Business Asia Fall 2010

BUSINESS ASIA

Issue No. 4, Fall 2010

Exploring the Highway of

Asia

US-CHINA TRADE WAR:What China Should Do Regarding Its Currency

The Industrial Policy of Thailand:The Invisible Hand of the Government

Staff List

EDITORIALSuthinee Buranaphong Tully Cheng Jeanine ChongMinnia Feng Teck Hong Brandon Ho Nolan T. Jones Joon LeeYun Qi MokJoseph NingSandy TunMelody XieZhige (Andy) XuCathy Meng XueMargaret Yoon

CONTRIBUTORSEdwina Regina, Cornell University Alum

Brandon Zaharoff, Northwestern University Class of 2011

Business Asia is an independent student publication produced by Cornell Asia Business Forum. We are an independent student organization located at Cornell University who produced and is responsible for the content of this publication. This publication was not reviewed or approved by, nor does it necessarily express or reflect the policies or opinions of, Cornell University or its designated representatives.

CONTACT US [email protected]

LET US KNOW WHAT YOU THINK at http://www.cubusinessasia.com! SEE INSIDE BACK COVER FOR MORE INFORMATION.

Cover Art by: Moqian Chen

OF ContentsTabl

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EDITOR-IN-CHIEFPamela Hidajat

HUMAN RESOURCESMin Byul Kim

COPY EDITORSManager Richard WeiAssociates Jeanine Chong Jeff Stein Mahina Wang

BUSINESS ASSOCIATESManager Jessica ChengAssociates Tully Cheng Ethel Hoon Vincent Tieu

TREASURERSManager Bethany (Ke) ZhangAssociates Madeline Culkin

DESIGNManager Michael HongAssociates Justin Boon Moqian Chen Cerise Marcela

MARKETINGManager Da Eun (Jill Seong)Associates SoYoung An Mary Forman Rebecca Kim Xi Lin EVENT COORDINATORSManager Jing Xiong HwangAssociates Nam Xuan To Yujiao Zhang (Stella)

General Business

8The Carbon Shoe Size of China: Larger than We ThoughtBy Jeanine ChongThe issue behind China’s burgeoning success

6Tariffs and Trade Wars: Why China Should Allow the Yuan to AppreciateBy Brandon ZaharoffThe importance of Chinese Renminbi

10China vs US: The Never-ending Currency WarBy Joon LeeHow China’s micromanagement of the currency is a problem for the United States

5 Editor’s Letter

12Politics and Economics: A Volatile Mix in TaiwanBy Joseph NingTaiwan’s relationship with Mainland China and its implication on economic, policy and foreign affairs

15Japan’s RecessionBy Margaret YoonReasons behind the recession in Japan since the 1990s

17The Industrial Policy of Thailand: The Invisible Hand of the GovernmentBy Suthinee BuranaphongA success story of a market-based economic system with minimum government intervention

20The Climbing Skyscrapers of China’s EconomyBy Tully ChengA success story of a China’s rapid growth as a BRIC has moved the country up two spots on the competitive list

22Riding into Renown: The Hallyu PhenomenonBy Yun Qi MokKorean Wave’s immerse impact on Asian businesses

26Expo 2010 Turns the Spotlights on ShanghaiBy Andy XuA guide to Shanghai Expo 2010

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Business Asia has continued to strengthened relationships with our readers. For this issue, we altered the size of the magazine to be a pocket-size magazine so our readers can read it on the go throughout their busy days.

Our magazine hopes to provide more knowledge on businesses in Asia and address a key issue that many college students face: What would it be like to work in Asia as compared to working in the United States. In this issue, we provide articles on successful entrepreneurs in China and India along with new opportunities for college graduates to explore. We also present an analysis into the current conditions in China, Japan, Korea, Taiwan, and Thailand.

We owe the success of this issue to our dedicated staff at Cornell University, our correspondents throughout Beijing, Indonesia, and Japan, and our partners at University of British Columbia, University of Chicago, Rutgers University, Boston University, and Northwestern University.

Finally, we value your opinion as a reader. We would greatly appreciate it if you could take a minute to fill out our readership survey available at http://www.cubusinessasia.com, where you can also learn more about past issues and our organizations. We are also looking for new contributors and partners, and we welcome anyone who is interested to email us at [email protected].

Pamela HidajatEditor-In-Chief

Editor’s Lett

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OF ContentsTabl

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40Six Emerging Industries in Taiwan: What Does This Mean for You in Terms of Career Opportunities?By Sandy TunA deeper look into the emerging industries in Taiwan and how it could determine many students’ future careers

Career

Entrepreneurship

43Seven in a Billion: Female Entrepreneurs in China By Nolan T. JonesHow Chinese social culture has produced a population of hard-working women

45The Dabbawalla: The Phenomenal Success of a Simple Entrepreneurial IdeaBy Edwina ReginaA highly specialized business based in the metropolitan city of Mumbai, India

Lifestyle

30International FlavorBy Minnia FengChains that have successfully tailored their menus to incorporate local flavors in many Asian countries

33Shangri-La: A Dissipating UtopiaBy Teck Hon Brandon HoThe rise of tourism in the city of Shangri-La in China, as it readies itself for its greatest facelift yet

35Development of the Music Industry in Japan By Melody XieAn interview with Mr. Yoshiaki Sanada, a music producer and past executive of Virgin Records, EMI Japan

Interview

38Singapore’s Temasek Holdings By Cathy Meng XueA leading Asian investment company owned by the Ministry of Finance in Singapore

Investment

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Tariffs and Trade Wars: Why China Should Allow the Yuan to Appreciate

The value of Chinese exports to the US in July 2010: $33.3 billion. The value of Chinese imports from the US in July

2010: $7.3 billion. Kind of one-sided, isn’t it? This trade imbalance has lead to widespread pressure on the Chinese government from governments and academics across the world to allow the Yuan to appreciate. The logic is that if the Yuan is allowed to appreciate, Chinese goods will be more expensive to foreigners, and that foreign goods would be cheaper to those living in China. Thus, an appreciation would cause both Chinese exports to decrease and Chinese imports to increase, thereby decreasing China’s trade surplus. As a result of an undervalued Renminbi (China’s currency), the Chinese government has accumulated over $2 trillion

in reserves—$801 billion of which is US government debt. China’s National Security Fund has stated its plans to diversify its holdings away from the US due to fear of lagging US growth. However, doing so would also mean that the value in Yuan of China’s holdings of US assets would not decrease as much in the face of an appreciation of the Yuan, suggesting that the Chinese government expects to allow the Yuan to appreciate in the coming years. Statements by Zhou Xiaochuan, governor of the People’s Bank of China, support this logic, alluding to a future appreciation of the Yuan. But why does the Chinese government care so much about the value of the Yuan? In addition to allowing the accumulation of reserves, the undervalued Renminbi allows company owners in China, particularly in labor-

By Brandon Zaharoff, Northwestern University

intensive industries, to sell their goods abroad cheaper than their foreign counterparts. Since labor is abundant and inexpensive, labor-intensive industries can be viewed as China’s competitive advantage. Conversely, an appreciation of the Yuan could actually benefit an industry that relied on foreign inputs, which would be cheaper in the case of an appreciation. Likewise, an appreciation would benefit the average Chinese purchaser of foreign goods, which would be cheaper as a result of the appreciation. Furthermore, a currency that is allowed to adjust more often would placate governments such as those in Washington and Brussels that have begun to enact tariffs on Chinese goods in an attempt to level the playing field in the domestic markets of those countries. Most recently, the EU imposed a 43.6% tariff on Chinese fiberglass. The Chinese government now has a decision to make: should it impose its own tariffs on the EU and other governments imposing tariffs, should it allow the Yuan to appreciate more, or should it allow foreign governments to impose such tariffs? The Chinese Communist Party has always been wary of appearing weak on an international stage so the choice of allowing these punitive tariffs to be enacted without response is unlikely. By enacting its own tariffs, the Chinese government could possibly start a trade war.This would have serious implications for the Chinese economy, since it gains from trading with large markets such as the EU and the US will decline whereas labor intensive exports to the EU and US could come from several other developing countries. Thus, a trade war would not benefit China. Hopefully, a spirit of compromise will arise in which the Chinese government allows the Yuan to appreciate and foreign governments repeal punitive tariffs. Do not expect this compromise to come without some political positioning on both sides, with a Democratic Congress in danger of losing power and supported by several districts that are the victims of the outsourcing of manufacturing jobs to China. China should be proactive now to prevent a trade war from developing or appearing weak later.

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$7.3 BillionVALUE OF CHINESE

IMPORTS FROM THE US IN JULY 2010

$2 TrillionVALUE OF CHINA’S

ACCUMULATED RESERVES

$801 BillionVALUE OF CHINA’S

HOLDINGS IN US GOVERNMENT DEBT

US-ChinaTrade Statistics


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It’s no secret that over time, as China’s economic prowess and growth has wowed the world, the corresponding growth

of its carbon footprint and pollution levels has not been quite as impressive. In 2006, China surpassed the United States in carbon emissions, releasing an average of 6.2 billion tons of CO2 per year and 4.7 metric tons of CO2 per capita. Despite China’s reputation as the largest footed carbon giant, the country has actually begun to lead in green tech production in recent memory. Through its great production capabilities—a combination of cheap labor, large capital, and heavy handed government subsidization of an industry with large potential—the country has begun taking notable steps in the creation of solar panels, while able to produce them much more cheaply than other countries. A notable worry brought to light by this efficiency is the dampening of the creation and innovation

of similar technologies in other countries. Further, the thousands of panels produced by big Chinese solar tech companies like Suntech Power Holdings will ultimately do little to help the situation in the land in which they were created; 98% of those panels are shipped overseas and do not see the sun from Chinese lands. Carbon capture technology is another area in which China is pulling ahead. These technologies are mostly planted within coal plants, pumping the emissions into chambers underground to have carbon stripped; China alone runs on 38.6% of the world’s coal energy, making the capture method seem like a viable option. However, the carbon capture method reduces the amount of energy produced from coal burning by at least one fifth, leading it to be labeled as wasteful and only a “Band-Aid solution.” Meanwhile, pollution standards within the country’s borders seem worse than

previously imagined. The national pollution census revealed earlier in the year proved water pollution levels in 2007 to be nearly twice as severe as previously reported. Earlier census data failed to take agricultural wastes into account; the 2007 numbers came out to be 30.3 million tons of waste that year. The revised numbers have drawn comments from various mouths, including that of Ma Jun, the director of Institute of Public and Environmental Affairs, who commented that, “We believed we needed to cut our emissions in half, but today’s data means a lot more work needs to be done.” The wastes and chemicals that cloud the rivers of China and the smog that covers the faces of the Chinese people have begun to make sway on others as well. Neighboring countries, like Japan and South Korea, breathe in the same dangerous chemical cocktail that China does, as nearly 40% of emissions and pollution found in those countries have origins in China. The dark substances even trek across the Pacific Ocean, landing themselves neatly in Los Angeles; on particularly smoggy days, up

to a quarter of the pollutants in the air can be traced back to China. With a heightened problem that threatens hundreds of thousands, and an effort towards green solutions that seems skewed towards profits much more than reduction of emissions, how will things ever get resolved, or even become brighter? Luckily, response has been brewing over the years. Reactionary groups have sprouted up across China, like Green Camel

Bell, which is dedicated to the preservation and cleaning of the Yellow River, the symbolic lifeblood of China. The group tracks and marks spills, leakages, and seepage of various dirtying properties; information is trooped back to a Beijing based group who operates the China Water Pollution Map. In a country where 90% of groundwater is polluted, people can freely access the pollution map to help identify the safe areas. The cleaning up of China may be one of the very few problems in which NGOs and the Chinese government are aligned; besides the technological aspects that seem more profit based, the administration seems committed to funding green innovation. The latest G20 summit ended with China leading alongside South Korea in investment, putting $34.6 billion dollars in the pot towards green tech. Though the smog still hangs heavy over the Beijing sky, mostly blocking out the skyline, there are still sunny days. Perhaps in the future those will increase in number.

By Jeanine Chong, Cornell University

The Carbon Shoe Size of China: Larger than We Thought

Sources left from let to right: http://www.flickr.com/photos/42dreams/1878731211/sizes/o/in/photostream/; http://www.flickr.com/photos/robts_pics/725243035/sizes/z/in/photo-stream/; http://www.flickr.com/photos/poeloq/3140094925/sizes/l/in/photostream/

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The currency conflict has come into the spotlight once more, as the United States and the European Union, spearheaded

by Germany, have started to actively pursue a cheap currency policy in light of the global economic crisis. Ever since China’s rise to prominence on the global stage, the tussle between the United States and China on the issue of currency has added pressure on an already strained relationship as both countries continue to walk on thin ice in several other matters such as human rights. The recent clamor is a mere sign of how sensitive and convoluted the issue has become, especially during these economically difficult times. To the surprise of many, the Yuan rose around 1% in the beginning of September, but the US lawmakers remain unimpressed. In the past, China made gestures to address US concerns about its currency undervaluation during politically sensitive times in order to soothe the US government , and with the US elections occurring in November, leaders from both parties are claiming that the Chinese are only playing mind games. The currency war with China is one of the major topics of debate in the upcoming election, and lawmakers are arguing that China’s stringent currency

policies are hurting American companies and preventing job creation. Timothy Geithner, the Treasury Secretary of the United States, has recently come under intense pressure for his ambivalent stance on the currency conflict and reluctance to brand China as a “currency manipulating” country. At a recent Housing and Urban Affairs Committee hearing, politicians criticized Geithner as being too soft, and that he “violated the law” by releasing a report on currency manipulation several months late and “ignored reality” by not proving China as a currency manipulator. The Chinese government exerts tight control over their economy, and the Yuan is no exception. Instead of letting the currency float freely, the Chinese government often keeps the Yuan under its market value. A weak currency significantly improves a country’s trade balance, as the country’s goods become cheaper for foreigners to purchase. The way China keeps down the Yuan is simple: China fixes its currency against the American dollar by intervening in the foreign exchange market whenever the Yuan starts to rise to a level that the Chinese government deems too high. The undervaluation of the Yuan is starting to take its toll on the American economy. As more consumers turn to cheaper

Chinese imports, American manufacturing companies are struggling to turn a profit. Therefore, many American manufacturing firms have downsized their workforce, which has led to higher unemployment rates and lower consumer confidence in the United States economy. The Rasmussen Consumer Index was at 75.7 for September of 2010, which is more than 40 points lower than the figure reached in 2005. The unemployment rate reached 9.6% in August of 2010, more than 4% up from 2005. Furthermore, with the influx of Chinese imports, United States’ deficit continues to climb, which has allowed China to have more of a presence in the United States both politically and economically. While many members of the Congress are becoming wary of China’s manipulation of the Yuan, the Obama administration has not taken any significant action to force China to increase the value of its currency. While many are clamoring for the US government to be more aggressive, China owns more than 847 billion dollars of the United States’ treasury security , and the administration is afraid that China may make moves that will negatively affect the slowly recovering economy. Therefore, the administration has taken much care in the situation, as one false move could easily disrupt

the United States’ foreign relations with China. However, the situation is not hopeless, as there are some possible solutions that may resolve the thorny situation. As some lawmakers are suggesting, the US could impose a tariff against China, which would discourage Chinese imports and decrease the gap in trade balance, which reached a deficit of 42.8 billion dollars in the second quarter of 2010. Another option is to launch a case with the World Trade Organization, which would apply global pressure on China to reevaluate its currency. The third option is to boycott Chinese goods, but this option is probably the least likely because of the United States’ dependence on “Made in China” products. In all likelihood, the currency conflict between the US and China will not cease in the near future. However, China did state its intention to ease currency control in June, which has resulted in a 2% increase in the Yuan. The solutions that I have briefly mentioned may or may not solve the problem of the US trade deficit against China, but one thing is certain: China’s micromanagement of the currency is a problem for the United States, and it remains an issue that needs to be resolved.

By Joon Lee, Cornell University

China vs. US: The Never-Ending Currency War

Background Photograph by: Omer WazirSource: http://www.flickr.com/photos/thewazir/3669910651/sizes/o/in/photostream/

Background Photograph by: DavidDennisPhotos.comSource: http://www.flickr.com/photos/davidden/2205322601/sizes/o/in/photostream/


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Our story begins with a charismatic Harvard Law School graduate who devoted his career to public service. In

his campaign, he promised to change “politics as usual”, a statement which resonated after eight years of corruption and scandals under his predecessor’s administration. He also pledged to restore the public’s faith in government and to revitalize the moribund economy. Questions were raised about his place of birth, and eligibility to run for president. In 2008, however, the voters of his country overwhelmingly voted him to presidency on a mandate of change. His party made major gains in the polls, completely dominating the opposition party in the legislature. Two years later, however, a struggling economy and controversial policies enacted during his term have contributed to sagging approval ratings, leading to resurgence in the opposition party. Although the story sounds like that of Barack Obama and the Democrats, it is not. It is that of Dr. Ma Ying-Jeou and the Kuomintang (Nationalist Party) of Taiwan. Like his fellow Harvard alumni, President Ma Ying-Jeou faces the prospect of local elections which are to take place later in the year. The controversy of his story, however, does not revolve around health care, economic stimulus, or financial reform. It is centered on an issue rife with Cold-War era influences clashing with the needs of a nation increasingly reliant about globalization. The central question for the island which calls itself the ”Republic of China” is how to deal with the rising influence and power of its neighbor, the People’s Republic of China. During the

Cold War, the government of Taiwan tried to position itself as an alternative Chinese government to the Communist Party in Beijing. However, from 2000-2008, the government of Ma’s predecessor, Chen Shui-bian, treated Mainland China as a threat and tried to create a distinctive Taiwanese cultural and political identity, using every opportunity it had to infuriate Beijing. Since handing over power to Ma’s administration in 2008, President Chen has been jailed on various corruption charges, and President Ma has taken a completely different approach to relations with China, viewing the world’s second largest economy not as a threat, but as a major opportunity for the island’s exporters. Under Ma’s administration, delegations have crisscrossed the Taiwan Strait, holding talks on both sides on a variety of issues. The two sides have bypassed the tricky political situation by agreeing to their own interpretations of Beijing’s “One China policy”. Under a framework called the 1992 consensus, Taiwan agrees to adhere to the policy by recognizing the one China to be the “Republic of China”. Mainland China, on the other hand, views that China to be the “People’s Republic of China”. By negotiating in this way, Taiwan and China have restored direct air, sea, and mail links between the two sides, something which had not existed since 1949. In 2009, a Taiwanese delegation took part in the sessions of a U.N. apparatus, the World Health Assembly, for the first time since Taiwan’s expulsion from the U.N. in 1971. Both sides signed the Economic Cooperation Framework Agreement, which lowered tariffs on goods

traded between Taiwan and China, the most comprehensive trade agreement between the two sides so far. In a more recent development, Chinese university students are now permitted to study at Taiwanese universities. Clearly, Ma has made China the focus of his administration’s policies, betting that binding Taiwan’s future to China’s booming economic growth will only help his country weather the current economic crisis. Policies such as these are crucial to the economy of Taiwan, which became known as one of the Four Asian Tigers, alongside South Korea, Singapore and Hong Kong, because of its leadership in high-tech exports. Initially, Taiwan had suffered as a result of the 2008 global recession. In the span of just two years, Taiwan’s economy has since bounced back with impressive rates of growth in GDP and exports as a result of increased Chinese orders, resulting in a huge trade surplus as well as a declining unemployment rate. Despite the tangible results of Ma’s policies, they are hardly universally popular in Taiwan. Many native Taiwanese, known in Chinese as benshengren, view his policies with apprehension. Ma is part of an ethnic group in Taiwan known as waishengren, people

who moved to Taiwan after 1949 with the government of Chiang Kai-shek. As a result, Ma does not speak the Taiwanese dialect fluently and has had difficulty developing a rapport with certain segments of his electorate. Many in Taiwan fear that Ma, because of his mainland Chinese roots, is indeed trying to achieve reunification with the Mainland, a prospect which frightens many Taiwanese. Many worry that trade agreements with China will flood the market with cheap Chinese labor and goods. To complicate things further, his government never fully recovered from the aftermath of Typhoon Morakot, a situation analogous to Katrina where the typhoon caused substantial catastrophe in southern Taiwan. Ma and his administration were blamed for the lackluster disaster aid and rescue effort. The core issue of Ma’s term as president is how to grapple with the following question: how to continue building closer ties with the Chinese Communists, while maintaining the solid base of support he needs to win local elections? To do so, he has attempted to portray his negotiations as pragmatic rather than idealistic, boasting that his administration has coaxed so many

By Joseph Ning, Cornell University

Politics and Economics: A Volatile Mix in Taiwan

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ssconcessions out of the Chinese that the terms are simply too good to walk away from. He has pledged to adhere to a platform of “No reunification, no independence, no war”. Yet, some are uncomfortable with the concessions he has made. Taiwan’s participation in the WHA, for instance, occurs under observer status using the name “Chinese Taipei”. There is also the question of how much Beijing will be willing to accommodate him and his government. Recent negotiations over direct flights between Taiwan and China, for instance, embarrassed Ma when China’s Civil Aviation Authorities insisted on relegating Taiwanese airlines to “red-eye” flights and giving many good flight slots to Chinese airlines. At the moment, Ma’s government is caught in a middle ground in which plotting the next move will be difficult. On one hand, he does not want to be perceived as selling Taiwan to China. Meanwhile, his desire for closer trade and economic relations forces him into negotiations with a rising world power which claims ownership over his entire country. In one sense, Ma Ying-Jeou is helping to bring one final chapter of the Cold War era to a close by defusing tensions with China. Just five years ago, China passed an “Anti-Secession” Law, threatening Taiwan with the use of force if it declares independence. In a short period of time, Ma has been able expand trade ties dramatically. There are many questions which will eventually have to be answered in Taiwan’s dealings with China. For now, Ma has chosen to deal with the issues pragmatically. The two sides of the Taiwan Strait already share a common culture and language. Now Ma Ying Jeou must convince his voters that they can indeed share increasingly close economic relations and also maintain the characteristics of a vibrant political democracy. Barack Obama may find it worthwhile to see how Ma Ying Jeou has dealt with controversial issues of trade with China. Only then might the U.S. be able to work towards closing its own massive trade deficit.

In 1951, Japan’s gross national product (GNP) was $14.2 billion (USD)—only 4.2% of the U.S.’s GNP. However, by 1970, Japan had

overtaken the European economies, and came to representing over 20% of the U.S. GNP. This was in stark contrast to Japan’s stagnation from 1992 to 2002. What could have contributed to this unprecedented recession? Since its defeat in World War II, Japan went through nearly unprecedented periods of boom and bust. Although Japan’s GNP represented merely 4.2% of the U.S.’s in 1951, its economy surged throughout the following two decades; by 1970, Japan’s GNP represented 20% of the U.S.’s. Yet this success was short-lived, as Japan’s economic boom stagnated in the 1990’s, reversing the country’s upward climb. What could have contributed to this sudden surge and fall? After World War II, Japan’s household sector—the macroeconomic sector indicative of the consuming population of the economy—had high savings rates, and its corporate sector had high investment rates. The high savings rate allowed for borrowing and investing at low interest rates, leading to significant growth in the economy and assets of stock. The combination of savings and investment allowed the Japanese economy to recover from the destructive ending of World War II. This economic boom gave Japan the second largest economy in the world until China recent surpassed it last second quarter. The 1990s saw a quick turn as Japan’s asset prices began to slide. Further falls in share prices were followed by a dramatic decrease in real estate and other asset prices, which wiped 1000 trillion yen (full years’ worth of Japan’s GDP). The withdrawal of public investment and the decrease in public consumption, exacerbated by problems in the banking system, led to a deeper recession

By Margaret Yoon, Cornell University

Japan’s Recession

Sources from top to bottom: http://www.flickr.com/photos/loofahdaily_a/2465509995/sizes/m/in/photostream/; http://www.flickr.com/photos/dans180/1942276802/sizes/o/in/photostream/; http://www.flickr.com/photos/loofahdaily_a/2466335088/sizes/m/in/photostream/; http://www.flickr.com/photos/bigbirdhang/58127278/sizes/m/in/photostream/

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ssin 1998. Because Japanese households and companies obtained assets through loans, tens of millions of balance sheets floundered. As a solution, companies and households desisted from spending and investments and used any remaining cash to pay their debt, thus emphasizing debt relief instead of profit maximization. The weak expenditure, coupled with even weaker investments, depressed asset prices even more. While the household sector saved just as much as before, the corporate sector stopped borrowing to spend the funds. A deflationary gap opened, which has been coined the infamous “balance sheet recession”. The key factor in the problem is aptly termed Japan’s “fallacy of composition”. Japanese companies and households are taking severe measures to repair their balance sheets in response to the fall of asset prices, but it seems that their combined attempts have done more damage than good. What should Japan do about its balanced sheet recession? The government has tried to stimulate its economy by spending money on public infrastructure. However, this

has proven to be ineffective because much of this money has been wasted on Japan’s powerful construction parties instead of those who need it: the unemployed. Japan has avoided a dangerous deflationary spiral by having the government spend just enough, keeping the economy close to 0% growth. What Japan needs is a thrust on deregulation and stimulus for fiscal spending so companies with balance sheet problems will have the money to reduce their debt. With more healthy balance sheets, there will be more incentive and desire to spend among the masses. Amidst the present economic crisis, the U.S. needs to keep in mind that monetary policies may lose their impact after companies start moving away from profit maximization to debt minimization. Japan needs to compensate for the demand that has been severely reduced by the active attempts to repair balance sheets. Thus, at times, individual choice can be the best course of action to ameliorate the present economic state, but the possible benefits and consequences of the collective result must be weighed carefully, for the repercussions may prove to be unexpected.

What Japan needs is a thrust on deregulation and stimulus for fiscal spending so that companies with balance sheet problems will have the money to decrease their debt.

Background Photograph by: sekihanSource: http://www.flickr.com/photos/sekihan/295757546/sizes/o/in/photostream/

In Thai economy, the priority of development is economic stability, which is considered to be the national agenda.

Since Thailand has long maintained an open economy, the economic condition relied on international trade as a significant source of development. Therefore, policymakers continue to use economic stability as a tool to draw foreign investment. The industrial policy as the subsidiary to the national agenda is the market-based economy with minimal government intervention. The achievement in economic development would happen though the private sector and direct foreign investment. Since the mid-nineteenth century, Thailand pursued the policy of export-led agricultural growth. With the continued availability of new land and specialized labor skills, the agriculture-minded Thailand was able to enjoy the prolonged high per capital

GDP with self-reliance and economic stability. This was the period when Thailand was not vulnerable to external shocks since the domestic needs are sustained by the internal production. Thailand enjoyed a positive trade balance since the surplus of agricultural product would be exported, gaining revenue to the current account. This cycle of gaining wealth would work as long as the national resources are available. With the rapid growth of population, agricultural areas were trespassed and turned into land for housing. Land became less available, so output dropped. The same industrial policy that relied on export-led agricultural growth was no longer effective. However, The World Bank and the IMF have hailed Thailand as an excellence example of successful development, relying on the market-based economic system with minimal government directed industrial

By Suthinee Buranaphong, Cornell University

The Industrial Policy of Thailand: The Invisible Hand of the Government


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sspolicy. This means that the government must have done something to navigate the industrial policy of the country. The case of industrial policy in Thailand would be worth studying whether its success and failure come from the act

of the private sector or the government. To achieve a balance between the private sector and government intervention is very critical. What the government chooses not to do is as important as what it chooses to do.

As mentioned, the first phase was the period of economic growth from agricultural expansion. In addition to the export-led agricultural growth, the import-substituting industrialization policy (ISI) was the secondary objective. Being a backward economy, Thailand sought to export agricultural products in order to import more sophisticated products related to advanced technology; this was a strategy known as “growth through trade”. Moreover, ISI also benefits Thailand in the sense that the government could collect revenue from import tariffs in order to avoid

imposing taxes on the main agricultural sector. In early 1960s, the Board of Investment (BOI) was established and issued a policy that favored more capital-intensive projects from foreign firms. In the mid-1960s, the policy changed to favor the firm which offered joint ventures with Thai capital. This change implied that the BOI wanted to develop Thai manufacturing capability through a mixture of infant industry protection and access to foreign technology.

This was the phase of transition from primary exports to manufactured exports and service-led growth. The policymakers began to realize that the GDP could not rely mainly on the agricultural sector as the export-led agricultural growth put the ceiling on productivity and hence would limit income in long run. Therefore, in the 1970s, the direction of Thailand’s industrial policy changed towards promoting manufacturing exports. However, this

change coincided with the appreciation of the Thai currency through the 1970s and early 1980s. Thai baht appreciated, thus making Thai manufacturers less competitive in international markets. The first move to manufactured exports did not prove successful. Nevertheless, phase two was a crucial time period because policymakers began to realize the limit of agricultural exports.began to realized the limit of agricultural exports.

Phase 11960s-1970s Export-led agricultural growth and ISI

Phase 21977-mid 1980sManufactured exports and services-led growth

Phase 11960s-1970s

Phase 21977-mid 1980s

Phase 31980s-present

Manufactured exports and services-led growth

Export-oriented Industrialization

Export-led agricultural growth and ISI

Phase 31980s-presentExport-oriented Industrialization

Pressure from the business sector forced Thailand to shift to export industrialization. The textile and jewelry sectors, in the second phase, successfully lobbied for improvements in export financing. Moreover, as the return in agricultural diminished and import increasingly substituted industrialization, major banks began to fade away from them in order to channel more credit to the industries. The data from 1991 to 1994 shows that agriculture’s contribution to the GDP has declined from 5.9 to 3.6 percent. On the other hand, non-agricultural sectors increased their share from 8.8 to 9.2 percent within four years. In 1988, the government reoriented the industrial policy in a new direction. The Bank of Thailand pressed for taxes and tariffs reforms to facilitate export. The move’s purpose was obvious: the government was no longer nurturing infant industries but forcing firms to compete in the international markets to survive. However, the roles of the government in the industrial sector are very different from those in the agricultural sector. The government did not interfere with the market as they did to boost the agricultural sector. The main propulsive force that shaped the industrial policy was the lobbying process from the private sector and the inflow of foreign investment.

The role that the Thai government takes to stimulate the economy has always been interesting. Politicians seem to know what to do in their respective sectors. However, their actions are neither obvious nor predictable. There is no strict pattern that Thailand follows, but there exists a long-term policy, observed by the fact that macroeconomic policies have stayed consistent even with the change of governments. It has been shown through time that Thailand’s industrial policy is in accordance with a market-based economic system with minimum government intervention. Thailand’s fundamental goal is to become industrialized and globalized to attain macroeconomic stability. Their changes in policy seem, though lacking an obvious direction in the short run, to be consistent in the long run with much less resistance to work with global firms. The changes in the Industrial Policy come from the increased cooperation between the private sector and the government. Most importantly, Thailand has combined import substitution with export-oriented industrialization to tackle problems including limited natural resources and a growing population. The government’s power in directing the Industrial Policy seems invisible, but turns out to be consistent and necessary.

The fundamental goal is to get industrialized and globalized to keep the macroeconomic stability ❞

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In modern day economics, Brazil, Russia, India, and China—the BRIC countries—prevail proudly as powerful nations at similar

stages of rapid economic growth. As a group, these developing giants represent over 40% of the world’s population, 25% of the world’s land mass, and a combined GDP of over 15.435 trillion dollars. Compared to other nations in the world, these countries are the largest and fastest emerging markets. However, even amongst the BRIC countries, China has distinguished itself as a unique developmental power in the recent years. While Brazil, Russia, and India remained relatively stable in this year’s global competitiveness report, China rose two ranks. In an interview session conducted in 2004, Goldman Sachs’ head of economic research, Jim O’Neill stated: “our BRIC projections suggest China will overtake Germany before the end of this decade, and Japan by around 2015.” Yet the magnitude of China’s economy surpassed Germany’s a year earlier than predicted and has recently overtaken Japan’s on July, 2010. Goldman Sachs now estimates

that the Chinese economy will pass the United States by 2027. After witnessing suchrapid expansion, one can only wonder: what is the cause of China’s rapid growth? Historians Zuliu Hu and Mohsin S. Khan attribute the spring in China’s economy to increased worker efficiency originating from the economic reforms of 1978. In particular, these policies increased the country’s financial effectiveness by establishing profit incentives to rural farms, private businesses, and foreign investors. Also, the government granted greater autonomy to enterprises by eliminating relentless intervention by state authorities. Since factory owners could keep more profits, they devoted more of their firms’ revenues to improving commercial performance. Furthermore, China’s open-door policy has added power to the economic revolution through foreign investment. While overseas ventures were negligible before 1978, investments reached $100 billion US dollars in 1994. In particular, foreign money has been used to build factories, enhance the job market, and link China to international markets.

But what has China been doing recently to grow so rapidly? Not unlike other BRIC countries, China’s great advantage is its massive territory and population. These qualities grant the country impressive economies of scale; however, unlike other BRIC countries such as India, China has a strong infrastructure potentiating the manufacturing capabilities of the country. More industrialized areas of the country such as Hong Kong and Shanghai are able to take advantage of the industrial power of the rest of the nation to spur international trade and commerce. To further differentiate itself from other nations, China has recently improved its macroeconomic stability while many other countries, including the US, have been getting less secure due to recent financial crises. According to World Economic Forum, this newfound consistency has allowed more complex conglomerates to propagate in the region, improving the financial markets. Furthermore, the various members of the forum have recognized that the flow of “capital through various channels, such as banks, financial market[s], and venture markets has gotten better and easier [in China].” The movement of capital around the nation has stimulated the economy, allowed businesses to flourish, made education more accessible and caused health services to become more

convenient. These factors have allowed China to climb up in the competitiveness scale to the 27th position from 29th last year. Still, China’s growth is far from complete. Most economies develop through a multiyear process of three distinct stages: they begin as fact driven markets, evolve into efficiency driven countries, and ultimately end up as innovation driven economies. China has already distinguished itself as an efficiency driven country, but the next step would be to evolve into an innovation nation. According to the Managing Director of the World Economic Forum, Robert Greenhill, China needs to improve its technological adoption of information and communications. Moreover, Greenhill believes that more people in the populace need to attend higher education and training programs for China to evolve into an innovation driven society. Finally, the country needs to build more roads and ports to spur foreign trade. As labor costs in East China’s coastal regions rise significantly and incomes between regions become asymmetrical, it becomes clear that China has many challenges ahead. While China has had a great run so far by growing the fastest among the BRIC countries, the country still has a long road ahead to distinguish itself in the international economic sphere.

By Tully Cheng, Cornell University

The Climbing Skyscrapers of

China’s Economy:China’s Rapid Growth as a BRIC has Moved the Country up Two

Spots on the Competitive List

Stages of Economic Development

Fact Driven

Efficiency Driven

Innovation Driven

Chinain 2010

Photograph by: Jakob MontrasioSource: http://www.flickr.com/photos/yakobusan/2475791972/sizes/o/in/photostream/

China has already distinguished itself as an

efficiency driven country, but the next steps would

be the evolution into an innovation nation ❞

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A Brief Introduction Bursting out of Korea with the pride of a tiger, the Korean Wave has been engulfing the entire planet, sweeping music charts and portals, occupying primetime television slots, and inciting unprecedented international interest and perhaps obsession with everything Korean. The phenomenon is labeled as the Hallyu or “韓流,” literally meaning the “Korean Wave,” by the Chinese media in the late 1990s in response to the explosion of Korean culture via its popular media, such as music and drama. The globalization and spread of Korean culture has colossal ramifications economically, socially, and even politically, especially in Asian countries like Japan, China, Malaysia, Singapore, Vietnam and Thailand. However, before we delve further into the discussion, we must trace the Hallyu back to its humble beginnings, to a woeful but beautiful tale of two star-crossed lovers.

Korean Drama When Winter Sonata was first

broadcasted in 2002, the fairytale-like plot swept away the hearts of thousands of middle-aged female fans across the Asian continent. The drama was ultimately aired by over 20 broadcasters overseas, and it enjoyed tremendous popularity in Japan with ratings of over 20%. Lead role Bae Yong Joon became a beloved icon and the highest paid actor in Korea. His visit to Japan in 2003 caused over 4,000 fans to swarm and paralyze Narita airport. Undeniably one of the catalysts that sparked the success of the Hallyu, Winter Sonata was followed by dozens of other successful Korean dramas such as the historical drama Dae Jang Geum (Jewel in the Palace), or the adaptation of the Japanese hit manga Boys over Flowers, which flooded Asian broadcasting stations. These Korean dramas have had more running time than even Japanese and American shows. Korean producers have become the alchemists of the twenty-first century’s media, stumbling upon the perfect formula to turn dramas into gold. They know exactly how to render these dramas appealing to men

By Yun Qi Mok, Cornell University

Riding into Renown:

and women of all ages, and to set themselves apart from the masses of other Asian and even Western dramas. First of all, Korean dramas place great emphasis on the physical appearance of its actors and actresses. For example, in the sensational 2009 drama Minami Shineyo (You’re Beautiful) about a young nun who disguises herself as a boy to become a star in an overwhelmingly popular handsome idol group, two of the main actors were well-known heartthrobs from popular bands C.N.Blue and F.T.Island, and the lead actor Jang Geun Suk was the winner of multiple popularity awards. Korean dramas are replete with eye-candy with whom viewers literally fall in love and idolize, and they therefore continue to watch these shows. Sculpted features and perfect figures aside, Korean dramas are emotionally powerful, and usually have relatively intricate plots which are genuinely interesting, innovative, and flirt with issues that Asian societies generally regard as taboo. In The First Shop of Coffee Prince, a poor young

woman disguises herself as a man to work in a coffee shop, leading to incredible tension with her boss; they explore a somewhat forbidden relationship because he believes her to be a man, and with these pseudo-homosexual elements, the drama develops. Of course, many Korean dramas are derivative love stories, but the industry constantly molds itself. In the knockout drama IRIS, starring Lee Byung Hun who played Storm Shadow in G.I. Joe: The Rise of Cobra, and Kim Tae Hee, considered one of the most beautiful women in Korea, a tale of espionage, shadowy assassins, love, and betrayal unfolds. As the most expensive Korean drama ever produced, and with ratings of 30-40%, IRIS was a phenomenal success. Furthermore, it also explored the tension between North and South Korea, but ultimately brought them together to combat the evil organization IRIS. It is the first drama to ever appear during Japan’s “Golden Time” slot, and is radically different from typical Hallyu dramas. Nevertheless, the appeal of Korean dramas, especially to Asians, lies in the fact

The Hallyu Phenomenon (韓流)


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ssthat threads of Confucian and traditional values are always subtly woven. Despite the materialism, urbanization, and often gaudy and ostentatious nature of most dramas, traditions such as filial piety, family love, loyalty and respect, and pride in being a traditionally “proper” man or woman, still exist as the backbone of these dramas. Korean dramas have achieved a unique balance between the new age and the old era, something that is not easily recognizable in Western dramas.

Korean Popular Music With albums like girl group 2NE1’s

To Anyone surpassing Eminem’s Recovery to take the number one spot on the iTunes hip hop chart (albeit briefly), hit songs like Nobody by the Wonder Girls attaining almost 38 million views on YouTube and becoming the first Korean song to debut on the Billboard Hot 100, and celebrity blogger Perez Hilton gushing over Big Bang’s Taeyang’s I’ll be There, Korean pop music has boldly presented itself into the international limelight. Although garnering interest only more recently, Korean pop music has gained remarkable international acclaim, especially in Japan’s market. Solo artist BoA has sold over 2 million albums and is one of only two artists to have six consecutive number one albums on Japan’s Oricon charts. The megastars of the five-member boy band TVXQ, also known as DBSK, hold the Guinness World Record for having the largest official fan club in the world

for two consecutive years and a record for producing 8 number one singles on the Oricon charts. Their popularity extends to countries like Finland and even Israel, where a group of fans showed their support by singing and dancing to one of TVXQ’s hit songs, Balloons. Other groups such as hip-hop boy band Big Bang and nine-member girl group SNSD, also known as Girl’s Generation, are all breaking into the Japanese market with remarkable success. Korean pop music differs greatly from mainstream Japanese pop in that it is more heavily influenced by American hip-pop and more recently, electro-pop with songs like SHINee’s Lucifer and G-Dragon’s

Heartbreaker. Fluid and smooth dancing skills are an expectation for all artists and original choreography is exceedingly important as it becomes as memorable and iconic as the music itself. An example is the hip-swaying dance move in Brown Eyed Girls’ Abracadabra. With hundreds of thousands of concert and fan meeting tickets selling out within seconds, the Korean music industry is certainly doing something right.

The Resonating Hallyu Influence Former President of South Korea, Roh Moo Hyun, once remarked that the Hallyu would unite the peninsula. While the North and South still haven’t resolved their issues, Hallyu has certainly brought the rest of Asia closer together than ever before. Girls from Singapore to China, from India to Japan, adorn their walls with the chiseled features of

their favorite idols, and weep and laugh over the same dramas despite speaking different languages. Hallyu has transcended political and cultural borders, and seeks to become a unifying Asian phenomenon. Part of its success has to be attributed to the astute South Korean government which capitalized on the Hallyu’s potential power. Korea has become one of the world’s top ten cultural exporters, and tourism has been skyrocketing since 2003 with 2.8 million tourists to over 7.8 million in 2009. Thousands of visitors were attracted by specially designed Hallyu tours which would bring tourists to filming sites of popular dramas. In 2005, cultural exports accounted for 6.65% of Korea’s GDP, an amazing feat considering that the USA had cultural exports accounting for about 6.56% of its GDP. Korean products endorsed by Hallyu stars are becoming must-have items, and Korea is even surpassing Japan, famed for setting Asian trends in beauty and fashion. Korean cosmetics shops such as The Face Shop are popping up throughout department stores, are endorsed by actresses like Jun Ji Hyun of mega blockbuster My Sassy Girl, and are selling the magical BB or Blemish Balm Cream that creates the flawless Korean complexion. Hallyu fans are also obsessively copying the styles of fashionistas like Big Bang’s charismatic leader G-Dragon, rapper T.O.P, or diva Lee Hyori. Unfortunately, the influence walks hand in hand with its darker twin, as the number of young women and men across Asia choosing plastic surgery to look more like their ideal stars is soaring. The most significant facet of all is the role that the Hallyu has played in shaping foreign perceptions of Korea, as well as improving foreign relations. Japan and Korea have always had a strained relationship due to their history, but the Hallyu seems to be sweeping the tension away, especially for younger generations. Past conflicts are being forgotten as women in Japan vote for TVXQ’s lead singer Hero Jaejoong as their most wanted lover and Koreans swarm Kimpo Airport at the arrival of Japanese idol Yamashita Tomohisa. At a 2003 summit

conference between South Korean President Roh Moo Hyun and Japanese Prime Minister Junichiro Koizumi, Korean superstar BoA was invited to attend and perform. Superficial though it may seem, Korea’s cultural sphere of influence is, without a doubt, expanding rapidly and crossing borders, promoting communication and understanding between cultures, especially with the ease of global distribution among today’s technologically savvy population. Nevertheless, many scholars worry about the future of the Hallyu. Is this a wave that will change the cultural landscape of Asia, or merely a passing ripple that will dissipate once the hype dies down? Numerically speaking, the Hallyu seems to be approaching a stagnant point, but this may simply be due to the worldwide economic downturn. Additionally, because the Hallyu flooded the world so quickly to reach its present success, other governments are worried about this massive cultural influx and are seeking to curb the effects. For example, Chinese CCTV announced that they would try to “diversify” its foreign programs by broadcasting more dramas from Hong Kong or Taiwan in order to counteract the monopoly of Korean dramas, and Taiwan indicated that they might ban “foreign” dramas during primetime show times. Anti-Korean sentiment was also seen in Japan with the 2005 publication of Manga Kenkanryu (Hating the Korean Wave: A Comic) written by Sharin Yamano. Despite criticism from the Japanese media, the manga became so popular that a sequel was published in 2006.

CONCLUSION Whether the Korean Wave is soaring on its crest or about to crash and break, time alone will tell. As an old Korean proverb states, “When tigers die, they leave leather behind. When people die, they leave their names behind.” Undoubtedly, even when the Hallyu ebbs away one day, its legacy and influence will have made a mark in the annals of history.

Is this a wave that will change the cultural landscape of Asia, or merely a passing ripple that will dissipate once the hype dies down? ❞

❝


Two years after the glow of the Beijing Olympics, China is now hosting the coming-out party for Shanghai.

China invested $55 billion in urban and regional infrastructure developments associated with the Expo– even more money than it devoted to remodeling Beijing for the Olympics. The 189 participating nations have collectively spent at least one billion dollars to showcase a polished and vibrant Shanghai as the next cultural and financial center of East Asia, or even the world. A historical record of 70 million visitors to the world fair is expected. However, estimates show that 90 percent will be Chinese. What is the purpose of the World

Expo? These days, it is hard to say for certain. In the 19th century, host countries of the Expo would offer complex exhibitions in emerging metropolises, such as Paris in 1937 and New York in 1964. This upcoming Expo will be the first exposition held in a developing country, and it aims to provide some insights to the world on China’s future development. From an architect and urban planner’s point of view, the Expo is a dream come true. Shanghai is using the Expo as a platform to go on a huge spending spree that will help stimulate a weakening industry dragged down by the global financial crisis. In order to prepare space for the Expo, Shanghai has cleared 2.6 square kilometers along the main Huangpu

Expo 2010 Turns the Spotlights on

ShanghaiBy Andy Xu, Cornell University

Photograph by: Jakob MontrasioSource: http://www.flickr.com/photos/yakobusan/2475791972/sizes/o/in/photostream/

River, moving the Jiangnan Shipyard and its 10,000 workers to north of Shanghai. Having visited the Expo on multiple occasions, I see it as a tourist bonanza. The Expo site is crowded with scores of national pavilions, shops and a UFO shaped performing arts center. Inside, you can find works by Manet and Van Gogh in the French pavilion and a British pavilion constructed out of 60,000 awe-inspiring transparent rods called Seed Cathedrals. For bringing domestic visitors face-to-face with pavilions of foreign countries, the Expo serves as a stage for cultural exchange. For instance, the average Chinese person probably does not have much knowledge about Switzerland. Its playful pavilion with a rooftop garden and topography corresponding to the Chinese “yin” and “yang” will leave a lasting impression on its visitors. In an age when you can exchange information instantaneously on the Internet, the millions of dollars spent per country on staging such a fair is evidence that nations want to strengthen their ties with China. Perhaps the availability of information on the internet is also why people are putting so much energy into the architecture instead of the content. Given China’s rising economic might, the Expo provides means for countries to publicly announce their intentions of working together with China. By focusing the attention of the Expo on other countries, China is promoting its “soft influence”; while the country increases its global stake, it is situating itself peacefully among its neighboring powers. Some of the Expo’s best presentations revolve around the theme of “Better City, Better Life”, in which pavilions showcase the urban practices of Vancouver, Osaka, and Hamburg. The Expo has gathered funding from the central government for the city to use towards upgrading Shanghai’s infrastructure, building new transportation links, and pushing forward an already breathtaking transformation in this city of 21 million people. Examples of this transformation are the construction of six new subway lines in the

56,000 police officers meet to discuss how to host a safe World Expo

Unfortunately, clearing space for the Expo means demolishing residential areas

Haibao, an imaginary character, is the official mascot of the Shanghai Expo

Highlights of the 2010 World Expo

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past two years, revamping of older districts such as Yangpu and Putuo with LED night lights, new roads and hybrid taxis with English-speaking services. Along the western banks of the Huangpu River, a kilometer stretch of the waterfront known as the Bund is being redeveloped. The essence of the Bund, a plethora of Gothic and Art Deco landmarks, will be preserved and showcased to the public. The district of Longbai where I live – five years earlier considered an outskirt location where a popular mode of mobility was the rickshaw – is now adjacent to two airports and a transportation hub which will connect Shanghai to Beijing by a futuristic Maglev train. The astounding scale and pace of these developments suggest that most of the Expo investment is geared towards economic expansion. Considering that the Shanghai Stock Exchange only began operation in 1990, the city has come a long way, boasting the second largest stock exchange in Asia by market capitalization. With still a long road to travel before it can catch up to the likes of New York or London, Shanghai plans to attract money managers, bankers, and world-class professionals of every field. These are reasons why the municipal government had made the Expo an organizing principle for the last three years. Almost nothing has superseded the Expo as an operation and political priority in the city. To demonstrate, Shanghai has around 46,000 police officers. State media says more than 8,000 additional officers have been drafted in to help from elsewhere, and a further 1,000 brought out of retirement, to keep the city clean and crime-free during the 184 days marathon event. For Shanghai’s leaders, all that effort has paid off. Employing the structure of the World Expo, Shanghai has impressed domestic and foreign visitors with its hospitality and efficiency. Therefore, participation in the Expo is no small matter for the Shanghainese people, who take pride in the opportunity to celebrate their town’s transformation into both a global financial center and a world-class metropolis.

A view of the China Pavilion, the impressive red structure, from a distance

Visitors walk around the funnel-shaped structure known as “Sun Valley”

“Future vehicles” are exhibited to visitors in SAIC-GM Pavilion at the World Expo

Highlights of the 2010 World Expo (Continued)

Ethnic Miao girls will give every 100th visitor to the pavilion a cup of wine served in an ox horn while singing songs encouraging them to drink. Ganbei!

Expo 2010: An Insider’s Guide

Themes: Blending of diverse cultures in the city; economic prosperity in the city; innovations of science and technology

The collection of museums showcasing Chinese strategies for urban planning, policy making and sustainable development is probably the highlight of the Expo.

Theme: Vitality of Life

The most expensive building funded by a foreign country is the Saudi Arabia Pavilion, which features a huge hanging boat shaped like a half moon, symbolizing dreams and friendships. Due to its overwhelming popularity, the estimated wait time to enter the building during the summertime was 9 hours. One way to skip the queue is to obtain a VIP pass.

Saudi Arabia PAVILION

Theme: Chinese Wisdom in Urban Development

The Dougong style China pavilion is a huge red structure that towers over the rest of the Expo Park.

The design of the China National Pavilion is based on traditional Chinese wooden structure architecture, and the design theme, “Chinese wisdom in urban development,” reflects the wisdom of the Chinese people in urban construction from ancient times to the future.

CHINA PAVILIONTheme: Rising to the Challenge

Testified by experience, the USA pavilion has been called “a national humiliation” and “an epic failure of planning” by American critics, who called its architecture as boring and argued that it fails to showcase American science and technology. The pavilion of the world’s superpower is the product of a last-minute campaign to raise about $60 million from corporate sponsors because no government financing was allowed under the “blackwater” public policy, which outsources public diplomacy to private parties. Not recommended.

USA PAVILION

Theme: Fruits of Civilization

The pavilion will offer free beer on their national day.

Czech PAVILION

The blue guy seen in every corner of Shanghai is a cartoon figure named “Haibao”, the mascot of the Expo 2010. Created from the Chinese character ‘Ren’, meaning people, Haibao embodies the character of Chinese culture. The blue color represents the ocean, the future and technology.

Expo Mascot

Guizhou Province PAVILION

Theme PAVILION

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Lifestyle

By Minnia Feng, Cornell University

Some of America’s largest restaurant chains have arguably even bigger presences in many Asian markets. A big part of their success is their ability to tailor their menus to incorporate local flavours and tastes into the classic American menu offerings; these regional menu items range from wacky to fascinating to extremely delicious and ingenious (you can never really go wrong with Asian food!). Below are some of these standout items from a few chains who have successfully navigated and now thrive in these previously uncharted waters.

International Flavor

Hong Kong: Rice BurgersYes, believe it or not, in Hong Kong’s McDonalds’, you may find your burger sitting cosily not between two good ‘ol bread buns, but instead in between ones made of glutinous rice. It is a wonder how the patties stay together, considering regular Big Macs fall apart like Jenga towers, but such is the power of the mighty glutinous rice.

Menu: McDonald’s

It seems fitting that the most out-there item McDonalds has would be in a country that always seems hyper-trendy. The Korokke burger is a sandwich made with breaded mashed potatoes, shredded cabbage, and katsu sauce. Oh, and it’s served with or without cheese.

Japan: Korokke Burger

Usually available during Chinese New Year, this burger unabashedly takes advantage of three long-standing Asian superstitions: wealth, food the New Year. Its tastiness probably cannot be judged by just a description; it consists of two beef patties covered in black pepper sauce and topped with diced onions. A burger with looks only a mother could love, but with powers that will make the taster, undoubtedly, a billionaire.

Malaysia: Prosperity Burger

Take a breaded, deep fried chicken patty in a wax-paper bag, dump your spicy powder in and Shaka away! Based on the popular Singaporean-Chinese dish, crispy five-spice chicken. Though this menu item requires some assembly, the concept is clever and the end product is, as I can attest, delicious. This product is also offered in other Asian markets, like Japan, underneath the 100 yen menu.

Singapore: Shaka Shaka Chicken

Sources from top to bottom: http://www.flickr.com/photos/n22yf/2512763361/; http://www.iyouweblog.com/food-cook-recipes/fuck-double-prosperity-burger/; http://www.flickr.com/photos/mdid/3337101086/

Lifestyle

Japan: Lavender Earl Grey Tea LatteIf warm tea isn’t enough to make you relax, and if Earl Grey still doesn’t do the trick, then Starbucks is betting the lavender will make you buckle and sink into a Lavender Earl Grey Tea Latte-induced coma. Japanese Starbucks stores have capitalized on the tea-loving nature of the country, offering a noticeably wider assortment of teas, including Assam Black Tea Latte and authentic matcha green tea.

Menu: Starbucks

While the idea of a red bean Frappuccino may seem very foreign to those not used to consuming azuki, it is in fact a perfect example of Western franchises capitalizing upon an ingredient commonly used in Japanese snacks (for example, ice cream, anmitsu, taiyaki, yokan, daifuku), and incorporating it into a classic menu item. The beauty of the Frappuccino is that it easily modified, yet still readily marketable because, whatever local ingredients are tossed into it, the Frappuccino cache is always there.

Japan: Azuki (Red Bean) Frappucino

While Starbucks is not as well known for its food, this genius concoction could soon change that. Taking advantage of the universally loved Korean Bulgogi,a type of grilled beef, and putting it between sliced bread could in fact be the greatest thing since sliced bread, perhaps even greater. The sandwich itself is a double decker, with one layer being a combination of Bulgogi with assorted vegetables normally accompanying Bulgogi (onions, red peppers) and a layer of romaine lettuce. The other layer consists of tomatoes and iceberg lettuce.

South Korea: Bulgogi Sandwich

Combines the crisp, tangy taste of raspberries with that ofblack currant, a popular fruit in Asia.

Singapore: Raspberry Black Currant Frappuccino

From the Taiwanese Starbucks’ extensive prepared food selection comes this dandy. Served in a long baguette, the combination of taro, bacon, and slices of Swiss cheese may seem odd, but it’s a great example of companies putting Asian spins on traditional Western fare to make it more appealing to the target audience. Taro is a very popular ingredient in Taiwanese snack fare (taro chips, deep-fried taro balls, etc.), and Starbucks’ ability to localize their food is one of the biggest reasons why they is so popular there.

Taiwan: Roasted Taro Bacon Sandwich

Sources from top to bottom: http://www.starbucks.com/menu/drinks/tazo-tea/earl-grey-tea-latte ; http://image.blog.livedoor.jp/m-05_74548/imgs/2/3/23d46a45.jpg; http://www.cookiecoffee.com/diary/1445/%E0%B9%81%E0%B8%88%E0%B8%81%E0%B8%9F%E0%B8%A3%E0%B8%B5-starbucks-card-%E0%B8%A3%E0%B8%AD%E0%B8%9A%E0%B8%97%E0%B8%B5%E0%B9%88-3-up-%E0%B8%88%E0%B8%B2%E0%B8%81%E0%B9%83%E0%B8%99-starbucks-%E0%B8%AD


A fog in the distance leaves its mystical trace amongst the majestic mountains. A drop of dew hangs playfully at the

tip of a lush, green leaf. The sun dyes the land a light golden bronze as it awakes from its slumber. My trip to the Chinese city of Shangri-La was filled with expectations of an earthly paradise where, as my tour guide suggested, “there is only happiness, no sadness.” The name, Shangri-La, naturally conjures an image of a heavenly utopia, untouched, untainted and untarnished. The famous appellation can be traced to James Hilton’s novel, Lost Horizon, written in 1933, where the use of the term “Shangri-La” was first used to describe the Zhongdian region in China, a distant place of beauty, spiritual replenishment, and supernatural longevity. Although the novel is rarely read today, the term has long become a part of pop culture. When I arrived, I was neither disappointed nor particularly impressed. Shangri-La city practices¬¬¬ the kind of small-

scale tourism that has extremely minimal impact on the environment—eco-friendly mountain activities, leisurely horse-riding, and unobtrusive visits to native residences. The contours of the immaculate greenery were punctuated with many monasteries that exuded a sense of Buddhist mystique and a touch of Oriental exoticism. However, because of Shangri-La’s sparse population and expansive landscape, the city turned out to be rather bare – so bare that it bordered on being sterile. Especially within the city limits, the nights were eerily quiet as denizens retreated slowly into their shops and flats. The few bars in the Old Town were as tame as purring kittens. Dim lights dotted the streets, casting a gloomy blanket over the dusty roads. As we passed the initial stage of wonderment at Shangri-La’s sheer beauty, “paradise” became an increasingly inappropriate word to describe this lethargic town. Beneath the veneer of inactivity and stillness, there lay a bold ambition fuelled by the hungry tourism industry. The first sign

By Teck Hon Brandon Ho, Cornell University

Shangri-La: A Dissipating Utopia

Lifestyle

China: Dragon TwisterWhile KFC no longer seems as relevant in the States, KFC is actually China’s most popular Western restaurant; in major cities, one can be found on seemingly every block. This is due in large part to their highly localized menu which constantly changes through seasonal specials. The Dragon Twister is described as a wrap done in the style of traditional Peking Chicken, complete with cucumbers, scallions, and Peking Duck sauce.

Menu: KFC

It seems even KFC’s names for their menu items sound esoteric, philosophical, and very Chinese. Nine lives is their official English name for the “Jiu Zhen Guo Zhi”, which literally translates to “Nine Treasures Fruit Juice”, a name probably less ambiguous than the English translation. Just what exactly these nine treasures are, the company does not specify, but there is a distinct tropical flavour that features mango and pineapple flavours most prominently. While it may not give you nine lives, this drink is wildly popular in Shanghai, especially on sweltering hot summer days. Complimented by other offerings in their drink menu, including its sister drink Eight Beauties and Grass Jelly Milk Tea, the KFC beverage offerings are a good example of a company in perfect sync with the taste buds of their target audience.

China: Nine Lives Juice

KFC sells salmon? I guess chicken can only go so far in a country like Japan. The fish, Karafuto-masu (pink salmon), are caught in the Okhotsk Sea by Russian vessels, and the sandwich consists of the fillet, a whole wheat bun, thinly sliced onion, lettuce, cheese, and herb mayonnaise. The item was well received in Japanese market and, in fact, KFC had offered salmon nuggets previously in the Chinese market, a further testament to their ability to identify fish as a staple of East Asian cuisine and incorporate it into their cuisine.

Japan: Panko Fried Salmon Sandwich

Though the name sounds ordinary, the dish is anything but. This dish is part of the special Veggie Selection menu KFC in India offers, catering to the unique cultural and religious diet aspects of the nation, and this particular item incorporates into itself uniquely Indian flavours. The Veg Rice and Strips offers veggie rice and vegetarian chicken strips paired with an “aromatic veggie pulao” and makhani curry.

India: Veg Rice and Strips

Sources from top to bottom: http://china.usc.edu/%28S%28d0yzn1u5m0sfqh55jlo4om45%29A%28slTR9e9-ywEkAAAAODY0NWMzNzItODBiNy00ZDBlLTk4ZDMtZTI2Zjc1MGIwNTM4RAm7wo7e538An_ljVF4DE13o-q4s1%29%29/ShowAverageDay.aspx?articleID=594; http://www.seafoodsource.com/newsarticledetail.aspx?id=323 ; http://www.kfc.co.in/KFCAllMenu.aspx BUSINESS ASIA • Fall 2010 • 33

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34 • BUSINESS ASIA • Fall 2010 BUSINESS ASIA • Fall 2010 • 35Photograph by: Sergiu BacioiuSource: http://www.flickr.com/photos/sergiu_bacioiu/4370021957/sizes/o/in/photostream/

struck me when I saw the construction site of a new hotel project by the world renowned luxury hotel brand Shangri-La. It was intensely strange that the brand did not enter the market earlier given the ring of its name. Nevertheless, it was almost indicative of the start of a tourism boom in this inaptly-named ghost town. While at my hotel, which the guide claimed to be the “best hotel in Shangri-La” but turned out to be horribly furnished and shockingly incompetent in its service, I noticed the second sign. The disparity between its standard (and that of many other outmoded accommodation options around) and the promises by new and experienced market entrants like Shangri-La belies a near future of the hotel market buzzing with competitive energies, as existing players awake to the need to update and refurbish. Many other construction projects in the city, whose skyline is increasingly dominated by cranes, jack hammers, and taller buildings, are surely a sign that Shangri-La city is gearing toward further development. As the sound of drilling pierces the tranquility of this earthly haven, will this paradise be preserved, or will our fantasy of Shangri-La evaporate into thin air under the maneuvers of our own hands? Putting my arms up in opposition to the scarring of the city’s unblemished front is akin to using the same arms to tuck floodwaters back into a river. Development is hardly reversible, especially in a country as thirsty for growth as China. Before we flash, once again, our jaded ideals of sustainable

tourism and extol its benefits to an equally jaded audience, let’s consider whether our goals are realistic. As the Chinese continue to feed their voracious appetites for progress, it is easy to lose sight of the line between what is acceptable and what is not. Tourism in previously underdeveloped cities like Lijiang and Dali in China has literally transformed these places into money-churning attractions far beyond recognition. The over-exploitation of tourism has tipped the balance against the very people it is supposed to benefit, resulting in, just to name a few examples, an erosion of culture, a loss of indigenous traditions, and air pollution. If Deng Xiaoping’s vision for China’s future is to “cross the river by feeling for stones”, referring to his gradualist rather than radical approach toward economic reforms for the world’s second largest economy, then tourism has upturned too many stones in its precarious crossing. What the city of Shangri-La needs to do is to learn from its predecessors and bring a halt to its breakneck development before its utopian image – the core of both its identity and its marketing – comes crumbling down. A huge advertisement board at the newly-built Shangri-La airport reads “Sheraton Groundbreaking Ceremony in October 2010”. With a cross between a smile and a frown, I left this beautiful city. A city with an unknown future, as it undergoes the biggest plastic surgery of its life.

The largest Prayer Wheel in China is located in the City of Zhongdian or Shangri-La

The distinctive Tibetan farmland in Shangri-La; the timber structures are for drying crops in the sun

By Melody Xie, Cornell University

Development of the Music Industry in Japan

Mr. Sanada graduated from Waseda University from the Department of Economics with a degree in Political Science in 1972. He entered Teichiku Records upon graduation and worked in the international division’s promotional department.After producing several smash hits at Teichiku, Mr. Sanada was hired by Toshiba EMI, where he continually oversaw the production of many artists that sold millions of records, including Wands, Ooguro Maki, and Pocket Biscuits.

In 1997, Mr. Sanada became the President of Virgin Records, EMI Japan. As the President, he produced globally influential artists including Ringo Shiina and Utada Hikaru, selling over 2.5 million and 9 million copies of their albums, respectively.

In 2006, Mr. Sanada was a partner in the establishment of Asiamuse Entertainment Japan and launched the debut of alan, SISTA Five, and Honda RuRu. Mr. Sanada then returned to Teichiku and was appointed the head of the production and promotional headquarters at Imperial Records, the popular music division at Teichiku Entertainment. There he oversaw the projects of Tiana Xiao, BEGIN, Akikawa Masafumi, Kumagai Ikumi, Higuchi Ryoichi, and several others.

Currently, Mr. Sanada is the executive producer at Japan Central Music, Ltd., a music publishing company that serves as part of Nippon Cultural Broadcasting, Inc.

BA: What do you think of the music industry in Japan?

YS: From a sales standpoint, the music/recording industry in Japan peaked in 1998 and has taken a major downturn thereafter. However, after a great struggle, live entertainment has managed to retain its sales. One of the major contributing factors to the decline of the music/recording industry is the fact that a mega hit has yet to come along and sufficiently captivate our generation.

Especially with the introduction of more and more digital means to retrieve music, instead of being artist-oriented, we have become more focused on evaluating specific songs. As a result, people have stopped listening to entire albums or an artist’s past works.

BA: How did you learn about your passion for music, and how did that lead you to where you are today? Can you talk a little bit about how you became an executive producer, and a little bit about what drove you to your success?

BA: Business Asia || YS: Yoshiaki Sanada

LifestyleInterview

Photograph by: Ray DevlinSource: http://www.flickr.com/photos/21061651@N08/with/3053180649/


that a 16-year-old girl couldn’t write anything impactful. Eventually, we were able to get “Automatic” playing on radio stations all over Japan. DJs were extremely moved by the song, and their strong recommendations, along with the fact that the song was fundamentally a good song in itself, contributed greatly to its success. It was notable that the song was made popular by the sole power of radio promotion, as opposed to television. After “Automatic” became a big hit, many people who were not supportive at first all of a sudden became supportive. We sent out an “Early Believer’s Card” to the people who supported the Utada Hikaru project from the beginning, and it has now become a highly valuable collectible item.

BA: How do you pick artists to work with?

YS: There isn’t one simple formula, but the candidate must possess basic musical skills… and perhaps the most important elements we look at are the artist’s vocal quality, his or her ability to express him or herself, and a strong will.

BA: Where do you see the Japanese music industry in future years?

YS: Even though music is not a necessity in terms of the sustenance of human life, it is an indispensable part of our lives. Music has evolved from being a physical form to digital over the past decade, and will perhaps continue to be played on even newer types of media. Nobody can say what the music industry will look like in future years. Perhaps it will completely become digitalized, perhaps it will return to its inception and we may all revert back to vinyl records. It doesn’t seem likely, but who would have thought, ten years ago, that we would have almost eradicated the need of physical CDs, and the younger generation, for the most part, does not bother to step out of their house—or rather, does not even have to do so—to get they want to hear?

Nowadays companies are looking at ways to profit from live performances. That is our new strategy. One thing we can be sure of, however, is that no matter what form it takes, music will continue to draw emotions from and resonate with people. We firmly believe it will proceed to live and to thrive, even—or perhaps, especially—in the current generation where music is so easily attainable. BA: What kind of characteristics do you think is important for people to have to become successful, particularly in the music industry?

YS: Whether someone wants to be an artist or producer, they must possess the same characteristics. The first thing is their interest in music, but what’s more is they must possess a certain type of curiosity—towards art, or movies, among many other things. Perhaps the shortest path to success becomes evident when a person is knowledgeable in many different fields. This is because the audience wants to feel what the artists are trying to express with their music; the audience will experience the artists’ experiences through their music. If the producer or artist is not sufficiently knowledgeable in a particular field, he or she may lead the audience in the wrong direction. Additionally, one must be extremely hard working, as the music industry is a fast-paced and highly competitive environment. An artist or producer must have great self-control, as well as a strong mentality, because there are many things that being in the industry alone requires one to be able to withstand. For example, the artist and producer must continue to believe in themselves, even when there are constantly negative or opposing comments coming from around them, in order to continue fighting for what they believe in... such was the case with Utada Hikaru. However, perhaps most importantly, is one’s love for music. Only when one possesses this trait, can he overcome anything and

YS: I’ve always liked music. When I was a child, under the influence of my older brother, I would always go watch movies and become completely mesmerized by the music in them. The first time I realized I liked music was when I watched “The Five Pennies” with Danny Kaye as the lead role. It was of the story of Red Nichols, a trumpet player. At age 10, I began learning and playing the trumpet... that was my first true experience with music. During middle and high school, I was in brass band, and I was also a part of a local full jazz band. When I entered college, I continued to play the trumpet in a jazz band. I did jazz all four years in high school, and I knew for sure that I wanted to pursue a career in music. However, I knew that I was limited by my skills as a trumpet player, and I began to focus more on what’s behind the scenes. That’s when I began my music career at Teichiku Records. Teichiku is a company that specializes in enka and kayokyoku (traditional Japanese music). I was unable to expand on my passion for jazz at the company. At the time, I was in the international division, and I was in charge of disco music, as well as rock and popular music. At this company, I was able to see through the production process of unknown artists such as “Jigsaw,” “Hot Blood,” “Carl Douglas,” and released smash hits with these artists. I continued to set records, and I felt fulfilled as I experienced the thrill of producing big hits in Japan. Because of my achievements, my company put me in charge of domestic artists, and I produced a rock group known as “personz,” whose record sales reached number one on the charts. At the same time, EMI was headhunting, and I joined them in their process of creating a new label. By that time I had already worked for Teichiku for 20 years, and it was exactly a time where I was searching for a new environment to continue my passion. In the Japanese music industry, it wasn’t really about working for and being loyal to one company, but rather more about working in the industry itself, so switching to another company was not exactly reproached.

At EMI’s new label (TM Factory), I was able to produce artists that quickly sold millions of records. Soon after, I became the President of Virgin Records. Virgin Records was full of creativity, and directors were active in finding new artists. Among these new artists were Ringo Shiina and Utada Hikaru.

BA: What would you say was the most challenge phase in your career?

YS: Indeed it was probably when I tried to release Utada Hikaru’s debut single. There was a year at Virgin Records where we didn’t release many big hits. One day I heard an English song Utada Hikaru sang. I felt that she had potential, but that particular song did not exactly capture me. I told the producer who played me her music to ask her to write and sing something in Japanese. And then she came out with the songs “Time Will Tell” and “Automatic.” We felt that both songs were great, and we couldn’t decide which one to use as the A-side for her debut single. We asked for many people’s opinions, but in the end the producer and I decided that “Automatic” would have to be it. Working in the music industry, oftentimes we must transcend theories and traditional analyses when making decisions. The only foothold we had at that time was the music we listened to until now and the promotion we’ve done in the past. Of course, we have experienced challenges many times, but every challenge becomes a valuable experience, and we must apply those experiences to our ventures in the future. To succeed in the music industry, we must possess a passion towards music and our artists. Utada Hikaru’s situation was such a case. Not everyone noticed Utada Hikaru’s charm at first. Our strategy was to focus completely on radio promotion and to ignore television promotion. Therefore we played Utada’s songs at every radio station in the nation. However, not everyone among our promotional targets was as excited as we were about Utada’s music. Many of them believed

Interview

Interview


resources, life sciences, telecommunications and media, infrastructure, industrial, and engineering. However, Temasek’s most significant sector exposure remains in financial services. Contrary to speculation sparked by losses from stakes in global banks such as Merrill Lynch, Temasek has not reduced allocations to this sector. In fact, 37% of Temasek’s portfolio was allocated to financial services in 2010, an increase from 33% in 2009, although the sector’s value at risk has increased. During the financial year ended 31 March 2009, Temasek made SGD$9 billion of new investments, of which SGD$3 billion were into the rights offerings of its portfolio companies, such as Standard Chartered, DBS Group and CapitaLand. U l t i m a t e l y , investment in financial services as a contrarian strategy increases returns for shareholders of Temasek. H o w e v e r , Temasek’s portfolio, in terms of geography distribution, might be unfavorable in some aspects, thus constituting an important weakness. Temasek’s stated strategy is to maintain an overweight in Asia, with a directional portfolio mix of 40:30:20:10. This means exposure to Asia of 40% or more (including China at around 20%), keeping Singapore at about 30%, maintaining OECD exposure at 20%, largely via Australia, and adding exposure of up to 10% to other geographies such as Latin America, Eastern Europe, the Middle East, and Africa. This portfolio mix provides a 50:50 exposure between slower growth developed economies and higher risk emerging economies. However, at the end of March 2009, Temasek’s portfolio mix by geography was 43:31:22:4. Over exposure to OECD countries is one of the main reasons for the company’s weak investment performance

in 2008-2009. Until the company rebalances its portfolio mix in line with the stated mix, the company could continue to suffer net worth loss in the future periods. Currently, a majoropportunity facing Temasek includes the establishment of the ASEAN (Association of Southeast Asian Nations) free trade market. Six ASEAN member countries (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) have agreed to reduce tariffs between themselves by 2007, three years ahead of schedule. Four more member states are also likely to join by 2012. Singapore, being a cornerstone ASEANmember, is likely to see increased cross-border investment and trade in a freer market, which significantly

benefits Temasek.Also, Temasek’s investments in the Latin American region may generate large profits. In 2007, the Latin American region attracted more than US$100 billion of foreign direct investments. Brazil and Mexico account for two thirds of the region’s GDP. Further, Temasek has stake in GP Capital Partners IV, a fund run by a private equity player in Brazil. This partnership has

already provided the company with several co-investment opportunities. Temasek plans to increase the Latin American exposure as a long-term strategy. As the numerous opportunities in Latin America unfold, Temasek may achieve further growth. Although Temasek Holdings’ investment projects, especially large international ones, tend to arouse political turbulence due to their close link with the Singapore government, its investment strategy and operations show a high level of deliberation and foresight. Thus, it is likely to sustain long-term development in the future.

Investing

With a multinational staff of 380 people, Temasek Holdings manages a portfolio of S$186 billion, focused primarily in Asia and Singapore. Its total

shareholder return since inception 36 years ago is 17%

compounded annually.

Investing

Temasek Holdings is a leading Asian investment company owned by the Ministry of Finance of Singapore. With

a multinational staff of 380 people, Temasek Holdings manages a portfolio of US?$186 billion, focused primarily in Asia and Singapore. Its total shareholder return since inception 36 years ago is 17% compounded annually. Temasek also has the highest possible corporate credit rating -- AAA/Aaa by Standard & Poor’s and Moody’s respectively. As of 2004, Temasek holds investments in many of Singapore’s largest companies, such as SingTel, DBS Bank, Singapore Airlines, SMRT Corporation and Mediacorp. It also owns public icons like the Singapore Zoo and Singapore Pools, the only legal betting company in Singapore. Moreover, Temasek owns stakes in many large foreign companies, including Standard Chartered, Bank of China and China Construction Bank. Currently, Temasek Holdings is strategically diversifying into asset classes, sectors and geographical exposure beyond its current portfolio. Two recently established,

wholly owned companies will facilitate this effort. One is SeaTown, to which Temasek has committed (SGD)?$4 billion under co-investment rights. SeaTown will be more diversified in geography and asset classes compared to Temasek and may take in institutional co-investors in three to five years after at least one market cycle of testing. Infrastructure, an asset class that is gaining importance in large institutional portfolios worldwide, is another possible addition in the future. An early step in that direction is SingBridge International Singapore, a Temasek subsidiary established last year. SingBridge develops sustainable townships, infrastructure and other large-scale projects such as the Tianjin Eco-City and Guangdong Knowledge City in China. Temasek’s success can be attributed to various strengths and strategies. Firstly, investment in diverse industries reduces business risks. Temasek Holdings invests in industries including financial services, technology, consumer and lifestyle, real estate, transportation and logistics, energy and

By Cathy Meng Xue, Cornell University

Singapore’s Temasek Holdings


Career

Taiwan is making a strong comeback after suffering the hardest hit from the global economic crisis. Chosen as the

“ugliest economy” in 2009 by The Economist, the Taiwanese economy suffered the biggest shock out of 55 countries that were tracked. As one of the world’s most export-dependent economies, Taiwanese exports plunged by 44% in the year 2009 with outputs falling by 32%. Now, the worst is over. The Taiwanese economy has expanded more than forecasted last quarter with its exports increasing for nine straight months through July, and has achieved the fastest first-quarter GDP growth since 1978. The economy is expected to expand 8.24% in 2010 and 4.64% the year after. The expansion of the Taiwanese economy has thusly led to a spike in employment opportunities. Taiwan has the second best job prospects in the Asia-Pacific region and is the third strongest in the world according to a report released by Manpower Inc. earlier this year. The government has

been vigorously promoting six emerging industries that will create about 450,000 new jobs over the next two years. The Council of Economic Planning and Development (CEPD) is focuses on the following industries: medicine and healthcare, culture and creation, biotechnology, agriculture, tourism, and green energy. Let’s take a look at these industries and see whether a future career awaits you there!

Medicine and Healthcare Taiwan is making large investments in its medical and healthcare system. According to the 2006 WHO World Health Report, the average lifespan in Taiwan ranked 39th out of 192 nations in the world. This shows the great demand for healthcare services from the aging population. With new healthcare technology rapidly being implemented and a shortage of healthcare professionals, those with expertise in healthcare, related technology, and medical services are highly coveted. By 2010, $86.4 billion TWD will be invested to boost the

By Sandy Tun, Cornell University

Six Emerging Industries in Taiwan: What Does This Mean for You in Terms of Career Opportunities?

industry output to $346.4 billion TWD. This will create around 31,000 jobs in the industry. If you have had medical or healthcare training overseas, your skills will be in high demand in the near future!

Biotechnology On March 26, 2009, the Executive Yuan of Taiwan implemented the Biotech Takeoff plan, which calls for the creation of a $60 billion TWD venture capital fund with 40% from the National Development Fund and 60% from the private sector. This initiative doubles the annual production of Taiwan’s biotech industry from $130 billion to $260 billion TWD over the next four years. This plan includes the reinforcement of “Research & Development” in the industry supply chain, the setup of a biotechnology venture capital fund to support local research projects, the founding of an incubator center to provide capital and legal support and management services for biotech firms, and the creation of the Taiwan Food

and Drug Administration (TDFA) to provide a regulatory environment compatible with international standards. By the end of 2010, there will be at least 18 international biotech companies established in Taiwan. This calls for skilled expertise in the biotech industry, especially in medical related fields.

Green Energy There are four key dimensions to Taiwan’s Green Energy Development Plan. The plan aims to make effective improvements to the energy supply structure by shifting to low-carbon supplies, incorporate low carbon usage in the design of cities, become a leading producer of sustainable energy technology and create green jobs. Solar power, LED lamination, wind power generation, bio-fuels, hydrogen energy and fuel cells, energy ICT, and electric vehicles will serve as key drivers in the industry. By 2012, the number of people working in Taiwan’s sustainable energy sector will be nearly twice the figure posted in 2008,

Career



CEPD officials forecast. Approximately $500 billion TWD will be put into the “Expanding Investment in Public Works project,” which is geared towards green energy and eco-engineering. While Taiwan has abundant human resources in traditional industries such as chemical and mechanical engineering, those with experience in sustainable technology and design are severely limited. Go green in Taiwan!

Culture and Creation With cultural influences from Mainland China and the neighboring islands, Taiwan has developed a distinctive culture. Taiwan desires to promote its uniqueness by setting up five cultural creative centers throughout the island to encourage investment and development within the arts. It aims to make enhancements in the television, film, and music industries. Taiwan is seeking collaboration with Mainland China in film production and is targeting an increase from one collaborated film to ten collaborated films per year. In an effort to promote the television industry, more resources and training opportunities are being offered in screenwriting, directing, and producing. Similar efforts are being made in the music industry. By 2014, revenues from television licensing are expected to increase from $344 million to $2.5 billion TWD in mainland and from $980 million to $3.1 billion TWD for overseas market. There is a great demand for film and music producers from overseas due to their advanced technical skills. For those of you interested in television, film, or music production, you may become the next big hit in Taiwan!

Agriculture With rapidly advancing technological innovations in agriculture, Taiwan is seeking to expand organic agriculture with the investments of over $1.461 billion TWD. The council plans to build three forest recreation areas and two fishing harbors, give agricultural tours to visiters, and sell goods such as tea, wines, rice, bamboo crafts, and seafood. The future of the industry focuses on enriching the quality of life with an emphasis on “creativity” and “taste.” It is expected that $24.2 billion will be invested to produce an annual output

of $158.9 billion TWD in agricultural produce. This will generate approximately 31,000 job opportunities. Those with expertise in agricultural management, environmental studies, and agricultural technology would be able to find excellent career opportunities in Taiwan.

Tourism Taiwan has made an extensive effort to attract tourists to visit this beautiful island. Five major segments have been identified during this process: “Beautiful Taiwan,” “Unique Taiwan,” “Friendly Taiwan,” “Quality Taiwan,” and “Promotion Taiwan.” “Beautiful Taiwan” focuses on improving sceneries throughout the 13 tourist routes. “Unique Taiwan” uses different group activities and cultural events to encourage tourism in Taiwan: health tours, Olympic events, group cycling activities, local Taiwanese cuisine, agricultural tours, and indigenous cultural exchanges. “Friendly Taiwan” readily provides tourist information through 136 info-stations at major transportation sites as well as a 24-hour free tourist hotline. “Quality Taiwan” aims to improve its services in hospitality and is calling for those with hospitality expertise to train its next generation of service staff. “Promotion Taiwan” has used traditional media such as advertisements in Forbes, Monocle, and National Geographic to promote the island. Taiwan celebrity endorsements can also be seen in foreign countries and a “Taiwan Fun” channel was set up to introduce the splendors of the island. There are many career opportunities in Taiwan if you are interested in working in tourism, and there is a high demand for those with specialized knowledge in hospitality management. Tourism in Taiwan is booming and there is a large group of untrained service staff, so if you are interested in hospitality and in exploring the wonders of Formosa, Taiwan is the place to be! By the end of 2010, the combined output of these six emerging industries is expected to increase by $1.17 trillion from $2.2 trillion TWD in 2008. In the process, the work force is expected to increase with the addition of 450,000 new jobs.

Career


“Women hold up half the sky.” Chairman Mao’s popular quote may be truer than ever in this era of Chinese economic prosperity. As the woman’s place in the Chinese workplace solidifies, women entrepreneurs are on the rise. Forbes Magazine’s recent list of self-made billionaires identified a total of 14 women. Of these 14, seven are from China. The booming Chinese economy, coupled with cheap labor and resources, has created a generous environment for female entrepreneurs in China. Topping the list is Yajun Wu, who made her fortune of U.S. $3.9 billion in property

development and holds the title of richest self-made woman in the world. Xiu Li Hawken, Zhang Xin, and Chan Laiwa—in 5th, 9th, and 12th place, respectively—took advantage of China’s housing bubble and also made their fortunes in property development. Others are involved in more diversified sectors. Liu Yingxia amassed a wealth of $US 1.7 billion in waste paper; Chu Lam Yiu worked in flavorings and fragrances; Lei Jufang created her wealth selling Tibetan medicines. Chinese dominance in this list raises the question of what makes China such a good incubator for female entrepreneurial talent. The answer lies in the fact that China’s social

By Nolan T. Jones, Cornell University

Seven in a Billion: Female Entrepreneurs in China

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culture has created a business environment that is extremely friendly towards women. They are encouraged to pursue an education, and familial pride pushes them to make valuable contributions to their family name. Also, the constant changes of a developing economy remove the massive amounts of red tape that can often impede start-up companies in Europe and the United States. Hard work, tenacity, business acumen, and innovation are all highly valued qualities in Chinese culture, and thus translate into a populace of highly business-savvy women. All these aforementioned traits are clearly evident in the life of Liu Yingxia. At 30, Liu is considered the youngest wealthy woman China.” She is very much the personification of flourishing, modern business. She is highly educated, innovative in integrating Western and Eastern business practices, and advocates for women in business. S u c c e s s stories like Liu Yingxia are only possible due to recently removed obstacles for female entrepreneurs . The number of female-founded companies has rapidly increased since 1996, after which 60 percent of female-started companies were formed. One of the main problems faced by female entrepreneurs is the lack of venture capital, forcing many women to rely on family and friends for business loans. Fortunately, Chinese culture bridges this gap because loans of money or capital among family and friends are extremely common. According to one poll, looking towards the future, female entrepreneurs remain highly optimistic, with 47.6% reporting great optimism about their company’s future, while only 5.2% expressed a “very pessimistic” view of the future. Despite increasingly positive changes

in Chinese politics and economics, female entrepreneurs still face many challenges. Although the government supports women in the workforce, their political views are still subject to the same scrutiny of all other citizens. For instance, when Rebiya Kadeer, a Uyghur, began to express her views on minority freedom, she quickly fell from government poster child for economic reform to public enemy number one on Xinjiang separatism. This emphasizes the fact that while women are growing in economic power, they still face considerable hurdles of discrimination in areas of loans and other financing options. Yet success stories of women who have overcome Chinese censorship still abound. For instance, Yang Lan has established herself as the “Oprah of China,” with an astounding viewership of 200 million per month. Yang Lan makes it clear that she does not like the concept of being the most powerful woman. To her,

the purpose of fame is to spread new thoughts, ideas, and e m p o w e r m e n t to women. As for the issue of censorship, Yang Lan acknowledges that there are some restrictions, but the Internet and public opinion have done much to increase freedom of speech in China.

She also discusses the incredible progress of the Chinese woman over the last century. From her grandmother with bound feet to her mother as a first generation college graduate, she has now achieved the unachievable as China’s biggest media personality. Chairman Mao once famously stated that women hold up half the sky. However, according to the local Chinese official Liu Qiaoying: “Previously we said that women can hold up half the sky, but nowadays most women in my town are holding the whole sky.”

“Previously we said that women can hold up half the sky, but nowadays most women in my town are holding the whole sky”

• Local Chinese Official Liu Qiaoying

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Dabbawalla, a Hindi word, means “lunch box delivery man” in English. The word Dabba means a tin cylindrical box,

while walla is a holder. Today, when you hear the word Dabbawalla , it does not simply mean a man carrying a tin box, but rather, a highly specialized business based in the metropolitan city of Mumbai, India. This service is a lunchbox delivery service. However simple it may seem, Dabbawalla has become an important part of the cultural life of the people in Mumbai.

How did the business start and gain its popularity? The concept of the Dabbawalla originated when India was under British rule. The British were not fond of local Indian food; therefore, most of them cooked at home and brought lunchboxes to their workplace. An Indian entrepreneur named Mahadeo Havaji Bachche observed the trend and set up a small service that collects lunchboxes from homes and delivers them to their respective recipients at a variety of workplaces. The business has carried on until today; the only difference is that presently, the customers are no longer British, but Indian businessmen, workers and schoolchildren. It seems that the locals continue to prefer having home-cooked meals over cafeteria-cooked food for lunch. Dabbawalla service still provides the same service it has always done. In the metropolitan city of Mumbai, as many as 175,000 to 200,000 customers use the Dabbawalla service.

The Logistics Handling thousands of customers each day, every chain of lunchbox delivery surprisingly only involves 4 to 6 men. These deliverymen are called dabbawallas. Dressed in a white uniform and a cap, a shirt and pants, a dabbawalla usually rides a bicycle or pushes a wooden carriage while working. The logistic process of the service is as such: The first dabbawalla will pick up several customers’ dabba, or lunchboxes, of whom live within a certain residential area. He will then take the boxes to the nearest railway station. At the train station, the second

By Edwina Regina, Cornell University Alum

The Dabbawalla: The Phenomenal Success of a Simple Entrepreneurial Idea

Sources: http://popupcity.net/2010/01/dabbawalla-hot-lunch-delivery-by-mumbais-fastest/

Entrepreneurishp


Entrepreneurishp

dabbawalla will be waiting for the first. After collection, he has to sort which dabba goes to which railway station and pass them to the third dabbawallas. Each third dabbawalla will take the train, traveling with the lunchboxes to the different destinations. At each destination, the fourth dabbawallas gather at the locale to pick up the lunchboxes and then deliver them to the customers. Longer distances would require more dabbawallas in one chain. After lunch, the process is reversed. Each dabbawalla travels about 35 to 50 miles in one day.

What’s impressive about Dabbawalla? The 5,000 dabbawallas handle as many as 200,000 lunchboxes each day, using no modern technology at all, yet these processes only accumulate one error per six million transactions. Therefore, US business magazine Forbes gave Mumbai’s Dabbawalla a Six Sigma Performance Rating. It also received ISO 9001:2000, a Quality Management System Standard certificate. Most dabbawallas are illiterate; thus, the business gives work opportunities to uneducated locals. Zero

fuel is used in this business because the dabbawallas either ride bicycles or take the public transportation during work. Regardless of the traffic and weather, including heavy rains and floods, the Dabbawalla service remains uninterrupted. This is mainly because each dabbawalla is accustomed to the area he serves, thus he can easily choose different routes when roads get flooded or when there is heavy traffic flow. Unsurprisingly, this business is constantly growing, attracting more investors in the business and is constantly receiving 100% customer satisfaction every year.

Future business expansion Because of this business’s great success, entrepreneurs of the Dabbawalla constantly try to expand it to different sectors. For example, a modern casual restaurant, aiming to provide Indian food with the feel and taste of a ‘home-made lunch,’ named “Dabbawalla” was recently opened in New Jersey, USA. Will this Dabbawalla restaurant come to be a successful business, following the steps of its original delivery idea?

Today, when you hear the word Dabbawalla, it does not simply mean a man carrying a tin box, but rather is a highly specialized business based in the metropolitan city of Mumbai, India.

Sources from top to bottom: http://www.indiashots.com/2009/04/01/dabba-walas-of-mum-bai/; http://popupcity.net/2010/01/dabbawalla-hot-lunch-delivery-by-mumbais-fastest/

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Business Asia Fall 2010