China to Increase Visa Checks. Again

Tuesday, May 15, 2012 22:55
Posted in category The Big Picture

Twitter was all a buzz with news of a 100 day campaign to root out foreigners living in China illegally. According to the China Daily:

Popular Beijing spots for foreigners, such as Sanlitun and university areas, will be targeted by police in a fresh drive against visitors who commit crimes, outstay their visas or gain illegal employment, authorities said on Monday.

For some, it was a sign that China was after “them”, a feeling that certainly has resonated in the journo community following the Melissa Chen affair, but after 10 years in China and a memory of 3-4 formal visa check campaigns, I am pretty confident this will turn out to be a non-event for most.

Where this announcement is tangentially interesting to me though is that after going through the process of re-upping my visa several months back, it became to clear to me that CHina had taken stps forward towards integrating all the systems which manage foreigners.  The subject of an interesting article last month

In short, the computers are now syncing.  A fact proven by the fact that when I was processing my residential permit at the local PSB my immigration picture flashed on the screen.  indicating that not only does immigration know your entry/ exit details, but also has access to your work permit, residential permit, and all the data required of each department (mobile phone, address, etc).

So, in a sense, with all this information it is theoretically possible that this 100 day campaign is nothing but a test of their abilities to take the database and extract those who are overstaying, checking on a few tourists who are in the wrong place (like in an English School), those who are standing on the street corners of Sanlitun, or going to language schools to see who is actually attending classes.

Which is to say that while the timing could have certainly been better, I do not see any reason for anyone to panic or to be offended, if asked for your credentials.  It is a small, perhaps slightly inconvenient, request and given how easy China has made it for many to get in, it should come no surprise that campaigns like this may need to take place.

Twitter Weekly Updates for 2012-05-14

Monday, May 14, 2012 16:25
Posted in category Uncategorized

10 Foods I (Try to) Avoid in China

Monday, May 14, 2012 9:10
Posted in category The Big Picture

Following last week’s post, I was reminded by a reader about a post I wrote a couple years back , and I decided to update it as the core of the post was a list of foods that I generally avoid in China.

It is a list that has changed over time, but in looking back, I have done well to stick to it pretty well:

1) Domestic Dairy and Soy Milk product – I wasn’t worried about melamine, I was worried about hormones/ antibiotics use.  This is one of those things that I have been looking at for a while. What I have found interesting through this crisis in confidence is that no one is looking at soy milk.  It is not all that different in process if you remove the obvious difference between a cow and soybean.  Both can be watered down, both can be thickened, both are really a collection of a million units into one….

2) Fish/ Seafood – This is perhaps the easiest to avoid as much of the (higher) quality fish and seafood in China is going to be imported at this point.  Globally there are a number of issues related to quality of fish, but in China my concern is rooted in antibiotics that the fish are ingesting to fight disease in the pond (largely a result of overfeeding and poor water conditions). That being said, chemical issues certainly exist as fish who survive massive die offs are still sold to market, and the Bohai Bay (home to oil spills and a large chemical base) has a lot of fish farms.

4) Domestic Pork/ beef -  Initially this is a reaction from my study of hte issues that the US faces with meat, but it is a reaction that has only grown more solidified as reports of pork contamination have played out in the media over the years.  Shooting pigs with growth hormones, use of antibiotics, and even injecting water to increase the weight, are reason enough for me to do what I can to avoid pork/ beef in restaurants.  When shopping for myself, I buy Australian beef.  It’s grass fed, and that is about as good as it is going to get.

5) Instant noodles – I once worked on a project for a large starch firm, and through this project I learned a lot about starchy foods, and how companies can mess with them.  Like Aluminum, there are many different grades of starches, and through the process of “reformulation” many firms will find the right “balance”.  which leaves a lot of room for the adulteration of product with various (industrial) chemical additives.

6) Processed meats – This pictorial (h/t CSR Asia) should be enough.

7) Shit on a stick – it is everywhere in China.  Local groceries, outside stalls, etc.. and it comes in many varieties… but let’s be clear about what that stuff really is (even if it looks like a hot dog, or a chicken foot, or a whoKNOWSwhat)… it is shit on a stick and it should not be eaten.  I specifically remember on instance several years back of losing all feeling on my tongue for 2 days from a single skewer of grilled mantou.  Perhaps it was a chemical burn, or perhaps it was the amount of MSG.  I dunno, and I don’t care

8) Powder based drinks – Sorry folks, but the 6 kuai bubble tea that has provided comfort on the walk is out too.  For me,  I opted out of bubble teas (and anything like it) once I learned how they were made.  White powder (sucrose/ fructose) + brown powder (tea/ flavor) + “tapioca” balls, and it is a decision I am happy with following news of industrial chemicals being used in Taiwan and a Shanghai Daily investigation into the industry.  Seriously, it’s all chemicals, and none of them are good for you… before the cutting of quality occurs.

9) Sauces – Soy sauce, fish sauce, chili sauce.. in a bottle we have largely cut out opting either for imported labels or simply making our own sauces. it is not necessarily due to the reports of boiled hair turning into soy sauce, or the reports on vinegar, or even the industrial complex that processes second hand oils… I was more concerned with the stabilizers and emulsifiers that are used in the process.  Chemicals that have many grades, and are often the first place a firm on the financial / moral ledge will make changes.  Not to mention the amount of salt and sugar that these sauces have, which is perhaps the global issue with any bottled sauce.

10) Anything that will make a government official lean over and say “this will keep you up all night long”.  Toad ovaries, deer penis, etc.  It has nothing to do with food adultery on any level, it is just something I will do just fine without.  Been there, done that, got the tshirt.

Feel free to add more in the comments section.

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Food. The Reason Some Are Looking to Leave China

Wednesday, May 9, 2012 7:37

Speak to anyone who had a child while they were in China, and one of the first issues that comes up is food safety. Beyond air pollution, there is no topic that (in general) I have more discussions about… and more often than not I am being asked what I eat and where do I get it from.

It has become such a concern that many (I speak with) are considering leaving China, and the recent Xinhua aritcle detailing the fact that cabbage in China is laced with formaldehyde is certainly not going to help matters one bit.

Zhao says he uses the chemical to keep the cabbage in good condition during a 10-hour journey to Langfang, a small city on the Hebei-Beijing border. “Vegetable dealers in Langfang openly demand formaldehyde-preserved cabbages because they sell more easily.”

He also says the practice is not a new one. “I just did what everyone else was doing for three or four years. Vegetable dealers in other parts of Shandong and Hebei do the same.”

A practice which is technically not illegal!

It is still unclear how the toxin-using dealers should be penalized, as no such conditions exist in relevant laws and regulations, said Liu.

China’s law on farm produce safety stipulates that the use of preservatives should “conform to relevant technical standards of the state,” but fails to define what preservatives, or how much, are acceptable.

Now, I am not sure how the application of formaldehyde will impact the consumer, whether or not it can be washed off or if one just needs to peel the top layer off (I have an email into someone who knows), but let’s be clear about something… this is not the worst of it, nor is it the only problem.

What is the problem? In my mind there are two primary factors that go beyond stupidity, greed, and outright evil.

The first is that the policy level, primarily at the NRDC where pricing of commodities (including food crops) is what gives them power. Like their ability to set energy pricing, the NRDC has the ability to pervert the natural laws of the market and force everyone in the chain to cut corners. That, in setting a price that protects the consumer from inflation, the policy will almost always result in cutting corners. Match that to the second big policy problem that exists, which is a blind campaign to promote security of or consumption of a good (like milk) where the conditions on the ground simply are not aligned. Farmers are forced to game the system through various chemicals, food quality standards are reduced, and once again the consumers are at risk.

Second to that in terms of important is the supply chain of food in China, and more specifically the fragmented nature of agriculture in China. the average farmer (legally) tends just over a MU of land. 660 square meters. Or what some in the states would consider their hobby plot. And with such a small parcel of land available to them, managing quality is absolutely impossible. They are unable to afford high quality inputs, their farm is not large enough for equipment, to max out their yields pesticides/ NPK/ herbicides are thrown on at 3x the rate needed. Match that to a supply chain that is equally fragmented, and is really a matter of consolidation, and what you have is a massive amount of adultery and waste in the system. A system which eventually finds exits in wet markets (small sellers), local grocery stores, and depending on the channel the large chain stores. high quality sources have historically been exported to the likes of Whole foods, but that is a separate post.

Which leads to the “how”.

How is it that goods laced with formaldehyde are making it to market? Simple, they have to. Keeping in mind the fact that China is fighting massive inflation right now, and that there are probably fewer industries for room to “look away”, the good make their way through consolidators, distribution channels, and testing centers without anyone raising a flag. It is in part because there is no third party system in China, and it is in part also due to the face that the media know something for three years without saying anything, but the net result is that people are getting sick. 300,000 children getting kidney stones. Shanghai’s stomach cancer rates shooting off the charts.

which leads me to the “what do I do”

simple. I find trusted sources. I spend time speaking with experts, visiting farms, and following supply chains to see who has the best quality (safest) products I can purchase for myself (and my family). Greenpeace’s new iPhone app helps with this, but also knowing who 5 star restaurants and hotels are buying from helps.

Which is where is starts, and why I am seeing massive spending by the local Chinese as they look for USDA Organic labels for baby food, are ordering vegetables from Shanghai/ Beijing’s largest organic farms, and are importing baby creams, powders, and clothing by the suitcase. An industry that, as I mentioned in my previous post, is booming.

But, for some (Chinese and expat alike), that isn’t enough, and over the next 2-3 years I expect to see people I know move to safer ground because we all know that even with the reporting, the fact is that operationally this problem is going to require more than installing some equipment and issuing uniforms to unemployed students.

Twitter Weekly Updates for 2012-05-07

Monday, May 7, 2012 16:25
Posted in category Uncategorized
  • [ge stagnates in China] GE Turns Eye to Australia http://t.co/xvJLXe9U # china $ge #
  • Hey everyone. I'm now on G+. Follow me and I promise to follow back. http://t.co/VwMh8spd #
  • How to follow All Roads Lead to China on Linkedin, Twitter, Google+, and RSS http://t.co/veqclYmG #
  • Soaring Meat Consumption in #China Has Global Implications http://t.co/EDDTrKMu @allroads #agriculture #food #trade #
  • My questions about what is going on in Beijing right now. http://t.co/s2HQHT4K #
  • Local banker view on getting profits out of China "only one official way (which is difficult), but many unofficial (which are easier)" #
  • RT @cmphku: Readers must see the 00:00 Weibo sign-off from The Beijing News. And comment before it disappears. http://t.co/N7sYaE6n #
  • Xi's era will be make/ break time RT @DavidBarboza2: Minxin Pei: Communist China's Perilous Phase http://t.co/tfPYFj9i via @WSJ #
  • One sign you have a tiger mom living above you… piano music starting at 8am on Saturday morning. Poor kid. #
  • Great conversation abt business in China w/ lawyer & investor. Many firms are re-evaluating "success" now. luxury happy.. for now #
  • Everyone agreed abt one thing. Many had expectations that were never met, and entrepreneurs coming to China hv steepest hill. #risk #reward #
  • Biggest concern abt China business env is the "extractive" mindset. chinese looking to cash out of China. Little trust in long term. #
  • In the third hour of her piano practice, #Tigermom feels the need to begin screaming about 4 year old not concentrating. #parenting #fail #
  • [great read] RT @NiuB: Why Pick a Fight With China? | The Diplomat http://t.co/521jkd9Z #
  • The latest proof Shanghai is getting expensive. The 28RMB 8oz peach tea @glolondon http://t.co/El9NM1GV #
  • U.S. workforce must boost skills for third industrial revolution http://t.co/UvCi7Ddo #manufacturing #madeinUSA #
  • [construction?] Minor earthquake hits Baoshan District in Shanghai http://t.co/2crz4Mjw #
  • [food safety is #1 catalyst] Chinese getting tired of #MadeinChina products http://t.co/akG1Urye #china #madeinusa #

Soaring Meat Consumption in China Has Global Implications

Wednesday, May 2, 2012 1:06

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After writing the piece China’s Energy Gaps Create Opportunities last week, a few different articles came across my RSS reader that highlighted the need for a food post as well.

Food is one of those things that I do not think gets enough attention. There are certainly more than enough stories about food safety in China, largely byproducts of lacking investment on the farm and in the distribution chain, but it is China’s reliance on imports that will become the story going forward.  As the above articles suggest.

According to the Earth First article Meat Consumption in China Now Double That in the United States:

More than a quarter of all the meat produced worldwide is now eaten in China, and the country’s 1.35 billion people are hungry for more. In 1978, China’s meat consumption of 8 million tons was one third the U.S. consumption of 24 million tons. But by 1992, China had overtaken the United States as the world’s leading meat consumer—and it has not looked back since. Now China’s annual meat consumption of 71 million tons is more than double that in the United States.

Figures that are represented in the chart above, and highlight very quickly and concisely just how fast China’s demand for meats is rising.  A rise that is matched by the rising demand for inputs (seed, feed, fertilizer, etc), as the recent articles China’s Sinograin may boost imports of U.S. corn  and China Soybean Imports to Jump by 14% on Demand

It is a problem that is at the heart of the matter tied to regulation, farm policy, and the distribution of food, and is exacerbated by urbanization and economic development which are fueling demand.   And beyond importing, where the opportunities are going to enter for solution providers are going to be (in my opinion) greatest on the farm and in the distribution system.

On the farm, perhaps the greatest shift that is taking place is the one where individual farmers, who are farming on average 660sqm of land, are consolidated through the legal frameworks set up a couple years back.  This will be the core for future investment as farm land is bundled up, and is worked to such a scale that a single farmer (of business) is making decisions about the seed to be planted, fertilizers/ pesticides to be used, and means of harvesting/ storing the crop. Right now, it is a bit of every many for himself, where largely uneducated farmers are planning crops and buying seeds with little formal education on agriculture, there is no scale in the fields (i.e very 660 sqm is different), and to pump up yields the farmers through on 2-3 times the amount of fertilizer/ pesticide needed.  A huge waste to the system, not to mention the impact to the water.

Which is operationally no different for livestock, aswe painfully learned through the melamine incident, but which I see every time I open up a carton of eggs and see varied sized, shape, and color.

The average farmer has no scale, and as a result is not only wasting inputs and more importantly, sees a huge variance in output as well.  It is a market leaves a lot of room for firms looking at financing farm consolidations, farmer training, equipment, inputs, and storage.  opportunities that have attracted the likes of Monsanto and Bayer, but have also attracted groups who are selling green houses, irrigation technology, and husbandry technology (live samples and more)

As highlighted by the WSJ article China Grows Its Dairy Farms With a Global Cattle Drive:

To encourage growth of big farms, the government has mandated that the country’s top milk processors—those who buy from the farms and turn raw milk into boxed milk, yogurt, ice cream and cheese—purchase a substantial percentage of their milk from big farms.

Foreign companies and financiers have jumped on China’s dairy bandwagon. Hong Kong-based private-equity firm Olympus Capital and Mueller Milch, a large German dairy, have invested in Chinese dairies. New Zealand dairy cooperative Fonterra, the world’s biggest exporter of milk products, is building its third dairy farm in China stocked with Kiwi cows.

And by the article U.S. barnyards help China super-size food production :

Worldwide, the United States exported an all-time record of $664.1 million worth of live breeding animals, semen and livestock embryos last year, an 82 percent jump in two years, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.  [...]

Last year, Chinese companies bought $41 million worth of live breeding animals and genetics – up nearly threefold from five years ago, according to USDA FAS.

The demand for breeder pigs, in particular, is zooming after China lifted a two-year ban on hogs and pork imports last spring. In the first two months of 2012 , China imported 62 percent of the total number of U.S. breeder pigs brought in for all of 2011.

With China facing increased pressure on all fronts it is an absolute certainty that China will have to modernize its food production and distribution systems, and as time grows more critical, the need for secure and safe sources of food are going to open up a lot of doors for solution providers.

For those of you who are interested in learning more about the wider context, or learn about the limits of China’s agriculture, I highly suggest watching this clip on Youtube where Lester Brown gives a presentation entitled Perspectives on Limits to Growth: World on the Edge .  He spends a lot of time on China

Follow All Roads on Linkedin, Twitter, Google+, and RSS

Tuesday, May 1, 2012 10:45
Posted in category Uncategorized

Are you a reader who is Linkedin, Tweeting, or would like to be notified when a new video or presentation are uploaded?

Then take a few minutes to integrate the various All Roads Lead to China social mediums into your accounts… and if you are not sure about which mediums are worth your time (social media can get a bit overwhelming), I have provided a description of the content that you will be exposed to through the various mediums.

The official Twitter account for All Roads, twitter followers will receive regular links to interesting articles that I find, or interesting quips that I come up with, on a daily basis

Our LinkedIn page has nearly 300 professionals who are actively discussing the issues that China is facing, and on a good week there are 3-4 discussions/ posts for members. It is a place to meet peers, ask for opinions/ resources, identify experts, or announce events/ jobs that you have.

New to the list is Google+. I am just getting started here, but am posting content that is somewhere between a blog post and a tweet. focused mainly on doing business in China, sustainability, and leadership.

The most basic way to connect to our connect, the All Roads RSS Feed will alert you whenever a new posting is loaded to the site, and depending on the reader you are using, may even send the content to you. Of course, you’ll still need to come to the site to post your comments!

So, with that, I invite you to join the platforms that you feel will be the most convenient, and engaging, for you.

Twitter Weekly Updates for 2012-04-30

Monday, April 30, 2012 16:25
Posted in category Uncategorized