Yiwu Markets

Yiwu

As a sub-city of the Jinhua municipality, Yiwu is famous for the massive markets in small products for sale. Recently, I visited the International Trade City (guoji maoyi cheng) and walked through stages 1, 2, 3. The market consists of masses of stores and products, all operated by individual-family households (getihu)—a China-specific designation that refers to a private enterprise of less than 8 people. While the majority of customers are from mainland China, there is also a large number of Asian bargain hunters, including those from Malaysia, India, Pakistan, and Russia. The proliferation of overseas purchasers and quality inspectors reveals, as well as dozens of hotels (and not much else) scatted around the Trade City give testament to the product-market role of this area of the city.

To understand something about the market, and try to make comparisons with the massive “electronics cities” located in Zhongguancun but also in cities throughout China, I decided to search out a pen with a laser pointer. In Shanghai, I had found a simple laser pointer in Bainaohui Electronics City at a friend’s store for the unfriendly price of 100 RMB ($14.60, using 8.63 as an exchange rate). In the first pen store I found in the market, I inquired about the price of a laser-pointer pen. “3.80 yuan, lowest price” said the shopkeeper, taken aback at my Chinese but responding quickly and firmly. Eager for the great deal, I began to pull out a 5-yuan note. “Wholesale,” interrupted the shopkeeper, “that is the whole sale price.” “Oh, how much for just one,” I asked. “Don’t sell [that way],” ended our interaction. At another pen store, I found the same laser-pointed pen and a similar price, 4.30 yuan. I asked if they sell retail or individually. “No, that is just a sample (yangpin).”

My failure to buy the product revealed one of the prevalent, though not rigid, characteristics of product markets at the Trade City: it is a wholesale operation, where the stores are a front for a network of factories and shipping that stretches from the Yangtze River Delta (Changsanjiao) to the Pearl River Delta (Zhusanjiao). The stores that quoted me a 4 yuan price for a pen with a laser pointed wanted a minimum order of 1,000 units to give me the wholesale price, otherwise they wouldn’t sell (I did convince another shopkeeper to sell me the pen for 5 yuan). Another product I investigated was a pen that can record 2 GB of video (of reasonable quality, given the camera is embedded in a pen) and audio somewhat surreptitiously. This product was quoted at 180 yuan, and the woman was willing to accept a minimum order of “several dozen”—a proposition I considered briefly, though the prospect of selling several dozen less on pen video camera seemed a little daunting.

Unfortunately, I did not stay long enough to investigate the relationships between different stores: whether there are wholesalers’ wholesalers, or bigger companies that stand behind the store fronts and supply them with goods, as is the case with computer, printer, MP3, etc. sellers in China’s urban electronics markets; do stores collaborate with each other and refer business to one another; the proportion of customers who are long-term versus short-term—or the proportion of customers that comes through a network of relationships (family, friends, native-place fellows, classmates) versus those that just walk into the market.

There is a sense of social in the Yiwu product market, however. Given my limited time, I could easily see the families that came to the market, not just to view and purchase goods (mothers, fathers, and children browsing the thousands of toys being bounced, flown, crashed, and driven in the halls), but to live lives (most if not all stores have computers connected to the internet, and many communicate back and forth using QQ, a chat program from Tecent similar to MSN and Aim—and visiting between stores, and similar age young people chatting and playing while they tend to business, hence growing up both business-wise and social-wise). This phenomenon is identical to Zhongguancun’s electronic markets, where life is lived and relationships are used, built, broken, and developed through the market, with the focus on customers and buying and selling forming only one part of daily life.

Yiwu is not a very accessible city for someone who does not speak Mandarin Chinese. However, it is only a 2-hour train ride from Shanghai (then a 30 yuan cab trip to the Trade City). There are three 5-star hotels listed on Ctrip (a China online travel agency which books hotels at competitive rates and is free) in Yiwu. Yet, in the City of Jinhua, another place I visited on this trip, which technically oversees Yiwu, there are no 5-star hotels and sparse 4-stars (I stayed at the Jinhua International Hotel, a 3-star; in Yiwu, I stayed at Snow Peak Hotel, also a 3-star, which sits literally on the 3^rd phase of the Trade City). There are, however, many, many foreigners, so it should be possible to get by with English.

Who knows? If you can pony up 10,000 yuan or so you can take a box of goods back to Shanghai (or elsewhere) and start selling or “doing business” (zuo shengyi), rather than just working. As the Chinese expression goes, “it is better to be the head of a chicken than the tail of a phoenix” (ning zuo jitou, bu zuo fengwei). 宁做鸡头，不做凤尾

Hanging Clothes and Losing Face: Che in China

Che Guiverra Doesn’t Hang His Clothes in the Street

I was riding the subway to the real estate development I am currently researching the other day, and as I stood up to get off, I noticed the profile of Che Guevara, the South American revolutionary that emblazens many T-shirts and posters in colleges throughout the United States. Curious as to Che’s appearance in Shanghai, no less on the number 5 subway line (which runs between Xinzhuang and the Minhang Economic Development Zone—both in Minhang District and all outside the outer-ring road—I leaned in for a closer look, and discovered an image of a Che T-shirt on a bamboo rod hanging over a narrow alley.

While the image is slightly blurred, you can make out the Chinese if you squint:



Chinese: “乱晾乱晒，它都怕丢人，你呢？”

Literal translation: “Chaotically hanging and drying your clothes -- it [Che shirt] is afraid of losing face, how about you?”

Figurative translation: “By hanging clothes out to dry next to the street, on sidewalks, from electric lines, etc, you go against principles of suzhi [quality, properness, manners], so you should be ashamed.”

Explanation and Opinion: It is definitely true that Shanghai people, more often outsider in Shanghi and especially the floating population (liudong renkou), lack proper places to hang their clothes. For those in apartment complexes, the “sun room” is a feature of almost all apartments, an area in which and from which to hang clothes. As I have mentioned in a previous blog, any view of an apartment complex in China will reveal hundreds to thousands of pieces of clothing in a rainbow of colors. In China, this appearance is jokingly referred to as “the 10,000-color flag of China” (wanguo qi) Hence those with apartments, more likely to be Shanghaiese or the huji population who make 70% of the population in 2007 according to the latest number from the Shanghai Bureau of Statistics (http://www.stats-sh.gov.cn/), have no need to be chaotic or outrageous with where they hang their clothes.

For those with less fortunate circumstances, however, the street is often the only place outside their domain (whether store, abandoned building, alleyway, etc.) where wet clothes can catch a brisk breeze. Che, figured in the city government public service announcement, is reminding this latter group (and perhaps re-enforcing what is “civilized” about the former group) that they should hang clothes away from the street, sidewalk, phone pole, fence.

My two cents: In thinking about Che and hanging clothes out to dry, the first thing I am reminded of is, as I argued in Green China, that China consumers are incredibly environmentally conscious. They do it out of cost, rather than some ideological commitment to the earth. Using the sun and wind to dry your clothes saves energy—indeed, a salute to the 10,000-color flag. The second thing is that, as a 2-year resident of Shanghai, the site of clothes hanging from phone lines, underwear in front of stores, pants and shirts on fences, indeed gives the appearance of untidiness and chaos—two things a stereotypical Shanghaiese dreads, preferring instead well-groomed, precise, and orderly appearances (of people as well as of buildings, streets, and apartment complexes). Perhaps I have become a little Shanghaiese myself. But the third point comes more from my Beijing-background, where the people reign supreme. There is nothing unsanitary (scientifically) or harmful about these clothes hanging in the street. Indeed, living in cramped and often dirty conditions, people still wash and dry their clothes—necessitating a place to hang them. The necessity of saving energy in the process of cleaning trumps Shanghaiese uneasiness about appearances. It is unfortunate that Che doesn’t agree.

In Death, Birth

Sometimes, in life, you think the gurus who spout aphorisms might be right; or, perhaps, that chaos theory has individual-life applicability. In theory, unexpected and rare events are random, and should only happen once in a while. Yet they don't and, like traffic, they bunch.

This morning, I lost my father-in-law. It feels funny to say it in English, because the title has little meaning. Instead, I write something about him, a man no one, including himself, thought worthy of mention.

He was born in Shandong Province, the same place where Qingdao (TsingTao) beer is brewed. It was the 40's and China was at war, he was born before China was liberated -- in 1944. He had a dozen brothers and sisters. Several, including his parents, died of hunger during the famine of the Great Leap.

He went to Xinjiang, a remote and desolate province, to work under the shangshanxiaxiang ("go up into the mountains, and down into the villages") directive of the cultural revolution era.

There he spent a dozen years, the prime of his youth, raising chickens and working the earth to create a better China.

After Deng's reform of China, he went with his wife, step-daughter, and son back to their hometown, Changzhou, a city in southern Jiangsu Province (near Shanghai).

In 30 years, he never learned the language. When I met him in 2000, and until he left this earth this morning, he never could speak Changzhou-ese. He understood every word. And, even today, he was the only in-law I could completely understand.

He ethos was conservation. If you turned on the light at dusk, he would shut it off when you went to the bathroom. He brusquely turned down any invites for public showers or karoke. He took pride that his household consumed the lowest number of watts every month. A cost-benefit analysis of glasses versus electricity was moot.

That conservation and saving can be born of need is a fact too often lost to modern environmentalists and free-market Greenspanians.

It was me, a foriegner, who brought this man to the Great Wall for the first time in Beijing. I take pride in that.

A saver, a conservationist, and yet a man who would rather you eat and smoke until you are painfully sick than that you abstain out of courtesy.

Yes, a rare man, an unknown man. Not a model of life, or of death, but a model nonetheless.

You will be missed, Ren Yongshan -- the mountain of eternity.

Green China

Green China

Why are environmental activists not cheering for China?

Recently (June 1, 2008), China banned (yes, banned) plastic bags thinner than 0.025 millimeters (0.001 inches). In addition, regular plastic bags are not longer allowed to be given away with purchases by retailers, including 7-11’s (convenience stores), grocery stores, and supermarkets. On average, plastic bags costs between 0.20 and 0.30 yuan (3 - 4 cents).

Reference to the story can be found here.

Of course, one of the negative consequences of this is that supermarket and convenience stores employees now feel like they don’t have to put your purchases in plastic bags at all (if you bring them from home). It seems lazy people will always find a way to skirt their responsibilities.

The green party, or environmental activities in the West, should be celebrating China as a paradigm.

But there is more: in China, almost everyone (I estimate 99.9%) air dries their clothing. I have never seen a dryer in China, and any walk through an apartment complex will immediately reveal colorful apartment balconies decorating with clothes of 1.3 billion people. How much energy is saved by this phenomena? Is there an “anti-dryer” movement in the West? Shouldn’t there be?

One more characteristic of green China: transportation. It is almost ironic that the environmental movement arose in the West, no less in the United States. Americans love their cars, and waste gallons of gas (and now money) based on the love. Public transportation in China is the rule rather than the exception. Of course, buses and subways are crowded. The alternative is bicycles. I am aware that bicycles take up more space in transporting people than buses, making them impractical users of space (especially in crowded cities), but compared to automobiles, there is no comparison. China bikers and bus-riders are truly the motor of green China.

I am not an environmentalist. But an objective analysis of existing states of affairs in the China and the U.S. makes clear that China is “going green” with much more fervent and commitment than the U.S. I only hope the “gas price crisis” will wake people up to the need for more public transportation.

Making Matters Worse

Making Matters Worse: Intimidation from China’s Bloggers

All people in China, regardless of race, birthplace, economic class, or nationality, are deeply saddened by the tragedy in Sichuan. Our hearts go out to Wenchuan, to the families of children, and to the courageous leaders who have persisted in the face of disaster. (Please see my previous post to donate to the U.S. Red Cross and assist in the re-development of Wenchuan). But amidst this tragedy, a hegemonic force has raised its head, with pernicious consequences: the wrong-headed and misguided blogging community of China.

They have not only misplaced their efforts, directing energy at innocent people, they have damaged the reputation of China and the Internet by their actions.

I refer to the case of Wang Shi, the Chairman of China’s top real estate company, Vanke.

On 5.12, May 12, Vanke donated over 2 million RMB to the earthquake disaster victims. It was one of the quickest to respond, as it also did with the snow disaster that hit China before the Spring Festival (Chinese New Year).

Responding to an anonymous blogger, who complained that 2 million yuan was a huge disappointment from Vanke, Wang Shi on his May 15 blog (in Chinese) wrote a response entitled “After All, Life is Primary (Response to Web-Friend No. 56)” (“毕竟，生命是第一位的（答网友56）”, here (in Chinese)).

Wang Shi: “China is a country where disasters occur frequently. Charity for disaster victims is the norm. Companies’ charity drives should be sustainable, and not become a burden. Vanke Group’s internal charity drive has a condition: for each collection, ordinary employees can only donate a maximum of 10 yuan. The reason is so that donations do not become burdens.”

According to numerous sources, including the China Securities Journal, the online community in China has vociferously and vituperatively attacked Wang Shi for these comments (here, in Chinese). The result, as Wang Shi feared, is that donations have become a burden that companies cannot avoid: one could argue a “Wenchuan tax” has thusly been applied to any company in China. This is not corporate responsibility but a hegemonic civil society that blindly seeks scapegoats for a true human tragedy.

Under relentless pressure, Wang Shi and Vanke relented, pledging 100 million yuan in reconstruction assistance over the next 3-5 years on May 20 (see Shenzhen Securities Exchange announcement here (in Chinese)). This decision was approved by the Vanke board of directors last Friday, June 6 here (in English). At the meeting, Wang Shi appeared pale and weak, apologizing to the masses he had somehow disappointed. The force and power of hegemonic civil society is truly frightening, and its channeling through the blogosphere is a blow to any cheerleader of democracy.

Background

Wang Shi was born in 1951 in Liuzhou, Guangxi Province. He comes from a military family. He is a heroic entrepreneur, as Liu Chuanzhi, Wang Wenjing, and others are in Zhongguancun. He is famous for having climbed Mount Everest, among other feats. He is a powerful advocate for private industry and reform in China.

Vanke (Shenzhen 000002, 200002, website) is the largest market capitalization real estate company listed in China. Its most recent results, reported in the 20081Q quarterly report, yielded 718.1 million yuan (103.7 million USD) in profit on 6.06 billion yuan of revenue (875.3 million USD). Vanke has ongoing sales in Guangzhou, Hangzhou, Shenzhen, Shanghai, and Chengdu, with new projects starting in 20081Q in Wuhan, Chengdu, Tianjin (2), and Dongguan. The majority of construction and sales occurs in the Pearl River Delta, Yangzi River Delta, and the Bohai Rim. Vanke has assets at the end of 20081Q totaling 107.8 billion yuan (15.57 billion USD).

Love Wenchuan

"If there is the littlest hope, we will use all of our effort"

Great words, and a great man.

5.12, and you were there. Looking pensive.

My words fail me.




What is a leader? Who is a hero?

I was there for Katrina. There, the heroes failed us.

Is this a hero?




















Words fail again, only tears.

The hardest of times, and the strongest of men.

There are no words...
















Love Wenchuan, love Chengdu.

Thank you Wen Jiabao!

Donations to Red Cross to rebuild the beauty of Wenchuan!

三面向公司的“游击战”

谢谢王教授的介绍。今天我想讲的是“三面向公司的‘游击战’”

对社科院知识产权中心的李明德来讲，中国传统文化对版权和知识产权可以用两个概念来描写：一是“窃书不算偷”，或者“偷书不算偷”。这里的意识是普及知识的内在善良、知识内容的无形形式。书只是纸及墨水，根本没有什么价值；软件只是磁带及0和1，根本不值钱。二是“传媳不传女”。这里的意思是女儿是要嫁出去，如果她知道家里的商业或知识秘密，那么其他的家庭将抢本家的饭碗。保护知识产权最理想的办法是非公开的、小规模的发展[1]。

没有物质形式的东西没有价钱和不公开小规模的发展这两个概念在网络社会有什么不搭界？从改革开放以来，中国保护不同类似的产权有没有受到这两个概念的影响？

改革开放一直以来经常见到“模糊”产权。从乡镇企业的所有制度和单位“小公家”的房子到私营公司戴红帽子再到盗版软件，免费mp3下载，和好莱坞拷贝电影，中国当代的产权没有明晰的解释。那么，在这种情况下，三面向的行为是否不恰当的？三面向的“游击战”阻挡了中国版权、知识、社会共识等发展吗？

我个人意见是否。原因在于中国信息产业、网络软件、技术开发等高科技的发展到目前为止已经发展到了一定的程度。为了保护这些公司和机构的将来盈利和持续发展，中国需要更多的像三面向这样的公司来打击模糊产权。

网络是共享为主的神话：一方面对于三面向公司的批判是它买断了一个共享资料，侵犯网络基本上的精神。不过，不管是西方国家也好，中国也罢，网络不是免费共享来发展的。中国的QQ、百度、优酷、土豆网都是直接与广告公司签订合同并收费才能够持续发展。这些知识产品表面上可以免费装载，但实际上每次使用必须参加市场活动。

两种反对可以提出来：一、三面向公司是以实行版权为主收益，并没有出版和普及知识的目的。那么，三面向的“买断”是它公司的营业模式，利用它与学者之间的合法合同来投资并出版一些文章来获得盈利。是否三面向将来会开发一个“许可证”之类的产品，我们无法知道，但三面向的法律战略明晰了出版和发表文章的产业。因为出版后的文章版权是跟着作家而不是跟着出版社，那么作家怎么处理自己的版权完全是他个人的事。

二、因为三面向主要买断了一些与“三农”有关的文章，那么文章的内容大大超过了任何个人或公司的业主权。我认为这样的想法还是找错了对象。如果一篇文章是对中国三农问题那么重要，而不是知识，不是讲话，不是某个教授的研究结果，那么作家卖出这篇文章等于是自己轻视了三农问题。我相信将来这样的事情不再会继续发生。

最后，我在这里提两个网络社会和知识产权的例子：第一来自我母亲。我母亲是一名专职顾问专门提供各种大学信息。自从与我父亲离婚起，为了谋生她成立了一家个人企业，帮助高中学生进入自己梦想的大学。2004年她请了一个设计师为她的企业设计了一个网站，专门介绍自己的服务。2006年她收到了一个（格蒂代表摄影师公司的）通知：她的网站所使用的图片是有版权的，而拥有图片的版权公司准备起诉她，要罚款2000至4000美元。后来，我母亲付了罚款然后从那家公司的营业部门用3730美元买到了该图片2年的使用“许可证”。

第二的例子来自中关村。在清华大学校内有一家公司自己研发一个产品叫“电子鼻子”。发明后拿到了国家专利权并开始生产和销售。一段时间后，另外一些公司，主要在深圳，打开“电子鼻子”的外壳和仿冒了里面的电路板和功能。结果，因为深圳的那些公司没有研发费用，它们可以以很便宜的价钱销售同样的产品。清华那家公司的老板不愿意起诉那些深圳公司因为“第一它们在外地，一旦起诉，将花大量的金钱，而这家公司很快瞬间蒸发。然后另外一家新的公司会成立，开始做一样的是事情”这位老板说。2004年，这位老板终于起诉一家公司：百度。他说起诉百度的重要原因是百度收了假冒公司的广告费用（搜索“电子鼻子”会找到假冒公司的广告）而造成他公司的损失，加上百度公司很大，不会跑掉。

总结一下：中国现在的网络社会越来越发达，也许从某种程度来讲，它已经超过了下线社会的发展。那么，模糊产权对发达网络社会和发展中的民间社会永远带来好处吗？从小规模的角度来看，模糊产权会降低创业、普及知识、和开发产品的成本。但同时模糊产权也影响公司和机构的盈利收入，减少创业、普及、开发等的机会。三面向确实在这方面给我们一个非常及时的提醒。

谢谢大家！

---

[1] 李明德，2003，“当代中国的智慧财产权制度与社会发展”，台湾清华大学当代中国研究中心的演讲，在 www.iolaw.org.cn/showarticle.asp?id=878，2008年3月4日访问。

The Sanmianxiang Company and IPR

(A version of this was presented at the "'Sanmianxiang Phenomena' Roundtable Forum" held on March 9, 2008 at Shanghai University. It was subsequently published in Chinese by China Business Network here.)

Background: Sanmianxiang (三面向) is the name of a company in Beijing. It was established on October 27, 2004 with registered capital of 2 million RMB and 10 employees. Sanmianxiang is headed by the venerable Zhan Qizhi, a former assistant professor at Henan Finance and Economics University. Sanmianxiang has signed copyright transfer contracts with 150 authors that include over 1000 articles. With copyright contracts in hand, Sanmianxiang has sued hundreds of government, university, and other websites over unlawful transmission and downloading of copyrighted articles. While initially promising authors that Sanmianxiang would publish large collections, instead Sanmianxiang focuses on prosecuting intellectual property scofflaws.

"The 'Guerilla Warfare Tactics' of Sanmianxiang Company"
Tyler Rooker

According to Li Mingde of the China Academy of Social Sciences Intellectual Property Center, traditional Chinese culture has two ideas that deal with copyright and IPR: one is “to steal a book is not to steal” or “to steal a book is an elegant offence.” The meaning of this is that the propagation of knowledge is inherently good, and knowledge is immaterial. Books are only paper and ink, and have not value; software is only magnetic tape and ones and zeros, essentially worthless. Two is “pass to the son not the daughter.” Daughters are married out, so if they know the families commercial or intellectual secrets, those secrets will pass out to other families who will steal the bread and butter. The ideal method for protecting intellectual property is to have closed, small-scale development. (See here).

How do the twin ideas that immaterial things have no value and closed, small-scale development is ideal become conflicted in Internet society? Since the reform and opening of China, has the protection of different kinds of property been influenced by these two ideas?

“Fuzzy” property rights are a common occurrence during the reform and opening era. From the ownership system of township and village enterprises to the “small public family” apartments in danwei, to privately-run enterprises “wearing a red hat” and even to pirated software, free mp3 downloads, and copied Hollywood movies, there is no clear interpretation of property rights in contemporary China. Then, in this situation, is the behavior of Sanmianxiang appropriate? Has Sanmianxiang’s “guerilla war” blocked the development of copyright, knowledge, and social awareness in China?

In my opinion, the answer is no. The reason is that China’s information industry, Internet software, and technology development—the high-tech industry—has already developed to an advanced degree in China. In order to protect the future earnings and continued development of companies and institutions, China needs more companies like Sanmianxiang to strike against fuzzy property rights.

It is a myth that the Internet is basically free: one of the criticisms of Sanmianxiang is that it bought out publicly-shared materials, infringing on the basic spirit of the Internet. But, whether it is the West or China, the Internet is not developed as a free, publicly-shared entity. China’s QQ, Baidu, Youku, Tudou all signed agreements with advertising companies and receive fees in order to sustain development. These intellectual products appear to be free to install and use, but in reality every use is participation in marketing activity.

Two detractions could be raised at this point: one, Sanmianxiang Company enforces property rights as its main business, and never had the goal of publishing or disseminating knowledge. In that case, Sanmianxiang’s “buy out” of copyrights is its business strategy, using its legal contract with scholars to invest and publish some articles and make money. Whether or not Sanmianxiang will create a “certificate”-type of product, that could be leased or paid for dissemination of article, we have no way of knowing. But Sanmianxiang has clarified the legal copyright issues in the publishing and issuing of articles. Because, in China, after publication, the rights to the article stay with the author rather than the press, the onus is on the author in how he/she uses these rights.

The second opposition is that Sanmianxiang bought out articles related to the “three peasant” problems, so the content of the articles far outweighs any individual or company’s ownership rights. I think this type of thinking is directed at the wrong subject. If one article is so important to China’s three peasant problems, and not the knowledge, lectures, or research results of professors, then selling the article is tantamount to belittling the three peasant problem. I believe in the future that this type of issue will not reoccur.

Lastly, I would like to present two examples on Internet society and IPR: the first is from my mother. My mother is a college-preparatory tutor, a college coach. After divorcing from my father, she founded her own company to help high school students get into the college of their dreams. In 2006, she received a notice (from Getty Photographer-Representing Company): the images on her website were copyrighted and the copyright owner was preparing to sue her, and she should pay 2000-4000 USD. After that, she bought a “certificate” for the 2-year use rights to the images for 3,730 USD.

The second example comes from Zhongguancun. There is a small company on the campus of Tsinghua University that researched and developed a product called “electronic nose.” Once it was invented and patented, production and sales began. Soon, however, other companies—mostly in Shenzhen—opened the cover of “electronic nose” and copied the circuit board and functions. As a result, because the Shenzhen companies did not have R&D or marketing fees, they could sell for a much cheaper price. The boss of the Tsinghua company would not sue the Shenzhen companies because, “for one thing, they are outside Beijing. If I sue them, I will have to pay a lot of money. Then the Shenzhen company will disappear. And another company will be founded that does exactly the same thing” the boss said. In 2004, this boss finally did sue a company: Baidu [the Google of China]. The reason for his suit was that Baidu had accepted advertising dollars from the Shenzhen companies (so that when you search for “electronic nose” you get advertisement from those companies) causing his company loses. On top of that, Baidu is a big company, and can’t run.

To summarize: China’s Internet society is more and more development. From certain respects, you might say Internet society has surpassed society. Will fuzzy property rights always bring benefits to the developed Internet society and the developing civil society? From a small-scale perspective, fuzzy property rights lower the cost of starting businesses, promulgating knowledge, and developing products. But, at the same time, fuzzy property rights negatively affect earnings and reduce opportunities to open businesses, promulgate knowledge, and develop products for companies and institutions. In this respect, Sanmianxiang has given us a very timely wakeup call.

Thank you!

Goin' Commercial

Long time without a post.

Much has transpired, though I am clueless.

Returning to the mainland (i.e. Shanghai) to endeavor in some commercial behavior. As Bob Jacobson would have it, I am turning capitalist.

Research officer at Rabbit Research China. Website is here. Rabbit Research China, aka 野兔研究公司。下海算了。

Preparing to blog anything in Shanghai, like Atlantic Computer Mall, that smells like Zhongguancun. I am ready...

Zhongguancun Dissertation Published

Taking the spotlight for myself, my dissertation on Zhongguancun has finally been published. Hooray!

Check it out at UMI (click "Continue").

Very 牛X, if I do say so myself.

BTW, if you purchase a copy, all the pictures are indistinguishable because the copies are in black and white, not grey-scale. If you purchase a copy, email me with your address and I will send you paper copies of pages with pictures.

Zhongguancun 2006 Six Month Economic Statistics (Parks)

Zhongguancun Science and Technology Zone
Management Committee

July 24, 2006

(Translated and adopted from Chinese, found at ZGC official government website, here, on October 29, 2006)

Zhongguancun Science and Technology Zone is composed of seven individual parks: Haidian Park, Fengtai Park, Changping Park, Electronics City, Yizhuang Park, Desheng Park, and Jianxiang Park. The following chart gives the breakdown of revenue by park.

Zhongguancun Science & Technology Zone 2006, January-June (Half Year) Economic Development Statistics (By Park)

	2006 1/2 Year(% ZGC Revenue)	2006 1/2 Year(Revenue in billion yuan)	2005 1/2 Year(Revenue in billion yuan)
Haidian Park	48.4	124.3	93.2
Fengtai Park	11.1	28.5	22.3
Changping Park	6.7	17.2	12.5
Electronics City	8.2	21.0	18.5
Yizhuang Park	24.8	63.8	39.1
Desheng Park	0.5	1.3	0.8
Jianxiang Park	0.2	0.6	0.4
Total	100.0	256.6	187.2

Zhongguancun 2006 Economic Statistics

Zhongguancun Science and Technology Zone
Management Committee

July 24, 2006

(Translated and adopted from Chinese, found at ZGC official government website, here, on October 29, 2006)

In the first half of the 2006 year, the total economy of the Zhongguancun Science and Technology Zone continued its high-speed, steady growth. The rate of growth of industrial production was relatively large and rate of growth of created export reserves slowed a little. There was steady growth in the amount of taxes paid, while newly recognized enterprises had clear decline. The entire economic trend was stable.

Zhongguancun Science & Technology Zone 2006, January-June (Half Year) Economic Statistics

	2006 (1st Half)	2005 (1st Half)	% Increase
Newly Recognized Enterprises	1916	2236	-15.3
Revenue (billion yuan)	256.6	187.2	32.6
Total Industrial Production Value (billion yuan)	141.7	102.9	33.6
Taxes Paid (billion yuan)	9.4	6.6	24.8
Exports Created (billion USD)	9.0	5.4	68.1

The structure of total revenue is worthy of note. Sales of products accounted for 162.6 billion yuan or 63.4% of the total. Technology revenue was 35.3 billion yuan or 13.7% of total revenue. And other revenue accounted for 58.7 billion yuan or 22.9% of total revenue.

New Oriental 新东方 IPO, Take Two

Of course, New Oriental sells dreams along with solid English teaching to children, college students, and young professionals. One of the major dreams that New Oriental peddles is chuguo 出国 or “leaving the country”, usually for New Zealand or Australia. Indeed, English education has this as one of its primary goals (and the ultimate endpoint, improving the self, making money, and becoming successful, is still achieved with chuguo). Many students, including one of my friends from 2000, swallow this dream whole and take classes, buy supplies, and pay tuition to New Oriental to achieve the dream. My friend from 2000 indeed did make it to New Zealand, although instead of a rigorous overseas education, he found a party-like atmosphere where rich children from China went to sow their oats.

A coin has two sides and education is a commodity, as difficult as it is to make teaching, learning, testing, and studying into a thing, much less a product or commodity. But that’s my two cents.

New Oriental Vignette

Along the Fourth Ring Road, to the east of Zhongguancun Avenue, is an enterprise that some of my friends only half-jokingly referred to as the most successful enterprise in Zhongguancun: New Oriental English-language school. On an otherwise inauspicious day in May, 2004, some poverty-line migrants, as they often do, were selling pirated English-language teaching and testing materials on bed sheets in front of New Oriental. As I passed the school I saw a sudden movement -- one of migrants grabbed his blanket and ran down a nearby alleyway. The others quickly followed. One unlucky migrant was too slow: several dozen CD-ROMs and teaching books spilled on the ground. He did not stop to retrieve them. Next, a police car and van pulled up, out of which four police officers emerged. They looked around, picked up the pirated CD-ROMs and books, and put them in the van.

Wondering what would happen next, I stopped and stood in front of the school. The police officers looked around and milled about for a few minutes. Then they drove off. Moments later, a young man standing in front of the school went to the corner of the alleyway, stood on top of a street post, and motioned down the alley. Minutes later, the migrants returned to the front of New Oriental to continue plying their pirated wares.

While piracy is ubiquitous in Zhongguancun, I argue here and elsewhere that neither ubiquity nor criminality is piracy’s greatest significance. Instead, one could even view these education material-peddling migrants as promulgaters of pedagogy.

I thought this vignette might be relevant to write about in light of today’s happenings.

新东方 (Xin Dongfang) or “New Oriental” Lists on NYSE

New Oriental is, according to Zhongguancun technocrati, the most successful enterprise in Zhongguancun. This is partially a joke since the most well-known companies in Zhongguancun are all technology companies: Sina, Lenovo, UFIDA, Founder. Further, Zhongguancun is a high-technology development zone, so the fact that New Oriental, an educational company that focuses on English, is so profitable is a little embarrassing but eminently understandable.

Peking University, Tsinghua University, Renmin University, and other famous universities, as well as national academies such as China Academy of Sciences and China Academy of Agricultural Sciences, are all located in Zhongguancun. The need for extracurricular education, such as that offered by New Oriental on nights and weekends, is one way to stay ahead at these education institutes.

Further, parents, with disposable income and no place to spend it, focus their financial might on singletons?the only children who have resulted from decades of the one-child, one-family policy. Singletons and New Oriental are another happy synergy, where children learn English and the school plies its wares.

Another level is migrants. Migrants come to Beijing, and to Zhongguancun in particular, for a variety of reasons. Mostly, it is to improve their lives, make some money to send back some, and become successful. One way to improve and succeed is to study English (or accounting). Hence, many migrants who are hesitant to spend their paltry pittances on consumer goods will instead opt for New Oriental hoping for a skill that will push them up and help them succeed.

All of these levels converge in Zhongguancun. Hence, despite the rise and fall of high-tech companies, the Internet wave, portals, and blogs, the one constant in Zhongguancun has been New Oriental. After so many years, a listing on the NYSE (and not tech-heavy Nasdaq) seems appropriate. New Oriental is reaching places that Sina and Lenovo perhaps cannot.

In any case, I welcome another Zhongguancun enterprise to the world.

Zhongguancun Enterprise Strikes Again

This morning, the most profitable, and some would say the most successful, enterprise in Zhongguancun listed on the New York Stock Exchange. The reasons for this, and a story about New Oriental piracy are forthcoming this evening… Stay tuned.

Article on Zhongguancun Published

After a long wait, I have finally published an article on Zhongguancun. It is not free, but fairly priced. If you have disposable income, feel free to purchase.

The article, "Technology as Practice in the Silicon Valley of China," is not focused solely on Zhongguancun. Instead it is about technology, and how viewing technology at the level of everyday life (the location of ethnography) yields insights into how technology comes to exist. I argue that companies and markets are necessary for technology to occur. In turn, technology's existence implies company and market.

This may seem to be a very specific definition of technology. However, I believe it to be general. For example, anthropologist Levi-Strauss analyzes a club that is used to hunt fish. The intricate, particular design and existence of the club is a objectification of the practice of killing fish (solving a problem) that comes into existence as a result of company (the people who make clubs and can make a living off that) and market (the demand for eating fish).

As you can see, this article is a little theoretical, and perhaps not suited to everyone. It does take place in Zhongguancun, and the three technology practices that I analyze come from my 2 years of fieldwork in Zhongguancun. In the article, I give some context to my fieldwork and describe the companies where I made observations. Technology, using my definition, is a key component of how Zhongguancun serves as a context for everyday life. Zhongguancun is also inseparable from technology practices that make it the Silicon Valley of China.

Eppur si mouve.

http://theuniversitypressjournals.cgpublisher.com/product/pub.42/prod.102

Newly Minted Ph.D. Returns from Beijing-Changzhou-Shanghai Trip

In late May and early June, 2006, I returned to visit all my old friends from Zhongguancun, the Silicon Valley of China, where I did the fieldwork that earned me a Ph.D. in anthropology of University of California, Santa Cruz, in cultural anthropology on June 16, 2006 [obligatory pat on own back].

Of more interest than me, of course, were the people and what they were doing. And, given the hyper-speed of life in China's city of cities (Beijing) and the hyper-ferocity of competition in a nominally socialist market economy, my experiences were fast and furious.

Upon returning to the IT/electronics markets of Zhongguancun to visit people from the Hilon photocopier company that I worked with for 6 months in 2004, I learned that the original company composed of 8 people had deconstructed in the literal sense. To visit my friends, I had to visit four different companies. The original company had met the fate of so many companies in Zhongguancun -- dissolution based on divergent interests and a sense that one can make more money if one goes out on one's own (despite the fact that the perennial topic of conversation among Zhongguancun IT/electronics markets bosses is the microscopic profit margins on sales).

One of the former members of the company I worked with in the markets, who I shall call Young Guo, is a fax machine specialist. I have seen him completely dissemble a laser fax machine in search of a problem. His hands are dirty, his manners uncouth, and his language peppered with expletives. But he is a dear friend and key source for the inner workings of the IT/electronics markets.

Young Guo had moved to Dinghao Electronics Market and rented a 6 square meter, glass-enclosed shop on the second floor underground at Dinghao. He continued to sell photocopiers, fax machines, and perform service and maintenance, as he had in the former company.

Besides catching up on the two years that had elapsed since we had worked to together, I had sought out Young Guo with a goal: I had a Cingular Nokia phone that I wanted to use in China. Who can de-encrypt this phone, I asked, so I can use it in China. Apparently, phones sold in the U.S. only work in two frequencies, and they need to be de-encrypted with a special device to work in China. If it could be done and had to do with IT or electronics, I knew, it could be done in Zhongguancun's IT/electronics markets.

Young Guo's neighbor, it turns out, could provide the service (not herself, mind you, but she had a connection with another guy who could). Before she de-encrypted, she warned me that there was a possibility that the phone might simply short-circuit. Since I had no other use for the phone, I was willing to accept the risk.

When Young Guo and I returned from lunch, the neighbor approached beaming with success. The phone de-encryption had worked! She then asked for payment: 80 yuan (10 USD). I paid it.

In a few minutes, Young Guo led me away to smoke and chat with a few friends in another neighboring store. Young Guo left to check on his store and then returned with a smile on his face. "She thought you were a customer," he grinned. "She tried to give me 20 yuan as a profit." Young Guo explained that since the woman thought I was just a friendly customer, not an ethnographic insider, she should make a profit for Young Guo and then give it to him -- her fee was waived for similar fees made when she introduced customers to Young Guo and he paid her part of the profit.

The woman insisted on keeping the 20 yuan so Young Guo tried to give me 20 yuan. I refused. Although I am sufficiently worried about losing 20 yuan, I did not think it important enough to have Young Guo pay it out of his pocket. I chalked it up to "tuition". At least it would make a good blog entry, I reasoned.

In the IT/electronics markets, life, exchange, reciprocity, and technology all go on through the social forms of entrepreneurs and companies. This is modern China, and especially urban, IT/electronics market China. But these relationships, between neighboring stores, stores and customers, and de-encryption devices, go beyond a particular time and place. I would even hypothesize their existence throughout China, even its villages and hinterlands.

And by the way, I didn't see the state in these markets. So much for totalitarianism.

How Lenovo is Like Microsoft and Dell

According to several managers I know in Zhongguancun, they are running a Linux software company that is mostly funded by China's government in order to create products (such as word processing software, operating systems) and services (such as training). Yet most entrepreneurs in Zhongguancun and, indeed, in China do not like this MO. Why? China's entrepreneurs love the market. The market, not the government, should decide who makes money, what is a good product, and the trends in industry.

It is quite comical, then, that Representative Frank Wolf (a Republican no less), Larry Wortzel, and Michael Wessel have determined that using Lenovo's computers in the State Department is unwise, due to potential espionage concerns. The reason the State Department chose Lenovo in the first place is that there is a competitive bid process, and Lenovo's computers were the cheapest, the fastest, and the best value. In times of budget deficit and current account deficit (not to mention trade deficit), the State Department should be commended. But it is being condemned.

Back to China. Why would the government fund its own Linux-based operating system and programs? Among many reasons, one is that there are existing fears about Microsoft and Dell, both American companies, that their software code and computers, respectively, contain secret code and hardware that will email secrets to Washington. What a far-fetched, feckless fear, I used to think.

As much as I relish being able to excoriate a member of the Republican party, it is disconcerting that Representative Wolf is so ready to capitulate to xenophobic fears. The market is not a panacea. Zhongguancun entrepreneurs' faith in competition and free market values is certainly idealistic. Yet, as one entrepreneur I interviewed once told me, "the government is a little slow. Making a PC these days is like making a TV -- it is not technology. If the government knew that, they wouldn't place so much importance on Lenovo." At the time, he referred to China. Now, I refer to the U.S.

Zhongguancun Zone 2005 Economic Indicators

Zhongguancun Science & Technology Zone 2005 Summary of Economic Development

Department of Science & Technology
Torch High Technology Industry Development Center

February 27, 2006

http://www.chinatorch.gov.cn/dtxw/dtxw_News_info_26421.aspx

2005 was the year after Zhongguancun Science & Technology Zone “Five Year Phase of Taking the Platform.” Various construction projects of the Zone achieved substantial results: economic development grew at a fast yet stable rate; in total economic quantity, indicators doubled from 2001; revenue in technology-industry-trade broke 480 billion yuan; industrial production and foreign currency increased mightily; there was a steady increase in the amount of taxes paid; the development trends in key industries was stable; core enterprises had a positive total development form; and there was a beneficial increase in key projects of the central area.

Zhongguancun Science& Technology Zone 2005 Economic Development Status
(Preliminary Statistics)

	2005	2004	% Increase
Newly Recognized Enterprises	4,434	4,266	3.9
Revenue (billion yuan)	481.9	369.2	30.5
Total Industrial Production Value (billion yuan)	255.2	187.6	36.0
Taxes Paid (billion yuan)	16.8	14.2	18.1
Exports Created (billion USD)	9.0	5.4	68.1

Separated according to Zhongguancun’s individual Parks, Haidian Park had an estimated total revenue of 248.5 billion yuan, Fengtai Park a total revenue of 60.0 billion yuan, Changping Yuan an estimated total revenue of 23.7 billion yuan, Electronics City an estimated total revenue of 41.0 billion yuan, Yizhuang an estimated revenue of 96.5 billion yuan, Desheng Park 2.22 billion yuan, and Jianxiang Park 1.0 billion yuan. Compared to last year, aside from Changping Park whose growth rate declined to 4.8%, other Parks all grew at a rate of 18% or higher, and Yizhuang Science and Technology Park grew at the highest rate: 97.1%.