Tuesday, September 7, 2010

The Wild, Wild East

My father once told me you can gauge the health of a city by the number of cranes you can see on the skyline. They cost a fortune to rent and operate so if you see a crane in use you can be sure that the objects they are lifting are expensive as well as heavy. In short, cranes lift Cap Ex. I lost count of the number of cranes on the second day of our trip but it was well over 50.

So what does a Mantha Crane Index© of 50+ indicate you ask? Growth fueled by economic expansion. The Thursday we were in Beijing the Q3 growth number was reported at +10% for the third quarter in a row (known as a triple double). This led me to wonder how a countries infrastructure accommodates such rapid growth. The answers where all around us. Aging power distribution lines attached to new transformers. Roads with the waste construction materials left by the side. Exposed water and gas mains. All these things where not truly wrong, just not how we would do them. It did however cause me to rethink my position on the regulatory agencies in the United States and their role in all our lives.

It also provided insight into how issues and challenges are tackled by the Chinese. Whereas we may estimate a project to cost X and include all the tasks that would be required of us were it done in the United States or Europe, a Chinese competitor or customer may see the project as much less. Do just enough, no more. This can be a source of confusion for western business people whose native industries are typically held to a higher regulatory standard. Business is a little more like settling the wild west.

To get a better understanding of how to engage the China market a friend recommended an event:
Put China in Your Business Future: Health & Green / China

Ill post again to let you know how valuable the event was.

I’ve also been asked to meet with a delegation from the Ministry of Commerce. They are interested in discussing B2B aspects of the energy sector with Americans with experience in that field. It’s amazing how small the world is becoming. We all have the same needs.

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