China Business Blog and Podcast

Some insight from Technomic Asia’s Kent Kedl is included in a Time magazine article about China’s entry restrictions for people traveling from Hong Kong.

From the Time article:

Since Hong Kong’s return to China from Britain in 1997, entry to the mainland has become even easier and faster—visas are processed with great speed and little hassle, making entry points into Shenzhen, the booming megalopolis adjacent to Hong Kong, among the busiest in the world. But all this has been upset in recent weeks: the Chinese government has mysteriously stopped issuing multiple-entry visas—an essential tool for Hong Kong’s doing business with China—in a move that has sparked confusion and frustration.

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Most China analysts, though, expect these difficulties to disappear after the Olympics. “They’re having a few jitters, but China isn’t going to cut off its nose to spite its face,” says Kent Kedl, a consultant at Technomic Asia, a Shanghai-based market strategy firm. Plans are already afoot to give Hong Kong permanent residents of any nationality visa-free access to the mainland within the next few years, the kind of privilege that millions of Asians who work in the West can only dream about. “Getting my Chinese staff to the U.S. is an absolute nightmare,” says Kedl. “Let’s have a bit of perspective.”

Read the full story on Time’s Web site.

Kent Kedl appeared on CNBC Asia yesterday to discuss the impact of the China Party Congress on China’s economy and businesses operating in and with China.

One particular issue Kent discusses with CNBC’s Amanda Drury and Sri Jegarajah is China’s policy favoritism toward technology and high-quality goods. They also discuss corruption and intellectual property concerns, but Kent is clear to point out that what happens “on the ground” is what really matters — “What happens in the central government doesn’t really translate down here [on the front lines, in the real world].”

For more on this issue, listen to Kent’s recent podcast on the China Party Congress.

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Today we’re discussing a topic we purposefully avoid on the China Business Podcast: Chinese politics. I’ve had some time to reflect on the China Party Congress itself and the impact it’s likely to have on the business environment here in China.

The party congress is held about once every five years in the Great Hall of the People in Beijing. In addition to making leadership changes, the congress also considers and makes changes to the party’s constitution. For business, the bottom line is that nothing done in this congress will profoundly affect the juggernaut that is the Chinese economy. Political changes can nudge the economy one direction or another, but for the billions of people in China, life will go on much as it did before.

So while it’s interesting, informative and thought-provoking to follow the news coming out of Beijing, it’s not going to make or break whatever potential China holds for your company. For your own business, pay even closer attention to what’s happening on the ground because it’s the people in China who will tell you — through what they do, how they act and what they buy — what the China Party Congress really means.

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And we’re back! Sorry for being out of touch for so long. We’ve been busy with speaking engagements and moving across the globe. I moved full-time to Shanghai — saves the insane amount of travel I was doing before. My partner Steve Ganster and I have been speaking at China-focused events in Minneapolis, Vancouver, Chicago and Shanghai, but now that we’ve settled down a bit, we’ll get back into more regular posts.

Today’s episode of the China Business Podcast covers:

• All the coffee in China: Starbucks’ recent strategy in China and it’s position as a “destination” more than “product”
• New cities for U.S. businesses to consider as they evaluate China
• Changes in the Shanghai government system and its impact on business
• And an invitation to tell us the topics that interest you

As always, you can e-mail me at kkedl@technomicasia.com with comments or questions, or leave a post on the blog at http://technomicasia.blogspot.com.

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The global trade imbalance — which is somewhere around $200 billion between the U.S. and China right now — is something that we can change. There’s no need to wait for politicians and economists to work their bureaucratic magic (or lack thereof). Proactive business tactics are the solution to any business problem — including “the China question.”

Recorded in the days before China President Hu Jintao’s recent trip to the United States, today’s China Business Podcast moves away from discussing things like merger and acquisition strategies to tackle some of the nitty-gritty economic issues surrounding China, its trade imbalance with the United States, the draconian Schumer-Graham bill, China’s currency valuation…all the fun stuff.

The moral of Kent’s story: Be proactive. Be innovative. Don’t think cheaper — think better.

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Today’s installment of the China Business Podcast features Steven Ganster and Kent Kedl, directors of Technomic Asia, offering their insights on the upcoming visit to the United States by Chinese President Hu Jintao.

Ganster comments on the U.S. perspective and offers advice for U.S. businesses, who he says will benefit from “direct engagement” and a proactive approach toward the China market.

Kedl’s comments, which begin at 2:16 in the audio, focus on the Chinese perspective and the importance of understanding China’s goals to help further our own.

Here are some highlights:

• Currency issues are merely a representation of the United States’ current frustration with China, masking deeper economic problems
• The idea that China allowing its currency to float will stop the job emigration toward China is narrow and unrealistic
• Uncompetitive business models and a skewed view of the global marketplace have the greatest negative impact on U.S. businesses, especially manufacturers
• Just like Bush does in the States, President Hu has his own political struggles and needs back home
• In the back-and-forth over whether this trip is an official state visit, the United States sees a “state visit” as a reward for certain actions, whereas China views it as an incentive for action; the difference is a source of tension between the two countries