Lately we have been hearing from US and other foreign investors that the China investment opportunity is a Fad and is phasing out. This is substantiated, they say by several reasons:
1) The true hanging fruits were picked already.
2) There is an overcrowding environment; everyone is there already.
3) Too much money too little deals making for high valuations.
4) There are too many Chinese exits, so the novelty is over and will not happen any more.
5) Oh and the most recent one, after the Olympics everything will die out. (who are you kidding)
Well, this, in my opinion is old school, very conservitative thinking and frankly very narrow minded or are these people just trying too hard to be a head of the crowd.
First of all, these investors do not see China as a long term player but only as a novelty, short term opportunity. This, like I said, is very narrow minded and arrogant.
Wake up People, China is here to stay, as a super power and take its rightful place among other super powers. Is the US not a good investment platform? is Europe or even Israel not still tempting, of course they are they are established and still play in the field, China is not even close to being established and let me let you on into a secret, they are not going anywhere.
Second issue, how can 1.3 B people (and growing) be a Fad and fading out? China is what Israel was 20 years ago, just much (much, much) larger, hence more opportunity.
Getting back to investments, it is true that in the Shanghai region, investments are more expensive, less of an opportunity, because smart people came there first. But again the market will stabilize and with success there will be more opportunities, just like the example in western countries.
But China's low hanging fruit are still out there and waiting for those less spoiled investors who are willing to travel 50Km out of town or into the western parts and there what you find can be outstanding.
Mao, who can be blamed for many things is responsible for some very good business decisions as well, which affect China today, even though they might not have been economic related at that time. He founded areas of technological excellence, such as Chengdu (Nuclear center); Xian (Aero space center); (he founded them inland away from the missile threat of Taiwan) and then developed Wuhan (Electro optics center); and more. In these areas very large and serious companies have been developing in the last 20 years derived from the core business of the area. These are not to be neglected. (I might tell you about one of these in the near future)
These areas have not been touched or tapped yet. Yes they are remote, maybe less English speaking, but since when does speaking English, mark a good investment!?
Friday, July 25, 2008
Tuesday, June 10, 2008
The Middle Kingdom (hidden meaning or not)
The name of "China" in Chinese is Zhongguo (中国). The first character zhōng (中) means "middle" while guó (国) means "Country" or "Kingdom" and commonly translated into English as "Middle Country" or "Middle Kingdom".
Some westerners tie to this name hidden meanings: that China considers herself the center of the world; looking at herself as the most important country with superior rights, deriving from this other hidden meanings like China's desire to control the world and more, but as my colleague Kang Jianxi pointed out to me today, there are no hidden meanings or hidden agenda, that the name simply means as the deep meaning of the first character zhōng (中) - taking the middle way, taking the balanced path without going to extremes of left or right, which is actually the core cultural essence of Confucianism and the Chinese culture.
This really got me thinking that our minds are so corrupt with the way of our power struggles that we assume that everyone thinks the same and has the same power desires.
So does China consider her self the center of the universe, a country that is above all others or a country that just wants to take its rightful place among the nations, as Christian Lou (who is usually a China critic from HK) says China just wants to achieve her rightful place of standing as one of the worlds super powers. (Between you and me, it is about time).
It actually makes a lot of sense to me, and that is how I believe the Chinese and their leaders see it and vision it. China does not want to master the World, does not want to conquer additional territories and anyone who read a little history knows that China has never conquered other countries, if anything they were conquered (before you start, yes there is a controversy about Tibet, but that is a different issue, which I will not go into now, and as far as China is concerned, Tibet was always Chinese territory, but again not our discussion). China wants to achieve its standing, to flourish as they should. China is a country which has went through several transitions and has understood that they can do better and be better. We should applaud this, assist in the making and not see it as a threat but as a deserved goal for a country and people that have struggled and worked very hard to achieve this objective.
So shouldn't we just realize that sometimes, some things are just what they are, with no hidden meaning, and should just be understood and taken literally?
Some westerners tie to this name hidden meanings: that China considers herself the center of the world; looking at herself as the most important country with superior rights, deriving from this other hidden meanings like China's desire to control the world and more, but as my colleague Kang Jianxi pointed out to me today, there are no hidden meanings or hidden agenda, that the name simply means as the deep meaning of the first character zhōng (中) - taking the middle way, taking the balanced path without going to extremes of left or right, which is actually the core cultural essence of Confucianism and the Chinese culture.
This really got me thinking that our minds are so corrupt with the way of our power struggles that we assume that everyone thinks the same and has the same power desires.
So does China consider her self the center of the universe, a country that is above all others or a country that just wants to take its rightful place among the nations, as Christian Lou (who is usually a China critic from HK) says China just wants to achieve her rightful place of standing as one of the worlds super powers. (Between you and me, it is about time).
It actually makes a lot of sense to me, and that is how I believe the Chinese and their leaders see it and vision it. China does not want to master the World, does not want to conquer additional territories and anyone who read a little history knows that China has never conquered other countries, if anything they were conquered (before you start, yes there is a controversy about Tibet, but that is a different issue, which I will not go into now, and as far as China is concerned, Tibet was always Chinese territory, but again not our discussion). China wants to achieve its standing, to flourish as they should. China is a country which has went through several transitions and has understood that they can do better and be better. We should applaud this, assist in the making and not see it as a threat but as a deserved goal for a country and people that have struggled and worked very hard to achieve this objective.
So shouldn't we just realize that sometimes, some things are just what they are, with no hidden meaning, and should just be understood and taken literally?
Tuesday, July 24, 2007
Hasn't China proved her self already? The HK case study
China is still in the mode of having to prove herself to investors; it is still too risky they say, IP infringement, tight local networking makes for a tough glass roof and more and more criticism and objections.
The skeptics among us, ask: Has China really "opened up"? Can they be trusted? What does the Chinese Government really want? What is their hidden agenda? Are they not just trying to lure us into believing in them so that they can later exploit our (westerns) success?
But, the answer is actually quite clear, when presenting the best case study ever – Hong Kong SAR Special Administration Region.
On the first of July 2007, 10 years have passed since the handover of HK to China.
In 1997 when people where getting their foreign passports sorted out and their money transferred to the west, many people assumed that this was the end of HK as they knew it. No more the worlds most Laissez-faire economy, no more the best efficiency, no more: transparency, free press and of course the end to the money making machine of HK. But as the years passed on people started to understand that the Chinese Government has stuck by all its agreements and really has left matters of economy and legal issues to be dealt by the HK government, abiding by the Special Administration Region arrangement.
And lo and behold 10 years have past and HK is still the most Laissez-faire economy. Little by little the HK people started to be proud of there Chinese heritage and started to understand that it is all for the better. They are now part of the biggest growth engine on Earth, the new money making machine "CHINA". Since the handover, business (after a short slump) went up and the pie of opportunities has grown, today HK not only enjoys the growth in HK, but the growth in Mainland China as well.
So now after China "proved", over a 10 year period, that what they really is just to take their rightful place among the leading nations and to be integrated into modern society, have they earning our trust.
I say YES, we can all start investing now……
(For those readers with the conspiracy theory state of mind and knowing the long term vision in China, you will need to wait another 10 years, but for me 10 years, is a good enough retrospect)
The skeptics among us, ask: Has China really "opened up"? Can they be trusted? What does the Chinese Government really want? What is their hidden agenda? Are they not just trying to lure us into believing in them so that they can later exploit our (westerns) success?
But, the answer is actually quite clear, when presenting the best case study ever – Hong Kong SAR Special Administration Region.
On the first of July 2007, 10 years have passed since the handover of HK to China.
In 1997 when people where getting their foreign passports sorted out and their money transferred to the west, many people assumed that this was the end of HK as they knew it. No more the worlds most Laissez-faire economy, no more the best efficiency, no more: transparency, free press and of course the end to the money making machine of HK. But as the years passed on people started to understand that the Chinese Government has stuck by all its agreements and really has left matters of economy and legal issues to be dealt by the HK government, abiding by the Special Administration Region arrangement.
And lo and behold 10 years have past and HK is still the most Laissez-faire economy. Little by little the HK people started to be proud of there Chinese heritage and started to understand that it is all for the better. They are now part of the biggest growth engine on Earth, the new money making machine "CHINA". Since the handover, business (after a short slump) went up and the pie of opportunities has grown, today HK not only enjoys the growth in HK, but the growth in Mainland China as well.
So now after China "proved", over a 10 year period, that what they really is just to take their rightful place among the leading nations and to be integrated into modern society, have they earning our trust.
I say YES, we can all start investing now……
(For those readers with the conspiracy theory state of mind and knowing the long term vision in China, you will need to wait another 10 years, but for me 10 years, is a good enough retrospect)
Sunday, May 20, 2007
To drink or not to drink, what is a gal to do?
Recently we were invited to the Chinese Economic and Commercial Counselor in Israel for dinner and as always the bottles of alcohol (Moutai - Chinese liquor, especially) were being pored lavishly. Having a Chinese dinner is really great fun, meeting new people, eating good food, and drinking. Now, I personally like my occasional glass of wine and alcohol and I might even drink more than one, but even I, who likes to drink, can not totally commit to the expectations of drinking and bonding under Chinese culture.
Drinking in China is a very significant part of bonding; this is a way to check out your partner and to create a strong relationship. The drinking part is actually very clever, only after one takes off their work/professional mask, allowing oneself to be relaxed and truthful, only then, can you really see, who is the person behind the mask. Drunkenness is a kind of a truth serum in which you can measure a man or woman as to there integrity, and see how they behave without keeping up appearances.
To my first question, does a woman have to participate in this custom?
Generally speaking, yes, you should probably agree to at least one drink and make it last for the whole night; this is a matter of curtsy and showing a willingness to cooperate.
I usually stop after the second or third and politely decline additional Gambay (bottoms up), it is usually accepted by my Chinese hosts who then exert more pressure on my male partners (this is one good female perk).
If you really don't like to drink, find yourself chinese female partners, with them this is not a problem, because apparently women all over the world drink less and bonding through drinking is not an issue. (We bond through stories about our children, child raising and occasionally shopping).
In any case when drinking in any circumstance don't forget the usual ratio of 1 small glass alcohol to 1 large glass of water.
Drinking in China is a very significant part of bonding; this is a way to check out your partner and to create a strong relationship. The drinking part is actually very clever, only after one takes off their work/professional mask, allowing oneself to be relaxed and truthful, only then, can you really see, who is the person behind the mask. Drunkenness is a kind of a truth serum in which you can measure a man or woman as to there integrity, and see how they behave without keeping up appearances.
To my first question, does a woman have to participate in this custom?
Generally speaking, yes, you should probably agree to at least one drink and make it last for the whole night; this is a matter of curtsy and showing a willingness to cooperate.
I usually stop after the second or third and politely decline additional Gambay (bottoms up), it is usually accepted by my Chinese hosts who then exert more pressure on my male partners (this is one good female perk).
If you really don't like to drink, find yourself chinese female partners, with them this is not a problem, because apparently women all over the world drink less and bonding through drinking is not an issue. (We bond through stories about our children, child raising and occasionally shopping).
In any case when drinking in any circumstance don't forget the usual ratio of 1 small glass alcohol to 1 large glass of water.
Wednesday, May 2, 2007
The writing is on the wall. Why are Y O U not paying attention!!!!!
- Based on recent growth statistics, China has become the fourth largest economy in the world, trailing only the United States, Japan and Germany and up from the sixth largest in 2004. Some analysts have even estimated that by 2035 China might surpass the United States as the world's largest economy.
- 57% of the leaders of small and medium sized enterprises (SMEs) in the Asian pacific region believe China will become the world's largest consumer market in 10 years, overtaking the United States ( 2007 Asia Business Monitor).
- China will take the "world's champion exporter" title from Germany as early as 2008 and already this year, China will overtake the United States as the world's number two exporter, (predicted Gerd Herx of the federal foreign trade body BFAI) with an estimated US$1.4 trillion in exports in 2008.
- Stephen S. Roach of Morgan Stanly predicted that by 2025 China will overtake the U.S. as the most influential country in global economic growth. Today Mr. Roach is moving to Hong Kong to become head of Morgan Stanley Asia. This 61 year old veteran businessman has decided to experience the most recent economic revolution in the place where it is happening.
It is mind boggling to me how so many people and businesses worldwide still choose to ignore the Chinese market. The excuses are very common: You can't do business with the Chinese; working in China is too risky; they are not trustworthy, they'll copy your ideas and technology and many more.
You must differentiate between the risk and the enormous opportunity. The world has been given a chance to experience a new revolution. An Industrial/high-tech revolution, much more accelerated than we've ever seen before. How can we choose to ignore this prospect? This is the gold rush of the 21rst century and it's less risky than before. If we examine the actions taken by the Chinese government and Chinese businesses, we can see very clearly how they're moving to implement the Chinese vision of becoming equal global players, rising to the level they are entitled to.
Yes, I grant that it is moving slower than some would like, but one should not expect quick changes, because this could bring on dangers of uncalculated evolvement. Let China Evolve and simultaneously enjoy its fruits, because if you join the wagon from the beginning when it is difficult, you have a better chance to be there when it's easier and ripe.
Sunday, April 15, 2007
Four fantastic years in HK
Our beginning in HK was not a very diplomatic one. On our way to HK we decided to take a family vacation in Thailand, which was very enjoyable and very much needed, taking into consideration our very difficult year in Qatar (different story, different time, will tell about it one day). Anyway we boarded Thai Airways almost straight from the beach due to time constraints expecting to be collected by the consulate driver and taken directly to our apartment (we were not fully accredited yet). What we did not expect, was that while we were on the plane the accreditation arrived "entitling" us to a full blown reception by the deputy head of protocol of the special administrative region (SAR) of Hong Kong in the very luxurious VIP room at the HK airport. This was quite embarrassing since we did not look like the typical HK diplomats. We were wearing our very torn jeans and cool tee-shirts with 3 hungry and tired children. At that point we learned the hard way, never to be taken off guard and that we will probably have very few moments to ourselves in this very small Island. Of course the protocol people were very understanding and sympathetic and nothing on their face hinted the awkwardness of the situation, I still wonder what they thought about us at the time.
You might say that HK is not really China and you would probably be right. Although formally HK is very much China, on the other hand it was the perfect micro system, for me to learn the importance of this vast country (China) to my very dear, struggling and much smaller one, Israel. HK opened my eyes to the opportunities for Israeli technologies and companies in China.
Very quickly I saw and understood that Israeli companies have great potential in China. That Israeli companies should put less emphasis on the American and European market because they hold very little growth and although they were the typically traditional markets for Israeli companies there is, no longer any real opportunity there just incremental growth. Israeli companies can not survive or keep there advantage on incremental growth, they need a market that can give them exponential growth, this is the Chinese market. Some companies have come to this reckoning, but others still resist for different reasons. There are those that are perturbed by IP infringement, those that heard of how people lost all their money in China and those that just don't understand or don't what to bother to learn how to do business in China. All of them might be right, but this is no excuse because today there are many ways to overcome these obstacles. The Companies have to look at the bigger picture, when one is given an opportunity like this, no company as strong as it is, can decide not to pursue it. The sooner companies understand this and execute by it, the better. Only then will they continue to be a real competitor in the international rat race.
From the other side of the map, more and more companies and people in HK and China felt that they have a real partner in Israeli companies and that they are really interested in Israeli technology. There was also a feeling that they can communicate well and that this partnership can work in the long run. Israeli companies although seem aggressive are very pragmatic and are willing to go to great lengths to make a deal work. Our technology is flexible and not rigid, it allows for change and different protocols and specs.
People in HK and China were and are always curious to understand what has made Israel so successful in many terms, although it is very small and plagued by war and violence. Unfortunately, in a twist of fate our greatest hardships were those that brought us the most success and fame. On the one hand many of our technological innovations are based on military technologies, and on the other our innovative spirit is due to the fact that in Israel "no" is not an option, in our mind "one" can always find a solution to even the hardest of problems, it is usually not conventional, but it also usually works. We have a motto if you can't enter through the door then try through the window, and this is why we may seem to some as aggressive, pig headed and even at times impolite. For us to get the job done comes first and foremost and one doesn't bother with trivial things like niceties…….(in a few weeks I will write about how to understand and get a long with Israeli business people)
Once people understood the benefits of doing business with Israeli companies, they also understood that Israel being far is not that great an obstacle. At my time and till today you see how the technological exports are on the rise. It came to the point that several of the big companies in HK, would contact our office as a first resort when they where looking for new technology.
To mention just a few of the Israeli technology that were incorporated in HK companies, here are a few examples: Orad Hi-Tec Systems is used in the Hong Kong Jockey Club, providing a dynamic horse tracking system with multimedia presentation for horse racing. Orad's CyberSet Virtual Studio and CyberGraphics 3D Real Time are also used for air graphics for web casting for TV productions in Hong Kong's major TV stations.
Starhome, a telecom company, implemented its Dialing Assistance Service at CSL – one of HK's cellular operator, enabling visitors easy roaming and generating additional revenue for mobile operators,
NICE Systems technology is used at the Jockey Club, insurance companies and 70% of the banks in Hong-Kong for recording customers' calls.
You might say that HK is not really China and you would probably be right. Although formally HK is very much China, on the other hand it was the perfect micro system, for me to learn the importance of this vast country (China) to my very dear, struggling and much smaller one, Israel. HK opened my eyes to the opportunities for Israeli technologies and companies in China.
Very quickly I saw and understood that Israeli companies have great potential in China. That Israeli companies should put less emphasis on the American and European market because they hold very little growth and although they were the typically traditional markets for Israeli companies there is, no longer any real opportunity there just incremental growth. Israeli companies can not survive or keep there advantage on incremental growth, they need a market that can give them exponential growth, this is the Chinese market. Some companies have come to this reckoning, but others still resist for different reasons. There are those that are perturbed by IP infringement, those that heard of how people lost all their money in China and those that just don't understand or don't what to bother to learn how to do business in China. All of them might be right, but this is no excuse because today there are many ways to overcome these obstacles. The Companies have to look at the bigger picture, when one is given an opportunity like this, no company as strong as it is, can decide not to pursue it. The sooner companies understand this and execute by it, the better. Only then will they continue to be a real competitor in the international rat race.
From the other side of the map, more and more companies and people in HK and China felt that they have a real partner in Israeli companies and that they are really interested in Israeli technology. There was also a feeling that they can communicate well and that this partnership can work in the long run. Israeli companies although seem aggressive are very pragmatic and are willing to go to great lengths to make a deal work. Our technology is flexible and not rigid, it allows for change and different protocols and specs.
People in HK and China were and are always curious to understand what has made Israel so successful in many terms, although it is very small and plagued by war and violence. Unfortunately, in a twist of fate our greatest hardships were those that brought us the most success and fame. On the one hand many of our technological innovations are based on military technologies, and on the other our innovative spirit is due to the fact that in Israel "no" is not an option, in our mind "one" can always find a solution to even the hardest of problems, it is usually not conventional, but it also usually works. We have a motto if you can't enter through the door then try through the window, and this is why we may seem to some as aggressive, pig headed and even at times impolite. For us to get the job done comes first and foremost and one doesn't bother with trivial things like niceties…….(in a few weeks I will write about how to understand and get a long with Israeli business people)
Once people understood the benefits of doing business with Israeli companies, they also understood that Israel being far is not that great an obstacle. At my time and till today you see how the technological exports are on the rise. It came to the point that several of the big companies in HK, would contact our office as a first resort when they where looking for new technology.
To mention just a few of the Israeli technology that were incorporated in HK companies, here are a few examples: Orad Hi-Tec Systems is used in the Hong Kong Jockey Club, providing a dynamic horse tracking system with multimedia presentation for horse racing. Orad's CyberSet Virtual Studio and CyberGraphics 3D Real Time are also used for air graphics for web casting for TV productions in Hong Kong's major TV stations.
Starhome, a telecom company, implemented its Dialing Assistance Service at CSL – one of HK's cellular operator, enabling visitors easy roaming and generating additional revenue for mobile operators,
NICE Systems technology is used at the Jockey Club, insurance companies and 70% of the banks in Hong-Kong for recording customers' calls.
First Passover without grandmother
This Passover (1rst-9th April) was the first without my grandmother. My grandmother died on Thursday 29th March, after she was hit by a car. She was an 87 year old wonderful woman that had a great impact on me and on my family.
It's very meaningful that my grandmother died just before Passover, since Passover so much symbolizes her.
First of all it is the holiday of freedom, the holiday that celebrates the people of Israel's transcending from slavery to freedom. After many years of repression in Egypt the Israelites forced their way out of slavery into freedom with all their power and God's might. This was my grandmother other than always taking care of us; one of the most important things for her was her freedom. She wanted to be free to do her thing, not to be bonded by other people's opinions and deeds. She always taught us, as well, that we have to be free in our doings and thoughts.
The other important characteristic of Passover is to be with family. That too was her legacy and she not only talked about it, but did all in her power to get us together and made sure we enjoy one another's company, be real friends and strengthen each other. She always got us together, all generation: my father and my aunt and there spouses are the best of friends; till today one of our best friends is my cousin and his wife and she also got her great grand children together, on her deathbed, they mentioned this very important legacy as there own as well.
So on the holiday of freedom and family, my dear grand mother died, so befitting and typical.
We shall always love and cherish her memory.
It's very meaningful that my grandmother died just before Passover, since Passover so much symbolizes her.
First of all it is the holiday of freedom, the holiday that celebrates the people of Israel's transcending from slavery to freedom. After many years of repression in Egypt the Israelites forced their way out of slavery into freedom with all their power and God's might. This was my grandmother other than always taking care of us; one of the most important things for her was her freedom. She wanted to be free to do her thing, not to be bonded by other people's opinions and deeds. She always taught us, as well, that we have to be free in our doings and thoughts.
The other important characteristic of Passover is to be with family. That too was her legacy and she not only talked about it, but did all in her power to get us together and made sure we enjoy one another's company, be real friends and strengthen each other. She always got us together, all generation: my father and my aunt and there spouses are the best of friends; till today one of our best friends is my cousin and his wife and she also got her great grand children together, on her deathbed, they mentioned this very important legacy as there own as well.
So on the holiday of freedom and family, my dear grand mother died, so befitting and typical.
We shall always love and cherish her memory.
Subscribe to:
Posts (Atom)
