Thursday, July 31, 2008

Freedom is hard?

The good folks at China Law Blog have published a debate about whether or not China will become a Superpower. I won't weigh in on that at the moment, but will save that for a future post. It did make me think a bit more about my own views and experiences in China -- especially those times when I was discussing freedom and the role of government with friends, both Chinese and Western.

This morning, I've been pulling together thoughts about individual freedom, and especially thinking about the balance of freedom and social harmony -- freedom with Chinese characteristics?

In any case, please accept my apologies for the repost from an earlier blog, but I believe that I need to get this out as a precurser to additional posts on the topics of freedom and government.

“Freedom isn’t free” goes a popular saying. I suppose the interpretation is that we have to fight to maintain our freedom. Freedom was hard earned through blood and toil of patriots, and we must be vigilant that our freedom isn’t taken away. My question is, taken away by whom? It is true that there is tyranny in the world, and tyrants that would enslave us if we allowed. A foreign threat is possible, and yet we are the most powerful nation on the planet, so that isn’t likely. It’s also true that most in elected office don’t have the interest of their constituents in mind. Most elected officials at the federal level are petty dictators who lust for power, and desire their own glorification (and reelection!). Our Founding Fathers knew this, and so purposefully limited the power of government.

Alan Keyes once observed that we can no longer bear the weight of our freedom. It’s true, the greatest threat to freedom is each one of us. Freedom isn’t free, but the greatest truth is that “freedom is hard – really hard.” Freedom forces us to accept the fact that we must make our own choices and live with them. Freedom requires that we encounter problems, and calling upon God and other free individuals, work to find solutions. The biggest threat to freedom is realized every time we look to Washington and wish the government would solve a problem for us. Forget that wish the moment you think it!! Freedom requires you to first think for yourself! As cleverly remarked by Pogo in the Walt Kelly comic strip of the same name, “We have met the enemy and he is us.”

Wednesday, July 30, 2008

Corbin Sparrow in Action

Allow me for a day to return to the topic of electric vehicles, especially the cute little Corbin Sparrow, which I blogged about on July 21. Recently, the Rochester Democrat and Chronicle online edition did a video of my friend's Sparrow in action. Check it out!!

Scroll to the botton of the page for the video on 'Electric Car.'

I drove this car after we put it back together, and it was fantastic!! I could definitely see commuting in this.

Tuesday, July 29, 2008

Decisions, Decisions

For the past week, I've been pondering the nature of decisions. I'm doing so mostly because I'm still recovering from a very bad one. It's a bit of an after-action review for me -- trying to understand why I did what I did, but also a chance to ponder the nature of professional work, and how we make our living.

At risk of damaging my professional reputation, I'll explain a bit what happened. It's really a simple story. I decided to act exclusively for one client. I turned down new work, eliminated some other clients, and went to work exclusively for one person. Why? Well, the economy is slowing, the rmb is appreciating, business is tough right now! Moving to secure anchorage in times of storm seems a good decision. It would be, if the anchorage were safe. Now, imagine if the anchorage is actually in the territory of a very hostile tribe, bent on your destruction, and caring nothing for human life!! Ah, this is the anchorage I pulled into. What's worse, I had met the chief of this tribe before. Once, he tried to eat my ear and shrink the heads of my landing party. The next time, he smiled and offered me some type of fermented beverage. I accepted it, I drank, I danced.....I woke up missing an ear.

This decision is not hard to analyze. I made a decision based exclusively on fear -- fear of the looming ecomonic hardships ahead. I acted from the most primative reaches of the reptile brain. In this case, I need only flog myself for cowardice.

Decisions in general (let's assume a higher level of thinking than I displayed) are the basis of our livelihoods. A corporate finance instructor in B'school told me once that grey was his favorite color -- the color of money. Easy decisions don't pay. The more grey, the more money to be made by those who operate in those uncharted waters.

Decisions always involve insufficient information. Good leaders gather all they can. They delay decisions until the last possible minute (not procrastinating, but gathering and analyzing). They analyze, they agonize, but they can't know everything. When the time is come, they decide, based on objective analysis, experience, and their "gut." They then step forward and accept the results of their decisions.

At some point, you have to fall back on "gut feeling" for part of a decision, nobody will dispute that. In my case, it wasn't "gut feeling," it was reptile-brain fear. It was the irrational dominating the rational. "Gut feeling" is not fear, it is listening to your heart (may I say that here?). After all the analysis is done, there should be a time of inner reflection (the situation will decide how much), but if you've got some experience, and some moral compass, one direction will be a brighter shade of grey.

Monday, July 28, 2008

Your papers are not in order!

...or I think that's what I recall the Russian-accented border guard saying in some 80's cold war movie. My first trip into China, I thought that's what I might encounter, only to be pleasantly surprised -- visa's were easy to get, easier to extend, and I was never asked for my passport.

Times are changing, as most of you already know! Over the weekend, I was asked by a potential customer about the current visa situation. I told him that I was certain that in the runnup to the Olympics, that visas were being restricted. My advice was to apply early, read the instructions carefully, and maybe even consider using a visa agent. I also know for certain that authorities are checking passports at hotels and apartment buildings.

Here are a couple of related stories:

I've never lived close enough to a Chinese embassy to apply for visas in person. My family and I have always used G3 Visas with very good result. Someone has always been available to answer questions, and I would recommend them to anyone who needs visa services.

Lastly, here is the link to the Chinese embassy in the US:

Friday, July 25, 2008

OEM Agreements

Please take a look at this post from the excellent China Law Blog:

I've been involved in this type of situation before, and have had the good fortune of working with Steve Dickinson myself. I won't repeat what has already been said -- please think about this sort of thing before it's too late!!

Thursday, July 24, 2008

Some Great Books on China

My family and I lived in Ningbo for 2 1/2 years. While I still read books about China, during the months leading up to our move, my wife and I both read about China every chance we could get. There are so many great books about China, it would be impossible to list them all, but I'd like to mention a couple of them.

While reading the excellent blog, I came across another book I can't wait to read. "Socialism Is Great!": A Worker's Memoir of the New China. This book has definitely moved up my reading list.

Of course, many of the books I read focused on abuses during the Cultural Revolution. These stories must be told, but they often made me angry, or depressed. There were two books by Da Chen, however, that made me feel differently. While Da Chen and his family suffered mightily during the Cultural Revolution, these books to me seemed more stories of hope, and triumph over adversity. He even made me laugh! Check 'em out!

Wednesday, July 23, 2008

Vendor Evaluation (or You Can't Know Everything)

I'm currently in the middle of a crisis. The lessons learned during this bit of trouble will certainly make me smarter, and hopefully, will help you avoid a similar situation in the future.

I've done business with a company for about three years. Let's call them SH -- it's representative of their company name, and also reminds me of a certain phrase, as in "went to SH*#!" I've done several projects with SH, and have been quite happy.

So why the trouble? I have a good process which I follow. I know much about SH. I've audited them, I've studied them, I know the owner and the key staff. How could it have gone wrong?

I don't know all the reasons why it went wrong. I do know that the technical director left, and not on great terms. That didn't seem like an immediate problem, as I knew the other department heads, and they seemed sound. I do know that some family members were being placed in key positions, but heck, I knew the owner, and he's a great guy, so no problem. Several other staff members left, but that's ok, SH is a good company, they can find new people. So my castings are running a bit late. Well, this is likely just a temporary problem.

Now I'm not claiming that this rapid company disintegration is a problem unique to China. With smaller US companies, changes in the upper echelon can have immediate and disastrous effect. In fact, one of my former employers went bankrupt soon after junior took the reigns from daddy. This can happen anywhere, but I've seen it happen twice in China, and it has happened both times with the departure of senior staff and replacement by family members who were completely incapable of performing the required job. Is that a sign to find a new vendor? It could be, but it's certainly a sign to pay more attention.

So what was my mistake? I certainly followed my process, and still things went bad! Here are my takeaways from this:

  1. Have a vendor management program and follow it. Even if informal, you should periodically re-audit, and track vendor performance.
  2. Dual source when possible. Due to complexity and volume, I couldn't practically dual source this part.
  3. Keep a list of qualified alternates in case you need to move quickly, and never stop hunting for new and better vendors. Does this mean don't build relationships with vendors? Absolutely not!! Just be prepared to move if things get bad -- I have a good relationship with this vendor, but not so good he's going to repay me for the money I'm going to lose!
  4. Don't be lazy!! If things start to smell bad, they're bad! I knew this company was starting to have troubles, it's just that it took so long to get this part qualified, and....
  5. Know who owns your moulds, if applicable, and don't be afraid to move them. Fortunately, I do own these moulds, and can move them to a new vendor.

Tuesday, July 22, 2008

Chevy Volt, Tesla, EV Controversy?

Allow me one more day to muse about electric vehicles, please, before I turn my attention back to China sourcing. There's been much written lately about electric vehicles (EVs), particularly the Chevrolet Volt and the Tesla roadster. For more information, check them out here:

The heart of the story is the assertion by Elon Musk that the bridge to full electric vehicles will be short, given the inherent flaws of hybrids (neither good with electricity or with gas). Read more here:

The other side (well, not really a controversy, or the other side, just a slightly different read on a great topic, but hey, words like controversy are so lame-stream media, one has to use them) is more in favor of continuing a hybrid-type drive train -- essentially full battery operation with internal combustion range-extender, or battery chargers. Nice article here:

For another fun read, check out this interview with Elon Musk:

Enjoy, and tomorrow, we talk about China!

Monday, July 21, 2008

Corbin Sparrow

I've always been interested in alternative energy. In fact, my first job was as a research engineer, and many of the projects I worked on involved using hydrogen and hydrogen blends in internal combustion engines. It was very interesting stuff!!

Anyway, I had a great weekend, because one of my good friends invited me over to help get his Corbin Sparrow back on the road. We installed a new set of batteries and a newly rebuild motor! What a great little vehicle! Check out the pictures below, and to learn more, visit

Saturday, July 19, 2008

Which is your factory?

First of all, let me say that the below picture is not meant in any way to degrade Chinese factories. I want to illustrate the vast differences that one may encounter in China. This picture is of a fairly typical, high-pressure aluminum die-casting plant. There is no central melt system, machines are fed with hand ladles, and more importantly, mould maintenance is sometimes minimal.

The next picture is a fairly new automated heat treating line.

The pictures are of very different technologies, but I want to illustrate the difference in cleanliness, organization, and quality of equipment. And yes, the air really is that bad in the first factory!!

So which one makes the best parts? Well, both. You have to know the capabilities of the factory that is making your parts, and how those capabilities match up to the specifications of your parts. If your definition of good is parts that meet your requirements, and you know that the plant's processes are capable of making parts inside your specifications, then either plant will do nicely!

This returns us to the point I am always driving at, that you must do your homework before you begin. First, you must have a clear specification, and it must be clear to your Chinese partner. Second, you must audit the factory you are working with. Third, you must have a systematic process to qualify both the factory you will use and the parts they will make.

Friday, July 18, 2008

Random Guidelines

China sourcing can be done successfully. I know there are times when you don't believe that. There are times I don't believe that. I know that your chances of success are greatly improved by following a systematic process. Does that mean it's slow? It doesn't have to be slow, but you must do your homework first, before you start contacting vendors. I'll go through more detail in future posts, but for now, let's start with some random little nuggets that you'll find helpful:

I welcome questions and comments! We'll dig deeper into actual process in the future, including specifications, vendor audits, and inspections! This is a repost from some of my earlier blogs, but it's such good general information, I think it's appropriate.

Thursday, July 17, 2008

The Latest

This is an attempt to combine blogging efforts into something meaningful. Previous attempts have limited content to only China, only small business, or only political rants and beer reviews. I hope, in this blog, to cover a wider range of topics, but eventually, and usually, stick with issues of business in China, especially issues effecting small businesses in China. Topics may vary, however, to include some ranting, helpful product or book reviews, and leisure travel. Eventually though, I will return to the business of China. Likely I will repeat some material from previous blogs, because I'd like to capture some of the articles that I've written, and some of the helpful processes that I've developed to make your efforts in China more successful.

Comments, questions, and suggestions are, of course, welcomed and encouraged.