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Peter Tirschwell,
Editor in chief,
The Journal of Commerce
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JC: How was your China trip, tell me your first impression?
PT: I
was in Hong Kong and then I was in Beijing. So I got two different
perspectives on what is happening in China right
now.
JC:So
before you went to China, you were imagining China is opening up,
did you feel it matching up to your expectations?
PT:More
than my expectations. Hongkong is in the position right now where
it has to frantically adjust and rethink its position because China,
particularity the Pearl River Delta Area, is expanding so quickly
and everything that was being talked about in Hongkong at least
for logistics, transportation and international trade had to do
with how to better integrate HongKong into Pearl River Delta region,
so as to take advantage and tap into this growth to the greatest
extend possible.
JC:
In terms of the HongKong's role and
relationship with the greater China, I would imagine the logistic
systems are well established, is it a matter of integrating that
with the less developed system in the mainland China from your point
of view.
PT: Well, less developed, but rapidly developing. HongKong
is the biggest port in the world and 90% or more of the goods that
moves to Hong Kong are mainland China in origin or destination.
Yet the ports in Shenzhen special economic zone, there are three
container ports there, are growing much faster than HongKong. In
fact Hongkong is not growing any more, it's now declining in actual
volumes Hongkong's volume were doing something like 4% in the first
quarter while the ports in Shenzhen were up in double digits.
JC:
why is that?
PT:Because
they are cheaper. Hongkong authority has not yet resolved the congestion
issues at their border. In another words, while I was there I learned
that at the time of handover, there was a feeling among the HongKong
government that the two systems part of the one country was the
emphasis. They really want to preserve the unique characteristics
of HongKong relative to China in terms of its economic systems,
it's portal systems, legal, all that. But as a result, serious problems
at the borders went unresolved for a number of years. Today you
have situation where trucks carrying export goods from mainland
China routinely wait for two hours, four or six, some times over
night at the border to get into HongKong. They understand very clearly
that they have to correct the situation by creating a technology
solutions some kind of smart card systems so that the border is
as secured as it always was, but the physical limitations are overcomed
such as the trucks can drive up to the border and drive right through
and all the customs checks and everything else will have been performed
in the electronic forms, you see what I mean?
JC:
If I understand correctly,
PT:
You have legal protection there, information systems but the cost
is higher, they admit that, they are trying to reduce the cost so
that they can be more competitive and grow as Pearl
River Delta grows, rather than stagnating which is what they are
doing now.
JC:
So in a way, Hongkong needs the mainland market.
PT:They
absolutely need it and they know that.
JC:So
after these about three years of the HongKong's take over, you feel
the people's feeling has changed. Did people tell you they used
to have certain concerns but now after this period of time, they
see it somewhat differently?
PT:They
see it differently. That's a very accurate
statement. They want to be part of China. It's like the handover
was two systems in one country. Now it's one country with two systems.
JC:
I like that.
PT:
One of the example of this is a new bridge
that is proposed to be built across the Pear River Delta into Latao
Island, connecting to the other side in Zhuhai and Macao. This road
linkis very important in the context of integrating HongKong into
the southern China economy.
JC:
How does your HongKong trip integrate into your overall strategic
planning or operation of your business?
PT:Well,
China is certainly the most dynamic area of economic growth in the
world today. I think there are no questions about that. Therefore,
people who are our readers who they are involved in executing international
trade are increasingly doing business with China, therefore they
need to know what the realities are about doing business in China,
so that the more we as journalists understand what's happening,
the better we can explain this then the changes to our readers.
JC:
In terms of content that
you cover, what are your points of interest?
PT:
Two major points of interests with regards to China. One
is the logistics systems that support international trade, in another
word, the export of consumer product that come from china to US,
and the strategies and practices and service providers that support
the movement of several million container loads of multiple millions
of dollars per year moving from China into the US. And the other
way around. Secondly, we are interested
increasingly in China's domestic market,
because increasingly the companies that are doing business in China
are manufacturing for the domestic market and also importing into
China for sales in the domestic market because incomes there are
growing, consumer consumption is growing, and China has not been
thought of to a great extent as the consumer market, but itıs very
much becoming that.
JC: Would talk about your experience in Beijing? You attended
a logistic Conference and probably found something differently than
that in Hong Kong?
PT:Yes,
it's a very different city. There are a lot of bicycles like I expected.
There is a strong sense at least in regards to the logistic field
that China needs to move very quickly to modernize its practices
in this area. We heard from different speakers from the government,
and from the private sector who spoke about the need to bring logistic
practical that have helped make companies in the West particularly
profitable to bring those practices and technologies into China.
JC: In terms of logistics in the mainland, in the innerland,
like Beijing, what specific practices apply to it and what is the
current situation based on your discovery at the conference.
PT:
It's a rapidly evolving situation, you've got roads and
highways
being built where there were no roads
and rails being improved, but you have
a long way to go as well. You have very little infrastructure that
supports the effective distribution of the consumer products around
the country. For example in our country, we have an intermodal rail
systems where containers are put on rail cars and are taken off
at the other end. We have a western truck load system where trucks
are consolidated with goods from many different customers, be consolidated
and delivered to their final destination and that is the critical
part of the distribution systems for products in US. Those systems
are in their infancy in mainland China.
JC: What do you see as a bottleneck from point A to point
B?
PT: Well the bottlenecks are many companies in China particularly
the State owned enterprises still handle their own transportation.
They donıt do a lot of outsourcing, in doing so, they are denying
themselves the opportunities to bring into their company the best
practices that has been developed.
The
other thing that holds them back is there are not a lot of expertise,
there is not a lot of trained people in China who understand logistics
and as a result the government said they want individuals who are
trained in this area to come back to China.
JC: How would China's entry into WTO help in this regards?
PT:
WTO will help this in a very specific way, because WTO has China
made commitment in distribution. So within 4 years, foreign companies
are going to be able to operate wholly owned logistics and distribution
operations in China to the extend the infranstructure and companies
that don't exist there at the moment, those practices will be imported
into China. Foreign companies view China as a growth market. They
will bring their business practices into that market.
JC:
You said you were making observations of the bicycles, did you make
some friends on a personal and cultural level, what did you learn?
PT: I did. I learned that Chinese are delightful people.
I don't know hostility of any kind. Because Chinese and Americans
are at a loggerhead, either one thing or another. I felt very comfortable
in Beijing and Hongkong, particularly in Beijing.
JC: What were some misconceptions that Americans had that
you feel cleared up this time?
PT: I don't know. You know Chinese is a very different culture,
different values, different way of looking at the world. yet their
intention is good. I saw a country that wants to raise its living
standards and enjoy a higher quality of life for itself and it's
accomplishing that, I came away with positive feelings.
JC:
Thank you very much Peter for your time and insights.
See
on Interview of Peter Tirschwell before his first China trip
in late April 2002, Interviewed on April 4/4/02 .
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