On Sunday 28 June, as member of the Israeli Chamber of Commerce (Ischam) I joined the official opening of the IBCC in 798 Art Zone. The brand-new building serves as the office of Ischam as well as a cultural and business center. Pretty cool and there were some interesting exhibits.
The weather was, well, sauna-like but that did not deter a big crowd. Luckily I came early so I could have a quiet look-around. Also good to meet some familiar faces.

Speeches were by the Ambassador Mr. Matan Vinai, Rabbi Shimon Freundlich and Peter, the Chinese businessman behind the setup of IBCC. And others. The Rabbi also affixed the Mezuzah on the entrance of the IBCC, together with the Ambassador.



The season of seminars to overseas MBA groups is coming to an end, things could pick up again in September.
It was an interesting springtime with pretty different groups to talk to, all of them having their own focus and interests.
I mostly give a very personal introduction on what China is today, unfiltered and direct, also covering the multitude of severe challenges China is facing today. I often have to answer the question: are you optimistic or not? My reply is: I am indeed worried as many others are but overall I am more optimist than pessimist. The proof: I just “repatriated” to Beijing a 40 ft container with personal belongings, so I intend to stay for a while more…

The pics:
– Sunday 17 May 2015: MBA Wagner Group (The Netherlands) – group of 15 including Philip Wagner, in Duge Boutique Hotel. Additional topic was health care in China, for a group of company medical doctors from Holland. Our Rotaractor Sophie kindly joined us to answer some more questions on healthcare.
– Monday 25 May 2015 in Capital Normal University: 14 students of Westfield State University (USA).
– Friday 19 June 2015: CASS Business School of London MBA (35 students), in Hotel New Otani Chang Fu Gong Beijing. Organized as usual by Legacy Ventures (UK).
– Saturday 27 June 2015: Panel with Tony Liu for Saint Mary’s College of California MBA, in ARIVA Beijing West Hotel. Organized by the National School of Development at Peking University, Beijing International MBA at Peking University (BiMBA)

On Monday 29 June, interview with Raphaël Grand of RTS, in our office that right now looks more like a museum of Chinese antiques. Only audio, so we were all pretty “dressed down”.
The interview was done with and through Nicolas Ruble, the co-founder of Prodygia with whom I work closely.
The theme was: what opportunities do foreign businesses still have in China, what are the cultural differences and what should foreign businesspeople keep in mind when dealing with their Chinese counterparts.

Nic also gave an introduction of Prodygia, see my short profile video here:

For the short radio interview:
“La page du 12h30 de ce jour”

In my book Toxic Capitalism I looked in detail at all kinds of waste. That turned out to be really complicated as there are different definitions of the different types of waste (e.g. municipal waste, domestic waste and more). One number I could not find was the estimate for construction waste in China. In my book I do mention the enormous waste due to constant renovations or tearing down rather “new” buildings. Well, I finally got a figure:

In 2013, China saw construction waste reach 1 billion tons, 26% of it from the process of building and 74% from demolition, according to a 2014 report on resources utilization released by the National Development and Reform Commission.
Only 5% of construction waste is recycled, which amounts to around 30 million tons annually, the report said.
The utilization rate of construction trash could reach 95%, as is the case in many developed countries.

I found this on bbs.chinadaily.com.cn, dated 18 December 2014. It lists the 10 bad behaviors of Chinese drivers. Amusing as I guess there must be at least 100, the list is endless. Anyway, interesting view:

Editor’s note: MichaelM, our blogger from the US, sums up the most common, chaotic driving practices of Chinese drivers.
1. They will exceed the speed limit so long as there is no traffic camera in sight.
2. They will pass you like crazy on the shoulder of the road.
3. They will cut you off with mere inches to spare.
4. They will honk at you repeatedly with “seemingly” no patience at all.
5. They quickly use the lane of oncoming traffic to bypass numerous stopped cars or going slow in a traffic jam. Oncoming traffic just makes room for them, as if it is normal.
6. They will use the sidewalk if it’s convenient for them to get ahead of you.
7. They will pull out in front of you no matter the situation and expect you to stop.
8. They will cut in on you in traffic and expect you to submit and allow them to do it.
9. They do have laws very similar to ours in the West, but, they are totally disregarded. They mean nothing because there is no one to enforce them except for the traffic cameras, which are few and far between.
10. Pedestrians can be seen nearly everywhere walking in the middle of the road, with seemingly no concern for their own safety or the fact that they are holding up traffic. The drivers will honk at them and simply go around them as if nothing is wrong.

So, Michael, go back to the street and add the other 90!
Not to be surprised, Beijing traffic remains a mess, traffic police is nowhere to be seen and is totally useless. And makes pollution worse.

In a talk to the Beijing Rotary Club, on 19 May 2015, Richard Margolis of Hakluyt (Singapore) and former CEO of Rolls-Royce China explained his views on how China has fundamental weaknesses in developing the latest generations of airplanes and airplane engines. Basically I fully agree with him.


There are structural reasons why they have failed to catch up and risk to keep falling behind. First of all, the airplane sector is too much in control of the government and all is done through SOE companies where positions are still politically dictated. This is also true in most government institutions what explains why China might sometimes do well but misses the boat (or the plane) when long-term planning is one of the keys for success.
The bosses appointed at top positions are normally party members who look at the position as one more stage in their political career, and typically they stay there for five years before moving on, so they hope, to a more important political position within the party system. This contrary to the West where a CEO looks this position as one to hold on to and in itself a career fulfillment. So, in China those executives will be worried of taking the wrong decisions and want to see that whatever they chose to do must show positive results before they move on to another post. That is obviously not good for long-term development.
That also explains in part why in China the outcome is more important than the process. That is also related to another major weakness: not to provide a working environment where staff members can alert the company when they feel something is going the wrong way. In a sector such as aviation technologies it is imperative to rigidly control the quality of the process all along the way, and not to cover up weaknesses or errors along the production chain as well as R&D.
As I have seen in many SOE, one is not supposed to let out a comment that shows “something is going wrong”. As a staff member, you notice but you rather tend to shut up.
As the private sector cannot really enter this sector on the one hand and has not the accumulated expertise and knowledge base to develop long-term costly R&D, catching up is as good as impossible with companies such as Boeing, Airbus, GE, Rolls-Royce (the engines company, not the automobile one). As seen by Richard, the gap can only increase.
Some may point to some successes by China in the space projects but as Richard explained – those sectors are in fact much easier than for example developing new generation planes and engines.
As long as China does not change the way it runs those SOE and does not allow more openness for the engineers to give the vital feedback and suggestions, that will remain a problem.
Companies like Haier, ZTE and Huawei may score well but those sectors are technologically easier, demand less development efforts and … do not put humans in danger if something goes wrong.

See also this recent news article:
Maiden flight of C919 passenger plane delayed

The maiden flight of China’s homegrown commercial jet, the Comac C919, is behind schedule and delivery could be pushed back as much as two years. The narrow-body aircraft, which will be able to carry 156 to 168 passengers and aims to compete with the Airbus A320 and Boeing 737, was originally scheduled to fly by the end of this year. Delivery of the first plane, scheduled for 2018, is also likely to slip, perhaps to as late as 2020. The final assembly of the first aircraft is taking longer than expected. So far the C919 has received 450 orders from 18 domestic and foreign clients.

On 23 April 2015 I joined the Annual General Meeting of the European Chamber.
Lots of speeches, by all the candidates for “election”, as well as by Francisco Pérez-Cañado, Minister Counsellor, Head of the Trade Section of the Delegation of the European Union.
There was no real election (as last year), as there were just enough candidates for the posts. Results:

President:  BASF (China) Co Ltd, Jörg Wuttke (again)
Vice Presidents: Chiomenti Studio Legale, Sara Marchetta; Scania Sales (China) Co Ltd, Mats Harborn; Total (China) Investment Co, Ltd., Bertrand de La Noue
Treasurer:  ABB (China) Ltd, Lars Eckerlein

The EU and China are currently negotiating for a Comprehensive Agreement on Investment, which aims not only at providing state-of-the-art investment protection rules, but also at eliminating market access barriers for EU companies.
The EU has a lot in the balance but needs to drastically change its strategy and show a unified front in dealing with China. Right now, first thing to do is for the EU to put its house in order. To be honest, I am not really optimistic seeing all the divisions between the member countries and the lack of attention from the EU overall to deal with China. Most countries are simply too busy trying to cope with their internal problems. All this while China ought to be a top priority.

An excellent overview can be found here:
The European Union’s China Policy: Priorities and Strategies for the New Commission
Published April 2015 by Guy de Jonquières, European Centre for International Political Economy (ECIPE) (Based in Brussels)

How many times was I told: “Gilbert, it’s a loss of face to go to an official meeting or a 5-star hotel on a bike. You are a boss, you cannot do this”.
So, why not? Many Chinese still have this attitude, brainwashed by their “loss-of-face” obsessions and the prestige to have a car. No thanks, we Europeans don’t think that way, leave the cars to the Americans with their automotive addiction. Now more and more European cities switch from cars to bikes and in many cities cars are the enemy – much like in my home town Ghent (Belgium). In several EU countries even ministers use a bike.
I also brought up this “loss of face” during my speech for the  Exclusive Dialogue with Vice Mayor of Beijing Ms. Cheng Hong, see http://blog.strategy4china.com/?p=5343

Our Swedish friends showed the example in China Daily:
“Swedish Minister for Health Care, Public Health and Sport Gabriel Wikstrom (second from left), along with Swedish Ambassador to China Lars Freden (first left) and World Health Organization Representative Bernhard Schwartlander (right), ride bikes to a meeting at the WHO offices in Beijing to promote good health and environmental protection. More than 80% of Chinese adolescents do not get enough physical activity, a major risk factor in obesity and the development of chronic diseases.”

In polluted and congested Beijing, biking is the solution to get somewhere on time and to unclog the traffic. Also, I can have my beer(s) and bike home. With a car, zero drinking, plus no parking etc. On the positive side, the city government is increasing the outlets for rental bikes and media such as The Beijinger promote it nicely, see also their explanation of Chinese terms.

Yes, biking is a hazard as Chinese respect nothing and traffic regulations are a joke. Traffic police does not exist so Chinese do whatever suits them. Cars and arrogant pedestrians occupy biking lanes, all while looking at their mobiles and/or smoking. One traffic rule seems to be that under no circumstances should a driver keep his eyes off the mobile.
Anyway, I always bike. Cold, hot, rain, snow, sunshine. I am happy to have found in a U.S. supermarket a great rain outfit. USA, the country of cars has this stuff, China no. Get that.
Of course I look like coming back from Ebola country but I could not care less. The set is super light and compact and I can put it over my shoes, trousers etc. And unlike the Chinese rubbish clothes, it does stop the water.
See the pics. With and without on 27 April. And my friends on WeChat showed massive support…

As for my little funny red bike, well, I have it nearly four years. Rather of poor quality I have persevered in repairing it, in the spirit of “Toxic Capitalism”. Many parts have been changed but I always return to the same bike shop on Dongdaqiao Lu where the more-than-retired staff serve me well and cheaply. Once they worked on it one hour and was billed … 25 RMB.

Sometimes life in Beijing for a foreigner can be both challenging and interesting. Like in my case, with my Chinese being reasonable for social contacts but pretty useless for business, it also sometimes leads to frustration.
The Chinese side (whatever that means) insisted I joined some big Taiwan seminar and banquet in Diaoyutai State Guesthouse in Beijing, most probably the most prestigious location of the city, food being normally better than in The Great Hall of The People.
I managed to escape from the seminar, luckily, as everything was in Chinese without translation. On top of that all the speakers (idem in the Banquet) were shouting like hell, making it also rather annoying. My daughter was getting tired of the noise in the banquet.

So, what was it actually all about? I still have no clue. My entourage just tells stuff me on a need-to-know basis. No extras.
The seminar was in one building and the banquet in another one. Nice walk.
During the banquet I also escaped by not having to sit at the VIP table. There was just one more foreigner in the whole hall and he was sitting pretty lonely on that long VIP table. Nobody seemed interested in him.
I got however a lot of attention as many of our Chinese friends were there and many other came to take picture with me. So, smile, give business card, say cheers and then next one. Who they were, mostly again clueless.
Oh well that is part of Beijing life. A must to stay connected to the “important people”.
The food was good, the red wine was pretty good and some of the performances were nice.
The gardens of Diaoyutai are meticulously maintained and are lovely, and we were so lucky with the weather.. Once I was there for a night party and it was really pretty with all the lights on the trees.

Voir article précédent:
“Les clés pour réussir sur le marché chinois par Chunyan LI”

Le 22 avril j’ai finalement rencontré en personne Chunyan, lors d’un déjeuner chez Morel (évidemment!). J’ai aussi eu le plaisir de recevoir une copie signée de son livre.
On avait tellement de choses à se dire…
Ensuite elle est passé voir mon ami Philippe Reltien de Radio France. Elle a certainement eu un séjour très chargé à Beijing…