All posts by ChinaJob

Obstacles To Innovation In China And India

From the CEO of Infosys

Globalization and the convergence of information and communication technologies have dramatically boosted the power and speed with which businesses, organizations, and individuals can access, process, and adapt information. This has given rise to the knowledge economy, where markets can trade what has long been untradable: workers’ education and skills. In the new dynamic, efficiencies in productivity growth are less important. Instead, growth is driven by the capacity of economies to create knowledge and innovate.

Three new innovation models are emerging. One is process innovation: wiring everyone to the same network and leveraging the cost, talent, and volume of an integrated global economy. Another is creating pint-sized products and services sold cheaply to masses of poor people. A third is innovating through local partnerships and networks to get around external hurdles, whether bad roads in India or bad government policy on IP in China. You see all three models in India. Boston Consulting Group put out a list of 100 emerging global companies; 21 of them were in India.

Initially, cost advantages attracted global companies to the emerging markets of China and India. China’s Pearl River Delta quickly became a hub of low-cost manufacturing, and the country’s manufacturing sector grew annually at 11.4% from 1993 to 2003. After economic reforms in 1991, India’s large pool of low-cost, technically trained talent made possible that nation’s growth as a global provider of IT services.

But today multinationals are beginning to leverage the skills of Indian and Chinese knowledge workers to innovate, and they are building strong R&D capabilities in these markets.

Innovation in China and India, however, has not grown on a truly global, commercially significant scale. Indian companies have yet to come up with significant innovations in entire product lines. Chinese outfits have launched clever but imitative products, and China’s R&D capabilities lag those of Taiwan and South Korea.

China and India rank 49th and 50th in the world respectively in terms of productivity growth. Their economies face major challenges to improved innovation. They lack end-to-end logistics, effective infrastructure, and strong regulatory systems. By understanding such weaknesses, corporations can devise alternate strategies and business models to transform the two countries into growth markets.

India has poor infrastructure, low literacy levels for many people, and labor inflexibilities. So high-volume manufacturing has not taken off yet in a big way. Yet businesses are using technology and communication networks to build virtual, interconnected innovation ecosystems to overcome the gaps. A network can tap multiple sources of innovation, including entrepreneurs, research labs, and students and faculty in educational institutions, such as the Indian Institutes of Technology (IITS).

Unearthing specific consumer needs in emerging economies can also aid innovation. HP Labs in India identified power outages as a key factor limiting the access and utility of computers in rural areas, so it designed a community PC that can run on car batteries.

There’s huge innovation in creating a high-volume, low-price business. CavinKare, an Indian company, began selling shampoos in the 1990s in cheap, single-serve sachets to make them accessible to the nation’s rural poor. This business model was replicated by Unilever (UL ) and Procter & Gamble (PG ).

India absorbs about 4 million to 5 million mobile phones a month, and its mobile rates are about 1 cents a minute, the lowest in the world. Clearly companies have innovated: They figured out how to stay profitable even selling telecom services at a penny a minute. They’re reaching consumers who are essentially not part of the formal financial system. If you can deliver to such people products or services in small units at a low price, the market is suddenly open to a much larger base.

In the end, innovation capability depends on economic flexibility. The U.S., with its entrepreneurial culture, relaxed labor markets, and free capital flows, continues to be the most innovative economy in the world. India and China need such an environment to bridge the growth and productivity gap between emerging markets and the developed world and to truly transform themselves into innovative, energetic economies.

Avon powers ahead with China recruitment

9/16/2006 – Having received the first license for a foreign-owned company to resume direct sales of cosmetic products in China, Avon added more than 33,000 new sales staff to its workforce there last month, according to data from the Chinese Ministry of Commerce.

The data, which was cited by Morgan Stanley in a note to investors, stated that the 33,339 new representatives were added to the work force in the month of August, bringing the total number of representatives to 188,273.
The figures indicates that the company is recruiting at an even faster rate than it had originally expected. Back in July the company said that its China sales force had reached 114,000 and that it was hoping to recruit a further 31,000 new employees.

Avon received the go ahead to resume door-to-door sales back in January of this year. The move followed the government lifting a total ban on direct sales implemented in 1998 in an attempt to quash pyramid schemes and other scams that were being offered on a door-to-door basis in the country.

Morgan Stanley reiterated in its note to investors that China remains Avon’s brightest hope for future growth at the moment, with the recruitment drive likely to boost sales for the second half of the year and helping to buoy the company’s overall results in the Asia Pacific market.

Although the general trend in the company’s global sales has been positive, the Asia Pacific region has proved particularly disappointing for the company as a whole. With the exception of China, the company reported a poor performance in other countries in the region, contributing to a 10 per cent drop in sales during the second quarter of the year.

But where other Asian markets are showing slow retail sales, the China market remains robust. Currently China is seeing some of the largest industry growth in the world, with almost all cosmetic and toiletry categories reporting sales growth well into double figures – figures that are in line with GDP that continues to exceed 10 per cent.

This growth could prove the key to getting Avon out of a difficult situation. Restructuring charges have hit the company hard of late, forcing investors to shy away from its shares. Following the announcement of its second quarter results at the beginning of August, the Avon share price fell over $5 to reach $27.40 on August 8. Since then the share price has leveled off and finished trading at $29.54 this week.

But the downward trend in the company’s share price reflects a general loss of confidence. The company’s latest results showed that sales had gone up, but underlying growth was below analyst’s expectations, due mainly to the heavy restructuring charges the company incurred.

During its second quarter net income dropped 54 per cent to reach $150.9m on the back $2.1bn in sales, up 5 per cent on the same period last year.

This figure was impacted by a $49m charge, as part of its massive $500m restructuring program, introduced in the last quarter of 2005. The scheme has seen profits tumble by 54 per cent but eventually could save the company $100m a year.

The restructuring costs have included organizational realignments and a reduction in the workforce, particularly in its middle management that has seen the elimination of more than 25 per cent of its management positions and lowered the number of management tiers from 15 to eight.

To date the company has now eliminated 10 per cent of its 43,000 worldwide workforce, however the expansion into China is helping to reverse that trend, emphasizing just how important the upturn in the China market is to the company.

Google Opens China; Hiring In Japan

Kai-Fu Lee and company now have new office space available to them in China. Meanwhile, Google has begun searching for more engineers in Japan to work on new mobile technologies.

The People’s Daily Online celebrated 85 years of the Communist Party of China with a banner atop the announcement of Google’s new office space in Beijing. Commentary from the news organization stated Google moved into their new quarters on September 4th, having temporarily been housed at Xinhua Insurance Mansion and Tsinghua Science Mansion.

The report described a picture of one workspace as “easy to mistake the office for a personal study.” I don’t know how many personal studies have dual widescreen computer monitors on the desks and sheathed swords on the walls, but that must be more commonplace in China.

Another set of photos of Google’s China staff at work and play shows them making sculptures out of a magnetic construction set and rocking out to Dance Dance Revolution. If they get hungry, there are plenty of snacks available.

Meanwhile in Japan, Google’s Omid Kordestani addressed a conference in Tokyo. Reuters reported that Kordestani wants to grow the company’s international sales from 42 percent of revenue to more than half.

They will recruit engineers in Japan to help accomplish this. Google already has a deal in place that delivers its mobile search and advertising to cellphones, and they want more from the market according to Kordestani:

“We hope to be much bigger in Japan,” Omid Kordestani, Google’s senior vice president in charge of global sales, told a conference in Tokyo. “We want more innovation in this market.”

“The mobile search and ad in Japan has been very successful,” Kordestani said. “It was developed by our engineers in Japan, New York and other locations.”

Kordestani also said that Google is seeking to develop new technologies for social network services (SNS.)

“Activities on SNS are bigger than any other activities on the Internet,” the executive said. “We’re looking to work more in this area.”

Citigroup seeks higher China investment quota

By Brian Kelleher and Jack Reerink

BEIJING (Reuters) – Citigroup Inc. (C.N: Quote, Profile, Research), the world’s most valuable bank, has applied to raise its Chinese securities investment quota as it seeks to strengthen its foothold in the mainland’s developing capital markets.

Citigroup already has a Qualified Foreign Institutional Investor (QFII) quota of US$550 million to invest in Chinese stocks and bonds, and the bank is keen to raise that amount, China Chief Executive Richard Stanley told the Reuters China Century Summit in Beijing.

“The QFII business has been very successful. We have the second-largest quota right now, and we’d love to increase that,” Stanley said, declining to give the application amount.

The New York-based financial services giant, which plans to add three China outlets in coming months for a total of 15 locations, also wants to play an active role in China’s fledgling securities markets.

“I would look forward to the opportunity to participate in the domestic securities business,” Stanley said when asked about the potential of setting up a securities joint venture, but he declined to go into further detail.

Goldman Sachs (GS.N: Quote, Profile, Research), Merrill Lynch (MER.N: Quote, Profile, Research) and UBS (UBSN.VX: Quote, Profile, Research) have struck partnerships in the mainland securities industry, but Beijing put a hold on granting any new licenses late last year.

Citigroup, which has a market value of US$244 billion, is part of a group including Credit Suisse (CSGN.VX: Quote, Profile, Research) and JPMorgan (JPM.N: Quote, Profile, Research) that does not want to be left out of the securities sector.

The bank, which will be allowed to sell local currency products to Chinese individuals when the market opens up under WTO obligations in December, has put high hopes on its retail banking operations, from mortgages and consumer loans to funds.

“All of this to a huge degree is dependent on the development of the capital markets,” said Stanley, a New York native who has been in his current job since January 2005.

Indeed, as foreign banks prepare to target local consumers, their efforts are stymied by a lack of derivatives, corporate bonds and funds — exactly the type of products people need to finance their retirement.

MASSIVE POTENTIAL

JPMorgan estimates that Chinese domestic stock listings will raise about $10 billion this year, which includes a simultaneous Hong Kong-Shanghai listing from Industrial & Commercial Bank of China (ICBC.UL: Quote, Profile, Research) that could be worth a total of $21 billion.

QFII and securities businesses will be parts of the broader China expansion strategy of Citigroup, which has more than 3,000 employees in the country and is hiring about 100 people a month.

Beijing began the QFII scheme about three years ago when it gave UBS the first quota. There are now more than 40 international banks and asset managers with quotas totaling more than $7 billion, which will eventually rise to $10 billion.

Stanley said that Citigroup is focused on growing its own business. But the bank is also leading a consortium bidding for a combined 80 percent stake in Guangdong Development Bank worth more than $3 billion, sources say.

It also has announced plans to increase its stake in Shanghai Pudong Development Bank (600000.SS: Quote, Profile, Research), its partner in a venture that has issued about 400,000 credit cards, to 19.9 percent from less than 5 percent.

Stanley declined to comment on both.

The bank, along with partners including top life insurer China Life Insurance Group (2628.HK: Quote, Profile, Research) (LFC.N: Quote, Profile, Research) and buyout firm Carlyle Group (CYL.UL: Quote, Profile, Research), is competing with France’s Societe Generale (SOGN.PA: Quote, Profile, Research) for Guangdong Development Bank in a bidding that sources say may be resolved by the end of the month.

China is finalizing rules ahead of its WTO opening that may include requiring foreign banks to incorporate locally, pay higher taxes and put up an additional 1 billion yuan (US$126 million), proposals that have met with some controversy from overseas bankers.

But Stanley said Citigroup, which made only a small percentage of its $735 million in non-Japan Asian profits from China in the second quarter, has worked well with regulators.

“The process has been very open and consultative,” he said.

(US$1=7.948 yuan)

Venture capital investing in China doubles in Q2 2006 from Q2 2005

Capital investment into deals totalled $480.1m in the second quarter of 2006, slightly more than double the amount invested in the same quarter of 2005 ($239.1m). Venture capital deal flow to companies headquartered in mainland China reached a high point with 54 deals occurring in Q2 2006, according to the inaugural China Quarterly Venture Capital Report released by Dow Jones VentureOne and Ernst & Young.

At the half-year point there were 85 deals and $757.9m invested in China, indicating investment in 2006 is likely to surpass the levels of both 2002 ($1.19bn invested in 145 deals) and 2004 ($630.4m invested in 103 deals).

Bob Partridge, China leader of Ernst & Young’s Venture Capital Advisory Group, said, ‘With China’s emergence over the past several years as a source for new technology and services, investors from around the globe have taken notice and are demonstrating this by providing them with the economic support necessary to compete in the global marketplace.

‘The increased early stage deal flow in China this quarter is also a sign that investors are ramping up investments in new enterprises. This substantial pipeline of companies lays the groundwork for continued investment in the region,’ Partridge continued.

The increase in the second quarter was boosted by a significant level of activity and capital for first-round deals. As a percentage of the total activity, 54 per cent of the quarter’s deals and 38 per cent of the quarter’s capital went to first rounds. Second-round deals also rose substantially. However, despite the level of early stage investing, most of the venture capital-backed companies being financed in China are more mature, established businesses.

‘We also are already seeing a broadening of the marketplace in China, with business services and other emerging segments now drawing investors’ attention,’ said Steve Harmston, director of global research for VentureOne. ‘Information technology remains the beneficiary of the majority of investment activity in China, as it does in the US and Europe, but it is also interesting to see pockets of activity in business and consumer services, healthcare, and even in alternative energy occurring in China.’

Google and Guanxi in China

Jake at Demo China has an important article on Google’s market share in China with plenty of back-up links. Google continues to fall behind China’s premiere search engine Baidu. Two research groups show about a 13% increase in Baidu search trsaffic and a 12.3% drop for Google searches in Beijing. The stats seem to be consistent with data mined in other parts of China.

The data does not surprise me as Google pays little attention to the unique needs of Chinese users. The sad part for Chinese users is: Baidu’s top search results are pretty much bought and paid for by advertisers; so, the average netizen is not getting an honest cyber-portrait of the best site for his query. And expats and tourists to China are more likely (based on my personal un-scientific study involving 25 new visitors and 15 fossilized expats) to use Google to find services and businesses in their area. And they would get infinitely better results by using Google or Yahoo!: type in Embassy phone numbers China and none of the top 10 entries will get you to a consular officer. In contrast, Google gives you 7 official and unofficial sites that will help those in need of a bureaucrat.

And I think Baidu’s numbers will mislead businesses that cater to foreigners. Advertising dollars that could bring them real traffic from customers with disposable income will likely be diverted to an ineffective Baidu. And Baidu is as expat friendly as Google is attractive to Chinese Nationals. Google spent a Googol last year on market research (100 times more than Baidu), but did it from the comfort of their California home. Baidu does not have to get off the couch as they have the confidence, whether worthy of it or not, of Chinese netizens and advertisers.

A funds manager in New York asked me last year asked me why I believed that Baidu would outdistance Google in China when it paid so little to understand the marketplace. I predicted that Google would flounder based on the ancient Chinese pronciple of Guanxi (literally: relationships, but far deeper in meaning) that so far, only Bill Gates has done a good job of understanding. According to Robert Buderi and Gregory Huang in Guanxi: The art of relationships: Microsoft went at the problem of opening up the China market in a way that was a departure for most Western companies. Instead of focusing on sales or cheap manufacturing possibilities, Bill Gates imagined tapping into China’s vast pool of talented computer science students and harnessing their energy in a way that would be mutually beneficial to Microsoft and China. He visited China’s top leaders repeatedly over the years, building a relationship and opening doors. He practiced Guanxi, a Chinese term that conveys trust and mutuality. Says Huang, the “most important principle is that relationships must be nurtured over time. They can’t be bought or rushed.”

I have not agreed with Google or Yahoo’s policies since they came to China, but along MSN, I rely on their accuracy in reporting. But, if they are going to stop the economic bleeding they had better find a vendor of Guanxi fast and take a double dose just for good measure. And Baidu had better wise up before someone actually tries marketing a home-grown engine with a touch of honesty.

by Lonnie Hodge

You know you have been an expat in China too long when…

YOU KNOW YOU HAVE BEEN AN EXPAT IN CHINA TOO LONG WHEN:

– You find yourself crying over a menu in a western restaurant because they
serve potato salad
– You eat every kind of meat off the bone, and then spit those bones on the table
– Squatters make you dizzy, but you now believe, despite the smell, they are cleaner than western toilets
-You are tired of explaining that Africa is a Continent, not a country.
– You see nothing wrong with standing on a white stripe in the middle of a
highway while cars whiz past you at 90kph
– You don’t blink an eye when a complete stranger wants to take a photo of
you with his family
– You actually put some thought into which live snake you want cooked for
your meal
– You eat soup with chopsticks
– you use Kleenex for table napkins
– You drink warm sodas and find them refreshing
– You are accustomed to seeing people’s heads popping up and down in the VCD
you are watching
– You no longer use articles when you speak
– you bargain with the grocer over the cost of a head of lettuce
– You no longer check the expiration date on the milk you just bought.
– You buy a movie that hasn’t been released theatrically yet at home.
– You comment that the pollution “isn’t really that bad…”
– You start wearing a face mask on windy days and wonder at the “silly
foreigners” who don’t do the same
– You complain about that price difference of DVDs/VCDs/CDs bought in the
stores and on the streets
– You start to wonder if the chocolate ice cream you find in the store is
even chocolate… sure it is brown, but…
– You can’t find face lotion or cleanser that does not bleach your skin
whiter….
You have a collection of Umbrellas
-You have actually gone shopping in your pajamas
-You give a beggar a handful of fen and he gives them back
– You have trouble sleeping when you go home for a visit because it’s just
too darn quiet
– You point out foreigners to your Chinese friends even though you’re
foreign yourself.
– You know words in Chinese for which you don’t know the translation in
English
– You answer ‘China’ when people ask where you’re from
– You pick your nose, burp, fart, and scratch so much even your Chinese
friends get embarrassed
– You get a discount if you speak English, but you pay more for Putonghua (Mandarin)
– You call home and your family tell you to speak faster and stop correcting
their grammar
– You eat cake with chopsticks
– You constantly wonder if everything has been boiled long enough.
– You answer ‘So is mine.’ when people say their English is so poor
– You answer ‘Into what?’ when people say China is developing
– You convince yourself that it doesn’t matter how dirty the cooks’ hands
are, cooking will fix it
– If there are only 4 screaming children running around the classroom, you
consider it a good primary class.
– If there are only 4 students sleeping, you consider it a good middle
school class.
– If there are only 4 cell phone addicted college students messaging its a good class.
– You love tofu because there’s nothing to spit out and it doesn’t have any
taste
– You start saying things like:’ ‘I very like’
– You hold hands with others of the same sex and think nothing of it
– You avoid touching those of opposite sex like they have bird flu
– You’ve got a pre-paid ticket with a reserved seat on a train or
plane, but you still run like mad to to the get there first
– You forget that vegetable soup is actually pesticide broth
– Smoking is doing less harm to your lungs than breathing
– You’re beginning to like fruit salad and mayonnaise
— Everyone wants to be your friend – all you have to do is teach them
English for free
– Everyone wants to teach you Chinese by speaking to you in English
– Your Chinese lessons consist of 50 words your teacher wants to know in
English
– You tell people you don’t understand, so they write it for you – in
Chinese.
– Your boss thinks you’re a stupid foreigner if you let him cheat you, but
thinks you’re a bad foreigner if you don’t
– Your boss speaks really good English until you ask for more money
– You have no qualms that someone who thinks you’re stupid and gullible has
total control over your life.
– You too think that the ugliest western man always has a beautiful Chinese girlfriend.
– A hike up a mountain calls for a plastic grocery bag full of junk food.
— The more you listen to the news, the more uninformed you are
– It fascinates you that when the national news is on, your forty TV channels magically become the
same channel.
– Absolutely everything that can possibly be eaten is in some way good for
your health.
– Only five minutes of prep time for a unannounced class no longer fazes you
— Your housekeeper throws out the chicken breast you have marinating in
garlic and olive oil but organizes your empty beer bottles and cans and you understand
– You leave your laundry hanging up for more than a day its dirtier than it
was before you washed it
And my favorite:
– You actually believe you’re here to teach English

10 sexy jobs

By Candace Corner
CareerBuilder.com

(CareerBuilder.com) — Money, power, fame and glamour are just some of the elements that take a career choice from tedious to tantalizing, but there’s a little more to it than that.

In the same way that physical beauty is in the eye of the beholder, the definition of what qualifies as a “sexy” is a matter of what you find most attractive about a job’s responsibilities.

Firefighters are sexy because their role requires bravery, and doctors have sexy jobs because they have commitment and credentials. Danger and intrigue can also factor in to what we find alluring.

If there’s one other thing sexy jobs share with the perceptions of physical beauty, it’s that society, for the most part, creates a general guideline for what makes a job hot. We find interest in the rich and famous and the jobs that seem to have the best perks.

Here are some examples of jobs that sizzle:

1. Showgirl

Why it’s sexy: Their job involves performing dances in elaborate, revealing costumes onstage.

Where you’ll find them: For the most part, it’s Vegas, baby. They’re onstage, in the dressing room or working out.

The pros: They’re in the spotlight, in peak shape, and always look amazing.

The cons: It’s harder than it looks, and involves constant exercise and a lot of practicing. Costume headpieces are heavy and people often confuse showgirls with being part of the sex industry.

2. Couture salespeople

Why it’s sexy: The rich and famous often shop high-end. The right store and location means there is a likely chance of working with A-list celebrities and other beautiful people.

Where you’ll find them: Mostly in New York, Los Angeles, London, Paris and Milan, but basically anywhere where wearing the latest trend is more important than the price tag.

The pros: It opens up opportunities for meeting the right people to launch a future position in fashion or as a personal assistant. And you can’t beat the employee discount.

The cons: Retail is still retail, so expect to continue folding sweaters, re-organizing racks and assisting crabby customers.

3. Fashion journalist

Why it’s sexy: These people know the industry inside and out, attend all of the fashion shows and schmooze with designers and other influential people.

Where you’ll find them: In the press seats by the runway and on location for interviews. While it’s not mandatory, there are more people working in the major fashion capitals.

The pros: Amazing samples and the opportunity to meet some of the biggest names in the business.

The cons: Finding work can be difficult. Writing reviews in this industry means a lot of working hours and dealing with city expenses and difficult people.

4. Runway model

Why it’s sexy: They showcase the latest fashion and their job is to be beautiful.

Where you’ll find them: On the runway and at fashion shoots, largely at the fashion capitals, but also anywhere there are designers looking to show the public their newest creations.

The pros: They have a reputation for being hot and they get paid for it.

The cons: Competition is fierce. The model look that’s in-demand at the moment may not be what designers are looking for next season.

5. Hotel concierge

Why it’s sexy: They’re smooth operators and know all the right people and places in the area.

Where you’ll find them: At upscale hotel locations and around the grounds making sure everyone’s happy.

The pros: Area businesses are more likely to treat you right, since you recommend new business.

The cons: Long hours and the not-so-glamorous duty of dealing regularly with difficult personalities.

6. Makeup artist

Why it’s sexy: They transform and enhance people’s looks to be their best or most interesting.

Where you’ll find them: At counters, on film sets, in dressing rooms and anyplace else where someone is going to be televised, photographed or doing a big appearance.

The pros: There is an amazing chance for advancement from counter rep to launching a signature beauty line or garnering celeb clientele once a reputation is established.

The cons: A client with a good experience will say a lot, but so will those with bad experiences. Word-of-mouth creates the biggest buzz, so this could work against a makeup artist.

7. Stunt double

Why it’s sexy: Stunt men and women defeat the odds while they leaping off buildings, cruising through fires and conquering car crashes. The thrill and the danger create a high.

Where you’ll find them: Somewhere dangerous or somewhere relatively safe and doing something dangerous.

The pros: They get the reputation of surviving some of the most death-defying acts humanly possible.

The cons: Stunts don’t always get the recognition they deserve in the public eye.

8. Magazine photographer

Why it’s sexy: They are paid to capture images of beautiful and interesting people and locations.

Where you’ll find them: At photo shoots and in dark rooms. The majority of the work is in New York and Los Angeles.

The pros: Their creative vision pays off, literally.

The cons: Expensive and heavy equipment, finding the right frame and needing to talk your subjects into your ideas.

9.Club owner

Why it’s sexy: They are their own bosses and they create the atmosphere where people go to party.

Where you’ll find them: Working the room and overseeing the scene.

The pros: As the owners of the area hotspots, everyone wants to know them. Reputation makes the business.

The cons: Trends come and go, and if club owners can’t keep it interesting, patrons will party elsewhere.

10.Professional investigator

Why it’s sexy: Their job is all about uncovering confidential information, whether it’s insurance fraud or cheating spouses.

Where you’ll find them: Doing research, testifying in court or on location for surveillance.

The pros: Uncovering infidelities and getting justice for the romantically wronged is their bread and butter.

The cons: Serving subpoenas and other court-related work is the unglamorous side of their business. The work can also be sometimes perceived as seedy by the general public.

The Talent Behind ‘China Inc.’

By Thomas Hout and John Wong

From The Wall Street Journal Online

A stereotype is forming around China’s acquisitions in the U.S. — buy fast rather than build slow. Lenovo’s buyout of IBM’s PC unit, TCL’s buyout of France’s Thomson and with it RCA, and now Haier’s bid for Maytag all suggest that China is in a hurry to go global and will freely spend low-cost money to acquire our brands and distribution access, plus secure an outlet for their low-cost products made in China.

The problem with this view is that China’s most successful acquisitions to date in the U.S. have little to do with China’s low-cost money and workers or buying our brands. They are instead all about Chinese management skill and U.S. workers. These no-name Chinese acquisitions are turn-arounds founded on hard-nosed Chinese business practices, and they import less product from China than most U.S. manufacturers do.

Haier in fact doesn’t fit the mold either. It has spent 10 years building its own brand in the U.S. and now has its name on 10% of new U.S. refrigerator sales. Large units, too expensive to ship from China, are made in the U.S. Haier succeeded by partnering with a young, market-savvy U.S. entrepreneur, Michael Jemal, who created down-market, niche refrigerator products that the big U.S. brands ignored and won its own distribution access by customizing products for the big box retailers. Haier’s bid for Maytag is a turn-around play premised on Haier’s proven management practices. Otherwise, sophisticated co-investors like Blackstone and Bain Capital would not be aboard.

Chinese companies that are successfully building slow in the U.S. include Wanxiang and China International Marine Container (CIMC). Wanxiang Group, China’s leading auto-parts maker, tried to export auto parts from China to the U.S. but found itself under-priced by Polish and Romanian imports. So it adopted a private equity role in building a U.S. business: it joint ventures or acquires stakes in struggling U.S. manufacturers, then restructures their management and operations based on what Wanxiang learned in China. The Group now has equity positions in over 30 auto-parts companies world-wide, and its U.S. sales of nearly $400 million are more profitable than its business back home.

CIMC may be the world’s least visible globally dominant company, making 40% of all shipping containers. In the 1990s it consolidated South China’s big container business — much like GM rolled-up U.S. autos in the 1930s — by buying up smaller local producers with non-voting stock, then rationalized production among these subsidiaries. Only then did CIMC acquire a U.S. truck-trailer maker from a bankrupt parent and turn it around, using Chinese-made container components and factory floor technology.

Chinese management is an under-rated asset in American discussions of China’s global strategy. Almost all large successful companies in China are turn-arounds of formerly politically managed state-owned enterprises. The managers who took them over during the 1980s and 1990s reforms had to learn what any turn-around specialist does — flatten layers, fire the pretenders, prune losing businesses, and hammer operating costs down. The CEOs of Haier, Wanxiang, and CIMC all started and spent their careers on the factory floor. China’s low-cost mentality is just as much about cheap management as about cheap labor.

So it makes sense that China’s first and surest global companies will be in mid-tech or modest brand businesses built on ground-level operating skills, opportunism, and local partnerships — not high-profile consumer brands or high tech. These proven Chinese strengths also play perfectly to deep changes going on in the U.S. economy — revitalization of distressed small manufacturers through new partnerships, private equity’s growing role, and even lower income consumers’ trading-down to lower-priced household durables.

Not all Chinese companies, however, think they have the time to build slow. Lenovo and TCL are in fast-moving businesses where strong global competitors are breathing down their neck in China — especially, Dell, Samsung, Nokia and Motorola. Computers, flat-screen televisions, cell phones, and mobile consumer electronics devices of all kinds may be made in China but controlled by multinationals there who are pulling away from Chinese competitors.

This issue of pace is a problem for China. Product and marketing innovation is rooted in close contact with customers and close collaboration with adjacent, complementary technologies. Chinese state-owned companies have typically been separated from end customers by government-controlled distribution intermediaries. The result is China doesn’t have what Silicon Valley and other innovation clusters have — diffusion of knowledge horizontally and movement of technologists between firms.

Too much can be expected of China’s high-profile companies now. The early rounds of Chinese globalizing favor less glamorous, hard-nosed Chinese companies who have a lot to offer to industrial America right now.

Expat Life: A One-Way Ticket To a New Life in China

By Alan Paul

From The Wall Street Journal Online

Please don’t call me a trailing spouse. It’s a horrible term — sexist and demeaning when applied to a woman and downright emasculating when slapped on a man. But lingo is lingo and facts are facts. And the fact is, in expat land, I am a trailing spouse. I became one the moment I put my career on ice, packed up the house and three kids in suburban New Jersey and moved to Beijing in support of my wife and her new job.

This isn’t all new to me. I haven’t set foot in an office for nearly 10 years, working from home as a magazine writer and editor. As our three children’s primary caregiver I am used to being the only adult male in a room, having chaperoned field trips, assisted in kindergarten classes and shown up for countless midday assemblies. Still, the dividing line is much sharper here. After all, we have uprooted our family and moved to the other side of the world for someone’s job. And it’s not mine.

While my wife, Rebecca, has long had the job that parents like to brag about, as a rising editor at The Wall Street Journal, I’m the one who has managed to live out the widespread male fantasy of getting paid for a state of perpetual adolescence. As a senior writer for Guitar World and the basketball magazine Slam, I was paid to write the kinds of things that most men call procrastination: Who are the five greatest power forwards of all time? Name rock guitar’s 10 greatest riffs. Why isn’t Lynyrd Skynyrd in the Rock and Roll Hall of Fame? When it was time to leave home and go to work, my destinations were press-row seats at NBA games or New York rock shows. It’s not a life I could easily abandon.

Yet when Rebecca casually mentioned to a friend last December that the Journal’s China Bureau Chief job was posted, I urged her to go for it. She was shocked. I had, after all, nipped in the bud talk of moving to Chicago, Washington, D.C., and San Francisco, hesitant to give up my gigs and support system to head off into the great unknown. “But this is different,” I explained. “It’s China!”

Six months later, worn out and frazzled from preparing to pull up stakes, I found myself asking my doctor for a sleeping-pill prescription to help me get some rest. A simple thought ran through my head: “Me and my big mouth.”

For months, I had wondered what it would feel like to board a plane with a one-way ticket to Beijing. When the moment came last August it felt like a huge exhale. A tremendous sense of relief washed over me, knowing that our 15 suitcases were secure in the cargo bin, life as I knew it was fading in the rearview mirror and adventures were looming ahead. Whatever difficulties the transition posed had to be a piece of cake compared to the painstaking, numbing process of erasing our existence in Maplewood, N.J., and emptying the house we had lived in for seven years.

Moving to China with three kids — Jacob, 7, Eli, 5 and Anna, 2 — seemed so wild and ambitious back in Maplewood. Then we arrived here — to the Western style “villa” my wife’s company owns in a tree-lined, European style gated housing compound called Beijing Riviera — and felt anything but exotic. Standing on the playground watching my kids run around, I was surrounded by dozens of moms from around the world. One of the first questions people ask upon meeting one another is, “Where was your last posting?” We were not only fresh off the boat, but fresh on the scene in a larger sense. Our most exotic traits were the reversal of gender rules and our straight-out-of-the-burbs background.

I met an 8-year-old girl whose mother was Indian and father Dutch but who had never lived anywhere but Beijing. Eli became good friends with a 5-year-old British girl with a perfect English accent who was born and raised in Hong Kong. At a school assembly, the principal asked how many kids spoke four languages and about 20% raised their hands.

Fellow expats were not the only ones not quite sure what to make of me. The company driver had to get used to not only having a lady boss, but figuring out how to deal with a male tai tai (lady of the house). Like most people in his position, Mr. D is a bit of a heavy. He is also indisputably loyal, officious and efficient. He has driven us around town to perform the many bureaucratic errands required to live here — processing visas, getting press credentials, applying for driver’s licenses. He also provides invaluable assistance in many of these tasks.

On one such errand, Mr. D’s view of me was stood on its head. I am credentialed and sanctioned as the Beijing Bureau Chief for Slam magazine. We waited in line at the massive, bustling government office where visas are issued for Chinese and foreigners alike. When it was my turn, the policeman processing my paperwork looked up from his stamping to say, “I very like Slam.”

Next came a fairly intense, in-depth basketball discussion. He wanted to know who I thought was the best Chinese basketball player, “after Yao Ming.” Mr. D watched and listened in amazement, then turned to the officer and asked him something in Chinese. The two had an animated chat, and Mr. D looked at me and smiled and laughed. Afterward, something seemed to change in the way he regarded me.

While my wife went off to work, burying herself in a demanding new position, the kids were adapting to life halfway around the world with remarkable ease, nonchalantly starting at a British-run school complete with uniforms. Frankly, they inspired me to keep moving forward and never look back, as I walked to Starbucks everyday, laptop bag slung across my shoulder, grateful for the free wireless service as I waited for my DSL hookup to be activated. It didn’t take long to sell a story on bike riding through crowded, downtown Beijing and start interviewing the stars of the Chinese national basketball team, in search of the next Yao. You know — getting paid for the kind of stuff most people call procrastination.