Moving to China: Where Should You Set up Shop?

Travelling the Silicon RoadSo you’ve decided you need to have a presence on the ground in China. Or you’ve decided it’s time to move some manufacturing to China, or expand the sales offices you have there.

Then the question becomes where do you go in China to set up shop?

It’s a big question, and not one with the clear-cut answers it had just a few short years ago. At first glance, it might seem obvious: if you’re talking about electronics manufacturing, then Shenzhen, China’s richest city, is the place to go. If you’re talking about something farther up the food chain, say semiconductor manufacturing, then Shanghai is the place to be, right?

Well, if you’ve been following along as Electronic News has ventured down the Silicon Road this autumn, you know it is not quite that simple. There is some truth to those statements, to be sure. But the industry landscape in China – and foreign companies options – are considerably more complex, to be sure.

But lets look at that conventional wisdom first. Shanghai and Shenzhen are obvious places for a reason. Shanghai is a huge port city with plenty of natural resources, namely water, and an established infrastructure – this is why there are fabs here in the first place, including many that belong to the fourth largest chip foundry, Semiconductor Manufacturing International Corp. (SMIC). You’ll find the Chinese offices of many a U.S. and European chipmaker here in the gleaming new skyscrapers that dot the skyline.

Look at Applied Materials Inc., the world’s largest process tool vendor, and an old hand when it comes to operating in Asia – it’s literally around the corner from its biggest Chinese customer, SMIC, and its headquarters in Shanghai.

At the other end of the supply chain spectrum is Shenzhen, which has blossomed over the past two decades into China’s electronics manufacturing center. It was made a special economic zone for a number of reasons, but those reasons are similar to why Shanghai has exploded — and why Shenzhen is exploding.

For one thing, Shenzhen is a port city. Located in southern China on the eastern edge of the Pearl River delta, just across the border from Hong Kong, it is home to much, if not most, of China’s electronics manufacturing, and has the infrastructure to support that. In fact, it is probably the only place in the world to have a wholesale electronic components shopping mall located in an office tower downtown. That’s right, the SEC Electronics Marketplace: seven floors of components and finished electronic goods available wholesale.

Both cities have abundant human resources, not to mention prevalent universities, particularly Shanghai. In fact, Shanghai is so popular right now — particularly with Chinese engineer-entrepreneurs returning from abroad to take advantage of the advantageous business climate – that there are some 120 fabless companies in various stages of development in Shanghai, according to one chip startup I visited.

Plus, both cities have much to recommend them in the eyes of Western expats. Both cities are relatively clean and pollution free, and are very cosmopolitan; one could easily get by in Shanghai without having to learn Mandarin, or ever having to eat Chinese food, for that matter (why anyone would actually want to do that, however, I wouldn’t know – but I met Westerners in Shanghai who happily pointed this out).

Shenzhen, meanwhile, while much smaller and definitely more “Chinese” than Shanghai, is rapidly approaching that same level of international sophistication, and is so new and clean, it has been labeled China’s garden city. Indeed, the whole city seems at first glance to be sparkling and new, and compared to China’s older cities, green space is much more abundant.

But these very things that make Shenzhen and Shanghai such obvious choices may also serve to make them not-so-obvious choices. Shanghai, for example, is very expensive by Chinese standards – many people I spoke with, both Chinese engineers who had worked in Silicon Valley, as well as Western expats, pointed out that housing costs are approaching San Francisco/San Jose levels – and all of the attendant issues are starting to crop up in Shanghai, too.

“It’s not a problem for us yet,” said Kevin Sun, a marketing manager for Applied Materials China, referring to the high cost of living in Shanghai. “But of course they feel this pressure,” he said of Applied’s local Chinese employees.

It’s Not Just Location, Location, Location: Beijing vs. Shanghai

Another thing to bear in mind is that to do anything in China, you have to have established quan xi with the government – you have to establish and maintain the right relationships. For all of its cultural opening up, for all of its warm embrace of the free market, China is still a party where the Communist Party holds near absolute power.

And while Shanghai and Shenzhen may have a wealth of technological human resources, when it comes to finding brainpower in China, there is no better place than Beijing – which happens to be the seat of political power in China as well.

Now, for people not familiar with China – and perhaps more so for those who are only familiar with Shanghai – it’s important to understand that Beijing is the cultural heart of China, not just the political center. Geographically, Beijing never had much to recommend it, but in China’s distant past, as its dynastic rulers began to consolidate power across this vast country, Beijing became a strategic location, the crossroads of a growing realm. That is essentially why it became the seat of power for China’s emperors, which in turn attracted China’s intellectual and cultural elite, historically.

By and large, this is still the case today. Not only is it the seat of government, it is home to most of China’s premier universities – the Peking University, Tsinghua University, and the China Academy of Science, to name just a few — not to mention most of its millionaires, old and new, and its popular entertainment stars. It is also home to many of its brightest painters, musicians and writers.

And if there is a hot-button issue for the Chinese today – well, there are many, actually, but the rivalry between Beijing and Shanghai is one of them. Of course, the people that live in China’s other burgeoning high-tech cities have their own views on the matter, but most Chinese people in the tech industry in either Beijing or Shanghai, have a strong opinion with regard to the rivalry.

And the people that argue on behalf of Beijing make strong arguments. Beijing may not be a bustling port city, and may not have the infrastructure for manufacturing that Shanghai has, which the city’s proponents readily acknowledge.

If you’re just after cheap manufacturing, then by all means, go to Shanghai, says Liang Sheng, the section chief of the Department of Information Industry of the Beijing Municipal Government. “But if you want to expand your profits, you have to come to Beijing.”

And if you are looking to develop intellectual property (IP) tailored for the booming Chinese market, Beijing is the place to be. “Here we have our own IP,” he said, observing – as many Chinese officials did — that there was a reason SMIC built its first 300mm wafer fab in Beijing.

Liang likens Beijing to Silicon Valley; it is where a big chunk of China’s domestic chip IP is created. China’s only EDA company, CEC Huada, calls Beijing home, and of the 400 design houses in China, 85 are in Beijing. If that ratio isn’t good enough for you, consider this: out of the 16 design houses that achieve more than $100 million in annual revenue, more than half have their headquarters in Beijing.

Of course, there is no official distinction between Shanghai and Beijing when it comes Chinese efforts to lure the semiconductor industry there. Rather, it’s the result of a natural evolution: “it’s just what it is,” remarked Xu Xiao Tian, secretary general of the China Semiconductor Industry Association. “These two cities have their advantages and disadvantages.”

There’s More to China than Beijing and Shanghai

Some of those disadvantages in Beijing, aside from a comparable lack of natural resources, are considerable pollution and horrendous traffic. That is not to say that they aren’t problems in Shanghai, but in Beijing, they are particularly acute. While Beijing has a venerable, effective public transit system, there are still so many people in the city that its traffic jams rival the worst of those anywhere on the globe; it will be interesting to see how Beijing addresses this problem when it hosts the 2008 Olympics.

And it isn’t the only place to find superior human resources in China; consequently, nor is Shanghai the only place to find infrastructure and physical resources for manufacturing. As Xu observed, quite rightly, many companies both domestic and foreign, are looking at other cities around China – Chengdu, Xian, Shenyang, just to name a few. There are resources to be had elsewhere, often without the costs associated with Beijing or Shanghai.

One thing is common to virtually every significantly large municipality in China today: the local governments are playing to their strengths, and doing what they can to lure foreign investment. Wherever you go, whomever you talk to in local governments – as well as the local companies looking for foreign business partners – the phrase “win/win” comes up time and again; incentives are falling out of the metaphorical trees.

And each these other municipalities offers unique cultural environments as well, as followers of the Silicon Road blog know well, be it the food of Sichuan Province, or the warm subtropical climate of southeastern coastal China.

“I want all these cities to be successful with their semiconductor industries,” Xu remarked. “We’re paying attention to all of them.”

Electronic News Travels to ChinaIndeed, if one were involved in optoelectronics, Xiamen would deserve consideration. If software is your company’s forte, then Shenyang may be the place to set up Chinese headquarters. There are many places, places that we couldn’t squeeze into my Silicon Road itinerary, that are burgeoning high-tech and/or industrial centers in their own rights, or soon will be – Xian, Wuhan, Tianjin, Beihai and Guanzhou, just to name a few.

Wherever you decide to set up shop in China, I can say one thing is abundantly clear after spending a month investigating China’s tech industry: now is definitely the time to be there.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

How Much is that Doggy in the Window?

Travelling the Silicon RoadSHENYANG, China — OK, time for a food update. As reported earlier, my digestive track finally decided to rebel against all of the strange and exotic cuisine it has seen the past week. As these things go, it is a relatively mild bout; it hasn’t kept this intrepid traveler from chalking off a few items on his exotic foods list.

As I’ve explained before, while normally a vegetarian, experiencing local cuisine in strange, foreign places trumps my normal dining habits, despite the dent I’m sure it places in my karma.

So I’ve been gobbling all sorts of Chinese food left and right; and unlike Chinese restaurants in the United States, which tend to have a limited menu of American-safe dishes, or specialize in one regional cuisine, here in the actual country of China the cuisine is as varied and exotic — to Westerners — as one could hope. One of the oddest things I’ve had to date — again, odd to Westerners — would be donkey. Fortunately, I don’t believe it was soaked in tiger urine (you’ll have to scan the comments section of an earlier post for an explanation).

Being a vegetarian, I couldn’t help but feel a little guilty — I’ve never ridden a donkey, but still. But that didn’t stop me from my quest to sample strange food. Here in Shenyang has been the only moment so far in this trip when I’ve encountered a dining option that gave me pause. This northeast region of China is influenced by both Japan and South Korea, and my gracious hosts here in Shenyang treated me to dinner at a traditional Korean restaurant the other night.

They were sensitive to my Western predilections — ironically, they said they were going to order lots of meat dishes, since us Westerners eat a lot of meat — and they asked me if I had any restrictions or anything I didn’t want to try. I, of course, said no. Then I was asked about dog, and then I had to pause.

And let me pause now, for the benefit of my Asian readers, who might not be that familiar with the United States and the West in general. Dogs as pets are common in the United States, and for many of us, our dogs are as dear to us as other family members — sometimes more so. I’m sure it seems odd to Asian readers (dog is not an uncommon choice in restaurants in many parts of Asia, including parts of China), but many Americans, myself included, would no sooner eat a dog than eat a family member.

But, faced with this choice, as I paused my own words rang inside my head, words you may have already read in this blog: When in Rome, emulate the Romans. Life is short, experience everything you can. If you are going to understand a culture, you have to live like them.

Man oh man; if there is one thing worse than being called out on a bluff, it’s calling out yourself. So damn the torpedoes, full speed of head. Leap, then look. Shoot first, ask questions later. So I said: “Sure, why not?”

I could only bring myself to eat one little slice of dog meat; I thought of all the dogs that I had known and loved over the years — Tasha and Sandy, I don’t know if dogs do actually have an afterlife, but wherever you are now, I hope you can forgive me. Fortunately the rest of the meal was absolutely fantastic, and my hosts most gracious, and that is not an exaggeration. If there is one thing the Chinese know how to do, it’s how to have a meal, and how to treat a guest.

Turning the Tables: Eating Strange, Exotic … Pizza?

Perhaps it was the squid on a stick that we had for lunch while wandering the streets of Shenyang on Saturday afternoon (an entire little barbequed squid on a wooden skewer; it was pretty good, actually), but I decided it was time for Tony, my Chinese interpreter, to experience a little bit of my culture.

Plus I had wanted a pint of Guinness ever since I noticed that there was an Irish pub — really! — next door to my hotel here in Shenyang. And I was curious as to just how Irish it was. You can pretty much plan on finding in any medium or large city in continental Europe a pub run by an Irish expat, and odds are the staff will be Irish expatriates too. But in Northeast China? What are the odds of that?

Surely this pub in Shenyang wasn’t run by an Irish immigrant. Well, I didn’t find any Irish people about the place, so I can’t say for sure, but it sure looked the part at first glance, polished wood everywhere, a foosball table and football (soccer to us Yanks) on the telly.

But there was insipid European pop music on in the background (something you’d never hear in any real self-respecting Irish pub, not even on the Continent), and the table we sat down at had a table menu featuring “Gratinated Harsh Brown Potato.” I shortly discovered they had Guinness in a bottle, but not on tap. OK, so maybe it wasn’t all that authentic, but they did have Beamish on tap, so what the hell.

Thus I introduced Tony to his first pint of stout. The pronouncement: “very bitter.” But he actually finished his pint before I did, so there you go.

I also introduced Tony to such exotic fare as a hamburger and French fries – with, gasp! Ketchup — and pepperoni pizza. We also had bruschetta as an appetizer. It all proved a little too heavy and exotic for Tony: he said at one point that if there wasn’t all that stuff on top of the pizza dough, like cheese and sauce and whatnot, it would be O.K. Remember, cheese really is a foreign concept here.

Electronic News Travels to ChinaI couldn’t help but tease him, observing that I had been eating strange, exotic food all week. “Come on, Tony, don’t be a wuss! I ate squid on a stick today!” Not to mention dog the night before. He made it up to me by agreeing to play foosball, which he had never seen before in his life.

The next few weeks may turn out to be as much an odyssey for Tony as for me, I think. In Shanghai I’m guessing I can find a pool table somewhere, and maybe even some Mexican food. If he thought ketchup and pizza was exotic …

Jeff

Editor’s Note: As explained at length elsewhere on this site, this is a blog entry of mine that originally appeared on the now-defunct Electronic News’ website, which is long gone. While its former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge), as far as I know, this blog content isn’t hosted anywhere else on the Internet, hence my reproduction here.

Original Comments

at 10/17/2005 8:07:32 AM, Jeff in China said:

In Shanghai, for Mexican food, I recommend Taco Bell Grande (no, it has nothing to do with the fast food chain in the US) just off Renmin Guangchuang (People’s Square), near to the Marriot on Nanjing South(?) Road. It’s right across from the Shanghai Art Museum if I remember correctly…

at 10/17/2005 12:39:52 PM, Jo said:

I can only hope that you were sick as a …. DOG!!!

at 10/17/2005 1:41:44 PM, Richard H. McKee said:

Dear Jeff, I have quietly followed your postings until now, but with all this food commentary, I feel compelled to remind you that you are in the “LAND OF DUCK”. Before you leave, you must seek out the many various dishes that involve one or more parts of a duck! Cold, marinated duck feet as an appetizer should be tried, among others. And of course, traditional roast duck comes in what seems to be as many variations on the theme as there are restaurants. One of my all-time favorites is SMOKED Duck, where fine tea leaves are used on the coals for a one-of-a-kind smoke flavor! And yes, if you look hard enough you can find good local beer options to Tsing Tao, such as “Nanjing” in Beijing. Cheers! -Richard

at 10/17/2005 11:37:33 PM, dick@ntcom.co.uk said:

there are companies in Ireland, including, I think, Guiness themselves, that export entire “Oirish” pubs with fixtures, fittings and even authentic dust for the top shelves Don’t forget fish and chips as an exotic meal

at 10/17/2005 11:52:50 PM, Jonathan, Bath UK said:

Ketchup:- The word is chinese for tomato sauce!

at 10/18/2005 12:53:15 PM, Michael said: Jeff: Try the duck tongue! Yes, I said duck tongue. As one can well imagine, there’s not much meat.

at 10/19/2005 7:07:57 PM, Vern, Cincinnati, OH said:

Have you found any of those green tea cakes yet? If you can’t find that elusive expresso machine in the morning, chow down on a couple of these puppies…um, sorry…delights. The words will start to flow like donkey blood…um, sorry…water!

From BMWs to Neusoft: Greetings from Shenyang

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Travelling the Silicon RoadSHENYANG, China – Welcome to Shenyang, origin of the Quing dynasty and a microcosm that reflects what is happening throughout China at large.

The high tech industry is blossoming here, but it’s more about the code than about the chips.

This busy city in Northeast China, the capitol of the Liaoning province, takes up some 13,000 square kilometers, and has a population of some 7.4 million people. A Mongol trading center for centuries, it has played an important part in Chinese history; it was the Manchu capital before the Manchus captured Beijing, establishing the Quing dynasty – the last of China’s dynastic rulers.

Later, this critical industrial city was held by the Japanese during its occupation of China for several decades, and briefly by the Russians after the defeat of Japan in World War II.

Today, some 57 different industries are represented here, everything from cars – BMW makes its 3 Series and 5 Series here – to advanced vacuum equipment used in high-tech R&D. While Shanghai may grab the headlines outside China and Beijing may be the heart and soul of this ancient nation, Shenyang is part of its muscle and sinew.

Both the central and local government has done much in recent years to foster growth here, and it shows: the city’s gross domestic product (GDP) was approximately $23.5 billion (190 billion yuan); GDP growth has been in the double digits since 2001. Foreign investment meanwhile has exploded, from $700 million in 2000 to $2.4 billion last year. The first foreign bank in Shenyang, a South Korean concern, opened a branch here in 2004 as well.

Like much of China, Shenyang is also a city in transition: there is construction everywhere and cranes dot the skyline in every direction; a gleaming, Western-style Holiday Inn hotel catering to business travelers looks down over the city center that hosts a large statue of Mao Zedong.

Street markets, where everything from combs and hand mirrors to fruit and squid on a stick are sold, flourish blocks away from new office buildings; old men using bicycles to tote construction materials share the road with luxury automobiles.

And like the rest of China, while manufacturing is still of great importance here, Shenyang is looking to build a technological future, and much of it in software. Start-ups concentrating on embedded applications for such things as industrial automation – a natural here in this industrial city — as well as CAD applications for manufacturing can be found here. There are 428 research institutes based in and around Shenyang – some local, some provincial and some national in nature; some are attached to the 30 colleges and universities based here. The city plays host to some 150,000 students besides.

It also plays host to large software companies that came from modest origins within a university, and flourish in part from all the local talent coming out of the university system here. Sound familiar? Like a certain place on the West Coast of the United States? It might look familiar too.

Deja Vu … Where Are We Again?

If one drives south of Shenyang’s city center, the old gradually gives way to the new. Some of Shenyang’s government buildings for example, look as if they date back to the 1950s, when the central government first set out to remake Shenyang as a diversified industrial city. And yet south of the city, tall, gleaming apartment and office buildings are taking root as are high tech parks and corporate campuses in the new Hunnan district.

Long, wide newly-paved roads lined with new saplings and well-manicured lawns adorned with corporate logos could make visitors here familiar with Silicon Valley wonder if they were south of Shenyang or northwest of San Jose. There are familiar names to be found here too, such as Tycho and Philips.

One of the crown jewels of Shenyang’s high-tech business is also found here, Neusoft. The company’s beginnings are the stuff of tech industry legend: it began in 1991, having incubated for several years in China’s Northeastern University, with three people, three computers and about $5,000 (30,000 yuan) in start-up capital. Last year, Neusoft Group Ltd. achieved total sales revenue of nearly $300 million (2.4 billion yuan) and now employees more than 7,000 people.

It boasts Alpine, Toshiba and Philips among its investors; in 1996 it became the first software company listed on the Chinese stock exchange. While it has branched out into other things, such as IT education and training and medical systems, software and services still provide the lion’s share of its revenue. It supplies software across a broad range of industries, supplying such things as database management and network security products to dedicated applications for tobacco and transportation concerns to systems integration.

Outsourcing is a foundation of the company, it began with a partnership with Japanese electronics company Alpine. It lists many big American names among its partners as well, IBM, Sun, Oracle and Microsoft among them. Neusoft primarily helps tailor outside companies’ products for the Chinese market; its outsourcing revenue was $36 million last year, and should hit $50 million this year.

Literally down the street and around the corner from Neusoft are the offices of Shenyang Only-Info Tech Co. Ltd. Like its neighbor it is a growing software concern that was spawned in academia, in this instance the Shenyang Chemical College in 1993. In 1997 the company was spun out of the college as a private company; today it employees 300 people and has annual revenue between $25 million and $37 million.

While the company’s history lies in IT products and services, like Neusoft, it has recently turned to software outsourcing, specializing in things like telecomm value-added software, digital gaming, and perhaps most notably, outsourcing software for Japanese software suppliers for the Chinese market.

Japan was once a bitter enemy of China thanks to its occupation, and memories are long here; mention Japan in a historical or political context and even many young people in China may react with guarded hostility. But the Chinese, being pragmatic, don’t let that get in the way of business, and Shenyang’s software companies are good examples of that.

Only-Info just launched its Japan-oriented software effort last year; it already represents a significant chunk of its revenue. As Only-Info’s Zhao Jun Hong explains, Shenyang, given its history and Japanese influence, has an advantage when it comes to the outsourced Japanese software market.

But like Neusoft, with which it has a joint venture operation, Only-Info plans to expand to more international outsourcing opportunities, launching U.S. and European-oriented software programs next year, Zhao said.

Manufacturing Alive and Well

While software may be a wave of the future for industrial Shenyang, it isn’t straying too far from its roots; manufacturing is still welcome here. In fact, much of its burgeoning software development is geared around manufacturing.

Take for example NEU Information and Technology Co. Ltd., another Northeast University startup that was formed by three professors from the university. It currently employs 22 people and another 20 students, and has assets of $3.7 million.

The company focuses on co-designing hardware and embedded software “to improve the intelligence of equipment” in industrial applications, according to Deng Qingxu, VP of the company. Among its products are emissions monitoring equipment that can be found in power plants throughout China.

And like its older brothers in the university-startup fraternity, NEU Info and Tech is looking beyond Shenyang and China to develop joint ventures with foreign companies, namely in the United States and the United Kindgom. In one case, it would like to license the technology in the gas control units of a U.S. company, and tailor it specifically for the Chinese market.

Even older companies in Shenyang have found their way into high-tech. Sky Technology Development Co., Ltd. was first established under the Chinese Academy of Sciences in 1958. Entirely stated owned at that time; now its employees own 35 percent of the company. Specializing in vacuum equipment, today it has helped simulate the vacuum of space for the Chinese manned space program, as well as providing components for a host of high tech applications, such as molecular beam epitaxy, electron beam and ion-beam deposition, chemical vapor deposition (CVD) and plasma-enhanced CVD.

Sky Technology has also been ahead of the curve in international cooperation; it has supplied parts for Applied Materials Inc. subsidiary AKT, as well as newcomers in the domestic chip market. And like seemingly every other high-tech company in Shenyang – and perhaps all of China – they are keen on more joint venture opportunities with foreign companies, in particular the United States.

The phrase “win-win” crops up frequently when talking business in Shenyang.

And there may be a new manufacturing market coming to Shenyang in the near future: chipmaking. Zhang Qing Feng, director of the Shenyang Science and Technology Bureau, a unit of the local Shenyang municipal government, identified the chip industry as of the new industries that the bureau sees as critical for the future of the city.

Electronic News Travels to ChinaShenyang has had discussions with a foreign chipmaker about the possibility of building the city’s first chip fab, a 200mm or perhaps 300mm factory, he said. While nothing has been signed yet, the land has been set aside, as the city has actively courted companies from South Korea, Taiwan and Canada.

Shenyang is doing all that it can to make the city attractive to foreign companies; “In the next few years we’re going to formulate incentives,” Zhang said, such as chopping the tariff on importing equipment into China, and providing easy access to government loans.

You’re Just Like Cross Town Traffic

Travelling the Silicon RoadSHENYANG, China — One thing people in the U.S. always talk about when returning from China is the traffic. But I think it’s the larger issue behind the traffic that those planning on visiting or working in China would do well to consider.

Us Westerners, especially us Americans, are used to having plenty of personal space. You know — “give me a home, where the buffalo roam” and “from sea to shining sea” — and all that. Heck, where I live in West Virginia, I can pee off my back porch in the middle of a sunny afternoon, if I want to, and no one would be around to see it.

So as a consequence, we don’t really grasp just how the large numbers of people in the cities here affect a culture.

Let’s take driving. Traffic here in China, at least in Beijing, scares the hell out of me, quite frankly. I had been warned by various Westerners about the taxis in Beijing, but honestly, the back of a taxi is probably the safest place to be in traffic in Beijing; the taxi drivers are the most experienced drivers, after all.

But to a Westerner’s eyes, at first glance traffic in Beijing — and the locals tell me it’s like that everywhere in China — appears to be absolute horrendous chaos. Cars cutting corners and cutting into oncoming traffic to pass or turn left, blindly butting into a lane rather than waiting to merge when there is a break in traffic, horns blaring all over the place, and as if that weren’t fun enough, thousands of bicyclists weaving in and out traffic, riding against traffic, blindly passing busses on the left, etc., — and not one of them wearing a helmet. Then throw in a slew of jay-walking pedestrians for good measure.

Chaos. Or is it? At first, I was tempted to believe the stereotype that many people on the West Coast of the U.S. have: that Asian people can’t drive. But that’s not the case — the contrary, in fact — as I’ve come to conclude after thinking about this all week. It started with this question: if thousands of people are riding bicycles everywhere in Beijing, and thousands more taking the subway or buses, then why is there still rush hour traffic and traffic jams to rival the worst that Berlin or L.A. has to offer, not to mention the smog?

The obvious answer: there are that many people crammed into a relatively small space, by Western, and particularly U.S. standards. Consider this: Beijing is almost the size of Belgium, and with a population of some 13 million (according to year 2000 figures), it has 3 million more people than Belgium.

And what’s more amazing is that there is rarely an accident. I spent most of this week running hither and yon in taxis (often clutching the door handle with white knuckles) and the occasional bus — I was in a taxi at least three times a day, sometimes more — and I witnessed one fender bender the entire time. What’s more, while you’ll hear horns all day and most of the night; no one ever seems to get road rage here; I have yet to see a cab driver so much as raise their voice, although they are quick with the horn.

As one of my new Chinese friends pointed out, if you don’t butt your way out into traffic in Beijing, when trying to get somewhere, you’ll literally wait hours. Same thing with getting in line for a subway car: if you don’t move quickly, you will be waiting for the next one. So the Chinese, nothing if not a pragmatic people, butt their way in. It may seem chaotic to us laowai (Caucasian foreigners), but traffic here is really an impressive, complex and delicate — albeit noisy — ballet.

The thing is, everyone here drives like that, and everyone expects everyone else to drive like that, and everyone has learned to deal with it, so it works just fine for the Chinese.

Maybe there are other factors involved that I haven’t ascertained; the population density in some of the larger U.S. cities rivals that of Beijing; in the case of New York City, it even surpasses it. And yet, while rush hour in any major American city will reveal a gaggle of buffoons behind the wheel, it never seems as chaotic as 8:55 a.m. on Monday morning in Beijing.

But it’s not that the Chinese can’t drive. Oh no, trust me on this one, folks. If the urban Chinese couldn’t drive and drive well, they all would have died in car accidents by now. And it’s not that they have a reckless disregard for life (although if I were to move here, I’d spread the gospel of the bicycle helmet).

I think that it’s just that this is the way life is in these crowded cities — that’s life in a country of 1.3 billion people. As I write this I’m looking out my hotel window in Shenyang, a city of seven million, and traffic, while seemingly not as crazy as that in Beijing, does nevertheless look like, and sound like, controlled chaos.

And it is stark contrast to what we experience in the States. If you picked 20 U.S. drivers at random and plucked them down in the middle of rush hour traffic in Beijing, I promise you, there would be 20 accidents in about 20 minutes.

And I think it’s the population density issue behind the fact that you often hear Westerners say the Chinese don’t respect privacy and personal space, or they have never heard of the concept of a queue — it’s not that at all; it’s just a byproduct of a large population.

Electronic News Travels to ChinaSo if you come here to visit or for business, keep it in mind when people jostle you at the train or subway station as they board the car, or when your taxi driver busts a move left of the yellow line into oncoming traffic, only to merge back into the correct lane at the last possible second, missing an oncoming car by inches on the left and a bicyclist by inches on the right.

Just smile and celebrate the exotic differences between our two cultures. And pray if it makes you feel better in the back of the cab.

Jeff

Editor’s Note: As explained at length elsewhere on this site, this is a blog entry of mine that originally appeared on the now-defunct Electronic News’ website, which is long gone. While its former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge), as far as I know, this blog content isn’t hosted anywhere else on the Internet, hence my reproduction here.