Sep 21

Part 3: Robert Compton talks to Fools Mountain about business climate in China

Written by dewang on Monday, September 21st, 2009 at 6:09 am
Filed under:Analysis, economy, General, technology |
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In this installment, Compton talks to Fools Mountain about the business climate in China. As a venture capitalist and a business executive, Compton brings a very unique perspective on “where China is at” in her development. In producing the documentary film, “Win in China,” he has had chance to interact with many business leaders in China.

Can “Made in China” quality improve?
Who will have a bigger impact, individuals from bottom up or top down driven by state-owned-enterprises?
Will China have a real-estate bubble like Japan and other fast growing economies and eventually burst, taking much of her accumulated wealth?
Where is China in her venture capital industry compared to the U.S.?
What do business leaders in China think about things that could constrain China’s growth?

Compton also tells us what he thinks of the Chinese government, China’s position in the 21st century, and much more. Click on the link below to start the podcast:

Rboert Compton talks about business, innovation, and his firm, ‘Win in China’

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2 Responses to “Part 3: Robert Compton talks to Fools Mountain about business climate in China”

  1. TonyP4 Says:

    * Quality is a top priority in Made in China products. The government have to step in enforcing the quality of all export products. I do not buy tires from China, reduce consuming food from China (not avoidable if we eat out a lot)… When you depend on foreign brand name, your profit margins will be squeezed.

    * The price of air pollution and water pollution could be too high. We need to raise price to the point we’re still competitive and use the money to fix pollutions.

    * Employment is not the only yardstick for industry, and profit return is. CCP wants to reduce social unrest by boosting up employment at all costs.

    * With the huge internal market, reasonable infrastructure, huge investment…, the growth wheel could be slowed down but it cannot be stopped.

    * The housing bubble will be burst but the effect will be smaller than Hong Kong in the past.

  2. Steve Says:

    Good comments, Tony. I did want to point out that I don’t think Bob quite understood my question to him about the bubble eventually bursting but I thought his answer about how China was approaching its increased wealth worth listening to. Plus, DeWang and I had already run past our allotted time (with Bob’s permission) and we didn’t want to abuse his kindness by keeping him too long.

    Per your comments:

    1) Certain companies have managed to achieve excellent quality control in China because they’ve adopted training and monitoring methods that work within the cultural norms. In my experience, the companies that value QC and use methods like these are successful. Poor quality control is a result of one of two factors; either the multinational company did not understand the culture and how to teach and enforce QC, or the owner didn’t care about QC and (as in the case of the milk companies) administrative figures were involved in hiding poor QC or illegal and unsafe ingredients in the pursuit of additional profit. Unfortunately as you said, the broad brush of China’s having poor QC is painted on all Chinese products when that is not completely accurate.
    2) As Jerry said in another thread, if pollution equipment is installed (such as scrubbers on power plants) and the operator turns them off in order to increase profits, raising the price just raises the profit. Unless there is better government monitoring of pollution and monitors who are not being bribed to keep quiet about broken laws, the situation will not improve.
    5) When housing bubbles burst, they usually affect the speculators the most but then the effects of those losses trickle down into the overall economy and most especially the construction industries. The larger the country, the greater the bubble so when it bursts, the effect tends to be larger. The saving grace would be that it’d be limited to major cities because the housing bubble doesn’t seem to have affected smaller cities or the countryside as much.

    I believe the only solution for these horrible QC incidents is for China to create a fully staffed FDA style bureau with real teeth that is given draconian powers to enforce food and product safety.

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