Monday May 12, 2008 China, at 2:38pm today, had a major earthquake at SiChuan, WenChuan, at 7.8 scale. Few minutes later, at 2:35pm, Beijing's TongZhou had one at 3.9 scale. I was at home and felt the rolling moves. Company evacuated everyone to the nearby open area. I heard no damages.
Fortune magazine's Geoff Colvin agreed with economist Angus Maddison that by 2015, China will become the largest economy, supplanting the USA, of the world. That's 7 years from now.
He noticed that the US supplanting then the largest economy only in 1890, overtaking, guess which country, China. Since technologies will inevitably spread to every corner of the world, population will eventually became the main factor for economy. It is only natural that China to "resume its natural role as the world's largest economy by 2015," taking them 125 years to catch up the lead the US has from industrial revolution and and wars.
I agree with the eventuality of this prediction, but not necessary the exactness of 7 years: more like 20 in my opinion. But this is hardly the main arguement.
The new generation of business leaders, now in their 20s or 40s, must learn to do business in China and with Chinese. 7 years is not that long to master a language, especially when one is not even trying.
Thanks Jim Grisanzio for mentioning. I am adding this line just to send trackback.
There is something in the water. Oh My Gosh, someone is swimming. Hmm, why would anyone swim in that water? Wow, it is quite a distance. This guy is an able swimmer.

Just when that interest was fading, I found his launching pad. One of his fellow swimmers just finished dressing up, next to a big bottle of rinsing water, probably communal. This is a popular swimming hole, evidenced by a group of men drying up under the nice sun, horsing around and having a good time.

Three paces fore, I found this sign saying swimming is not allowed.

I walked on, shaking my head and not knowing what to say. Looking up, a restaurant worker is cleansing his mop in the same water. In addition to whatever the ducks leave behind, I wondered what else are in this big swimming pool.
Phone rang. Girlfriend cried on the other end. She was sick and lonely. She was stranded in the biggest snow storm in 50 years and can't get home. Sob. Tears. More sob.
Deng hung up, put on a pair of long underpants, grabbed an extra jacket, threw few things into a tote bag, borrowed about $80, and ran out. In between them, thousands of cars parked on the highways. Millions of people waited in train stations, bus depots, or airport terminals. In 24 hours, he reached the point all mechanized transportation halted.
Girl was still 250 miles away. The ambien temperature hovered below freezing.

Off he walked! For more than 18 hours he walked on the icy and deserted highway through freezing rains and blizzards. He walked, Forrest Gump style, by himself. His trousers were wet and covered in ice. He ran out of foods. A stranger gave him $15 and some foods. He used the money to buy some talking time for his cell phone. Soon, the money ran out and, again, he entered radio silience involuntarily.
After about 65 miles, the stranger found him and told him that the girl was OK and arrived home. Deng collapsed almost immediately. He recovered in a couple of weeks and became the hero of China's storm of 2008. Women all over the country thought he was the most romantic one of the year.
The girlfriend dumped him a couple of months after.
This will be my 3rd installation of Chinese New Year blog. There had been sad departures this year in Beijing. We have seen many friends leaving their posts, often for something better or bigger. This is a vibrant and fast-paced city. People come and go. Many left their imprints on our hearts.
I wrote two years ago that
Similarly, I wrote last year that.
Not only each counter has an element, it is either of Yin or Yang. This year is the 5th on the heavenly counter and 1st in earthly: 25th in the cycle or the year of 戊子 (WuZi). In Chinese numerology, odd numbers are Yang and even numbers Yin. The 5th heavenly counter, 戊, is of the earth element. Adding all these together, we have a earthy and masculine (Yang) rat coming.
This reveals a rarely known factoid about the earthly counters: why are those 12 animals chosen? It turns out the sequence of these 12 animals are alternating in Yang and Yin. Those with odd numbers of toes are Yang animals and those even Yin. The Yin or Yang of heavenly and earthly elements always matches: Yin with Yin and Yang with Yang. The world is in harmony and all is good, except for rats.
Rats have an unique Yin Yang quality. They have 4 toes in their front paws and 5 in the rear; they are both Yin and Yang! For this reason, rat designates the mid-night hour, the time in between Yin and Yang. This makes many Chinese not sure about rats: ghosty, sketchy, shifty. On the other hand, rats reproduce quickly and are impossible to exterminate: proliferating, energetic, diligent, and tenacious. There are advantages to be in the year of the rat.
New York Times reported that World Bank has been computing GPD, based on PPP, with 1980's prices all the time. After they have switched to current prices, China's GPD shrank to mere US$6 trillions, instead of US$10 trillions.
China Daily picked up the same story on December 18th, but the numbers are slightly different.
This is comical. PPP based GPD, said the article, is preferred by economists. World Bank is among the most prestigeous economist society. It is a collosal blunder for World Bank to have used a 25-year-old price basket for GPD computation. I don't really quite understand how can this happens, governments, China included, publish CPI data every year.
Does this mean the USA has lost their ground to pressure China to appreciate RMB faster?
According to China Daily, China's economy grew 11.2% in 2007. As for 2008, the forecast is 10.8%. I still remember government's target of 8% at the end of 2006. Guess many countries hope to deal with China's problem — having too much money.
What constitute civilization? What makes a society pleasant to be part of, or intolerable? What makes you shake your heads, or irate and want to punch someone? What make you thinking of not coming back to this area ever?
Small things. What Rudy Giuliani called "quality of life" factors. In China, they fall into two general categories: inconsideration to others and not picking up after self. These are the new "4 pests" China government want to eradicate before Olympics. And I am 100% behind it. I would like to add the 5th one (and everyone has their favorite 5th one too) of littering.
I am confident that China will become a pleasant place for everyone. The economy is driving it and nothing motivates a Chinese more than growth. As the economy turns more and more consumer oriented, those "one time get rich schemes" will disappear and reputation will prevail as the leading success factor. At business level, this means quality and services. At personal level, this means good social behaviors. I also believe, in general, individual wealth promotes nicer social protocols.
It will be a nice day for me to see someone walking 5 paces, clear his or her phelgm into a tissue, and throw that into a garbage can.
If you read Jim Grisanzio's blog like many, you have already known about our ACM/ICPC contest in Nanjing and seen this picture.

They are high-school kids! These two are 17 and their teammates are even younger. They, about 10 high-schoolers, are guests in this college-only event. They would go through the contest like real teams, but won't be eligible for winnning.
I chatted with them briefly. They have only heard about Solaris prior to this contest. "It seems very powerful. Everything that is supposed to work really does." Jim had a conversation with them too — in English. They are not shy, they know they probably won't win, but they knew the future will be theirs.
And I am real glad that they learned Solaris already.
The Beijing News (新京报: XinJingBao) reported on September 15th that 10.3% of people in Beijing are Wangs (王). That's 1.16 millions people: the largest family name in Beijing. I knew very few fellow Wangs, but am proud to be one of them. We Wangs are doing pretty good.
Less reported is how this statistics came about. China has a unique government agency: the National ID Number Inquiry Center (公安部公民身份号码查询服务中心). With just few RMBs, you can check if an ID presented to you is valid or not. The bearer's full name comes back in just few seconds after you make the call, via SMS of course. They jointly produced the report with National Statistics Bureau.
What's the rationale of I feeling cool? Proliferation of our genes is only natural. After thousands of years, this instinct has evolved to the flourish our communities: family, villages, neighborhood, profession, employer, hobby, or whatever. We like our communities to thrive. We will go very far to make sure of it. It's genetic.
Contrary to communities themselves, their governance is nothing natural and almost purely political. Some of the communities are inclusive, outside members are welcome. Others are exclusive and even hostile to outsider. Human societies spend lots of energy to govern just the membership of communities. You learn a lot about the community observing just from this angle. Check out religions: how can a pagan convert? What rituals? Does it expel (usually by shunning, once in while by killing)?
It appears not at all instinctive for communities to be inclusive. That takes courage, leadership, open-heartedness, and open-mindedness.
For the nation, Wang (王), Li (李), Zhang (张), Liu (刘), Cheng (陈), in sequence, are the largest 5 last names. I learned that, over thousands of year, Wang is the most popular choice for foreigners to choose as their Chinese family name. The name is associated with royalty and is easy to write. So, openness and inclusion pay off for this community.
If mature societies legislate slower, China has certain reached adulthood. More than a decade of debate and many, many drafts later monopolies will become unlawful this year. Look closer. There are few concepts to send MN's (Multi-National Corporation) lawyers into study sessions.
In addition to the prevention of businesses squeezing out competition with predatory means, China's anti-monopoly laws prevent administrative monopolies: those protected by governmental barriers. Tobacco, transportation, stele-communication, and postal services are examples at national level, tourism and agriculture at regional. Is it an administrative monopoly, say, to stop issuing new taxi permits in New York city?
MN's worry the economic security clauses that govern foreign acquisitions. China now has a legitimate bureaucratic weapon to stall, or stop, acquisitions in name of national security. Does it sound familiar? Remember CNOOC's failed attempt to acquire Unocal? US Congress stopped it based on the threat to US national security. Funny that many US companies, Carlyle group for example, is now crying foul.
Overall, people welcome this law as a signal for modernization. China's latest major legislation is also paving ways for a society of lawyers and lobbyists. The era has arrived, the signs will become obvious soon.
Back in the good old days, few hundreds years ago, civilized and advanced people colonized lands far away from home. With their government's encouragement, they mined ores, exploited natural resources, enslaved natives, and left the wounded land to recuperate, if ever.
Who were those cold-blooded people? British? Spaniards? Dutch? Portuguese? Chinese, it seems, joined the accused list. International Herald Tribune headlined on the miserable state of Zambia. China has invested millions into Africa, like Britain did India, to extract minerals and other natural resources it needs for development. When Africans became wealthier, China then sold them goods made in China, usually at the prices that wiped out the local industries. These countries then entered the vicious downward spiral that has only one ending.
What about the well-known economic theories on comparative advantages? The extreme form of this theory will reach the conclusion that colonization is only economically efficient. The exploited, after all, is more efficient in producing cheap labor and raw materials. Is this where economy fails humanity? Or should those economic theoreticians consider non-renewable resources different?
I don't have an answer. I feel the whole planet earth is polarizing into haves and have-nots. China, India, and few emerging countries are fighting to join the right side. Many countries seem hopelessly stuck on the other side. Soon, the gap will be too great and they will be forever left in the poor.
It is not an alien concept to buy or sell intangible. Chicago hosts the largest exchange services for futures, options, and commodities. Internet, as expected, intensified this beyond traditionists' imagination and left the uninitiated bewildered and befuddled.
Korea, not USA, is the most advanced region in the world for online gaming. Gamers gain rock-star-like status. People gathered to watch game play and cheered with every impressive move. Superstar gamers get endorsement money from merchandisers not unlike sport stars in USA.
In serious gaming, a player needing an edge frequently turns to ItemBay — a web-sited serving, exclusively, the exchange of virtual items, such as weapons, armors, or even gold coins. Its moniker a pun on eBay, this company has over 35 million dollars of transactions every month. Several sources estimated that this RMT (Real Money Transaction) industry is nearly a billion dollars a year.
Entrepreneurs in China employ low-cost workers to sweep the virtual world for valuable items or laboring, virtually, for gold or other commodities. Once harvested, the company sell them for real money. Amateur gamers cried foul; wealthy gamers simply buy their ways into the prestige class, instead of earning it the honest old fashioned way. There is a law prohibiting professional gold-farming; it allows trades among true gamers. Honestly, I don't see how this law can be enforced.
Can I relate those companies with the textile industry sweat shops?
The phenomenon illustrates few points Jonathan ingrained on us during the recent executive pow-wow in Menlo Park.
Business happens where people are. Rich as they are, only 300 million people live in USA. Internet activities and consumers now define the world economy, instead of supply chains and enterprises. This means that action will be in Asia.
Innovation happens elsewhere. Different region chooses to invest on the infra-structures that benefit them the most. These investments will yield fruits relevant to the region. Smart businesses exploit and harvest those innovations.
Business process innovations and technological ones complement each other. Wherever there is a demand, someone will design a business structure to exploit it.
How would we thrive in this new world? Think global ALL THE TIME. Opportunities and competitors are both waiting. Ignorance will definitely miss the opportunities; competition does not play fair and has no mercy.
Here in southern China gathered leaders of world's open-source community. GuangZhou city (广州: great foods, hospitable people, and warm climate) hosted this year's China OSS summit. A couple China Academy of Science Fellows graced this conference and heightened its prestige level (government and press attention). In the wake of China's standardization of UOF and ISO ODF, Microsoft's submission of yet another one became the lightening rod in a fierce storm.
I am one of those sad global business travelers. We eat airline foods, sleep in unfamiliar beds, participate family events via international phone calls, get confused on time-zones, go to an exotic city to see only the hotel room and its gym. (Simon does not even get to see the gym.)
We are trained to travel light: only the necessities of toiletry, change of clothes, and medicines for emergencies. We carry a bag of cables, chargers, and the all-important universal plug adapter. Countries around the world have different electricity and shapes of the electric plug. Without this dongle, your plug cannot mate the socket on the wall. It feels like dying from thirst in front of a vending machine that does not take your money.
Every time I use this dongle, I sigh silently. What a mess!
There is no international standard for the shape of electric plugs. Some countries, later in development cycle, adopt more than one shapes (even for normal appliances). The result is a tremendous waste of money. A converter industry spawned! Some houses (I am living in one) installed multiple kinds just in case. This is an annoyance we are forced to accept. Really. What a mess.
Once a society adopts a standard, people innovate above or below. If a country chooses a shape for electric plugs. Companies can still innovate on electricity generation; they can also create new electrical gadgets. The standard guarantees inter-operatibility, which increases the market size and leads to more innovations. The world needs choices of solutions that are exchangeable, not choices of standards.
On May 2nd, ODF became an international (ISO) standard of office file format. Few weeks later, UOF became a China office file format standard. Quickly, China and OpenOffice.org, started to work to unify them. Today, I invited Microsoft to join this effort. China government knows more than one such standards is not a good thing. Let's hope the world feels the same.
No more dongles.

I knew TwinMOS as a Flash memory company: SD, CompactFlash, USB stick, flash-based MP3 player, etc. Before that, they made other hot electronic commodities. Like many other HsinChu companies, they are big enough for efficient manufacuring and small enough to be nimble. The success, or demise, of such companies depends on the judgement of a few who decide when to abandon an ageing product and retool the factory for the next wave of successes.
TwinMOS runs a mean and efficient IT department. They find something that works and stick to that system for years. Not for loyalty, but the costs of retooling. Or, as Jonathan said, they cannot afford the cost of exit. Let's just say that Sun has not yet penetrated TwinMOS (I am working on it). For now, they are one of my feelers to HsinChu science park and this versatile island of Taiwan.
And what product line they most prominently showed in CompuTex? Yes, like about 20 other booths, iPod speakers. All of them save a slot at the center to proudly up-stand an iPod, whatever model. The rest is the show-off of industrial designers: candy-colored sub-woofer of a space-age shape, speakers arranged in a creative way, a LCD screen, knobs or touch buttons, a remote control, and a back-panel of some connectors or wires.
Yes, like PC-AT few decades ago, iPod has started an industry. Apple today controls the specifications of the connector, the FairPlay technology, and a primary conduit to lots of contents. All amateur PC industry historians are predicting on what will happen in the next few years.
And guessing what Apple will do.