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4th of July Celebrations – Expat Style.
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In America the United States Independence is such a big holiday that perhaps you may wonder how do American expatriates, who cannot go home, celebrate it? You will find that Americans around the world make this a very important holiday—perhaps it may mean more to Expats than to you! Even in a place like Hanoi, Vietnam there is a fun filled Independence Day celebration. This is ironic if you consider that this celebratory party is taking place just a few blocks down the street from a once notorious prison that held our service men during the Vietnam War—called the Hanoi Hilton. Just a short distance down that same street is the present Hanoi Hilton that is called Hilton Opera.
This party has all the trimmings of a regular 4th of July party, and it is not just for Americans, but Vietnamese and many other nationalities—so long as they purchase a ticket. A huge outdoor picnic buffet, Hanoi style, with American favorites such as hotdogs, potato salad, Mexican food , BBQ pork, Ruben sandwiches, salads, ice cream and donuts are all provided.
Entertainment and games is also included along with a show by the Hanoi Circus, a variety of outdoor games, and even face painting activity. One of my favorite parts of the evening is the US Marine Guard’s marching the colors as the National Athem is played by the Marine Pacific Brass Quintet. This always brings an emotional response from the Americans in the crowd. The evening ends with jazz music being played by a Grammy nominated artist Andromeda Turre and a raffle with over 150 prizes being given out.
Sounds a bit like your local celebration? This event which is sponsored by the American Chamber of Commerce, strives to bring a bit of home to those Americans who are living in Hanoi.
Look below to see some photos from our celebration this year.
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Photos of the crowd that attended.
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The tickets included an large buffet and other treats such as KFC Chicken and donuts.
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My friend Matthew Chao is showing his American pride!
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The Hanoi Circus came to entertain us. We had everything from jugglers, monkeys to rollerskates!
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This couple was spining around on those rollerskates!
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There were flags and decorations everywhere.
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As part of this cirus act, this man brought in two very large snakes. He was dancing with this snake around him. I am still trying to figure out how a half naked man with a snake is something American!
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This little boy was very brave to allow this snake to be put around him! As you see I did not volunteer!
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This was a watermelon eatting contest. A Korean man, not an American won!
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Marine Corps Quintet is presently on tour and they came all the way from Hawaii to play for us.
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Hanoi based US Marine Corps presenting the colors and flag.
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 Negotiating Chinese style is not always as easy as it seems.
A friend of mine who is an American who works in Guangzhou told me that he may need to start to take some anger management classes after all his negotiating in China. I told him that I wanted to know where the classes were held as I would be happy to sign up along with him. The truth is that in China negotiating is tough, it takes a lot of patience, self control and just plain endurance.
First the tea is poured. I don’t even drink the tea, so I take the cup and put it aside. We start on the small talk, weather, family, life and just about anything. About this time the cigarettes from the factory get lite up. There is no sense of there being a non smoking zone, so smoke gets blown in your face. I sit and try to move away from the smoke and not complain but keep a smile on my face of “I am so happy to be here today.”
At this point at least 45 minutes since we have walked in the door have past and we have not even started to talk about anything important. The room is filled with smoke and all the while we need to be sure to keep a smile on our faces. Then slowly the complaining starts. It can range from whole host of things but it is anything from labor being so hard to get, to supplies increasing in price to just about anything you can think about. The list can go on and on. We smile and tell them how the complaint does not matter or how we understand BUT….. And around and around we will go on this, the same complaints, our giving the same reasons but using different words or techniques each time we give them. This could go on for 1 to 2 hours. Finally sometime after my lungs are black from inhaling the smoke, my face is sore from putting on that fake smile we get the point while we are really there and what we need to talk about.
From an outsider all this can seem like a pointless exercise. I mean after all isn’t time money? Why can’t we get to the point of the conversation? I ask myself that question many times.
Here are some things to remember about negotiations Asian Style:
1. Negotiations Asian Style is a Skill. This requires a skill, that I find few foreigners really have. In the first place to really negotiate effectively you need to speak and under the language and culture. As a foreigner you may think you have won, but in reality you have not. This I have found is best to be done by Chinese to Chinese or by Asian to Asian. As a foreigner, you will get a lot more done by sitting and listening instead of trying to control the negotiating.
2. Shouting Does Not Mean Anger – Chinese shout when they talk. Chinese is just a loud language and noise is used to emphasis. So if you are sitting there not understanding a thing and you hear shouting, it does not mean anger. Shouting or loudness is used a lot, especially when there is negotitating going on.
3. Don’t Rush &ndash- This is harder to do than say, but sit back relax. Do not look like you are in hurry but act like you have all the time in the world, especially if you want to get your way in the negotiations. Take your time and work with the rythum, don’t try to break it.
4. Expect to Compromise –In fact in truth most Chinese would prefer to compromise with a problem than to go to court. Expect that there will be some compromise, so have an idea of this compromise ahead of time.
5. Expect Complaints –There will be complaining. It is the nature of the negotiation and do not take it personally. But find a way to weed through the complaints as some will be justified and many will not be.
There is nothing like a morning in Asia. The streets are full and buzzing and from very early in the morning people are out on the streets, parks and sidewalks to exercise. In a typical morning you can see everything from a dancing class, aerobics class, badminton to a weight lifting class. When I am in Hanoi, many mornings I get up early and get out on my bike to ride around the city. I have to start out between 5 to 5:15 am in order to have any hope to beat the morning traffic. I follow a route where I will circle around West Lake, go by a smaller lake called Tay Ho, then go to the downtown area near the main lake there called Hoan Kiem Lake, past Lenin Park and then on to my home. One morning I took my camera with me and took photos to show you about some morning exercise in Vietnam. I hope you will enjoy this photo blog as you follow along with me to see a typical day or morning exercise in Asia.
 Morning Exercise, a Photo Blog.
5:20 am – West Lake, This couple had their own tape player and the wife was leading aerobics while her husband was following along.
5:30 am – West Lake, This is a group of women with one man looking on. Probably they are engaged in some kind of stretching exercise, prior to a walk near the lake, but I can’t be sure.
5:45 am – West Lake and Tay Ho Lake Area – There is always a group of people here each morning exercising and stretching. If you stay at this area long enough you can find some very interesting stretching moves going on.
5:50 am West Lake and Tay Ho Area – Every morning these women have a street aerobics and dance class. This morning a foreign woman and man were running by and she stopped to try to teach them some correct moves for aerobics. I do not think the women were too happy as they you can see from the second photo they continued to do what they do each morning which is basically to wave their arms and shake their hips to the beat of the music.
6:15 am – Hoan Kiem Lake, Asia would not be complete without a morning Tai Chi Class. There are Tai Chi classes going on all over town and anyone can join in, even if you just got off your motorbike and still have on your helmet as this man did. Don’t be shy, if you want to join in, then join in!
6:20 am – Hoan Kiem Lake, Every morning rain or shine these guys have set up a portable weight room on the sidewalk. This morning as I stopped to take their photo they asked me to join them, I told them maybe sometime in the future!
6:30 am – Lenin’s Park, Morning Exercise would not be complete without a Badminton Tournament. There are badminton games going on all around the city. As you can see they even have the sidewalks painted and nets set up. Old and young alike participate and play badminton.
6:32 am - Lenin’s Park, All kinds of exercise is going on in Hanoi in the morning. Everything from Football (Soccer Games) to just morning stretching exercises.
Anyone who travels to Asia needs to take the time to get up early in the morning and go to a local park to see what is going on there. Otherwise you will miss this very important and exciting part of life in Asia.
Cow and Bike crossing
The other day I was out on a long bike ride with a friend of mine, and along the way we passed a sign that said “Cows and Bike “path only. I thought only in Asia would they put the Cows and Bikes in the same lane. Well after all aren’t the cows slow just like the bikes ought to be? I don’t know about you, but I prefer to avoid riding on the road dodging cows and going through cow dung along the way.
Asia is the land of “almost right.” At times I feel like they almost get it right. They erect beautiful buildings, and have all these high tech things but then some of them just do not quite work. They build a freeway and suddenly in the middle of nowhere the freeway stops, you have a light and then it starts again. I have no idea why they just couldn’t make the freeway go all the way through. Or my personal favorite is the freeway in Guangzhou that has a speed limit of 30 or 40 Kilometers per hour. Do you have any idea how slow 30 or 40 Kilometer per hour is? That is like 19 to 25 miles per hour. Most people do not even drive that on a residential street let alone on a freeway. I can bike as fast as that. I get frustrated when the freeways are empty and my driver is going 30 or 40 kilometers an hour down an empty freeway because the freeways are monitored by a camera, and you can get a ticket even if there are no police. Why build a freeway if you have to crawl along the way? A heavy foot on the gas is not allowed.
I have heard a lot of talk in America lately, and especially in our industry about all the problems in Asia; including the lack of containers, and that workers do not return promptly to work after the New Year. A third issue is my personal favorite: The statement by some people that they must buy their goods before the Lunar New Year because quality will decline afterwards.
Here is what my experience in Asia tells me about all three of these misconceptions:
1. Containers are always a problem as is shipping space during the Lunar New Year. Companies and customs close down for a week so that naturally there will be a backlog. If the American Government or our Ports closed down for a week we would also have a huge backlog. Imagine if Wal-Mart closed for 3 days? Well that is what happens during the Lunar New Year, everything is closed—sometimes effectively for more than a week.
2. Quality is always a challenge in Asia. Even with complete hands-on inspection it is a challenge in the best of times. The only thing you can do is have people on the ground who are working for you or if not you have to oversee quality yourself. My experience shows me that quality may decline during the time before the long Lunar New Year holiday as factories rush to complete orders. Once the New Year is over they have a fresh opportunity to make a fresh start. At Mondoro we spend a lot and time, effort, and money at the factories checking production throughout the entire production process. A good inspection team will always find quality problems at any time of the year.
3. Workers always come back from Chinese New Year late or leave early. The factories all know this and account for this. Sometimes they do come back late and one reason is simply that they have a long way to travel and it is for them a long hard ride that can take up to 5 days. I think if I had to spend 5 days standing on a Chinese Train or going by a crowded bus I would also postpone my trip if I could. Companies need to take this all into account because there will always be a long Lunar New Year holiday to contend with no matter how much we may want it to go away.
How to get full points?
I have been enrolled on-line in a degree program in Chinese Law with a University in Hong Kong. Their system of grading is based on Hong Kong and UK practices which has severely bruised my ego. You write a paper and they tell it can earn 100 points, but in reality they will only give you half that amount. An American University Professor I met on a United Flight coming back to Asia recently told me, “In the Hong Kong University system only God or the Professor can get the full points, they will never give it to the students.” This philosophy has been very hard for me as an American to handle. I expect an A paper that has a 100 point value to be 90, 95 or 100 points not 55, 58 or 60 points. Each time I see the lower scores I take a huge gasp, my blood pressure rises and I write an email to my tutor to ask them why I failed my paper when the only comment I got was “you covered all the points and did a very good job.”
All this demonstrates a deeper hidden philosophy between Asia and the United States, and how we each view positive re-enforcement. For example when I speak Chinese to someone I get a response ‘bucuo” or OK. To me as a westerner OK, just means OK. It does not mean great, but is just OK. But when someone who speaks very little Chinese and can only manage to say just a few words, the Chinese may exclaim Oh your Chinese is “hen hao!” Which literally means your Chinese is very good! I have often noticed this unstated cultural phenomenon.
The Chinese are generally modest in nature and will not come right out to say “look at me, look at how great I am,” so when they tell you that your Chinese is OK, what they really mean is your Chinese is acceptable or good. But to the struggling Chinese speaker when they say your Chinese is very good, what they are really saying is keep it up, your Chinese will become better. They are giving encouragement to keep trying to learn more Chinese. This is the same thinking that I am getting in my University courses and how they grade the papers. I will never write a 100 point, or even a 90 or 95 point paper. It is not possible and will never be possible. At the Master’s Level of study in Hong Kong, it just does not exist. It is a way to keep us all humble and remind us that no matter what we write it will never be worth the 100 points, never – ever. So between the 58 paper scores - the “you speak Chinese OK, - and the bad economy, my ego is bruised and broken—there there is no pride left all at all. The blessing in all this is that it continues to keep me very humble.
Is living in Asia cheap?
My sister and her family are thinking to come over to Asia for a visit. When I was speaking to her about this trip she said, ‘you know once we get there things should be cheap and not cost us much.” For some reason many people seem to think that living and working in Asia, is the “cheap” life where everything is inexpensive, good quality and so this allows us to rank in the dough. But nothing can be further from the truth since the reality is that goods and services and housing are generally cheaper and of better quality in other parts of the world than in Asia. Someone once called Asia as “Fools Gold.”
Asia is an expensive place to live. Hong Kong is ranked as the 5 th most expensive place in the world for expatriates to live. This puts them ahead of New York City which is ranked Number 8. Just below New York City is Beijing that is ranked Number 9 and Singapore that is ranked number 10. This is way ahead of Los Angeles that is only ranked as the 23 rd most expensive place to live. Asian cities consistently rank on the top 10 as the most expensive cities to live and work in the world. This does not account for other things like the loss of the standard of living (which is generally better in places like America) or the cost of food. Yes you can eat on the street, get a meal for a few dollars, even find some great local restaurants at bargain prices, but the general cost of living is very high. It may surprise many how expensive it can be to live and work in a Third World country like China or Vietnam. There are some advantages like being able to afford maid service but on the other hand things like educating your children can cost anywhere from 10,000 to 20,000 USD per year, and many of my friends complain the education is not worth that amount. Real estate is generally very high and what you get for your money is must less than what you can get in other parts of the world.
Almost all expatriates I know in Asia work very hard. It seems that to really live and work in Asia you need to be a bit of a self inflicted workaholic. Long hours are required as is a lot of travel and weekend work. Even holidays are never really holidays, there is always work to be done. The pool or posh gym you may have access to may hardly ever be used as there is just no time to go there. The daily commute on the roads can be grueling as most Asia cities have severely congested roads that can mean anywhere from one hour to several hours commuting each day. Add on top of that the price of food, gas and even automobiles—all of which are much higher than you would pay in a place like the United States or even Europe.
So is living in Asia Fools Gold? Well it is certainly not the cheap place that many seem to think it is. Asia makes a place like the US state of Hawaii look like a bargain.
Policing the internet
This last week my staff went to a meeting at our local Chinese police station. They told us that as of July 1st, 2009 all companies in our area are required to buy a machine or buy into a system that will allow the police to view the content we are viewing on the internet. The reason they gave was that they wanted to ensure we do not view any unsuitable, vulgar, or indecent materials, such as pornography. Putting our internet in the hands of the local police is not a solution.
China has waged a war with unsuitable, vulgar or indecent internet materials such as internet pornography. Both Google and the Chinese search engine Baidu had to give public apologies about allowing unsuitable materials through their search engines.
I personally think it is great that China is taking action to try to stamp out pornography and other lewd sites, but opposing internet pornography is only the beginning of what may become for China’s a real moral dilemma.
I have no problem with China policing and stamping out pornography on the internet, in fact, I praise them for taking a step such as this. But then, what about the other obvious “moral and lewd” behavior that is going on in China? Who is going to police and stamp those out? The late night phone calls you get in some Chinese hotels where a girl on the other end asks for “service.’ This obviously is not a 1:00 am call for room service and it is common knowledge that someone in the hotel is giving these girls the room numbers to call. Or consider the many Gentlemen clubs, Karaoke bars or other places that are ripe spots for prostitution. Countless hotels in China have condoms and other sexual paraphernalia in the hotel rooms—usually in the bathroom right next to the soap and shampoo. Many of these items are quite shocking and would be only seen in adult stores in America. A common sight in Chinese hotels—ranging from five star to one star rating— is to see Chinese men going up to a room with a young girl carefully arrayed with heavy makeup and scanty clothes. The Washington Post estimates that prostitution in China is flourishing, with numbers increasing each year and among all classes of people. Certainly if China must require me to invest in a machine that connects to the local police station so they can Nanny manage my internet, they should also start closer to home by cleaning up obvious problems like prostitution.
C.A.R.B.S or No C.A.R.B.S?
Readers in the Home Furnishing Industry should be aware that the California Air Resource Board (C.A.R.B) has established new limits on the emission of formaldehyde in all composite wood products—including products made by medium and thin density fiberboard (MDF), particleboard and plywood. This ruling which was effective 1 Jan 2009 has started a debate in the furniture industry of what it means for manufacturers, importers and retailers to be CARB’s compliant.
I have many of my customers asking me what does this C.A.R.B ruling mean and what do they need to do to be compliant? This new law could not have come at a more difficult time, when the industry is already stressed or even depressed. It will affect pricing and also will affect how an importer purchases products from overseas.
Here is a quick review of what it means to be C.A.R.B S. compliant:
1. Materials affected by C.A.R.B.S.:
a. Particleboard (PB)
b. Hardwood Plywood (HWPW) which is divided up into veneer core (HWPW-VC) and Hardwood Plywood Composite Core (HWPW-CC).
c. Medium Density Fiberboard (MDF) which is either standard or thin or Low and High Density.
d. Hardwood, Plywood or Medium Density Fiberboard which is made from ultra low emission formaldehyde (ULEF) resin or from No Add Formaldehyde (NAF) resin are not under this law but must still be tested and have documentation.
2. Items Affected by C.A.R.B:
a. This regulation affects all products regardless of finish, size or use. Don’t think that because you have a small box or any small item you are exempt. Quite the contrary! It affects all items large or small.
b. It also affects all products whether finished or unfinished. Remember with C.A.R.B’s the type of finish does not matter, only what the product is made of.
c. All items with these composite wood materials are under this law. There are allowed sell through dates for products already on the shelf or already produced until about July 2010.
3. Labeling and Documentation: This area promises to be one of the more difficult areas for vendors, importers and retailers.
a. Vendors
i. Label all products as C.A.R.B. compliant
ii. Keep accurate records of all purchases of C.A.R.B. compliant materials.
iii. Show compliance on the Bill of Lading or Invoice.
iv. Are expected to presently be producing C.A.R.B.S compliant items sold for distribution in the State of California.
b. Importers
i. Notify vendors of C.A.R.B’s and take all precautions to be C.A.R.B compliant.
ii. Keep accurate records of materials being used including:
1. Date the purchase, the name of the supplier of composite materials, and/or the finished goods.
2. Keep records for a minimum of 2 years.
iii. Are expected to be buying C.A.R.B.S compliant products. Sell through date is 1 July 2010,
c. Retailers
i. Take all necessary precautions to ensure this law is followed
ii. Get a written acknowledgement from your supplier of their understanding and compliance with the regulations..
iii. Keep records from the supplier to show that compliant materials are being used to manufacture the products being sold.
1. The record should include the date of purchase, and the names of suppliers of composite wood products and/or finished goods.
2. Keep records for a minimum of 2 years.
iv. Sell through date is 1 July 2010.
d. Please note that vendors, importers and retailers are not required to test for C.A.R.B compliance but they are required to keep records and document the precautions they have taken to comply with this law.
You can find out more about this law by going to the California State website.
Like most laws that are put in place, this law is filled with confusion. Here are a few points to remember:
1. This is a state and not a federal law, and only affects the sales in the State of California.
2. This law requires that everyone involved in this process must keep the necessary records—certainly one of the more burdensome parts of this law.
3. Expect to pay more for C.A.R.B’s compliant goods. To produce this raw material is a lot more expensive and therefore is an extra burden and material expense on the manufacture of the composite material that must pay for testing and record keeping. Also, for many in our industry where only small quantities of C.A.R.B.’s materials are used there will be an added burden. Someone at the end of the supply chain will have to be responsible for the suppliers they use for low volume C.A.R.B. compliant goods. Keeping small quantities of compliant materials will be a challenge for many suppliers. Further, some countries only have a few suppliers who are compliant. I know for example that in Vietnam there is at present only one plywood supplier that is compliant. Obviously other countries will similarly be limited in their supply sources.
4. This law does not affect solid wood products. Hardboard, natural wood panels, bamboo, softwood plywood (Cone Bearing) or orient strand board or chip board. Only the composite wood products as listed above.
5. The sell through dates for products which were manufactured before the 1 Jan 2009 deadline (importers were given a 3 month grace period which has passed) is technically only for products manufactured before the Jan 2009 date. For products produced after this date they are expected to be C.A.R.B.S compliant even if they are sold before the actual sell through day of 1 July 2010.
6. Recently the State of California gave panel manufacturers a 4 month grace period of compliance due to the economic crisis and their inability to sell the panels as fast as they normally would, click here for more information. If the bad economy continues California may also be forced to extend other sell through dates.
7. The California Air Resource Board has the authority to check the C.A.R.B.S. compliance measures of importers, retailers and distributer’s in the State of California.
8. Importers should be advising their vendors in Asia if they sell into the State of California and require C.A.R.B.S compliant products. Not all Asian vendors will automatically produce C.A.R.B.S compliant products as there could be added costs involved. Importers should clarify this with their Asian vendors.
So when you ask the question if you need to be CARB’s compliant the question really comes down to how many products do you sell into the State of California and how many of your products are made from composite wood materials? Only you can answer that question, but if you are selling into the State of California any items which are made of composite wood products you should make sure you conform to this new law.
Reference:
Click here to view the State of California’s sell through dates on CARBS.
Run Over!
The other day one of my customers told me that some samples we shipped to them had literally rolled out of the back of the truck and were run over by a tire of a large semi truck. I thought isn’t that exactly the way I feel a bit these days – like I was also run over by a semi truck? My life the last two months has been spent cleaning up the mess in my Vietnam Office that two of my staff left. Both of these staff were so corrupt that the only place I feel they should be at the moment is sitting in a jail cell. They stole, lied, cheated and schemed how to cheat on every single thing that was possible. They took from others and hurt others with no thought for anyone but themselves. Criminal is the kindest word I can think of using in this case; I feel I have looked the devil in the eye. In any other country these individuals could be locked up in a jail cell, but in Vietnam with a legal system that does not always see corruption as a problem there is not always justice – especially for foreigners.
Vietnam is a land of irony. Take for example their Civil Code Article 9 that is entitled Good Faith and Honesty. It says that “in civil relations, the parties shall act in good faith and honesty,” and then it goes on and describes that all people in Vietnam are expected to be honest in their dealings with each other. I recently pointed out to my staff since honesty was placed in the Civil Code it has become a legal concept. In theory this should mean that to be dishonest, lie, cheat and steal is against the law and companies should unquestionably be able to bring to justice the employee who decides to take money, embezzle or do a host of other illegal things. In theory it could be done, but in practice high principles are much more difficult to actually apply to your work place.
I have spent a large part of the month having meetings with my staff and vendors to talk about what corruption and honesty means. Most of my vendors have openly told me that they have been cheated so many times by corruption and dishonesty that it has hurt their business. Some have told me they had to dismiss most of their staff at one time or another due to corruption. Like me, these small business owners understand how corruption hurts business and why I had to take the steps I did. Many of them have openly thanked me for cleaning up my office and getting rid of the employees I did. They all smile when I tell them I want them to sign a contract to confirm that if they pay out any corruption money to any of my staff they must pay me back double the amount they have paid out.
To me this is all very ironic for a country that has honesty as a legal principle in their Civil Code. I should not have to have these conversations—they should be understood as they are part of the law. I should not have to define what corruption or dishonesty means.
At present Vietnam is clearly a country that is struggling to find a balance between what is honest and dishonest, corruption and non-corruption. There are many who feel that Vietnam’s corruption could derail their chances of becoming a real economic Asian Dragon. Most foreigners who are working here that I happen to know are frustrated and have been hurt by corruption. Also many Vietnamese are frustrated and, like their foreign counterparts, have also been hurt by corruption. That is very ironic since the principle of honesty has been written into their laws. So the theoretical principle of Good Faith and Honesty, because it is unenforced, may end up to be the very principle that completely derails Vietnam’s economic bubble, and may end up to be the reason that they may become just an economic Asian Dragon wannabe, instead of the real thing!
Transparency and Corruption
This is the 2nd time this year I have had to let some of my top people in Vietnam go due to corruption. Each time I have done this it amazes me that when I fire them, they give me a look telling me that I just do not understand their culture and then give a sigh and say “This is the Vietnamese way!” I am amazed that they will try to claim that being corrupt is just a normal way of life, a normal way of doing business. That somehow to lie, cheat and steal is Ok, so long as they try and make it seem part of the culture – part of the Vietnamese way of life, the Vietnamese way to conduct business. I personally find this very insulting to the many Vietnamese who are decent, honest and hardworking individuals. I do not feel that an entire country and people can be corrupt or even that they all really believe in corruption. There are many good and honest people in Vietnam.
Here are a few lessons I have learned from my personal experience and from some very hard knocks while running a company in Vietnam:
1. Watch out for the Sweet talking: Most of the people I have had to fire for corruption had good English skills and knew how to talk sweet. Because of their English ability they rose up in the company. Not everyone who speaks good English is corrupt, but in my opinion sometimes the sweet talking may be just a means to cover up a very nasty smell which is usually corruption. One of my staff told me about a manager I recently fired due to corruption that his problem was also that while he knew how to talk he actually did very little. Look for signs that work has not been accomplished on a consistent basis. It may be a cover for something else that is very wrong.
2. Look at the other Staff: Does the staff really respect their supervisor? There are always clues out there as to how others may feel about a particular person in a position of authority. Loss of respect probably has a cause which needs looking into. The staff may suspect that the person who is giving the orders is corrupt or lazy or arrogant for a reason—but they may not know why. Of course a lack of respect for managers affects the entire organization. When it is hard or slow to get things done you may suspect deeper problems.
3. Look for Alliances: In all my cases with corruption, alliances were formed enabling people in authority to be corrupt. In both my cases it involved key people in positions of authority and responsibility, who formed a kind of corruption alliance based on personal relationships outside the office. In hindsight I might have avoided problems when I learned they were forming these personal alliances. I should have made a change that might have avoided the problem. At the least I should have looked more closely at them to see at how things were being managed.
4. Start to investigate: You need to start the process of investigation immediately. There is a cultural affinity we can all appreciate if we ourselves have been an employee under a manager who is self serving. It is natural not to “squeal” on fellow workers—especially managers. Overcoming this reluctance will not be easy, but once you do you may be surprised what you find out.
5. Proclaim Zero Corruption Tolerance: I have a very tough non-corruption policy. This means I start to investigate even with small corruption. I have found that when I start to smell it I am usually right—something is wrong. We are requiring everyone we work with, including suppliers, to sign a very tough non-corruption policy. I also repeat my policy again and again in all the documents I give them, and I repeat it in many office meetings. In the end, only by rooting out verified corruption will you convince everyone you will not tolerate it. No matter how painful it may be, or how much you like or enjoy the person who is corrupt, you must take a stand and not tolerate corruption—even for small things. You can never turn a blind eye to something like this or it may just continue to grow.
6. Establish Checks and Balances: I have found from sad experience that only by putting in place very strong checks and balances—especially for those handling money—is it possible to make corruption more difficult. Requiring more involvement by several employees may not completely stamp out corruption but it certainly helps. Good management procedures are needed to achieve this.
7. Establish a Code of Conduct and Teach Ethics – You need to have all your staff sign and understand a code of conduct. And you need to teach them about business ethics. Also reach out and teach your suppliers and business partners. I have found by talking to my suppliers that most of them agree with me and even told me they do not like corruption any more than I do. One told me he paid an agent for a large US Company corruption money for an order and then the agent ran away and left him with the goods. He told me “I have really learned my lesson on this.”
There may be some in Vietnam who feel like corruption is OK—that it is the way of life, and that taking money is somehow an acceptable way to do business. This is set to change as Vietnam becomes more and more open and more foreign investors move in. Take for example the case of Intel now building a large factory in Vietnam and which has vowed to build and operate it corruption free. (You can see the article here.) Even the Prime Minster of Vietnam has admitted that corruption is a huge problem in Vietnam and he has vowed to work to stamp it out. But Vietnam has a long way to go to solve its corruption problems. In a recent Time Magazine a case is discussed where the government gave a stimulus payment to 10 million very poor people in Vietnam. Most of the money was intercepted by corrupt officials and never made it to those who needed it most.
So is corruption really the Vietnamese way of life? It is certainly a problem for investors and businesses. Transparency International ranks Vietnam as 121 out of 180 countries. Vietnam is ranked 121 along with other countries as Nepal, Sao Tome and Principe, Nigeria and Togo. Denmark is ranked No 1 with Somalia being ranked as no 180. Hong Kong is ranked as 12, Belgium, Japan and America are all ranked as 18. China is much higher than Vietnam with a ranking of 72 and India is not far behind with a ranking of 85. As you can see from the Transparency International rankings, Vietnam has a long way to go to be more transparent and to change the world’s perspective that they are a country where corruption is tolerated. The most important thing any company operating in Vietnam can do, is follow the lead of companies like Intel and take a tough non-corruption stand. They need to educate their employees and business partners, and ensure they have in place a zero corruption tolerance policy. After all, corruption is a hidden cost that hurts everyone here in Vietnam; because it reduces the prospect of bringing in more foreign investors, adds hidden costs to products and eventually even hurts the people who are participating in it.
Asian Life Prespective
Inside Carol and Quan's
new apartment
Earlier that day I had stopped into Papa John’s pizza for a bite to eat. The restaurant was crowded with scores of Chinese of all ages chowing down on the favorite American food—pizza. For a country that traditionally does not like cheese, they have taken to eating pizza, spaghetti, noodles and garlic bread—any and everything American or European. From ice cream to coke, to snicker candy bars to chocolate. China is and has become more western with more imported western foods and other items than ever before.
Carol and Quan
inside their new apartment
As I was going home later that day I thought about my day. Pizza, the rock n roll version of a Chinese supermarket and the modern Chinese housing estates. It dawned on me that this must be what living the Chinese dream is all about—good food, good shopping, good home and a good life.
Often in America we talk about the American dream as where and how we live. We speak of having a house in the suburbs, a good job where we earn lots of money, having a good school for your kids, a bit of baseball or sports on the weekend and being able to conveniently get to some good stores for shopping. Is this Chinese dream so much different? Maybe the Chinese are not so different from us after all—their wants and desires are similar to our own, and our dreams of living are similar to theirs: good food, good shopping, good home and a good life.
Perspective on a Crisis!
The other day I was in Hong Kong speaking to a friend and she told me she had put a position for a secretary on an online recruitment website. Just by the one online posting she received over 500 applications.
Workers in a factory
Asia is hurting. People are out of work. Factories are closing.
It is now official; China is losing its position as the world’s cheap manufacturing center. Factories all over China are closing their doors, but this time permanently. Gone are the days when everything in China was cheap, cheap. Prices are rising, factories are closing and people are out of work and looking to find a job—any job.
You think America or Europe has jobless problems, but what if you have over 75 million people out of work? Over 20 million of these people are migrant workers who do not have an education or any skills. They will be hard to train into a high tech manufacturing industry. They are untrained and used to only performing low skilled, basic labor. So where do you find work for all those people? The 75 million unemployed do not include the scores of newly graduated University students who have found it impossible to find a job after graduation. Also what about the millions of skilled labors who are now looking for work? Chinese college graduates this year have been told it will be tough or next to impossible to find work. After four years of slaving away at college, they are not happy.
China has some small unemployment benefits for those who are not working, but the amount given them will not be enough. Most of them need to depend on their extended families and friends. There is no such thing as an unemployment package to help you survive, live and eat while you transition to a new job as some countries have, especially in Europe. In China it is basically if you do not work, you do not earn money and in many cases do not eat.
Not having a job in China means more to workers than just being unemployed. The Chinese generally like to work and are considered very hard workers. Many of these laborers who are out of work may have been accustomed to working 60, 70 or even 80 hours a week. They work hard and do not complain—usually at some very basic manual labor.
In the Chinese constitution it is written that it is the duty and right of every Chinese citizen to work. In China work is not only seen as a right, but also an obligation. That is why you see so many migrant workers who are willing to spend months away from their families, traveling sometimes long distances, to a place to work where they could earn decent money. For them this was their privilege, their right, and their duty. It was their way of showing their family that they love and care for them enough to work hard so that their children and their children’s children can be educated and have a better life. They are willing to sacrifice today for the next generation. So for these workers the loss is just not having a job; it is the future of their family and the generations to come that is at stake. And it is a blow to their self esteem, self worth and pride.
BAH HUMBUG!!
By Anita Louise Hummel, President, Mondoro
Dickens’ Scrooge was visited by Ghosts because he said BAH HUMBUG!! to Christmas. Do you need the same treatment? Like Scrooge, I’ve said BAH HUMBUG!! and was consequently was visited by Ghosts who delivered a few scary thoughts.
A poor girl
Gone are the days when everything in China is cheap, cheap. I had a friend in the US recently exclaim to me: “Isn’t China cheap!” China is no longer cheap—prices are going up every day. Not just on the goods and products for export, but also for the staples such as rice or meat. Yes it is still cheaper to produce products in China than in other Western Countries, but rising prices means the Chinese will have to get smarter with the goods they manufacture.
In recent years, China has been under a lot of pressure to lower its currency against the US dollar, and this China has done. When I first came to China years ago the exchange rate was 1 USD to 8.2 RMB (Chinese Yuan). The Christmas of 2006 it was down to 1 USD to 7.8 RMB. Then last year we all gasped a sigh when it was “only” 1 USD to 7.3 RMB. We thought wow that is a drop; it can not keep on going. Well we were wrong. Today, this Christmas, it is about 1 USD to 6.8 RMB. What does that mean? It is more than just the exchange rate; it’s the other changes that have quietly been imposed by the Chinese Government. Exports are more expensive because of a cancellation of tax incentives. New labor laws mandate a 40 hour work week, and society insurance has been enacted. China is no longer the cheap, cheap place it once was.
But not all the changes are negative. China has been forced by circumstances to improve quality and reward her workers with a more equitable wage. Factories are working smarter and must now manage more professionally or suffer the consequences.
Ghost of Cheap Food Past: I have in my Hanoi Office several take out menus from some local restaurants. Formerly it was much cheaper to call out for food than to buy all the ingredients and cook it yourself. This was especially true for me since I travel a lot. Food would spoil very quickly especially in a warm, humid climate. Well the prices on the menus have changed so quickly that I have not been able to keep up with them. Every day it seems the prices here have been changing. In fact, inflation in a country such as Vietnam has suddenly become a huge problem, with prices rising over 30% in a single day. The funny thing of this is that once the prices increased they stayed high even after the world prices went down. Rising labor costs has kept many prices high. Even the guy who fixes my bicycle is asking for more money. The vet who treats my dog has raised his prices. The grocery store I shop at has significantly increased every price. Everywhere every thing is increasing. So if there is a bright side to any of this, I am forced to improve my cooking skills and learn to cook with less instead of more!
Ghost of Responsibility Past: I have lived in Asia for a long time and have seen a lot of poverty, and during that time heard a lot of stories of people who are suffering. It used to be I could hear it, see it and somehow compartmentalize it away. In Asia it is easy to become a bit callous towards poverty because you see so much if it. But I have come to realize that I can no longer be in Asia and not try to find some way to help others who are less fortunate that I am. I could see that I needed to develop a social responsibility, not just as a company, but also as an individual—a human being. The world is full of so many stories of suffering, but I have decided that even doing a bit, just a little bit, can make a difference.
In this newsletter I have described Tserong Dejie a 14 year old Tibetan Girl who is in need of a hearing aid. But she is just one of the children who need help. There is also a boy in her school named Nima Luori who also needs a hearing aid. Both these children go to school each day and do not hear or understand all that is being taught. In fact these children have never been able to see a qualified doctor about their problems. Tsering Buma is 7 years old and her father died years ago. She is pretty much left alone to fend for herself. Her teachers Aden and Lamo are extremely dedicated. Both of them earn only about 500 RMB (73 USD) per month or a total of 6,000 RMB per year (882 USD) yet they each spend most of their income on the cost of education. Aden spends 5,000 RMB (735 USD) per year to educate his own son to learn his native Tibetan language. Lamo, spends over 4,000 RMB (589 USD) per year to be able to further her own education through a distance learning program. These people teach and go to school in a small broken down school in the mountains of Tibet. There are few luxuries there and the walls are broken and hardly holding up. Life is hard. When was the last time that any of us hungered after an education as much as this that we were willing to sacrifice and endure what they endure?
The stories from Vietnam are similar. There is a Sister Monk Thich Dam Lan who lives in a Pagoda outside Hanoi where 53 orphaned children are in her care. She depends solely on what money she can personally obtain including donations. Presently she has over 15 small babies under the age of 24 months. A Vietnanmese Catholic Priest in Northern Vietnam has over 200 children in his care; many of them are severely handicapped. People like these two wonderful people dedicate their lives to helping those who are less fortunate than we are.
Old Scrooge finally learned his lesson the “dramatic” way with Ghosts of Christmas Past. My attitude has for too long been BAH HUMBUG!! Before the Ghosts visited me I felt like many of you. Just forget Christmas. Skip the presents, skip the unwanted gifts, and skip the festivities. After all there is not much to celebrate this year. It is getting harder and harder to watch the news on TV, whether CNN, BBC or even the foreign Chinese news station Channel 9. Everywhere there is bad news.
Instead I hope to have a Joyful Christmas—having learned my lesson from good Old Scrooge. I am going to strive to remember those who are less fortunate, those who need our help, and those whose lives we hold in our hands—those we have the ability help and make a difference in their lives. We can all: Help Our World – One Person at a Time.
To find out more about how you can be involved or help with Mondoro Charities go to www.mondoro-charities.org
Not a Wipe Out!
By Anita L Hummel, President of Mondoro
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Livingroom furniture and accessories
The economy is on everyone’s mind these days. Anywhere you go in the world everyone knows about the world financial crisis. Therefore it is no surprise that the state of the economy was on the minds of everyone at the October High Point Furniture Market in North Carolina. One of my customers told me that it was not a complete wipe out! I liked that analogy; it was down and it was fallen, but we did not wipe out and break any bones! Isn’t that a nice thought?
This is the first time in about 10 years or longer that I did not attend the High Point Furniture Market. I had many reasons for this, but the biggest was the same reason as everyone else, the “E” word. Things in the industry are just not what they use to be. News looks bleat, I mean even the news stations now are starting to say that fateful “D” word. So when that happens it is time to buckle down, cut back and work just that bit harder, not because we all want to, but because we all have to just to survive.
Here is a new twist on the October market dates. Historically speaking October has never been a great month for business. The Great Depression started in October on a fatal black Tuesday, October 29th, 1929. Then October 19,1987 became Black Monday, a another day when the Dow lost over 22.6% of its value. Sound familiar?
I am not sure what historians will call this October. They may call it the Black October, or the month our lives changed forever. The verdict is still out there as to what will happen with this roller coaster financial ride we have all been on. In fact the whole world may say thank goodness we are past October and now into November!
Holding the market in October compounds the problem because every 2 or 4 years it is the month just before a US Presidential or congressional Election. No matter which side you are on, it is an unsettling time since some of us will be happy about the expected outcome of the elections and others will not be.
This time the whole world is involved in this election, and they also have a kind of vested interest to see who the President will be and what if anything will change. So, this political uncertainly does absolutely nothing to help the worldwide economic worries that take place during the month of October, causing economic and political anxiety to hit right smack in the middle of the October High Point market.
Not even taking into account that October has a bad history for financial disasters, I am not sure how any trade show anywhere around the world could be considered great during the present unsettling times. Even the famous trade show in Guangzhou called the Canton Fair show had a huge decline in attendance. One factory said that their show participants were off by 70%. That is a huge decline. European and US buyers were noticeably absent from the Canton Show as compared to past years. This economic chilly wind has also been felt in Asia and at the Asian shows.
From a supplier, wholesaler or retailers point of view, there are other reasons for not wanting a furniture market in October. It is too late for the Christmas selling season because your hottest, newest products cannot be manufactured and shipped in time. That is one reason people have asked to move the October market to a better month. The show is not timed so everyone involved can benefit from the holiday season. With the Christmas selling season starting earlier than formerly, buyers must time purchases correctly.
So what is the solution? I am not sure what it is. After all, the High Point Market Authorities have already gone around and around changing dates in the past few years. Perhaps we have to keep the October market, but we must realize that October is a month that can be unsettling to people for a variety of reasons. And sometimes all we can do is hope, pray, and then be thankful that it was not a complete and total wipe out!
By Anita L Hummel - President of Mondro
Things have been a bit rough the last few weeks. Not only have I been recovering from a leg infection, but everyone in China now has to suffer from the let down of the Olympic Games. The games were here, now they are gone. I actually cried when the US Men’s Basketball and Volleyball teams won the gold. I felt a slight pinch of jealousy and envy as I watched how many medals the Chinese were getting and I felt a sense of pride when I realized that even though America had fewer Gold metals than China, we did have more over all Olympic medals than China. I could now after all still hold my head high in China.
But now the Olympics are over. I can no longer focus on the medal count, and I can no longer use the Olympics as an excuse to have a good cry. Now when I cry I get back to reality and cry for the US economy. Life! Well it has been a rough summer….at least a rough summer economically and now on top of that those of us in China have the let down of the Olympics, so we have plenty of reasons to cry.
I was speaking to one of my customers this morning and she told me that the summer was also tough for her. I think everyone in our industry has had a hard summer. There have been a lot of changes going on. Housing is down, in fact so down that many people are just hoping to stay in their house long enough to make it through the tough times. The last thing they are thinking about is a new piece of furniture for that bedroom.
I am not sure if Americans and Europeans realize how tied their economy is to China and Asia. When America or Europe coughs, Asia gets a cold. If American’s stopped buying goods from Asia, Asia will feel the pinch and would hurt in a very bad way, in fact it would maybe never recover.
There is an economic cold that Asia is feeling, the chilly wind that comes from the west. It is a cold that felt around Asia, but perhaps more so in the small ma and pa factories than in the larger ones. After all the larger factories can give up a few of their Mercedes Benz, skip a few of their 10 course meals and go to McDonalds or decide to finally sell off that private golf driving range they have at their factory. The small guys, the ones that run the small Ma and Pa factories are a lot more vulnerable. These are the guys who are down on the factory floor, each and every day, working side by side with their workers to produce products to sell in America. They are exactly the kind of people that we as Americans should be supporting and helping along the economic road of life. They are the future. They are just like you and me. They have the same dreams and desires that we have. They want to have enough money to support their family, to put food on their table, to give their children a good education. They are the people that we should be buying from, we should be supporting and we should be making sure they stay in business.
By Anita L Hummel - President of Mondoro
Watching the opening ceremony of the Olympics, a thought comes to my mind as to how far China has come in my lifetime. When I first came to China as a carefree, backpacking foreigner in 1985, I was constantly stared at on the streets of the capital. For two weeks, the world came to China to see how far it has come.
Being a foreigner in China used to be unique, but today, I hardly get a glance from the Chinese. They are so used to seeing foreigners on the streets that we are no longer unique. The Chinese have figured out that we have big noses, big eyes, and big hips. We are not noticed in the way we were when so few foreigners traveled China as I did. During that time, being a foreigner in places like Beijing or Shanghai drew attention. Your friendship was sought after—having a chance to talk to you was an opportunity that few Chinese wanted to miss. Sitting next to a foreigner on a bus or plane was a big deal. We received special treatment, and, in some cases, foreigners expected that treatment. We felt that in the1985 China, we were important. As China has advanced, they have instead focused on national pride. Proud to be Chinese! As they say in China, “Wo Ai Zhongguo,” which means “I Love China!” And the Olympics have rightfully built on this pride. After all, the Salt Lake City games and the Atlanta games helped to build American pride. So who can fault the Chinese for having the Olympics build Chinese pride?
The Olympics is not just about the games; it is also about the arrival of China onto the world stage. They want the world to stand up and take notice. China is showing the world how it has grown and how much it has advanced.
China in 1985 was backward, awkward, and totally Third World. Today, China is bright, shining, and full of modern conveniences. Cities like Beijing or Shanghai are completely world class. Who could fault the Chinese for their hard work and determination? And what a party they gave the world! Who could fault them for demonstrating a bit of pride? I cannot—and believe me, I have lived in Asia long enough to have become cynical about these kinds of things.
So as I watched the Olympics opening ceremony, all I could do was sit there in awe and think, “China, you have come a long way baby!”
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