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How Google lost its self-inflicted struggle - Kaiser Kuo

Kaiser Kuo by Fantake via Flickr

When we started in January our little sequel "Why Google is leaving China", people asked us if it would not be an option for Google to stay in China. Even in the early start of the problems Google inflicted on itself, the question was more when and how much of Google would leave China, not if.
The company announced publicly it would no longer censor its search engine a China, a requirement for any internet company working in China. Obviously, you do not have to like that, but publicly defying any government would cause a backlash. And the option of Google reversing its stance seemed also a rather remote possibility.

But Google made it in the past few months even worse, explains Kaiser Kuo to the Mercury News, by further damaging its already impossible position:

With Google running a distant second in China to Baidu.com in Internet search, Kuo said many Chinese Internet users may care more about preserving Google's popular Gmail services than Google.cn search. Google, he said, lost public sympathy in China when Secretary of State Hillary Clinton made a speech about Internet freedom just days after Google made its initial threat to stop censoring its search results.

"That sort of gave confirmation to the Chinese suspicion that Google and the State Department were sort of in cahoots on this," Kuo said. "I've seen a lot of Chinese people who might have been quite sympathetic to Google circle the wagons, and say they are concerned by this American scheme to try to destabilize China through this whole business of Internet freedom."

While shutting down its search engine seems a matter of weeks, Google seems to try to keep other services going, says Kuo:

Google "will probably shutter Google.cn" while keeping its research center open and preserving a market presence for Google's Android mobile-phone operating system and Internet-based services like Gmail, said Kaiser Kuo, a China Internet expert who has been following the
confrontation from within China. "It's not a great outcome. It's not the best thing possible for the Chinese Internet user, but it's not as ugly as it might have been."

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Kaiser Kuo is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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A dead body in front of your office- Mark Schaub

Mark Schaub by Fantake via Flickr

The battle stories on doing China business in the past illustrate how much China has changed for the better. Shanghai-based Lawyer Mark Schaub recalls in the book A Changing China, produced by the Chna Speakers Bureau, how his legal profession has become much more professional over the years.
But still, the old stories are too nice to be forgotten, and Mark Schaub recalls one very specific incident with a client in Wuxi:

On a Monday morning around 10 o'clock I received a call at the office; the person calling was very nervous. He said there was a dead body in front of his hotel door. At first I thought it was a joke, then I realized that he was a German and it wasn't therefore likely to be a joke. What had happened was that on the previous Friday, a 35-year-old man had a small accident at the factory. The company didn't have any relationship or procedure in place to deal with the local hospital. When they took the man to the local hospital, the hospital said it was going to cost 7,000 yuan to fix him up. It would be expensive to sew him up.

They went back to the factory to try to get money. They collected about 3,000 yuan. The doctor said

A Changing China 91 they weren't trying hard enough to get the money, and the injured man actually bled to death in the hospital. His family members recovered the body and put the body in front of the general manager's hotel room door. Then things got even more out of hand for the general manager.

Relatives and friends were bussed in from all the over the place and staged a riot at the factory.

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Mark Schaub is a speaker at the China Speakers Bureau. You want to hear his legal battle stories in person at your conference? Do get in touch. 
More battle stories from a large number of our speakers you can find in A Changing China. You can also get a free review copy in pdf format.

China scenario's for Google - Kaiser Kuo

Kaiser Kuo by Fantake via Flickr

(Now updated with the original speech at YouTube)
In his speech at the famous Austin SXSW China's prominent internet watcher Kaiser Kuo closed his keynote with a few scenario's Google has in China. Google threatened to leave China in January after hacker attacks in December, said it would stop censoring its China search engine. But neither has happened, while the tension has gone up. In a summery of ReadWriteWeb:

Kuo said that the Chinese government will wait for Google to make the next move. It realises it has nothing to gain by pushing Google or being openly hostile. The ball is in Google's court and it will probably keep to its word that it will stop censorship in China. It may still shut down operations in China, which in practice means closing google.cn. But this has a lot of problematic scenarios - including the difficulty of having translations done for Google.com and staffing issues of closing down.

The pros of pulling out of China include saving face and appeasing western users. But the cons are significant. They include a backlash from tech-savvy, urban Google users, a setback to scientific research, a global black eye for their image, and ceding the virtual monopoly in search in China to Baidu.

The moderate scenario is that Google.cn is shut down, but continues to work with its mobile partners in China, R&D and sales continue to operate in China, and Google services will be unblocked.

The best case scenario, Kuo believes, would be if Google stopped censoring google.cn - but the service stays online.

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Kaiser Kuo is a speaker at the China Speakers Bureau. When you need him at your conference, do
 get in touch.
Kaiser Kuo also contributed a chapter to our book A Changing China, describing the history of rock music in China from his own perspective.

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Expected: a massive bailout of banks - Victor Shih

Victor Shih by Fantake via Flickr

A massive bailout of China's major banks might be one of the options to let them recoup much of the 2.4 trillion Renminbi (255 billion euro) spend during the recent financial rescue operation, says professor Victor Shih to BusinessWeek today.

“The most likely case is that the Chinese government will engineer a massive financial bailout of the financial sector,” said Shih, a professor who spent months researching borrowing by about 8,000 local government entities.

Chinese officials pledged this week to limit the risks posed by the investment vehicles, which circumvent restrictions on local-government borrowing to channel money into stimulus projects. Yan Qingmin, head of the banking regulator’s Shanghai branch, said March 5 that China plans to nullify guarantees provided by local governments for some loans.

It would not be the first time, China's ministry of finance would jump in to clean up the books of its commercial banks. The five larger banks emerged from the planned economy with many bad loans and a tradition of lending out money without much hope of ever getting it back. That operation has been rather successful, but has suffered a strong setback during the most recent years.
Shih is rather pessimistic when it comes to fast solutions:

He said that if the central government stops lending to the entities now, the cost of a bailout may already be “in the neighborhood” of 3 trillion yuan.

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Victor Shih is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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China's rich in global top in 15 yrs - Rupert Hoogewerf

by Fantake via Flickr

China's billionaires keep on collecting more wealth and the Hurun founder, Rupert Hoogewerf, the China rich list, expects them to reach the global top in 15 years, when the economy keeps on growing, he tells the People's Daily.
The newspaper focuses on Zong Qinghou, the owner of the wildly successful Wahaha group, China's leading soft drinks producer.

The richest man in China is Zong Qinghou, who runs the multi-billion-dollar soft drink firm Wahaha Group. Zong is ranked 103rd on the list with an estimated wealth of around $7 billion. Not only has he nearly tripled his wealth from $1.9 billion in 2008, he has also improved his standing from 376th earlier. 

Plain-suited Zong, who is also a deputy to the National People's Congress (NPC), told China Daily on the sidelines of the ongoing session that he was not surprised at his ranking considering that his company has been extremely profitable in recent times. 

Rupert Hoogewerf, the British founder of Hurun rich report, said Zong's ranking does not come as a surprise. "Wahaha means 'laughing children' in Chinese and is one of the most valuable brands in the country. The self-made billionaire has always been focused on being the leader in the beverage segment ever since he started his firm in 1987," he said.

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Rupert Hoogewerf is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

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A Chinese patriot, heading for European parliament - Zhang Lijia

Zhang Lijia by Fantake via Flickr

Author Zhang Lijia of the bestseller "Socialism Is Great!": A Worker's Memoir of the New China might be building fame fast outside China, but her interview with the Global Times is a breakthrough. While no political activist, she is also not always toeing the official bureaucracy. But at least in the English-language media, times are slightly changing.

"As you know my view is not always in line with the government, though I regard myself as patriotic," she says, even before the interview.

Despite the odd actions of the powers that be, Zhang is no political activist, and her book is no Cultural Revolution related diatribe like many Chinese authors before. Instead she tells the tale of a young woman growing up and working in the Liming factory in Nanjing, one of China's furnace cities, making intercontinental missiles that could reach America.

Her plans for the future are no less remarkable. As Zhang Lijia holds a British passport, she can enter European politics. In the Global Times:

"I've had a great time in China, It's very vibrant and interesting, and I definitely don't have plans to move. One possibility is that I'd like to try and become a Member of the European Parliament. I just think that it's disgraceful that there are no members that are Chinese, they have them from India and everywhere and China has become too powerful to be ignored. They have to understand how to deal with China.

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Zhang Lijia is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch.
Zhang Lijia also contributed to our book A Changing China
.

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