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Back in the early summer of 2003, at the tale of the SARS outbreak, Beijing was gradually going back to business as usual. I was in a cab to go the U.S. embassy in Beijing for a student visa interview. With the rising sun scorching the earth, I started to sweat, because the cab driver insisted leaving the windows open without air conditioning. His excuse was to keep the air flowing to help prevent SARS. But I knew many cab drivers had the habit of not using air conditioning just to save gas. About 40 minutes later, I arrived in the embassy and joined a long line outside of the gate. I actually arrived early, 90 minutes before my appointment, to make up for the notorious long wait in line. It was not a pleasant experience to stand outside under the summer sun for an hour and half. I also didn't have the wisdom to bring a sun umbrella or a paper fan or to wear casual, short-sleeve summer clothes. By the time I finished the line and was allowed into the nicely air-conditioned security check room, I thought the day was finally going to move on. But the high-tech temperature monitor on the wall caught me. With a sharp beep sound, a security guard immediately came up: "Your temperature is too high. Go back outside and try to cool down." I went outside, desperate. How am I going to lower my temperature standing under the sun? With a dozen other fever-suspected applicants next to me, I asked the guard whether we could move to a tree's shade. The answer, of course, was no. For the next three hours, I tried to meditate and cool myself down with my mind. I was called back to test my temperature several times and failed every time. With the clock ticking, I was almost certain that I was going to miss the visa officers' working hours. They cut off applicants at noon. The next available interview would be 30 days later, and I would for sure to miss the graduate school orientation. Finally, 10 minutes before noon, a manager-looking man brought us back to the air-conditioned room. "We'll give you one last chance in three minutes. Try to relax and cool down." Three minutes of air-conditioning worked wonder. All of us passed the security check. And I got my visa that day.
As the H1N1 flu has been declared a pandemic by the World Health Organization, NPE2009 is taking precautionary measures, including setting up hand-sanitizer stations throughout Chicago's McCormick Place convention center, having all shuttle buses cleaned daily, and making sure all Chicago hotels have instituted additional cleaning measures. In a statement issued today, SPI President & CEO William R. Carteaux said: "It is certainly not my intention to make light of concerns regarding the H1N1 pandemic, but the plain fact is that in the United States, aside from a few temporary school closings, the situation continues to be 'business as usual'. The percentage of the total population affected remains less than one-tenth of 1 percent. Furthermore, after thoughtful research based on mathematical modeling, the World Health Organization decided not to restrict global travel because limiting travel would have very little effect on stopping the virus from spreading. Historical records of previous influenza pandemics, as well as experience with SARS, validate this." The good news is that 30,000 attendees from more than 100 countries have already registered for NPE2009 after the initial media coverage of H1N1. Carteaux said he will bring his entire family and 80 percent of his staff to Chicago for NPE week. All is encouraging. But just as how many American citizens were culture shocked with China's heavy hand on H1N1 prevention (see PN editor Bob Grace's recent column from Chinaplas called " Taking temperature of the flu outbreak"), I can just imagine how Chinese exhibitors and visitors will be shocked that American airports and convention centers don't take people's temperature, that the authorities don't quarantine people who have had contact with H1N1 patients or those who have fever, that Americans are not very nervous about the pandemic. China and the U.S. have very different legal, political and medical systems, population conditions as well as mentalities. Let's hope everything goes smoothly at the upcoming NPE show, and everyone remains safe and healthy.
Jessica Bellas' new book "Maotai, mooncakes & monks: Misadventures in Hong Kong & China" is not one of those how-to guides. It is a collection of light-spirited essays that vividly reflect an American expatriate's first impressions of and culture shocks mostly in Hong Kong. The title of the book is quite telling itself. Maotai is a famous brand of high-end Chinese rice liquor often served at business banquets on the mainland. Bellas' demonstrated ability to drink large quantities of Maotai won her a job offer from a government official from Zhejiang province, because toasting Maotai is a fundamental practice that builds bonds and lubricates business and government relations. The mooncake, on the other hand, is a traditional Chinese pastry for lunar worship and moon watching during the Mid-Autumn Festival. There are many varieties of mooncakes in different regions, and innovative new flavors keep coming out, such as the ice cream mooncake by Häagen-Dazs. Bellas didn't particularly enjoy the Cantonese mooncakes offered by her Hong Kong colleague. "This must be what it would be like to bite into a hunk of lard," she described the taste of the "bean-flavored, pastry-enclosed lump of jello." I don't blame her. My own colleagues, the adventurous ones, at Plastics News also found it hard to like the mooncakes I brought to the office. The mooncake is indeed on the top of my own list of "famous Chinese food that Westerns hate." What else is on the list? There is Zongzi, a chunk of glutinous rice stuffed with fillings and wrapped in reed or giant bamboo leaves. People eat Zongzi during the Dragon Boat Festival, commemorating the death of ancient patriot poet Qu Yuan. What's the story behind monks? Bellas encountered a wild monkey irritated by her photo flash during her tour of Hong Kong's Ten Thousand Buddhas Monastery, which I visited a number of years ago. I'm just glad the angry monkey didn't attack Bellas or anyone else. The book's subtitle "Misadventures in Hong Kong and China" seems to be hinting that the book is intended for Westerners only. I make this speculation because it's not politically correct to juxtapose "Hong Kong" and "China", at least not from the Mainland perspective, just like how the Americans won't appreciate the saying of "Texas and the U.S." Adsale the Hong Kong organizer of the Chinaplas trade show, for example, consistently uses the official name of "Hong Kong Special Administration Region." In the English version of its Web site, it refers to Taiwan as "Taiwan", while the Chinese version phrases it "Taiwan province of China." Right or wrong, the matter of fact is, nobody can succeed in China without handling political correctness properly. Regardless, this book is a refreshing and fun read filled with passion, humor and wit. More information can be found on www.tamcopublishing.com.
Cangzhou Mingzhu Plastic Co. Ltd. announced last week plans to acquire Dezhou Dongli Plastic Co., whose main assets include two biaxially oriented nylon film extrusion lines with combined annual capacity of 9,000 metric tons. Mingzhu has one existing BOPA line and one under construction, each with 4,500 metric tons of annual capacity. The deal is priced at 112 million yuan, which industry insiders say is a good bargain. "Mingzhu tried to rake up 108 million earlier this year for the 4,500-metric-ton new line," securities analysts said. Publicly-traded Mingzhu said Dongli's two lines are not running due to managerial and technical problems, which will be resolved with Mingzhu's expertise. Mingzhou is a joint venture between Hebei Cangzhou Dongsu Group Co. Ltd. and Hong Kong Juhong Co. Ltd. It makes polyethylene pipeline systems as well as films. It claims annual processing capacity of 180,000 metric tons. Its second BOPA line is expected to be completed by summer 2010.
We've heard about the rising wages in China's industrial regions and its negative impact on the nation's competitive advantage as a manufacturing base. The labor contract law introduced last year also is believed to be elevating labor cost by mandating worker benefits, for one. So how much really does it cost now to hire an injection press operator? Certainly the location matters. In Zhejiang province - one of the richest regions on the east coast -- some injection workers are paid a mere 4.3 yuan ($0.63) per hour, according to an investigative report from the Zhejiang Workers' Daily. The employer, Ping Xing Electronic Co. Ltd. in Leqing city, also pays an extra 30 yuan ($4.38) monthly allowance if the worker goes to work for no less than 28 days in that month. Moreover, the president of the local workers' union admitted that most factories in Hongqiao Township have longer than legal working hours. Many don't provide benefits or written contracts. "Only a few large companies have relatively proper practices." If the sample is still too small, let's go to the popular job hunting sites. When I searched for injection press operator positions on www.zhaopin.com, a Chinese equivalent of www.monster.com, these results popped up (city, company, monthly wage):
• Suzhou, China Shuheng Pipe Clamp Manufacturing Co. Ltd., 1,000-2,000 yuan (US$146-293)
• Chengdu, Push Medical Plastics Packaging Co. Ltd., 1,000-2,000 yuan (US$146-293)
• Changchun, Joyson Automotive Components Co. Ltd., 1,000-2,000 yuan (US$146-293) As a matter of the fact, the smaller molding shops that don't recruit through online ads pay even less. I don't agree with notion that the decline of foreign investment means China is losing its competitiveness against other low-cost manufacturing locations. China's slowdown is a natural response to the global adjustment of over-consumption and overproduction. The abundance of labor supply during a downturn keeps wages even lower. I do feel bad for the workers. The labor contract law gave them a good opportunity to secure better pay, working terms and benefits, but the global recession disrupted the government's plans to upgrade the economy. Now, where is China going?
A newly-released blockbuster movie is shaking China. The black-and-white "City of life and death" has a powerful Chinese title "Nanking! Nanking!" and gives the audience and the public an extremely emotional ride. Nanking - usually spelled Nanjing these days - is a city with rich history. It served as China's capital during six dynasties. The word Nanjing literally means "south capital". When thousands of years of feudalism finally ended in 1911, Nanjing rose again to be the capital of the Republic of China. Growing up, I paid many visits to Nanjing, about an hour from my hometown. At least a dozen times, I went on school-organized tours to pay tribute to historic sites, including the Memorial Hall of the Nanjing Massacre, which is the main theme of "City of life and death". The truth is: you can't understand the Chinese people without understanding their history. So much has happened in 5,000 years, including glorious moments and dark times as well. After years of living in the U.S., I've realized that many Americans (and other Westerners) have a hard time sympathizing with Chinese people's feelings toward history. They have legitimate reasons. From the 1840s to the 1940s, China and its people were invaded, colonized, enslaved and slaughtered. One of the world's earliest and best places of civilization was in the dark for a century. Not long after the People's Republic of China was founded in 1949, the Great Leap movement led to severe famine, followed by the Cultural Revolution that damaged not only economic growth but also cultural heritage and people's values and faith. All that, associated with shame, anger and distrust, is still vivid in Chinese people's minds. In my eyes, much of China's economic miracle has been created with the will and motivation to make the country strong, independent and respected again. I know, 1.3 billion people, they are all different. Some people show more patriotism than others. But it will serve you well to keep in mind how Chinese people feel about the past two centuries. If Nike had done so, it wouldn't have come up with the ad featuring LeBron James slaying a Chinese dragon and a kung fu master, which was deemed an insult to China's national dignity. The ad was consequently banned. Chinese people's emotional sensitivity also stems from the culture. They don't have the sense of American humor. From a Western perspective, they take everything way too seriously. They don't give themselves a break. But that's who they are. That's what history has made them into. Perhaps you can't make sense of it, but please, at least accept it.
In an April 29 open letter, the U.S. Business and Industry Council President Kevin L. Kearns rightly pointed out the lack of attention the domestic manufacturing crisis has received in President Obama's first 100 days in office. This trade group takes a very conservative - often protectionist - stance on trade issues, but the letter raised some good points. Here are some excerpts: Yes, there is a crisis in the financial sector that requires attention, but there is a larger, cascading, and potentially more devastating crisis in the manufacturing sector, which unlike banking actually creates wealth.To date, your economic team's approach seems to be trillions for banks, but hardly a dime for manufacturing. You save wrong-doing financial houses from failure, but send good-faith, if sometimes poorly run, manufacturing companies into bankruptcy - a formula for disaster.The current economic crisis is ultimately rooted in America's longstanding failure to produce as much as it consumes. Without doing so, we cannot create the wealth needed to pay our way in the world and ensure a high standard of living for our citizens at home. Debt-financed "prosperity" was an illusion.The only way forward is for America to make and consume more domestic products, and cut imports and the foreign borrowing necessary to buy them. ...
The solution to our economic problems is not to print enough money to return to the previous unsustainable global trade regime. Rather, we must rebuild those parts of the U.S. economy that actually create wealth within our borders, and therefore restore a prosperity financed by earned income rather than by reckless borrowing.
The same letter condemned foreign countries' "predatory trade practices, including currency manipulation, VAT export rebates, government subsidies, IP theft, industry-government collusion, foreign cartels, dumping, closed markets, etc." It went on and called for the President to "administer some 'tough love' to our trading partners and a world economy still dangerously addicted to exporting to overextended U.S. consumers." If I'm reading it correctly, it's alluding to the administration's decision to not cite China as a currency manipulator, which is one of those things without quick answers or solutions. When a nation is faced with both internal and external problems, how should those issues be prioritized for maximized results with limited resources? In the manufacturing case, some real change from the domestic side will be a good start and actually increase the nation's bargaining power in global trade negotiations.
It feels like a long time ago, probably because subconsciously I just don't want to revisit what happened in the spring and summer of 2003 in Beijing. But the ongoing swine flu (or "influenza A (H1N1)") scare revived my memory of the outbreak of the severe acute respiratory syndrome. In hindsight, SARS started in the early weeks of 2003 in Guangdong province. The government initially denied its existence and then underreported cases, as the virus quickly spread out to other regions and countries. Eventually, more than 600 Chinese residents died of SARS. The government's mishandling of the epidemic sparked anger from within and outside of the country. But the dry facts don't do any justice in revealing what individuals experienced in that crisis. I'm sure everyone has a different story. Mine started with school closings in Beijing. In the middle of the spring, more SARS cases were confirmed in the nation's capital. Authorities ordered a lockdown of all college and university campuses (yes, they were gated and guarded). Without special permission, nobody could leave or come in. Classes were canceled. Life became very simple - studying at the library, eating at the school cafeteria, and sleeping in the dorm - until one evening, I injured my right ankle when playing badminton (we were advised to exercise to strengthen our immune systems). I was immediately sent to the school hospital on campus. After a brief check-up, the doctor taped up my painful and swollen ankle and prescribed pain killer. Fearing of bone damage, I asked for an X-ray exam. The doctor said: "Are you sure? At this point, we only send suspected SARS patients to the X-ray lab." One major SARS symptom was the buildup of fibrous lung tissue, which shows on X-rays. So I decided to skip X-rays and use traditional herbal ointments, which were mailed in by a relative outside of Beijing. In short, it took a year and half to heal that ankle. At the end of the summer, when things came back to normal, I finally had an X-ray, which showed abnormal balance of bone density and slight misalignment. The doctor said the only way to fix it would be to break my ankle again and realign the bones. But I was all set to come to the U.S. for graduate school. I never since had the time (or the courage) for that treatment. I'm glad that the Chinese government appears to be taking plenty of precaution and maintaining transparency this time. Although China so far doesn't have any confirmed cases of swine flu, health checks are being conducted. National leaders are working with international organizations and other countries to fight swine flu. Let's hope the outbreak doesn't get much worse.
Recent media reports from China revealed disturbing news on the making of fake eggs with synthetic resin and pigments. A number of investigative reporters across regions visited "fake egg masters" who hand make and assemble egg yolk, egg white and eye shells. These fake eggs are being sold as regular, edible eggs. Consumers usually don't find out until they notice the unusual texture of the eggs during cooking or eating. Photos and videos of the process are posted online, such as here. So far, there is no official conclusion on the effects of these fake eggs on human body. But media reports have quoted experts advising consumers not to eat them. There is a lot that can be said about this, from business ethics to consumer rights. We all know that China needs better enforcement of intellectual property laws, but in this case, who owns the intellectual property of eggs? Mother Nature? Ironically, the egg counterfeiters actually claim their "independently invented production techniques." One counterfeiter said he spent years developing "innovative" methods that make fake eggs "flawless". Coincidentally, earlier this month, the owner of an injection molder in Wuhan said it took him hundreds of thousands of yuan and two years' of "research and development " to come up with "quality knockoff car parts." The operation was busted by authorities, according to the government Web site. What the two cases have in common is that the ultimate goal is cost reduction, which seems to be what some Chinese businesses embark on. You'd wonder why they are willing to invest the capital, time and talent on knockoff projects? Why wouldn't they do normal, legit business? Among all reasons, I think an important factor is the severe deficiency of business knowledge and skills that are required in original product development, launch, marketing and brand management. It's easy to imitate, no matter how hard the imitation process is. It takes much more to develop marketable and profitable new products from scratch. Many Chinese businesses understand their weaknesses and simply decide to take a short cut by making knockoffs. Meantime, the government is not doing a job of banning these illegal and unethical shortcuts. These shortcuts don't lead to real, sustainable success. They bring short-term financial gains for some individuals, but also cause long-term damage to the society.
Thanks to globalization, one nation's fiscal spending to stimulate economic growth is bound to "leak out" to the entire global supply chain. For example, China's move to subsidize big-ticket item purchases - such as appliances, cars and electronics - in rural areas is bolstering sales for Japanese and Taiwanese suppliers, among others. Chinese financial media CBN cited a report from Nihon Keizai Shimbun saying that Japanese material suppliers, including Mitsubishi Chemical Corp., have raised their ethylene capacity utilization rates to 75-90 percent. The report attributed the change to China's growing demand as well as the ending of the industry's inventory adjustment. Taiwan Union Plastic Machinery Co. Ltd. also reported 10-15 percent sales growth in the first quarter, when the company said it sold more than a dozen large injection molding machines (with clamping forces of more than 1,600 metric tons). The company's 2008 sales contracted 5-10 percent, according to a news story from Xinhua News Agency. "We didn't expect to see the effects [of the stimulus package] so soon," a company official said, "We believe the growth rate will reach 20 percent for 2009 fiscal year."
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Since the launch of our Plastics News China eWeekly newsletter and related Web site in June 2005, I've been receiving e-mails and phone calls from readers who would like to discuss news events and industry trends with me. This blog is to provide a platform to facilitate such communication. I invite you to come here often, read about the latest happenings and discuss them with me as well as with industry friends all across the globe. I welcome your comments and opinions.