throughout the book to open the readers’ eyes to globalization.

Opening peoples eyes to globalization doesn’t sound like it’s that important at first.  But that couldn’t be farther from the truth.  China and India are discussed in many examples throughout The World is Flat.  Each is discussed in context to their strengths: India and their outsourcing and offshoring capabilities and China about their labor force.  Realizing the potential of these two countries alone and their effect on the United States economy is really the benefit of this book.

Are There Any Weaknesses?

I’ve read a few reviews of this book in curiosity of what other people thought.  Oddly enough the main thing everyone else complained about was also my number one complaint.  The constant beating of the “World is Flat” drum throughout the whole book.  I found myself having to put the book down at times because I was just so annoyed with the constant use of “flat”, “flattener”, “flattened”, “flattening”, etc. when there are so many other words that would have made the point so much clearer.  It gets to the point where you feel as if you’re being programmed to use this word and you really don’t even know what it means anymore since Friedman uses it to describe everything and define nothing.  But let’s move on and look at the content itself.

The analysis of globalization in this book is very general.  It doesn’t go into a lot of detail on any of the issues presented.  There’s a book written in response
that critically analyzes Friedman’s book and the main points he makes:

The World Is Flat?: A Critical Analysis of New York Times Bestseller by Thomas Friedman

I haven’t read this book yet, although I plan to pick it up and take a look at what issues Aronica and Ramdoo present.  I’m guessing it’s a lot clearer than Friedman’s approach.  The fact that there’s an entire book written in response to Friedman’s should tell you something.

Further Thoughts

While reading this book I found that I was inspired to look further and take notice of a lot more issues that could be affecting the globalization of the world around me.  While I had to really ignore the constant use of the word “flat” and its many incarnations, I think it did play a crucial role in framing the content of the book around its title.  That connection between the drastic claims of a flat world and the stories that paint the picture make the reader open their eyes to what’s happening around them.  The world is getting smaller.  Communication is increasing in speed.  Information is becoming as available as air.  Every new generation has more and more opportunities than the one previous.  We just have to go grab it.

That pressure to get out of the chair and go do something I think is the greatest take away from this book.  We need to understand that America is still great and has a lot of things to offer.  The most important thing: our imaginations.