What is wrong with Greece?

February 23rd, 2015

Snapshot China – Newsletter No. 3 – What is wrong with Greece?

It is Chinese New Year in Beijing and most of us try to enjoy some quiet days. Quiet maybe, but not peaceful.

Europe is in turmoil for many reasons. Russia and Ukraine are grave threats not only for the economy but also for the possibility of a new cold war, or worse. Immigration, integration and social stability have failed; religious extremism and crime have become a menace in daily life. The economy remains lethargic, the least to say. The euro is unstable. And there is the danger of “Grexit”, the exit by Greece of the EU.

Overall the EU is weak, politically and economically and fundamentals are simply not good.
Exaggerated or not, I am told the image of the EU Parliament today shows politicians who are redundant in their home country, get a well-paying job to do little and hardly appear for work in the Parliament, except to read a novel, newspaper or check their mobile. Is there any record of attendance? The EU Commission has some competent staff I have been fortunate to work with but right now the top people still need to find their way while also facing a divided Europe that is unable to assume any position of strength to deal with internal and external challenges. Even a world power like China is calling for attention but Europe seems too busy with its many other “priorities”.

The case of Greece is a threat for the future of the EU but also a symbol of the many things that went wrong and remain so as nobody has the courage nor vision to clean up the mess, not only in Greece but also in many other member states. The system has failed as I explained in my book “Toxic Capitalism”, referring to some of the absurdities in Greece, Italy and other countries.
In my book I mention the dubious role of the financial institutions, the rating agencies, the bureaucracy and politicians in general. Since then, what has changed? Not much. Greece has made mistakes for sure. Simply calling for austerity and debt repayment is rather meaningless without rendering justice. Moreover, the real problems are not being tackled, such as the devious role of banks and other financial institutions during the crisis, the corruption and inefficiency of the bureaucracy and political institutions, the failure to collect taxes, the monopolies and oligopolies who continue to strangle the economy. The country is ranked very poorly for corruption, graft and media freedom. How can the Greeks come out of their misery under those conditions? It is unfair to call them lazy. In Greece running a business is a joke because of its stifling bureaucracy, and no politician has the guts to do what needs to be done. Nothing much has been achieved on tax evasion and graft prosecution. There is a need for a real revolution. The Chinese might not be always models to copy but their performance in the port project proves what is wrong in the country (see “Chinese Transform Greek Port, Winning Over Critics – Cosco-Built Container Terminal in Piraeus Marks Public-Relations Victory for Beijing”, WSJ 20 November 2014).

Greece is just an extreme example of what is wrong in our decaying Western Europe. Except to a certain degree for Germany, Switzerland and some Nordic countries, Europe has nothing to be proud about in terms of running their country, their economy, their foreign policy.

I still feel “European” but I sometimes have doubts. China has a host of thorny challenges but Europe certainly has no right today to lecture it: the EU has to clean up its own house before it can claim any credibility.

As for China, the challenges I mentioned last year are still here. Where the country is going remains a question mark and 2015 might be a difficult year indeed. China closes its door a bit more for sure, maybe it feels the rest of the world is both irrelevant and a threat. First deal with the internal issues, isolate the patient in quarantine. Then later we will see.

As Europeans, we need to act if we want to remain relevant.

(this Newsletter is sent out to our listed contacts)

Les clés pour réussir sur le marché chinois par Chunyan LI

January 29th, 2015

Un livre écrit par Chunyan Li, une jeune Franco-Chinoise, “Réussir sur le Marché Chinois” est basé sur les témoignages concrets et éclairants d’entrepreneurs qui ont connu déboires et succès dans “ce nouvel Eldorado de la consommation”
Le livre repose sur les témoignages d’une centaine d’entrepreneurs français et chinois qui partagent sans détours leurs expériences sur les principales difficultés locales : le jeu des concurrents nationaux, le flou réglementaire, les difficultés de recrutement et de fidélisation de la main d’oeuvre, etc…
Il se fait que je figure aussi dans le livre… Je dois féliciter Chunyan pour son approche professionelle et méticuleuse, c’était un plaisir de travailler avec elle.

Trois points le différencient: combinant deux angles – occidental et chinois –, privilégiant une approche pragmatique et analysant en profondeur l’influence de la culture sur les affaires. À la fois ouvrage de référence et guide pratique, ce livre s’adresse à tous les francophones désireux de s’installer en Chine, faire des affaires en Chine ou avec la Chine.
Avant-propos de WU Jianmin, ancien porte-parole du ministère chinois des Affaires étrangères et ancien ambassadeur de Chine en France; préface d’Henri Giscard d’Estaing, Président Directeur Général du Club Méditerranée.

Chunyan LI, née en Chine et diplômée de l’université de Pékin et de HEC Paris, vit en France depuis onze ans et voyage régulièrement entre les deux mondes. Elle a accumulé plus de dix ans d’expériences en Conseil en stratégie, Marketing/Développement commercial et Gestion de projets internationaux dans les deux pays et des univers très variés – télécoms, services, cosmétiques, énergie & utilities, grande distribution, automobile et construction. Fondatrice de FEIDA Consulting (www.feidaconsulting.com), société de conseil qui accompagne les dirigeants d’entreprise sur les questions de stratégie et de performance entre la Chine et la France/l’Europe, elle anime en outre le forum virtuel France-Chine (www.forum-francechine.com) ayant pour objectif de promouvoir des échanges franco-chinois.

“Réussir sur le marché chinois”
100 dirigeants révèlent les secrets du casse-tête chinois
Auteur: Chunyan LI
Date de publicaiton: 5 décembre 2014
Edition: Eyrolles – 272 pages – 24€
En vente: sur Amazon (version papier et éléctronique) et Fnac.

En savoir plus:

http://www.lesechos.fr/enjeux/les-plus-denjeux/idees/0203992718425-les-cles-pour-reussir-sur-le-marche-chinois-1072307.php?drHu5TFy7y6zcd5I.99

http://www.forum-francechine.com/reussir-sur-le-marche-chinois/ (page dédiée aux lecteurs)
http://www.feidaconsulting.com/presse-medias (presse & médias)

Where is The Forbidden City? Can’t see a thing! Pollution nightmare and what to expect

January 26th, 2015

On 15 January, after leaving the Great Hall of the People I crossed Tiananmen Square. Pollution was horrendous, one of the worst days in months: well over AQI 500. See the pictures.

Beijing has a big big challenge really to clean that up.
As I explained to the European Chamber, the Beijing Government is under severe pressure to solve the pollution problems. Targets to reduce PM2.5 have not been met and the Central Government is starting to pressure Beijing: solve it, otherwise you will get in BIG trouble (won’t say here what they actually meant by that…)
Both SCMP and China Daily reported on the issue. In short, the only way to solve the problem:

-       reduce the population now estimated (officially) at 21.52 million (my estimate is much higher);
-       make Beijing an expensive city to live in: expensive subway, expensive housing, no relaxation of home ownership;
-       reduce polluting traffic;
-       remove as much industry that requires a lot of manpower and is polluting;
-       close down 36 large markets including wholesale markets for clothing (near Beijing Zoo);
-       increase green and agricultural belts around the city;
-       in short make the city unwelcoming for migrants, industry and “others”.

For a taste, read this:
24 January 2015 – Beijing to limit population growth this year
By ZHENG JINRAN/CAO YIN (China Daily)
http://europe.chinadaily.com.cn/china/2015-01/24/content_19394122.htm
There is more about that on China Daily.

FDI it was, ODI it is!

January 26th, 2015

On 15 January I took part in “The 2nd China Overseas Investment New Year Forum” (“Silk Road Five Promotions”) in The Great Hall of The People where I gave a short presentation.

The audience of over 800 was basically Chinese with few foreigners, most of them being speakers.
In the morning session there were also speeches by the French and Pakistani ambassadors (pictured, Maurice Gourdault Montagne & Masood Khalid).
In my speech (see here the PDF: 150115 ODIb), I gave some insights on the shift from Foreign Direct Investment (FDI – the money coming in) towards Overseas Direct Investment (ODI – the money going out).
As time was short, I was given 15-20 minutes, then cut back to 13 minutes, I concentrated on showing a suspicious trend in ODI along with some very basic guidelines on how Chinese entities could be more successful in investing and carrying out projects in overseas countries.
In the session I talked, I just came after the ambassador of Poland, H.E. Tadeusz Chomicki, and before the speakers of South Korea and the USA. (all pictured)
For once the food served during lunch was pretty good – usually the food there is very much soso.

Who stole the show at AMCHAM & EUCCC event?

January 26th, 2015

On 14 January the European Chamber and American Chamber organized a New Year Celebration at the Kempinski.
A pretty large audience who was there to listen to Joerg Wuttke, Jim Zimmerman and a panel hosted by Andy Brown (Wall Street Journal). I felt standing around to listen to the panel discussion was not ideal, people pay less attention. Nothing earth-shaking to report from that panel anyway.

Personally I was more than happy to meet in person our “idol” Big Daddy Dough – aka as Andrew Dougherty who performed on stage the video clip “Beijing State of Mind”. I wrote about the clip earlier:
The best promotion video of Beijing: http://www.beijing1980.com/?p=169
I actually use the clip in most of my seminars until the students are ready for my presentation: it surely draws the attention and some asked me for the clip…
So, you know who stole the show!