Shanghai is China (repeat after me)

bodawei

May 18, 2011, 02:59 PM posted in General Discussion

The outspoken Dr Geoff Raby, Australia's Ambassador to China, speaking of foreign firms: '"If you establish your head office in Shanghai, effectively you have tattooed on your forehead - 'I don't understand China'," he said.

hamshank

May 19, 2011, 01:06 AM

Interesting article

So living in Taiwan and having only been to ShenZhen on the mainland, my question is this....what makes Shanghai more "foreigner friendly" than Beijing?

Is it a numbers thing? Foreigners sticking together or are there different policys that make Shanghai a more attractive proposition for foreigners and foreign business?

bodawei

Well, Shanghai's whole 'city' history has been associated with foreigners - perhaps that is a factor. Shanghai in the 20th century was largely a creation of foreign governments and foreign business interests - it is also a remarkably new city. Beijing was never like this, and has a long history of urban settlement. (Interestingly Jakarta is rather like Shanghai in this respect.)

I think the cities are equally 'foreigner friendly' in the sense of how 'easy' it is to live there as a foreigner - creature comforts, support systems, foreign networks, and so on.

But Geoff Raby's point is about being in touch with national Chinese networks. Of course Shanghai has its own Chinese networks but they wouldn't count much where I live for example.

What does Shanghai produce that is relevant to the rest of the country? That comment will be controversial .. :) But it is actually a serious question - I don't know the answer.

hamshank

All good points...

"What does Shanghai produce that is relevant to the rest of the country?"

Good question...A financial hub perhaps?

I would also be interested to know...Why having a head office in Shanghai automatically means they are unable to understand the rest of China? i.e What could have lead to that view being expressed? After all, what is the problem with having the head office in Shanghai and an another non head office in Beijing for example?

xiaophil

I would imagine it would be to some companies' advantage to be out of the central government's line of vision.

bodawei

Hi hamshank

I think if you at what he said, it was a criticism of those that ignored Beijing. But the location of the head office is symbolically important, even in the West.

'What would lead to that view being expressed'? Well, experience is my guess. A lot of foreign firms come and go; they find China too hard. Even some big firms. Australian business has a particularly poor record.

BTW you answered my rather rhetorical question about what Shanghai produces beautifully. :)

tvan

May 19, 2011, 12:36 PM

Re: the statement,

"He implicitly slammed all of Australia's major companies for basing themselves in foreign-friendly Shanghai rather than Beijing, where decisions are made."

All the decisions are made in Beijing? Really? The view from the boondocks is that Beijing's decisions are often ignored; it is the decisions of the provincial princes that most count! Maybe after Mr. Raby finishes with the Analects, he should pull his head out of his Beijing a__ and travel a bit.

bodawei

Hi tvan

I understand about Beijing's decisions often being ignored, and the provincial princes, but there is more to it; it is about being in touch with the right people. Most of the provincial princes were made by Beijing, and/or have spent time there.

I don't know Geoff Raby and I don't know how much he has travelled but I am greatly envious of his experience. (What a cool job!) I wouldn't write him off; I have heard him speak just once and on that amazingly prescient speech in about Sep 2008 would rate him highly - maybe he has a good speech writer? :)

ouyangjun116

The big decisions are made in Beijing and they can override the provinces decisions at the end of the day. When the "State Government" (Beijing) issues a new ruling for China, it is required to be rolled out elsewhere. Some provinces may not initially get on board and follow, but look at this scenario:

If you were running a business and you set up your business model on a Province decision that was not in line with the Beijing government, how comfortable would you be with your business model for long term sustainability? Knowing that Beijing can come in anytime and enforce the rule on them your business model could essentially not work and your business would suffer and maybe not be able to run.

(note: I have not read the article from Geoff Raby, but intend to do so this morning)

tvan

Hi ouyangjun, I hear what you are saying; and certainly China is much more centralized than my home country. However, I question whether: one, you need to live in Beijing to know and influence government policy and, two, that the Beijing government is the key to doing business in China.

I started up a small medical equipment business here and, as you can imagine, it is heavily regulated by the Beijing government. However, I don't think being in Beijing would give me any advantage; my (Chinese) partner thinks the same thing. Beijing is pretty hard to influence, especially for a foreigner. (Something tells me that it would take more than a few KTV girls to move national policy.)

Regarding Shanghai, I would say that it has three advantages: First, it is the largest port complex in China located at the mouth of China's largest navigable river. Second, as mentioned above it is a financial center. Third, it is not Beijing.

tvan

Hi @bodawei. I read the article and researched him a little. He's certainly a very accomplished man. However, I found myself questioning a lot of his statements, especially re: "understanding China." It wasn't so much that I disagreed with his statement that learning Chinese is not essential to understand China. Rather, it was his implication that he "understood China." It seemed rather arrogant to me.

xiaophil

May 20, 2011, 09:18 AM

I know your point in presenting this article was not about Rudd, but still...

I'm wondering if it was right for Raby to belittle Rudd in this way. I understand that Rudd's term as prime minister didn't end in the way that he would have liked it, but does that mean he doesn't understand China reasonably well? I don't get his point about the Anelects too. I mean, I know that the Anelects won't give a clear picture of modern China, but surely Rudd knows more about China than what he gleaned from the Anelects? I put these as questions because I wouldn't know as well as you as I am unfamiliar with the nitty-gritty of Australian politics. I will say that it felt like Raby's comments were a part of a competition power struggle more than who actually is the better 中国通, and thus I wouldn't put much faith in any negative evaluations either make of each other. This is all assuming that Raby's comments are a veiled reference to Rudd. Which I bet they are.

bababardwan

Not sure we've seen the last of Kevin. The latest polls have his popularity soaring and Gillards plummeting.

"who actually is the better 中国通"

..hehe, love your comments. Also impressed you have something to say on Aussie politics. When the "great debate" was on telly in the leadup to the last election, it was outrated by Masterchef. As one commenter noted , we were more concerned with whether Sandy's souffle would rise than who would be leading the nation.

iaing

May 21, 2011, 04:37 AM

I'm still shaking my head at how Raby thinks he can actually be contributing positively here. These comments are far to general and sweeping to be of any real use other than to raise Raby's own profile/ego and to launch himself into the private sector as a consultant.

Shanghai, may, or may not, be a great place to establish your head office - it depends on what business you do and what your market is. Many firms have key people in key offices all over China doing good work at the appropriate place time and place.

To state that "learning Chinese" is not necessary for "understanding China", was a real kuxiaobude moment for me (its hilarious lack of logic, matched only by the sad knowledge that Raby is still wasting my taxes).

bodawei

May 21, 2011, 01:19 PM

Thanks for everyone's comments. I think the real point of Geoff Raby's speech was to call for a lift in Australia's Chinese literacy, which means far more than learning the language. (The 'Shanghai' comment obviously sparked debate but maybe this is because the truth hurts. Hopefully it will cause people to reflect on what they 'know' about China.) Despite the intensity of our relationship Australians have a long way to go.

Whatever you think of Raby's motives, you would have to admit that both he and Rudd are way ahead of the army of commentators who ciriticise, in this respect.

bababardwan

hehe, love the title of this post mate..very eyecatching.

tvan

"The 'Shanghai' comment obviously sparked debate but maybe this is because the truth hurts."

Hah! Either that or businessmen know more about China than politicians.

bodawei

Thanks mate - it seems I stirred up a hornet's nest. Just reflecting, it seems to me that this 'Shanghai versus Beijing' thing is more hotly debated by foreigners than it is by locals.

From discussions with Chinese it seems it is not a matter worth debating. It is just accepted that certain decisions are made in Beijing.

RJ

May 22, 2011, 10:35 PM

I think you are reading too much into the analects comment. It was:

"Many examples can be found of people who speak Mandarin to a high level but who do not understand how China works," he said. ''They may have learnt their Chinese shut up in their study reading the Analects."

Mr Rudd studied Chinese at the Australian National University under the renowned Sinologist Pierre Ryckmans, who translated the Analects of Confucius.

He is simply saying that you have to do more than learn the language to understand China. Not an invalid point. This is politics remember, he makes cryptic comments about SH but his real purpose here is to get people to question Rudds understanding of China. Maybe SH is not the best place to set up business if you want to serve the entire Chinese market, Sh is not China and can be very different, not to mention expensive. Again I see this as a jab at those who visit SH and think they have been to and are familiar with "China". We all know this is not the case.Whether BJ is better just because decisions are made there, not sure mr Raby understands China any better. (but remember where he was when he gave the speech) He is smply trying to cast doubt on Rudd's position as an old China hand, which is granted him by most, simply because he is fluent in Chinese. I take it Raby doesnt speak Chinese? Anyway, I think the title of the article says it all.

bodawei

Hi RJ

I like your take on this (Rudd is famously difficult to get on with, and he and Raby would be like two old bulls trying to prove they know more than the other on all things China.) But Raby is too smart for this to be only about Rudd, or even particularly about Rudd. He has an important message for Australia and he has been working hard on this for some years. It irritates me beyond belief that Australian business people don't make an effort with either the language or the culture. They usually don't even make an effort to learn how to pronounce a few Chinese names correctly. We are a pretty lazy society; we have to be dragged off our beaches to make a living.

Something I failed to mention is that the story was filed by John Garnaut - in my humble opinion the best foreign journo working in China. Or does he just have an uncanny ability to write things that I agree with? :) His column 'East is Red' appears regularly in two Australian newspapers.

I don't know if Raby speaks Chinese, but he is very sharp. People should read the rest of his speech carefully.

Another analysis of this issue is at: http://www.theaustralian.com.au/news/world/crusade-for-china-literacy/story-e6frg6ux-1226059888990

tvan

May 23, 2011, 11:15 AM

@bodawei, in your experience, have you observed any business people (i.e. specific nationalities) that do take the time to "learn China" better than Aussies?