At last! China talk from people who know China
By: Bryna Stankiewicz
7/23/2010
Hawaii News Now resident explainer, Howard Dicus 07/22/2010
China, we are told, is a huge business opportunity for Hawaii. We'll sell them all sorts of stuff! Their millionaires will come visit us and throw money around!
I've been skeptical, because the talk reminds me of the dotcom boom, when every business plan described a huge 1.2 billion person market and explained that getting just 1% of that market and charging only $2 would net revenue of $24 million. Most dotcoms failed because the real market was smaller and the percentage they needed was larger and it was harder than it looked.
How big is the Chinese market? Everyone likes to say 1.3 billion, which is the estimated population, but this is misleading, because if you're selling something it won't be in every store in the country, and if you're looking for tourists, not all 1.3 billion take vacations. If the only convenient airlift takes off from Beijing, then you're really going after however many Beijing residents are allowed and can afford to take foreign trips, and now you see you need more than 1% of that market or it's no good. So, yes, I've been skeptical.
I feel better about Hawaii's China prospects after the annual meeting of the Chamber of Commerce of Hawaii, where I was allowed to moderate a panel of four guys who actually know something about China. Not one of them sugar-coated anything, yet they all think there's real potential there.
Keith Vieira, the Hawaii-based senior vice president for Starwood Hotels & Resorts Worldwide Inc., says the Chinese like to travel, they know what good service is, and that's what they want. He says multilingual training is essential for concierges and other front-of-house employees.
Dennis Teranishi, CEO of Hawaiian Host, has been selling candy in Wal-Marts and duty-free shops in the largest Chinese cities for five years and has yet to make a profit, but he feels he will. He says one obstacle is that translators, essential in doing business in China, are in such high demand that they change jobs a lot and you may return four months later to find your main contact is gone.
Dale Madden is a kama'aina importer who has been doing business in China for decades and sells thousands of products in America and Japan that were manufactured in China. Madden prefers to avoid brokers and agents and deal directly with factories. Madden and Teranishi have both encountered venal or officious people but both say this is the exception rather than the rule.
Dr. Christopher McNally, a research fellow at the East-West Center, says China needs high growth for political stability, and he thinks it can sustain high growth for the next 10 years at least, by morphing from an industrial society - growth coming from outside investment - to a consumer society like America, with growth coming from consumer spending. All the panelists seemed to think that this need for growth will ensure no serious backtracking on the entrepreneurial spirit China has today.
What are the Chinese like? Chris McNally answers the question, then adds an asterisk. He says the Chinese are less formal than the Japanese and more likely to tell you what they really think. And they like Americans better than many other foreigners, regarding Americans as more easygoing than others. The asterisk? China is a big place. Generalities don't always hold. For example, in Shanghai, a license plate costs thousands of dollars and people want a nice car worthy of the plate. In Beijing, license plates are no big deals and a car is less of a status symbol. Regional differences shouldn't surprise you. Would you offer generalities to describe as identical the residents of Dallas and Boston?
Still, the panelists said the Chinese do generally like Americans, know and like Hawaii, and are fascinated by the volcano. But it would sure help if we had more Mandarin speakers. Chenling Chou, a Honolulu-based translator who spoke to me after the meeting, reminded me that most Chinese speakers in Hawaii speak Cantonese, and Cantonese, she said, is as different from Mandarin as English is from French.
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