Business in Wuhan

Are you planning to do business in Wuhan, the biggest city in centeral China? Quite smart!

The south China is losing some of its advantage in manufacture industry. The prices for houses, land and labor are rising rapidly. The local government increases the lowest salary year by year in Shenzhen, Guangzhou, Zhuhai, Dongguan etc. As profit margin has already dereased quickly, many factories are considering on removing to even poorer countries like Vitenam and Burma. Obviously, that cannot solve the problem completely. There are not so many well educated engineers and huge labor resouce in these countries; also, the public facility is not as good as that in China.

How? Move to north, move to Wuhan. Tranportation cost may increase, but cost on labor, land, rent, electricity and facility will compensate much more. Wuhan has the 3rd largest university student population, 2nd largest iron & steel production, 2nd largest auto company in the nation. The biggest hydroelectric station in the world is also nearby. The city has been called "center of China" for hundreds of years. The biggest & longest river and the most important railways and highways in the nation are all pass throuth this center city. In the early 20th centry, the city was called "Oriental Chicago" by foreign investors and adventurers. Before 1949, Shanghai and Wuhan are the topest 2 cities ahead of Beijing in China.

World famous companies have already come to Wuhan. Citroen and Foxconn both has big factories of over 100,000 workers in Wuhan. The French have put most of its investment in China to Wuhan for quite a long time.

If you are interested in Wuhan or like any discussion on this city, please contact me. I am now intesested in the fields of

1) financial service (only interested in value investment)
2) food service
3) retail
4) education
5) internet
6) microelectronics


I am glad to have your emails: ickitt(*at*)gmail.com

Invest crazy real market in China

While the US real market falling into the valley in past 15 years, Chinese real market keeps on rising. When the government declared the state would no longer provide low-rent appartment for its citizens, the real market is destined to roar for a long time; we must understand that no land in this country is privately owned by anybody.

The land namely belongs to the state; but actually to the governmental high officials. House owners have only the very limited right to live on the land, where their houses are, for no longer than 70 years. According to the law, the government can take back the land any time (even in the 70 years) . Only the government has the right to sell land to real development companies; this means the local governments and high officials have the chance to make monery for themselves with this privilege. You can image not every company has the chance to get land no matter how qualified the company is.

The real market in China is far away from the market economic. This market is monopolized by the governmental high officials and real companies with special background. Wanna be special? It is not as difficult as before, as long as you have enough money and know how to use the money to get land.

The people in Chinese cities have complained for high house price for quite a long time. Meanwhile, the centeral government has kept on issue real regulations and laws to control the crazy house price. I have been never believed in what the central government has done. The fact is the people need houses, but the government is always trying to beat the hourse providing.

Also the government tries to persuade the people to give up the idea to own a hourse or an apartment. Yongtu Long, a high central governmental official, said he had not owned a house until 58 years old; he might have forgot that before he was 58 years old, no houses or apartments sold in China.

The central government always heads for south if it plans to reach north. I firmly believe the house price will not drops unless the land private ownership is realized.

As the best and biggest real company, Vanke occupies only 1% of the whole market. So, come to China for the tempting real and make a big fortune! Do not mind the special money cost, every penny of which is absolutely worth.

Blogging is not easy

Blogspot has been blocked by by Chinese gov's Great Fire Wall (GFW, compared to Great Wall, one of the 7 miracles in the world) since Aug 2007. What a miracle for Chinese bloggers and it should be the 8th miracle of 21st century for human civilization.

Anyway, I finally found the way to "walk over" the damning GFW. The Great Wall was used to fight again the Norman in ancient; however, the GFW is to block free ideas of Chinese people in 21st century. I firmly believe that to detain one's mind should be cursed much more than to one's body.

Thanks God. I can finally update this blog now.

GFW failure or temporarily accessible?

Google blogger/blogspot cannot be accessed from China mainland at this time. GFW failure or temporarily accessible? I do hope the damnable GFW is OK for this time...

After I opened this blog for only 2 days, the blogspot was blocked by Chinese government...

I will keep watching for another 2 days. If it is still OK, I will update this blog soon.

Internet Business in China

Doing business in China? Good idea! The largest market in the world, cheap and huge labor resource, the appreciating RMB, the kind government for foreign investors and promised high yields ... However, it does not sound as good as in internet business.

Google, the best online search engine and the best web company, acts in China not as excellent as Baidu. Yahoo defeated by SINA and SOHU sold its yahoo.com.cn to Alibaba, which is greatly threating ebay with its taobao.com without taking another Chinese C2C website dangdang.com into consideration.

What problems?The China government's rigorous internet policies upon foreign companies?Yes, but very limited. The most important factor, I think, is that Chinese have their own ways on internet surfing, quite different from that of the people in the US. In fact, the similar problems lie also in other businesses, just not so obviously.

For Google, I think it all right except for its boring Chinese name gu-ge; and it is true that, google has been greatly feazed by the GFW. Yahoo deserved its lose in China as it was not willing to study from sina.com and sohu.com. Chinese do not like to read news and stories on the web-pages from yahoo, which has a very "simple" homepage almost without scrolling the slider bar. Chinese hate to click for more than 3 times to read what they want; they dislike too much indexes and directories. They are fond of shortcuts; even these shortcut links are filled in all over the homepage. Also, ebay destined to fail when it entered China the first day. Two reasons: 1) Chinese do not believe in credit cards as this country pay more attention to reality rather than credit. 2) Chinese like bargaining when buying anything. For the first, ebay could not build up an online payment system according to Chinese customers as quickly as taobao.com. On the other hand, taobao solved the second problem completely by launching its own integrated IM software customized for online purchasing; thus the customers and the seller can enjoy the pleasure on bargaining, even more pleasant than in real market.

Now the US internet service providers might have learned a lot from their Chinese competitors. But understanding what Chinese customers want is really not so easy; you must really understand Chinese commerce under the background of Chinese culture, watch and study the customers' behavior very carefully.

In fact, the same problem lies not only in the internet business, but most of the other industries. It might just not so obviously. For example, Dell can provide much better notebooks than many Chinese manufactures, but Dell's selling acts not as well as its competitors'. Chinese people just do not like Dell's direct selling service. The problem seems to mainly lie in internet only because the internet business in fact mainly focuses on channel service.

Will Chinese Benefit from RMB Appreciation?

RMB appreciation or not, this is a problem. According to natural rules in economics and the interest of the US, I agree that RMB appreciation should be necessary. The government cannot always disobey the basic rules, no matter how powerful it is. Foreign investors may be excited on talking RMB appreciation; however, for ordinary Chinese people it might not be a good news.

I do not care for the affection of RMB appreciation on Chinese export trading, instead, let us take a look at the changes in ordinary Chinese life. In Wuhan, the biggest city in central China, with the population of over 850 million, food price has increased 25% in average since this August when China government began to speed up the appreciation of RMB; the price for egg even become 2 times that of in July. However, the average income increase only 0 - 3%; more than half employee cannot get a compensation in salary as the increasing of laid-off workers. Also, the prices of electricity, water and gas keep on rising national wide including in Wuhan this year. In spite of the government regulation on real market, the average price of apartments in all Chinese cities except Shanghai continue rising up. That is the life the ordinary Chinese should be faced in front of RMB appreciation.

I still admit that RMB appreciation is correct; the problem lies in the government financial policies. RMB cannot be exchanged freely for ordinary Chinese and the government insists on GDP increasing depending on export rather than domestic consumption. Now who should take the responsibility ? Again the whole Chinese people?