The below is my final report written for my MBA at Purdue University. After spending three weeks in China, traipsing through digital streets of Shanghai, down alleys in Xi’an, filled with dust blowing in from the Gobi, and the labyrinthine hutongs of Beijing with my MBA cohorts, we were assigned a paper. A simple write-up of our experience. I was able to turn my last night in Beijing into my entire paper, which worked very well with my schedule. The paper, of course, omits a lot of the colorful details of the night that would be considered, erm, unscholarly.
Production facilities in Pudong, Shanghai, negotiating with invasively pushy knock-off vendors; the terra cotta soldiers in Xi’an, the Great Wall of China… my educational experience in China was so swift and vivid that these were the punctuation marks that act as the caesura in my memories of the trip. However, what I consider to be my most valuable memory didn’t happen until the very last night of our trip when a friend of mine from the States took me out to show me “his” Beijing. Perhaps it is because what he showed me existed in such stark contrast to the China I’d been visiting for two weeks prior that made that night so special. Perhaps it was because we’d had one too many shots of the pungent, Chinese vodka, baijiu, that made it seem surreal. Or maybe it was just that being able to explore unfettered by a flock of my beloved MBA cohorts that allowed me to easily squeeze into the nooks and crannies of Beijing. Regardless, what I found was a slice of China that was keenly aware of both itself and the rest of the world, bursting with capitalism, and showed a staggering amount of Western progress stemming from thousands of years of history.
My friend, Tom, from my undergraduate years at Indiana University had been living in China for three years as a government liaison for a Dutch renewable energy company trying to supply Western China with wind turbines. After returning from the Great Wall of China my classmates were all weary with exhaustion from our hike, but I felt unusually energized. I called my buddy Tom looking forward to gallivanting around with a clever “big-nose” who knew the Dongcheng neighborhood of central Beijing like the back of his hand.
For the sake of ease, he told me to have a taxi take me to Worker’s Stadium. I met him at the gates outside of this soccer stadium, and he led me around its outside wall to, of all places, a hot dog shop.
I looked around confused; there was one person working, three wrinkled hotdogs rotating on metal bars, and no patrons, save us. Following his cue, I followed Tom down some dimly lit stairs into the men’s bathroom. “Do you have to use the bathroom or anything?” he asked. When I declined, he proceeded to find a specific brick on the bathroom wall, pressed it, and the whole wall slid to the side, revealing a gorgeously appointed speakeasy hidden inside the guts of Worker’s Stadium, serving exquisite gin cocktails with cucumber- their specialty. His description of his job, the economics of providing inland China with cheap energy, and greasing the palms of Chinese officials, the dynamism of energy production in what is now the world’s number one consumer of oil and electricity, amidst such refined surroundings made the second guess where I was for a moment.
After our time at this clandestine bar, we went back to Tom’s neighborhood, navigating the hanjing’s, the tangled series of back alleys, in China for some street food. After eating skewers of (I think) beef, covered in mint and MSG, cooked over open coals that were bellowed by the vendor’s trusty hair dryer, I found myself in a Melrose-esque pedestrian street, vibrant and bustling with shops and bars. “This is my Chinese friend Jeff’s T-shirt shop,” Tom said, pointing to a shop that could have easily been found on a boardwalk. “He started it with 10,000 RMB and now he owns several of the apartments in my building.” Inside the shop were T-shirts featuring intentionally bad English, a tongue-in-cheek nod to missed translations from Chinese to English. T-shirts making fun of Chairman Mao’s revered quotations. T-shirts showing President Obama in traditional 50’s Chinese communist garb that said, “Obamao” underneath. Shirts and paraphernalia that were, according to Tom, forced to be hidden by Chinese authorities when Obama made his last visit.
Furthering the whimsical influence of the Chairman, Tom took me to a live punk-rock venue called “Mao Livehouse.” Inside, behind two steel doors, was a live punk rock band with superb sound quality and a phenomenal light show. This band was not good by Chinese standards, they were good by anyone’s standards. Standing along a mix of about 100 expats and locals, this band had a very Western, and very progressive sound. Shocked that a Chinese band had such a contemporary, even innovative, sound, I had to know more. I approached the band’s manager after the show. She was from the University of Michigan, American born with Grandparents that still lived in China. She moved to Beijing to be a support beam in Beijing’s burgeoning rock and roll scene, which is apparently much bigger than an outsider would think.
Tom then took me to Great Leap Brewery – Beijing’s first ever microbrewery. Its owner, a guy named Steve, was a former IT professional from Cleveland who grew bored of the corporate drag in Beijing after three years. Steve missed the taste of a decent India Pale Ale but loved his home in Beijing. He had never brewed beer before once in his life. With an easy-to-get, low-interest loan, he bought a beautiful corner lot in a back-alley and started brewing beer… good beer! I asked him what alcohol regulations were like in Beijing, what was his overhead, where did he source his inputs- all the questions a MBA-to-be would want to know. He said that the regulatory process was limited to signing a single piece of paper. That once a month when the Chinese power representative would stop by he would say, “I used about 250RMB of electricity this month,” hand him the cash, and that was it for utilities. That he was proud to source all of his hops and barley from Chinese farms outside of the city. “It’s like the wild west out here,” said Steve, “you can be an entrepreneur in a wide-open landscape, without capital, without experience, and you can be extremely successful.”
Two of the biggest questions any business student would have are, first; How China’s giant, infant economy will evolve, blurring the lines between communism and capitalism, and second; is their economy growing too quickly and hotly? How will government constraints respond to yet unseen business transactions. What I saw over the course of my trip was that multinational companies are hastening China’s Westernism in a macroeconomic sense. China’s top-down response, while risky, has resulted in awe-inspiring results. At the same time, the top-down consensus that seems to pervade Chinese business discussions always seemed worrisome to me. I reckoned that, long-term, playing by one person’s rules impedes the game as unfairness arises. That fact juxtaposed with China’s scale made it seem like all balls were in their court.
What I saw on my last night in Beijing, however, showed me the cultural evolution that’s appearing in response to Western-style capitalism. More than making a few Yuan, these entrepreneurs are doing something really important for the Chinese people, in my opinion. An ability to be whimsical, creative, even occasionally irreverent as seen in the “Obamao” parodies in the T-shirt shop or the punk band at Mao Livehouse. Introducing microbrewed imperial stouts to Beijing, making superior beers than Yanjing and Tsingtao and doing it with exclusively Chinese inputs. This bottom-up growth was the insight into Chinese commerce I was missing.
It’s this latter form of business that hinted at an answer to my second question; whether or not China’s economy would bubble. It was said during class one day, that China’s is, “the biggest economic experiment in history.” The government’s top-heavy capitalization, development policies, and multinational business practices are all economically amorphous and could have any number of outcomes, both positive and negative. However, I hope that the small business perspective I saw first-hand will spread, becoming increasingly easy to infect young entrepreneurs as a few Chinese factory workers here and there realize they want to be running the line, not a cog in it. It was a fun, hidden corner of China that felt as unique as it did home-like. It gave me great expectations for the future of China.