Yue’s Yappings

With 12,00 exhibitors and 66,000 buys, the Taipei International Electronics show is one of the biggest shows in the electronics industry. And it’s definitely the biggest show I have attended.

Walking through the exhibition floor, you’ll see all sorts of products, ranging from electronic components to safety and surveillance equipment to wireless communications to testing and certification products and of course consumer electronics.

This year the show has also added new technology products including solar energy and RFID. All RFID related products, such as tags, readers, system integrators, etc. are grouped into one section. Skyetek, my company, has a booth in the RFID section that we share with our local partner.

October 10^th is a national holiday for Taiwan, but it didn’t have any effect on the show’s attendance. On the contrary, more people were on the exhibition floor today than for the opening day yesterday.

It seems like you never get a break in sales. It’s the first week of October - the beginning of the 4th quarter. Now starts the final stretch for making our yearly sales quota.

So I’m headed back to Asia, this time for four weeks. As Charlie drove me the airport on Sunday morning, I felt sad, although I’m not sure why. Maybe it’s because this is going to be a long trip. Or maybe I’m still feeling the effects from Friday night, when I suddenly fainted during happy hour and ended up in the emergency room. I gave everyone in the resturant a scare since I was on the floor unconscious for almost a minute.

The doctor said I was fine - I’m just a “fainter.” Looking back, I’ve fainted two times previously in my life, but its usually caused by something obvious or stress (like one week before the wedding, seeing Charlie with blood on his face after having his wisdom teeth removed by the dentist - they hadn’t yet cleaned him up when I walked in). Anyway, the doctor made me feel better by saying he was a fainter also. And it once happened when he was a groomsman at a wedding! Luckily, I haven’t done anything quite so dramatic yet.

So back to my trip. My first stop is Taipei, where I’ll be attending the Taiwan Autumn Electronic Show, one of the most famous in the electronics industry. The city will be packed with visitors from all over the world. After that its Shanghai. And then maybe Hong Kong - that’s still to be decided.

It’s fall in Colorado, which means the aspen trees in the high country are starting to turn a beautiful golden color.

This is a picture I took last week at Kenosha pass.

This week’s issue of the Denver Business Journal has a story about Skyetek and RFID. The article highlights Skyetek as a local area company (to the Colorado Front Range) and some of the benefits of using RFID. It also talks about one of our prominent customers, Vail Ski resort, which will use RFID chips in their new ski passes. Using RFID chips also lets Vail turn their ski passes into a payment system for their restaurants and rentals.

If you are interested in the story, here is the link to the website.

China’s rapid industrialization has resulted in tens of millions of migrant workers leaving the countryside to try and find work in the booming eastern cities. Not surprisingly, this has made it very difficult for the government to keep track of people.

Shenzhen, which borders Guangzhou and Hong Kong, is one of the primary magnets for migrant workers. It has grown from a small fishing village twenty years ago to a huge 12 million person metropolis. With growth of migrant workers has come crime - Shenzhen has the highest crime rate among the major cities in China.

As the New York Times reported last month, Shenzhen is building the world’s largest people tracking system to combat the problem. It comprises over 20,000 digital cameras, installed on every street, and uses sophisticated software to try and identify criminals or any illegal activities in realtime.

In addition, starting this month, the Shenzhen government is issuing citizens a new, RFID-based identification card. Each card stores a person’s name, address, work history, education background, religion, criminal history, medical history and their landlord’s telephone number. And since China still enforces its “one child” policy, the card also stores the number of children the person has.

And the Shenzen government has yet bigger hopes. It wants to turn the card into a debit/credit card - so people can use it to buy subway/bus/train tickets. Of course, then it becomes trivial to see where you are at and what you are doing.

Before you dismiss this Orwellian nightmare as limited to China, don’t forget that:

• England has the highest number of surveillance cameras per person in the world
• Both England and the United States are trying to introduce national identity cards similar to the ones Shenzhen is using
• The FBI has been experimenting with facial recognition software at high profile events like the Super Bowl

Of course the proper limits for government surveillance in this age of terrorism is hotly debated. Its unclear where the bounds will be drawn in Western democracies, but in China citizens still have precious little power to push back against the government.

A few weeks ago, Christine Lu, the founder of The China Business Network contacted me and asked me if I’d like to be interviewed on her radio show called “The China Business Show.”

Intrigued, I took a look at the China Business Network website and was quite impressed. Its designed for English speaking business people that work in China or with Chinese companies on a daily basis. In addition, each week Christine produces “The China Business Show” which covers all aspects of doing business in China. Each show consists of a series of interviews with people who are experts on doing business in China - its an invaluable source of insider perspectives, secrets and tips.

Today, I was Christine’s first guest on her show. I was a bit nervous since the interview was not only live but it was also recorded so anyone can download it and listen to it. The interview lasted 13 minutes, and I talked about my company, Skyetek, and the challenges of selling RFID technology in China. And then it was over - its surprising how fast 13 minutes on the air can be.

If you’d like to hear the podcast its now online.

This is a picture of the Bighorn Mountains in the summer time - a majestic range of peaks located in north central Wyoming. Lauren and Jon are arriving from D.C and New York City tomorrow morning and then we are off for a few days of backpacking and camping. Most likely we’ll be doing this hike, which I put up on MapBuzz if you’re curious.

Charlie, Jon and Lauren have been on a number of trips - in Colorado, California, Virginia, Idaho, Washington, Alaska, etc. But it will be my first trip ever - I hope it is going to be fun!

Three years ago, Charlie and I visited our Italian relatives Barbara and Vittorio in Lucca, which is in Tuscany between Pisa and Florence. Barbara and Vittorio own a number of houses and villas and rent them out during the summer. We were lucky enough to stay in Villa Pieve during our visit.

We had a great time in Tuscany. One of the memorable events was our search for the long-lost Prada outlet. Most famous Italian fashions designers, such as Armani, Gucci, Hogan, Fendi, Valentino, etc, have outlet stores south of Florence. Charlie of course had no interest in shopping, but I was able to convince him by saying that we would visit Florence once we were done with shopping. To my amazement he agreed.

Outlet stores in Tuscany are different than in America - instead of having the stores located in one place they are scattered across the country side. Unfortunately, that makes them very difficult to find. Among all the outlets, Prada was the one that I really wanted to visit. But it also turned out to be the most difficult to find.

We drove forever that day trying to find it - stopping at gas stations and convenient stores to get directions. I don’t speak Italian, but everyone seemed to understand when I said “Prada” - they must be used to lost fashionistas like myself. But sadly we failed to find it and ended up too exhausted to see Florence. And then due to all the driving, Charlie ended up with a stiff neck which immobilized him for 2 days.

We’re planning on going back to Italy next summer - and this time I am prepared. For a start, I actually have the address this time:

Prada store
Località Levanella
52025 Montevarchi (AR)
Tel : +39 055 91 901

And instead of driving, I’ll take the train to the Montevarchi station and then get a cab (about 15 minutes). And this time we’ll make it to Florence!

A few times a week, I receive emails originating from China similar to this:

您好！我公司现有全国多个省市发票优惠代开，经营范围广，发票验证后付款，有需来电联系。陈先生

In English:

Hi, my company offers receipts issued from multiple cities and provinces in China, covering a wide variety of businesses. Payment is accepted after verification of receipts. If you have a need, please call Mr. Chen

Most countries allow companies to deduct certain expenses against their income, thereby reducing their taxes. China is no exception, and showing typical Chinese ingenuity, there are now Chinese companies that are happy to sell you fake receipts that look just like the real thing.  And in fact, I hear its becoming a common practice. So beware of fake receipts from China!

My sales territory covers Asia, including both China and India. For the past year and a half I’ve focused on east Asia - China, Taiwan, Japan, South Korea, etc. Part of the reason is that the RFID market is more mature in those countries. And part of the reason is that I had existing connections in China and could get started more quickly.

But now its time to focus on India. I know very little about India, and have not yet visited it (that will change this fall). But after talking to a few customers in India, I’ve already learned a few things:

Religion

Indians are a religious people - for many, religion is a way of life. In most parts of India, Hinduism is the dominant religion. There are many gods in Hinduism, and each god represents a special character, such as intellect, kindness, beauty, etc. For example, the god Ganesh, a very popular one, stands for intelligence. You pick a god based on the attribute you want to have, and then you worship that God. And if I understand correctly, you eventually become like a god (Indians believe there is a god in everyone).

Now contrast that to China. Chinese are not religious. And in fact, a popular saying these days in China is that “Money is God.”

Population

By population, China is the world’s largest country. But not for much longer. Unknown to most foreigners, China’s one-child policy has been very effective. The average birth rate is now 1.7 per couple, well below the replacement rate of 2.1. The Chinese population will peak within the next twenty years and will then start to dramatically decline. Even today, only 20% of the population is under 15.

That means China is in a race against time - it must get rich enough, quickly enough, that it will be able to support the world’s largest aging population. If you think Japan is struggling today, or the United States will in the next twenty years, just think of China, which is much poorer and has no social safety net.

As large population in China are getting old, India is getting younger. Its birthrate is an astronomical 3.1. It is a much younger country than China, with 30% of the population under 15. With already over a billion people, it boggles the mind to think how India could possibly cope with such a gigantic, growing population.

Gender Makeup

Both countries prefer males over females. In China, the ratio of male to female babies is 120:110, which means 8.3% of males won’t able to find a wife. I don’t know the ratio in India, but I understand it is similarly skewed.

Unfortunately, single, young males tend to be disruptive in society. How will these two countries deal with such a huge social issue?

Cheap Labor
With such large populations, both countries have spades of cheap labor, thereby making them attractive investments to western companies.

India has excelled in IT outsourcing, partly because English is the official language thereby removing a huge barrier to communication. Of course India doesn’t have much choice, since its infrastructure is so dreadful that it would be outsource manufacturing to it.

China, on the other hand, has become the low cost manufacturing center for the world. This is partly due to its connections to Taiwan and Singapore, which share a common language and industrialized well before China. In addition, China has spent huge sums of money upgrading its infrastructure. Parts of eastern china are as advanced as the United States - huge skyscrapers, interstate highways, maglev trains, new ports, etc. Of course the farther you get away from the coastal cities, the more dire the infrastructure gets. But overall, the infrastructure in China just works, and its getting better all the time.

Summary

I can’t wait to visit India in the fall, and learn a little bit about what its really like to do business in India.