Trip reveals inner workings of Asian trade partners

by Jayna Eller Velo
for Virginia Business
April 2007

“Made in China.” We buy so many goods from Asia rarely thinking about the rapidly changing societies from which these products originate.

Recently, I had a firsthand glimpse of China and South Korea in an international exchange program involving MBA students from Old Dominion University.

China’s capital, Beijing, is home to nearly 15 million of the estimated 1.3 billion people living in the country today. We saw evidence of the efforts to accommodate the city’s growing population as hundreds of cranes lifted high-rise residential and commercial buildings skyward in every direction. Historic “hutong” residential courtyard communities dating back 700 years were being bulldozed to clear the way.

While Beijing constructs high-rise apartment buildings to house its growing population, the city’s transportation system copes with the daily movement of millions of people. Bicycles are everywhere. One-third of the space on major roadways is allocated to bicycle traffic. Bikes carry not just people, but loads of cinder blocks, construction supplies and produce destined for markets. More than 20 million bicycles share Beijing roads with 2.5 million motor vehicles smaller than we typically drive.

While it deals with everyday life, Beijing is also enthusiastically preparing for its world debut as host of the 2008 Summer Olympic Games. Historic landmarks are being refurbished, and vendors hawk Olympic logo merchandise. Beside Tiananmen Square, a giant clock counts down the time until the games begin.

To teach English to Beijing residents who will work with the games’ international visitors, the government mailed out study guides and sponsors a radio English tutorial program. Taught in high schools, many Chinese can read English, but speak English hesitantly. Our Chinese host students said much of what they know about the U.S. is learned watching American television shows such as “Friends,” in English with subtitles.

Visiting Olympic athletes may find their performance affected by the “dirty” air in Beijing, resulting from dust blowing from the Gobi Desert, auto pollution and a landscape stripped of trees. Smells of untreated wastewater underscored the reality that the water supply was not potable. Everyone drinks bottled water.

Often cited as the most important emerging power in the world, China is the world’s second largest and fastest growing major economy in purchasing power, but its per capita income is ranked around 88th in the world. China is beginning to allow privatization of government-controlled manufacturing and service industries. These hard-working people, eager to afford the “luxuries” of Westerners, are putting forth great effort to advance their lifestyle. China’s economic modernization has lifted almost 400 million citizens out of poverty since 1990, but 415 million Chinese still live on less than $2 per day. It is reported that China graduates more than 800,000 students a year in engineering and sciences, but only has 120,000 certified lawyers.

Putting so many Chinese people to work is a big challenge. Older adults work in parks surrounding the historic landmarks playing instruments and singing for visitors. We saw people cutting grass with hand clippers. With the large work force willing to work for low wages, it is quite evident why so many products are made in China.

Icons of Western capitalist companies — McDonald’s, KFC and Wal-Mart — are intermingled with Chinese establishments. My camera broke, and I found a replacement at the Beijing Wal-Mart, an American Kodak camera “made in China.”

We spent the second half of our trip in South Korea, America’s seventh largest trading partner, visiting Yeungnam University students who were very pro-American.

We toured Pohang Iron and Steel Co., one of the world’s largest integrated steel companies and manufacturer of South Korea’s most important national product. Utilizing straight-line production, POSCO produces steel coil from raw materials in five hours. This steel is used building the country’s bridges, high-rise buildings, construction cranes, ships, autos and electronic products.

Everything in South Korea is steel — chopsticks, cups, beverage cans. Steel is “patriotic.”

We also visited Hyundai Motor Co. and Hyundai Heavy Industries, the global leader in the shipbuilding industry, building all types of ships in nine large-scale dry docks. Hyundai has delivered more than 1,200 container ships, tankers and military warships to 45 countries since 1972.

As transportation and telecommu­nications bring nations of our world closer, and the global economy increasingly impacts our daily lives in significant ways, our international exchange afforded us the opportunity to see firsthand the economies of two of America’s major trading customers and competitors.

Jayna Eller Velo is a second-year MBA student at Old Dominion University in Norfolk and works as a marketing communications consultant. She has traveled extensively and lives in Virginia Beach with her two daughters.