India and China: these two have long been considered two big software nations and software outsourcing companies are thinking about the two big time. However, according to a recent White Paper by Paul M. Denlinger, an increasing number of Indian software outsourcing companies are looking to the Middle Kingdom — the PRC — to do their software outsourcing.

Problems the White Paper believes that Indian software companies are facing include a decreasing talent pool, rising costs, and infrastructure problems, including insufficient infrastructure and not enough time to train and build the infrastructure.

The White Paper then outlines China’s strengths and how it is becoming the answer to India’s problems. It quotes the fact that China has the only talent pool large enough to compare to that of India (and it cites a still-largely-untapped local talent pool outside the capital and provincial capitals). Also, ten “software-friendly” cities, solid training and educational basic skills, and better English and communications skills are cited as other reasons behind the PRC’s strength.

Yours truly questions some of these strengths: not all second-tier cities are close to a major hub, and universities still feed relatively “dead info”, giving people limited time and opportunities to apply what they’ve learnt. However, that’s just the views from one guy; you’re more than free to browse through and throw in your own twopence.

The paper is available on the China Vortex blog, but you’ll need to register for free to become a subscriber of the blog. It could be an interesting read.

Tags: blognation, China, blognation China, India, Software, Outsourcing

Chinese video sites are an affair of the heart to many a venture capitalist, especially those from America. Here’s a quick look through at the numbers from Kenny Lee’s TagEdge:

• Youku — completed USD 25 milion in a round C financing on November 21, 2007 (previously raised USD 3 million and USD 12 milion in previous financing)
• 56.com — raised USD 20 million in a Series B financing (June 2007 saw it raise USD 10 million)
• UUSee — raised USD 23.5 million in its latest round
• Pomoho — raised USD 10 million in seed funding
• PPStream — raised USD 10 million in round B financing
• Tudou.com — completed USD 19 million of its round C financing

Interesting to note if some of those companies “went public” about their latest capital injection:

• Youku.com — announced
• 56.com — no official announcement
• Pomoho — no official announcement

Also interesting to note is that despite the rapid growth of this VC market, as well as the high profile investments from the US venture capitalists, these video startups generated neither massive returns nor went public.

Just how long will this cyber-audiovisual romance last?

Tags: blognation, China, blognation China, Mainland China, Internet in China, Enterprises in China, Chinese video startups, VC

Mind the Gap Saturday is a feature every Saturday where blognation China tells its readership the differences — the gap — in the tech, mobile and enterprise worlds between China and the Western World.

So you know what kind of a feared corporate animal the “fried squid” is, heard that your friend has fallen victim to yet another of jiaban, laughed along to the rare Taiwanese laughathon between 9 and 5 (you should have been crackin’!), and “sharpened your knives before a fight”. What’s next? The second instalment of The Biz of Biz in China on Mind the Gap Saturday — on blognation China, of course. Now that you know what the Chinese workplace offers you, here’s what you need to know about integrating into the workplace.

Collectivist Corporate China

By all means, it feels cool to swing by your Beijing office all dressed up the way you do back home. You’re yourself — and just yourself — you’ve been yourself in the West, so why not be yourself in the East, too? They’ll eventually recognize your efforts, so you can probably get away with a bit of (controlled) arrogance. And — oh, the team; half the time, they don’t know what they’re on about!

If you come to the People’s Republic in that kind of a mood, however, be prepared to be sent back to the airport! In the nation of 1.3 billion, collectivism — or doing things in groups — is more like the order of the day. It’s not that individuals are treated like total robots or neglected, but in China, doing things in groups is more what you’ll be after, day in, day out.

Once you realize that you do need to work in a group in order to your bread or congee, however, you’d do yourself (and the group, at that) a big favor by fitting in as much as possible. That’s not a cue for you to dump what makes you you, though, but in short, if you can balance the “you” with the interests and conformity of the group, you’ve pretty much made it. If you’re trustworthy, honest, reflective, generous, and sensitive, you can make it easily in the Middle Kingdom. Keep your assertive, strong and outgoing self from the Western world — but do note that they may need quite a bit of tweaking!

Please Mind the Gap Between the Boss and the Employee

The gap between the boss and employee is, as I mentioned last week, gaping at the very least. Although companies operated by the haigui (overseas Chinese) who are back on the mainland may be more democratic, the fact is that most companies in China are still very much a boss-ordered-this world. The difference between boss and employee is bigger than you think.

So what’s the magical ladder closing the gap between the two? Emotions, that’s for sure, but also trust and reliability. Do your stuff right, be on time and contribute, and always be right behind the man at the top — support your company. Tell the boss that you’re in for the long run and that you want to make the company great. By that — we need to see action, not just mere words.

Having said all that, respect and obedience are still very much two things that will make many a boss’s day. It’s not that corporate dissent is totally verboten, but if an employee clashes with the boss, the chances of scoring the dreaded fried squid (Chinese for the pink slip) are higher in the PRC than in foreign lands. In China, authority is more pronounced — Chinese bosses (especially those in State-owned enterprises) don’t like to be challenged.

The Silence of a Storm

Judging by how often a Chinese utters the word “yes” to just about every request, it would be too simple — but at that, too simple, sometimes naïve, and at times just plain too crude and rude — to brand the locals as “yes-men”. There’s a big cultural “thing” that makes 99% of locals say “yes” 99% of the time, and that’s because they don’t want to start a storm.

At times, locals will intentionally say “yes” to even the most absurd idea out there. There’s a big reason for this — locals hate to dezui (得罪) each other (and dezui could be translated to something as easy as to “p”-off someone else). The idea of spending Saturday at the office instead of in front of the karaoke machine may be the most stupid proposal the China branch of Acme Incorporated may have come up with, but (in particular) if the boss said so, no employee would dare think of vetoing the proposal.

Those in power would equally be wrong to treat every “yes” at face value. (This is something that foreign bosses in China often fall into — they seem to take everything at face value. Not their bad — after all, more things are at face value in the West!) Sometimes, going through a third person to ask if the idea was brilliant or brain-dead could yield a more frank answer — and do note that the vast majority of Chinese do not speak their minds! (They want to say what you’d like to hear — which could produce quite a wide gap with how things actually are in reality!)

If you smell something wrong, hold them horses as soon as possible — and inquire or change course. Storms in the Chinese biz world can tend to be on the silent side — sometimes, you can hardly make out their imminent arrival — but once they’re there and especially once the lid pops open, it can get downright nasty.

Relations: Distance, Not Boxes

Here’s a fundamental difference: In the west, we’re used to sticking our colleagues, friends and allies in boxes. There’s the box for the company, the box for the bar, the box for pretty much everything. You’re either in the box — or you’re out. Black and white — virtually no space left for shades of grey (or very rarely at that).

Distance, though, is how the Chinese see relations. The Chinese are in no rush to stick their colleagues and pals in boxes. A client that has not been in touch with the company for a decade is never thrown out of the box; the Chinese prefer to think of him or her as “far” rather than being too “near”. You share your skeletons in the closets with your “nearest” friends, while you can feast over some Tsingtao Beer with some friends that appear “far” that you want to pull back into your circle of friends.

Yours truly is a big advocate for the distance-based relationship idea. He never dumps friends in the dumpster — no, that would be too inhumane. And he goes out of the way to be nice and approachable even to friends he hasn’t met for about five years or so.

By the way, gifts play a big role in Chinese society. If you felt someone was being really nice to you, by all means give that bar of chocolate to her, or award him with something nice.

The Love of All Things Laowai

The Chinese are madly in love with Things from Foreign Lands. I know this as a Swiss citizen, because they go absolutely nuts over our army knives, chocolates and watches. (I myself go nuts over our sausages — but I digress!) Many a Mercedes is owned by the well-off, and the décor of the average well-to-do local looks more like an imitation of Versailles than anything else.

So it’s probably no state secret that the Chinese are love with a lot of “foreign things”, so to speak. If you’re a foreigner working in a Chinese company, expect to be the star of the office. Even if you look Chinese, but are of a different nationality (like yours truly), you’ll still attract All Them Eyeballs — and they’ll ask you all kinds of questions about where you’re from (as well as what they eat over there, and Stuff Like That).

But once you’re too much into being totally foreign, other locals will start complaining. They expect the laowai, or “old foreigner”, to dance the Chinese way. (And nope, being “old” in China isn’t all that bad — you’re wiser when you’re older.) If you turn a blind ear to local demands, they’ll start yelling at you — with slogans like “You don’t care about the interests of the Chinese population” and “When are you going to localize so and so?”.

That’s not arrogance, by the way; nope, we’re talking about two big things here. First — did I hear someone utter that famed “When in Rome, do what the Romans do”? Second, is this not the world’s most exciting market, with 1.3 billion and counting? With China becoming more and more relevant, I suppose they have quite a bit of a “right” (if you must) to expect more “special treatment”.

Here’s the scary thing: if you don’t localize, they’ll have a local copy available anyway. They’re fully OK with sealing the door; the internal market is big already. My advice: be a harmonious laowai — and dance the Chinese way. It’ll be hard to do at first, but will win you a lot of points.

The Importance of Making Chinese Friends

This one is actually more social than biz-related, but it’s truly essential. If you’re in the PRC for the long run — and in particular if all you can do with your limited Chinese is to point directions, bargain and understand the word laowai, the writing is on the wall: You need to have a Chinese friend that swims around nicely in the local lingo.

The importance of making Chinese friends goes to the extent that even the police in Beijing will often ask you to put your Chinese friend on the line if communications between you and the cop come to nothing due to the language barrier. So do it. Meet up with a local, be nice, and make a friend. (Didn’t they say something about “a friend in need is a friend indeed”?)

More importantly, by making local friends, you integrate more and more into the local culture. You get to be more and more Chinese. And to the locals, there is no better sight than seeing a laowai respect and understand China — and to be as Chinese as possible. If you master this, you’ll be showered with awards in every conceivable way — sooner or later!

Next week on Mind the Gap Saturday: Two big microblogging networks — Jiwai.de or Twitter? The local version or the original? Be sure to Mind the Gap again next Saturday!

Tags: blognation, China, blognation China, Mainland China, Enterprise, Corporate Culture in China, Mind the Gap Saturday

Mind the Gap Saturday is a feature every Saturday where blognation China tells its readership the differences — the gap — in the tech, mobile and enterprise worlds between China and the Western World.

How does business — and corporate culture — work in a People’s Republic of 1.3 billion? Whether it’s that in a startup, an SME or a long-established company, here’s the start of blognation China’s two-part look at the “biz of biz” in China.

Draw Your Line

The line between commander and obeyer, instructor and the instructed, boss and employee has never been clearer than in China. And it’s no big surprise. If the whole Chinese system is of any clue, it’s that the big boys at the top gain a seat — and once they do that, rule the country or the company from that spot “high up” there. This has been the way things were done for millennia on end. Change is, of course, coming, but only slowly. For generations, the Chinese have come to understand that if you’re ordered to do something, that thing gets done with the least bit of protest.

Chances are, the big-bossism, or laozongism (named after the Chinese word for “big boss”, laozong (老总)), is still alive and well. People either fear or come to not like the laozong when the going gets tough. The name of the laozong is sometimes referred to with an expression of displeasure or disdain. Yes, the boss ordered this, but it may not be the smartest idea out there.

If the “boss ordered this”, however, it’s pretty much done without a fight. People are under the idea that a fight with the boss would be futile — and, at the very worst, could result in that instantaneous pink slip.

The Emotions Matter

So how do people deal with their laozongs? Believe it or not, some get downright emotional with them. We’re not talking about weeping at the boss’s feet when the going gets tough, but in China, emotions are sometimes so important that they overshadow the legalese — and the rules. (That’s sometimes a good thing, and at times could be a really bad thing.)

Countless employees sacrifice their twopence just to get closer to the seemingly inapproachable laozong. They do their best to please him or her (I once worked for a lady laozong, by the way). A smile on the side of the laozong, or a nod at that, does wonders to brighten many an employee’s day.

Emotions matter for another cause: it does its bit in building trust (even if at first fragile, it can easily solidify provided there’s a clear effort). When things get rough, the laozong isn’t that likely to take someone who he or she knows is with him or her to task. Someone might get a “fried squid” (chao you yu (炒鱿鱼); that’s Chinese for getting the pink slip), but if you’re on good terms with Mr or Ms Laozong, your chances for being the fried squid are less if there are good emotional connections between you two.

Prepare To Be A Jiabanist

How many times have I asked fellow Mac user group people to come to a meeting? And how many times was the answer, “Nope, I’m jiaban right now!”. If I could get a penny for every jiaban excuse (lame or well-grounded they may be), I could easily be on my way to a Porsche Boxster.

Jiaban (加班) — Chinese for doing overtime work — is, in essence, an almost-inalienable part of working in China, in particular for locals. Locals type away at their office computers on Saturdays, and at times, on Sundays as well! Social events are sacrificed in favor working overtime, as overtime pay can bring that extra yuan or two in.

To many a Westerner — a committed 9-to-5-er — overtime work is probably something more close to an emergency break — pull (and work overtime) only if you must. The Chinese pull this break, however, at an alarming rate. A Western jiaban “emergency break” (so to speak) remains in almost pristine condition through the course of a year, while the Chinese version looks like the kid toyed around with it too much.

Jiaban is likely to happen more in startups and SMEs as they have quite a bit of work to deal with. This is not to say that big, established companies don’t do jiaban, but as with all things — starting up is hard to do (or to do well, at that), so it’s not really that much of a surprise if a startup has to work excess hours just to get something rolling.

Much Do About Nothing

So what happens inside the average Chinese office? As yours truly experienced it in person, surprisingly little in terms of real, decent work being done. While refilling his cup of warm tea at the work place this time last year, he found his co-workers watching Taiwanese comedy shows, lying on the sofa, or chatting with friends (not fellow colleagues) using MSN / Windows Live Messenger or QQ.

Scarier stories come from state-owned enterprises, where the über-unproductive idea of “paying you something even if you do nothing” holds true. If you’re on an internship, you pretty much get the lion’s share of time free, but stuck inside an office.

This apparent low rate of productivity could turn into something meatier (and it’s not good for China), and could put the brakes on the whole system. In fact, the whole thing’s gone to such an extent that some companies spy on what their employees are up to. (Privacy is not that big of a term in China as is the case in the West.)

When The You At Work Transcends Into The Private You

In the West, we’re used to keeping at least two boxes of contacts; those we meet at the workplace, and those we meet back at home. If it’s 5 PM (or 6 PM), you leave the office, and that’s the end of you in employer / employee form. You return home to your wife or husband and kids, and that’s you in your private (secluded?) version.

In China, however, it’s not rare that the 9-to-5 you continue after 5 PM. Weekend calls from fellow colleagues are only recently being targeted as somewhat intrusive, and working on Sundays is not forbidden — some people (including yours truly!) work non-stop, 7 days a week!

The only time that the 9-to-5 you is concealed are during week-long holidays, in particular Chinese New Year. Right before the start of the New Year, new projects are concluded, work is finished at incredible speed, and when the fireworks light up the sky, Chinese biz people know that they have at least seven full days to tune out of their 9-to-5 selves.

Yours truly mixes both worlds. On Sundays, of course, he phones nobody except for his fellow Mac group friends (as he presently considers this a hobby) and his close friends. However, if he gets a work-related call (he never initiates one), this call is answered immediately and without delay. Work continues on an individual basis on Sundays with nary a hitch, but no new business-related correspondence is written; a day is given to everyone else to take a break, and plug out, while he continues with reduced work.

“Sharpen Your Knifes Before A Fight”

Ladies and gentlemen, prepare yourselves in China for the Big End-of-the-Year Biz Rush. From November every year until Chinese New Year in the new year (western or Chinese), the last quarter of a year is likely to be that time of year when jiaban occurs at such frequencies that you’re one to concede that this is one real 7/7, 24/24 nation.

What happens around this time of the year is that work is often at a tonload. Some people (especially the faithful corporate viewers of many a Taiwanese comedy show) have accumulated more than enough work. Knowing that all of these has to be finished before the year is out (unless being poor or pink (as getting the pink slip) sounds attractive to them), they surrender nights and weekends during this final quarter and work their bottoms off.

Also, most of us like to close out a year on a good note. What about those things we’ve promised to do, but haven’t touched on yet? And finally, what about that last-minute partnership agreement that just chimed in? Add all of these together, and the busy final quarter suddenly starts to make some sense.

This strategy, known to many a Chinese as “sharpen your knifes before a fight” (临战磨枪), is also common currency to Chinese university students. Being in essence fed with dozens of pages of notes, those students yell it out at KTV bars (having suffered through five full days of classroom bore) until the looming exams make their mark felt. They then shun the microphones and the beer for the late-night “lightening-speed revision courses” that sees many a university building alive even after sundown, and in a matter of weeks, cram their cerveaux with all that edu info and — hopefully pass the exams.

The Fun Bit: Teamwork

Working in a Chinese company, however, is not all that gloomy. Not all bosses are evil, and not all work is difficult or impossible to complete. And at the end of the day, you get — the fun and pleasure of working in a team.

Company hangouts, corporate sing-a-longs, outings and hikings with the boss and your fellow colleagues: these alone make the hard work kind of pay off (in particular in a social factor). You get to meet great people, and you work together as a team to reach common goals — as in, to finish what you’ve been given with flying colors.

You never know what you get when you’re with a team — and this holds true in particular for yours truly. Being a media student at university (for postgraduate studies), he was an intern at the Beijing branch of a Chinese TV station. In one of those company socials, he was suddenly called upon to be the host for a surprise wedding ceremony. No problem: he did what he had to do — right away. A bit of fun — a bit of something unexpected — but the best thing (and the most rewarding thing) was that he got to meet great new people, and have a good time together.

Who said teamwork wasn’t fun?

Next week on Mind the Gap Saturday: We continue our look at the Biz of Biz in China, and share with you some values and good practises that will get you ticking in a Chinese company. See you next Saturday!

Tags: blognation, China, blognation China, Mainland China, Enterprise, Corporate Culture in China, Mind the Gap Saturday

Times are looking good at Sohu: one of China’s biggest web portals (which also does online games), has reported a 46% increase in revenues in Q3 2007. Sohu’s brand advertising revenues rose 42% year-on-year to the present figure of USD 29.8 million. Free services are now a darling of the customers, boosting profits for the quarter to the tune of USD 11.7 million, on revenues of USD 51.5 million.

Charles Zhang, Chairman and CEO of Sohu, was quoted by vnunet.com as saying: “You invest in the technology, bandwidth, servers and all those software engineers to develop products that are free, like blogs”.

Regarding standalone blogs, which at present remains a free product, click-throughs have shown some signs of improvement due to the seamless integration on the portal. Boosting ad sales through free services is a slow process, but growth is projected, according to Zhang:

“For online games, it is an immediate reflection on revenue and earnings … But for brand advertising, it is a slow but fundamental and irreversible path towards the largest internet portal in China and the largest, most attractive advertising platform in China.”

Tags: blognation, China, blognation China, Mainland China, Chinese portals, Sohu

How big is the Chinese Web 2.0 world? Well, big enough to fit on a postcard:

How big is a postcard? Maybe not that big. Then again — you may have to squeeze your eyes — to read the microscopic text next to some of these logos. A give-away that the Chinese Web 2.0 world isn’t that small anymore.

Where did I get this postcard? At the Chinese Blogger Conference, of course — still underway in Beijing.

This is also your cue to stay to blognation China for tomorrow’s continuing coverage of the Chinese Blogger Conference. Continuing live coverage begins at around 9 AM Beijing time; feel free to Twitter in for updates.

Tags: blognation, China, blognation China, Mainland China, Internet in China, Bloggers in China, Chinese Bloggers Conference, Web 2.0 in China

I sifted through three long articles in Chinese on Sohu IT, a local Chinese tech site, which featured in-depth reviews from a recent Internet and Web 2.0 investment conference in Beijing. What struck me the most, however, was what I’d like to call the dancing monkey theory. Hanneng Investment General Manager Zhao Xiaobing was quoted as saying at the conference that the Web 2.0 world is not the same as a dancing monkey party.

The theory goes that farmers rush to see a monkey performing, dancing around and grabbing everyone’s attention. As soon as the money lifts a plate and starts asking everyone for money, however, just about everyone runs away.

What’s behind this theory is that those Web 2.0 companies that are in it for the short run only (perform, then ask for money) are not going to make it. People will go to your site, use your services, but the moment you want to make a quid or two, they’ll run for their lives. On the other hand, if you’re in it for the long run — if you’re in it to offer people more and better services — you could easily make a profit.

There’s another example behind this. Mr Zhao gave us an example: one of his friends had a story where his daughter, now at Peking University, watched virtually no TV at all. The daughter was watching Internet video, day in, day out.

Mr Zhao singled out three possible types of companies in the Web 2.0 world: community portals, video sites and networking sites, and made it clear that a winner was bound to emerge out of the three. Despite this, what every site had to do right out of the box was to make their users sticky — make sure that they were frequent visitors and frequent users.

One of these original articles is here (in Chinese) — a good read (if you’re also OK with Chinese).

Tags: blognation, China, blognation China, Mainland China, Web 2.0, Internet video, startups

Web 2.0 is alive and well in China. In a recent IDC report, it was reported that there were at least 2,000 local Web 2.0 companies. Apart from social networking sites, there are also some commercial uses of Web 2.0 technology.

The IDC report states that the Web 2.0 scene is active due to the heavy investment, and goes on to recognize the efforts angel investors have made. The Chinese Web 2.0 trend is strong, and has been since early 2006, with most Web 2.0 enterprises being low-cost providers of information, seeking gains by providing information in a variety of ways.

However, the local vox populi sees the Web 2.0 boom a bit differently, with some saying that due to the rampant me-tooism in Web 2.0 sites, quite a number of these me-too sites could see their demise in the future. Also worrying is the IPR factor: the Chinese version of Facebook, Xiaonei, looks alarmingly similar to Facebook and has, at times, been branded a rip-off of Facebook.

Tags: blognation, China, blognation China, Mainland China, Web 2.0, IPR, IDC report

This Times Online article probably says it all… the daughter of a former bricklayer is China’s richest person with USD 16.2 billion to her credit.

The fortune of Yang Huiyan, estimated at $16.2 billion (£8 billion) by Forbes magazine, enables the property developer from China’s Guangdong province to leapfrog Zhang Yin, the wastepaper magnate, to the top of the rich list. Her wealth derives from the property empire that her father founded…

Her net worth was more than seven times that of last year’s richest Chinese, Huang Guangyu, an electrical appliance retailer who runs Gome stores nationwide and in Hong Kong. Mr Huang dropped to tenth place on this year’s list, even though his net worth soared by more than 50 per cent to $3.6 billion, reflecting the rapid growth of China’s economy…

A graduate of Ohio University, Ms Yang married a government official in 2004 after she returned to work in her father’s business. Asked by a Hong Kong newspaper why he had handed his fortune to his daughter, Mr Yang said: “Even if I reach the age of 100, I am going to give it to her anyway. She is family and I have faith in her.”

At last check, USD 16.2 billion translated to CNY 121.565 billion. At twelve figures before the decimal point, that’s quite a bit of money.

Here’s a little cultural background to all of this: In China, the family is (dare I say) far more important than Western cultures have it. In terms of the language, both the word “home” and “family” all refer to the same Chinese character jia (家), which — in actual fact — refers to both home and family (as I said).

Family businesses in China are still very much alive, despite an increasingly mobile dagongzu (打工族) working for others and a sizeable number of people “realizing their own dreams” with their own startups. Control of the business remains firmly in the hands of the family, and transparency is sometimes sacrificed to make sure that the head of the company (old or new) still remains part of the same family.

China’s one-child population has made the only child that much more important (and at that, that much more spoilt). Being treated like “little emperors” right from birth, they throw tantrums if they can’t buy the latest-and-greatest Lego toy. When they get older, the family agrees that most, if not all, family property will be transferred to the only child, which sometimes results in astronomical amounts of cash being transferred from father-to-son or father-to-daughter.

What they do with the money see two very different routes being taken. For the “plain-vanilla mainland Chinese”, part of the “spend-it-all-you-want” tribe, a startling amount of the money gets spent. (Some eventually spend so much that they go outright broke.) The others, though, tend to accumulate that cash — and at that, seek ways to make more out of the money.

The way being taken by yours truly is yet another route. Probably, at the end of the day, quite a bit of that cash will be spent for the good of the parents (yours truly maybe buying them a cruise that they long to have) or the family (at that, the extended family). The consensus amongst especially the youth is that spending money they earn themselves often makes them feel a lot for “shuang” (爽), as in “relaxed” or “at ease”.

The outside world may feel that this is “newsworthy”. At 16.2 billion dollars, it probably is, but to the Chinese, it’s just part of “everyday family life”, as well as “everyday family traditions”.