Weekly Update

The Google Commentariat...
Some Twisted Logic Going On Out There

Search Google for comment on Google in China and there’s rather a lot of it. It’s been penny for your thoughts time and anyone who’s anyone, and even more people who are no-one, have weighed in. Some of it interesting; most of it not. Take out the one or two sensible and informed comments, throw out the voluminous nonsense and what you’ll find is that you are left with a vast amount of comment by what might be termed the ‘China Business Firsters’. This group is largely comprised of consultants and talking heads who, in one way of another, are trying to sell you something – usually themselves in a cheap suit and their opinions on China (Eerr, pot, kettle, black: Ed). They are a vocal and historic group – they’ve been around since the 1820s at least. Their basic argument, such as it is, is as follows: China is a massive opportunity; China is a place you can profit; don’t criticise it and always find reasons not to. The basic aim is to get you to believe in their God, and then, once you’re persuaded, to get you to make a donation to their church.

However, as this newsletter likes to point out, the silliness and confusion around foreign business in China, and the arguments of the China Business Firsters when it comes to Google, are a prime example of their invariably rather tortured logic. Boiled down, their argument has been going, repetitively, something like this:

1)       Google’s presence in China is a force for good as its existence somehow helps China to ‘change’ and this is true of all foreign businesses and, of course, all foreign consultants;

2)       In entering the Chinese market, Google accepted certain restrictions and impositions. In order to remain, and having made these initial concessions, they should not complain when additional restrictions and impositions are placed upon them;

3)       Google is not really interested in internet freedom as such but rather, having not been particularly successful or dominated the market in China, is looking for an exit strategy which somehow blames China and the Chinese for their own business failings and not hiring enough consultants.

You see, we hope, the twisted logic of the China Business Firster argument.

Firstly, everyone, anyone and any company should be in China as this is promoting ‘change’. Secondly, the expected prize is such that all impositions should be accepted and once you have entered the process you should accept any and all impositions (this may be termed the Appeasement strategy, or alternatively, the ‘Chamberlain Gambit’). According to this argument there is no point at which you can opt not to continue the process – you have entered a highway with no turn offs, no U turns allowed, apparently. Appeasement is an unchangeable position rather than a momentary tactic. Third, and this is where the China Business Firsters really get themselves in a mess, the very people who are helping ‘change’ China are also part of a corporate conspiracy to undermine China due to their lack of business success.

This is, of course, a completely lunatic argument which makes no coherent sense outside the pages of a Dan Brown penny dreadful. Corporations cannot be, as the Business Firster argument has it, both benevolent and agents of progressive change and vast organisers of conspiracies dissembling their way into a row such as Google now finds itself embroiled in. As for the idea that concessions once made must then be forever accepted and any further concessionary demands acceded to because some sort of principle has been established with the initial concession – well, all we can say is that we suggest you Google ‘Neville Chamberlain’ and see where that leads.

I have in my hand a piece of paper signed by Herr Net Nanny...

This week’s non-appeasing Access Asia Weekly Update aspires only to burst free of the Great Firewall to bring you details of our new reports on Retailing in China and Condiments, Sauces, Spreads, Spices & Herbs in China (A mouthful we realise, but we cannot think of a suitable cover-all word for these sectors), as well as: the dangers of bankers being told they’re well-rounded individuals and wanting then to tell you; the usual EXPO balls; is Tesco about to embark on a disastrous strategy in China after a snafu in Wales?; and Shanghai’s most hopeful shopkeeper.

And don’t forget kids, Access Asia’s End of Haibao Countdown Clock tells you its 270 days till the end of the EXPO!

Access Asia Reports News

Our annual report on Retailing in China is close to publication, and should be out by the end of this week. This year’s update is, we think, a much stronger report, with more detailed analysis of each key sector of the retail market, including sections on retail pharmacies, fashion and sportswear retailing and petrol stations, while we provide comparative financials for the 100 leading listed retailers in China, and market share analysis of the key retail sectors.

Meanwhile, we are now cracking into a long-overdue update of our report Condiments, Sauces, Spreads, Spices & Herbs in China. Not the catchiest of titles, but the English language seems to lack a handy, cover-all term that gathers-in all of these products, which fail to fit into other report sectors. The CSSSH sector is useful as an indicator of how sophisticated the food retail market is getting in China. It is interesting how Chinese consumers are increasingly buying such products thanks to their greater interest in various home-cooking cuisines, and greater access to the kind of modern grocery retailers that sell such stuff. It is also interesting that if you do an online search for “spreads in China”, you get quite a few articles about syphilis!

Looking further ahead, we are also kicking off reports on:

[       Dried Foods in China: just add water;

[       Baked Foods in China: cakes, bread, bagels, buns, etc.;

[       Soya Products in China: stinky tofu, chewy tofu, soya milk, etc.;

[       Hot Drinks in China: tea, coffee and those vile malty brews;

[       Oils & Fats in China: the stuff the grannies literally kill each other for on cut-price day at Carrefour.

EXPO Ball of the Week

The Southern Sky mountain Column in Zhangjiajie, Hunan province, will now be known as the Avatar Hallelujah Mountain. Local officials said photographs of the mountain had been used as the basis for Avatar's fictional world of Pandora, which may or may not be the case. Rumours that Shanghai is planning to rename the EXPO site Titanic Flats after the great movie inspired by Shanghai’s property market are strenuously denied.

Some are getting a little carried away in the madness of the Blogosphere. This from a blog called Alternative Airlines:

“In scale, scope and commercial impact the Shanghai Expo 2010 will far exceed anything that the Beijing Games achieved and is likely to exert a massive influence”...blah, blah, blah

While the hopeful are still issuing press releases – none more so than the Czechs:

“Official: Czech exhibits to dazzle visitors to Expo 2010: the forefront of the building will depict the Old Town of Prague using 40,000 pucks, the black rubber disks used in ice hockey.”

That is quite, eerrrr, dazzling... and then there will be a tribute to a man who would truly have appreciated the bizarreness of the EXPO – Franz Kafka – who almost once wrote a story about a man who went to bed and woke up looking like a Haibao! (And if you don’t get that joke, you’re poorly educated).

Kafka – looking Kafkaesque

Is Tesco About to Alienate Its Core Customer Group in Shanghai?

Shanghai’s honest consumers are well known for their charming and eminently practical habit of wandering down to the shops in their pyjamas to pick up their groceries of a morning, afternoon, or evening. Despite many a plea from some local politician that such behaviour is apparently ‘uncivilised’ (we recently asked an official why every building in Shanghai was being painted with cream paint when none had ever been traditionally – he replied that ‘cream is civilised’, so now you know) Shanghai folk have stuck stubbornly to their traditions, in the face of mass etiquette sermons on international norms delivered by senior officials who drive into their McMansions full of Louis XIVth furniture on gated ghettos with Spanish names in American cars. Shanghai consumers may not stand up for many rights, but popping down the shops in your jim-jams is one they do hold dear.

But Tesco may decide it does not want PJ-wearing customers spending their hard earnt RMB in their stores. They don’t in Wales apparently. A Tesco store in Cardiff has banned customers from wearing pyjamas while shopping. Mother-of-two Elaine Carmody, 24, was refused custom when the policy was introduced at the St Mellons store. You may wish to listen to a semi-literate defence of jim-jam wearing while shopping in Wales here.

Will this policy be extended from Cardiff to Shanghai? Will beefy security guards turn away old ladies in PJs in need of a bottle of cooking oil? So far it appears not, which means the Welsh are being unfairly targeted. But then, who cares? Wales has less than 3 million people, about the same number that are, at this minute, lining up to buy things at a Tesco store in Shanghai.

Still OK in Shanghai – BANNED in Cardiff

Access Asia Books...
A Simply Stunning Tour de Force in the ‘A Little Knowledge is a Dangerous Thing’ Genre

Apologies for a longer than usual review, but never have we been sent a book quite as mad as this before!

Eventually the historians will get to work interpreting the financial crash of the last two years (the real historians that is, not the Niall Ferguson instant historian-pundit-bloviators). It is likely that many of them will come to the startling conclusion that bankers can be idiots, who are allowed to operate way above their intelligence level with somebody else’s money. This has, of course, been the case in past financial crashes. But perhaps never has a senior banker actually written a self-confession that forms an admittance of weak intellect and appears to blithely accept no responsibility for anything until Stephen Green of HSBC was handed a publishing contract.

For the record, Green was CEO of HSBC between 2003-2006, and is now Chairman. He is not an innocent bystander of the last few years, but one of the architects. So the absurdity of his newly published book is all the more shocking. Green’s Good Value: Reflections on Money, Morality and an Uncertain World is quite simply the most bonkers book to appear for quite some time, and will (we believe) become the book that defines the true level of stupidity and vaingloriousness of the senior bankers who created a system that could crash so severely (unless Fred Goodwin writes a book about charity and thinking of others first). Any judge faced with Green in the dock and handed this book as evidence would call in the men with the white coats.

What Green has served up consists of a most bizarre and rambling opening 100 pages of random thoughts on world history and economics of the sort weak A Level candidates hand in. He’s clearly read a few books – the problem is he has clearly ONLY read a few books. This section mostly consists of retelling some historical anecdotes most people know and précising the populist sort of Wal-Mart non-fiction as typified by Thomas Friedman. Thrown in are some weak observations on the rise of the city, a misinterpretation of Marx’s concept of alienation, some more A Level-type thoughts on existentialism, and on, and on. Then we get to his analysis of the crisis... and here Green comes over as totally bonkers, rather than just marginally read. A few quotes:

‘There were warning signs, and the first breezes of the oncoming hurricane were detectable as early as 2005’ – remember Green was CEO of HSBC at this point! He also claims to have been aware in 2005 that ‘America was living beyond its means’, ‘world markets were looking extremely stretched’ and that he had a ‘growing sense that at some point the music would stop.’ And on, and on like this. Sorry to ask the obvious but – WHEN EXACTLY DID GREEN THINK HE MIGHT LIKE TO SHARE THESE THOUGHTS OF IMPENDING ECONOMIC COLLAPSE WITH US MERE MORTALS?

It gets madder too. While CEO of one of the world’s biggest banks, Green then offers some reasons why the system collapsed – banker hubris? Lack of regulation? Casino capitalism? Oh no, apparently poor bankers were just very tired! ‘when the history books are written about this period, I believe they will miss an important dimension if they do not focus on the pervasive stress and the sheer tiredness of those involved – whether policymakers, regulators or bankers.’ Damn! If only he’d told us he was tired early, the IMF could have given every banker a nice pillow, a few days off and a Radox bath and we could have avoided a recession!

In the end, of course, Green doesn’t blame himself, doesn’t blame his friends, (interestingly) never really comments on China (except glib notes about urbanisation, etc. because HSBC wants to do business there) and decides that all this mess must be due to ‘some, possibly criminal, individuals’ who remain nameless but very hubristic and stand in the tradition of, ‘a long line down to the present day of individuals who have manipulated the markets, beguiled society, defrauded investors – and all in a desperate search for recognition, for admiration, for acceptance.’

Dare we suggest individuals like Stephen Green? And dare we suggest that a ‘desperate search for recognition, for admiration, for acceptance’ could lead one to write a book attempting to exonerate themselves from any blame for the recession?

We do and we are. Read the 200 pages of mad, cobbled together incoherent rambling that Green has put together as a book, and the only conclusion you can come to is that HSBC, like so many other major banks, has been run by a muppet for many years already!!

Truly amazing... and not a little terrifying – he’s still out there planning a banking strategy for China with his York Notes somewhere!!

Global financial recession?
Nothing to do with me Guv’ner.

And Finally...
Shanghai’s Most Hopeful Shopkeeper

As everyone knows, Shanghai is the gardening capital of China – no home is complete without a large garden in which to recline in on warm summer nights and enjoy your flowers and vegetables. Or maybe not. Still, that hasn’t stopped this optimistic and extremely hopeful shopkeeper along Huaihai Road opening a luxury gardening store with everything the green-fingered Shanghainese gardener needs to keep their garden looking lovely. Good luck mate!

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