Sitting at Changi Airport again. Waiting to board the plane for Shanghai.
It has been a while since I last flew, the reason has to do with some alphanumeric character … H1N1, I am not so worried about catching it but having to stay in some country for seven days under quarantine Just doesn't sound like fun :-)
On learning experience for this trip, let’s start with the financial crisis and China.
In my earlier blog, I spoke about my visit to China in Nov 08 and witnessing the closure of several factories in the midst of the financial crisis. I wrote about the row of factories, several were locked and closed with statement stating that operation has seized and also the long queue of workers line up outside one factory with some of the workers carrying placards and shouting for their back wages. In another factory, I noticed another queue of workers going into a factory to collect some money given out by the local government agency.
The scene reminds me of the days in England and the Coal Miners strike in the early 1980s when I was working in Sheffield, England. Mass of people was out of job at that time. I never thought that I will see this situation in China.
This is an update of the earlier visit. The factory where the workers were collecting the money is next to my client’s factory and I got talking to the factory manager of the defunct factory. The money is from the local government about RMB 600 per workers. At that time, I got talking to some of the workers and jokingly, one suggests that combining their money they can start a small hawker stall. One laugh while the other companion thought it was a good idea.
Now I return to China and things are slightly better, The Chinese implementation of the stimulus package is swift. There is more confidence at the ground level. The queues are gone. Interestingly I was told that several MNC shut for their Chinese new year break…… one months early. Can you image that business is so bad that they can afford to shut down early and release the workers.
The general impression I got from this whole episode tells me that this crisis is really bad. I need no analyst to give me figures and statistics, nothing is better than seeing it at ground zero.
I am however confident that the Chinese economy will ride this “tsunami” very well. Remember the workers who wanted to start their hawker stall. Well I met one of them on this trip.
With the combine receipt of the three workers (1800 RMB) they started a small hawker stall (illegally) and very happy about it. They work the midnight to morning shift for their stall just to avoid being caught by the police. The Chinese are generally very resilient and entrepreneurial. I believe the impact will make them looks inward rather than outward for their growth.
Back to the purpose of my trip, I am going to Shanghai to carry out a due diligence project.
In my business there are two type of incoming work for acquisition. The first type is when somebody wants me to find another somebody to either buy or sell their business, while the second type is when the somebody who found the other somebody to buy and sell their business and I am just the facilitators J
I prefer the second type of business. Frankly 70% of my work is from the revenue in the second categories and also I get a retainer up front and not wait for success basis.
This is the acquisition of a local company by a foreign companies.
To be continued…