Shanghai: The other capitalist city in China

Shanghai Municipal Council building

From Hong Kong (a capitalist enclave in the People’s Republic of China) we took a 21 hour train ride to Shanghai, which has been reclaiming its pre revolutionary title as the center of capitalism (and finance) in China. I think of it, not always positively, as New York. One of the original treaty ports opened to foreign settlement in 1842, it gradually became an enclave with its own self government—in fact, two governments. One, that controlled the area we’re in now, was once the famed “International Settlement”, formed by the union of the British and American concessions in the 1860s. Administered by foreigners, it was really a quasi-independent city, with its own officials (elected by a minority, which did not include Chinese until the 1920s), its own police (supplemented when needed by forces from the foreign navies here), its own stamps (at least until 1896; the stamps featured the dragon, an otherwise imperial symbol), and courts which administered foreign laws. There was a US Court for China, for example.

Because of extraterritoriality, the right to be in this protected Settlement (the French, as was their wont, refused to join, and had the French concession, which was more known for gambling and gangs; It was right next to us, along the Whangpu, the area known as the Bund), safe from the vicissitudes of civil war (the distintegration of the Chinese empire lasted almost 100 years, and included a 19th century quasi-Christian uprising called the Taiping rebellion that lasted nearly 20 years, and left millions dead, and swelled the population of Shanghai with refugees).

In the early 20th century, Shanghai became the hub of especially British, and later Japanese, enterprises in central China, as the port connecting the Yangtze interior to the rest of the world. Hence, along the Bund were located the major banks and hotels and clubs that recreated the life style of countries thousands of miles away. We’re just behind the Bund, that wonderful façade of 1920s and 1930s buildings that you might have seen in Empire of the Sun. The former Hong Kong and Shanghai Bank, just down the street from us, dominates the Bund—its British lions restored in front guard the entrance to an interior that I remarked to Ruth Ann, “I’ve seen churches that aren’t this nice,” with marbled floors and columns, and murals recently uncovered on the ceiling depicting stylized cities of the Western world.

Because of its association with capitalism under the Nationalists, Shanghai suffered for a long time after 1949. Many of its industrialists fled, either to Taiwan or Hong Kong, to help jump start those “tigers,” but Shanghai languished until the early 1990s, when former political officials from Shanghai—Zhu Rong-ji and others—moved into high offices in Beijing, and the city more than came alive economically. Always populous, it now has 23 million inhabitants. Always crowded, it has (since my first visit here in 1990, and with a great assist from the Shanghai Expo) found ways to move crowds (infrastructure is one of the major contrasts between China and India; on our over 800 mile ride from Hong Kong to Shanghai, we were paralleled by new highways) such as subways, expressways (some of which destroyed the old colonial homes; I’ve met Tess Johnston, who has compiled Lost Shanghai, and other books detailing the colonial architecture. She and her photographer were taking pictures of the buildings as the bulldozers were tearing them down), and double decking. One of the most crowded streets was the Bund, which had 11 lanes of traffic and needed 20. That was torn up and an underground tunnel put in. Amazing changes.

I love the old colonial architecture of the Bund (so called Puxi, the west side of the Whangpu river), and the Chinese have made serious efforts to preserve the “Heritage” of the colonial past. The buildings in this area are signed with the period, former use, and architectural style. Many are art deco, dating from the late 20s, or early 30s, such as the Sassoon House lavishly redone (3 years of renovation) by the Fairmont, and its 1906 partner, the former Palace Hotel, now the Swatch Art Palace Hotel (naming rights?). At least one has been restored to its former use, as the headquarters of AIA. Cornelius V. Starr, the founder of the insurance company, had a building on the Bund, and maintained good relations with the Chinese government after 1949, and returned here in the late 1990s. Not many people know (but I do) that the “AIA” building was owned by the North China Daily News, a British newspaper devoted to preserving the colonial way of life, but as I’ve said, I love irony (the most ironic location, perhaps, was when I came in 1990. There were few places where foreigners could buy things, the so called “Friendship Stores,” which used special money—foreign exchange certificates; the biggest was in Shanghai, on the grounds of the former British Consulate).

If you’re a foreigner walking along the Bund, you’re likely to take pictures of yourself facing the Shanghai that people in the 30s, who had spent months at sea, witnessed on their arrival.

If you’re Chinese (or young Americans, like IWU students) you’re likely to be drawn to Pudong, the East side of the Whangpu River, which is the symbol of the new, new, newest China. The Pearl TV tower dominates this new town, which I visited when it was a gleam in a developer’s eye (in 1994 or so). It was rice fields and construction gear, and we went to a construction hut where there was a plan for the financial capital of China, with 3 million people, a major new airport connected to the city by a maglev train, the tallest buildings in the world; I thought, “Fat chance.” If you’ve seen the toilets, you’ll wonder what chance the Chinese have of creating this model city. 12 years later, on the way to Pudong airport, driving past this city of 3 million people to the major new airport watching the maglev train speed by the tallest buildings in the world (including one shaped like a bottle opener), I ate crow before that group of students, warning them not to doubt China’s ability to do whatever China sets out to do.

We got in around noon and had the day free, and, as you can tell, I enjoyed wandering aimlessly in and out of the 1920s and 1930s (the students think that was my youth), occasionally stopping for 2012. We do our tour tomorrow.

Hot, Flat and Crowded in Macau

Macau May 12, 2012

I’m sure Thomas Friedman did not have Macao (as the Portuguese would spell it) in mind when he wrote Hot, Flat and Crowded, but that was certainly an apt description of that Special Economic Region today. Once a sleepy backwater (probably since the Opium War catapulted Hong Kong ahead of it as an entrepot for the China trade, with the possible exception of World War II, when Macao was neutral, thus a magnet for refugees and a haven for spies), the handover in 1999 has given THE gambling spot in East Asia a sharp boost.  The city of 300,000 or so in 1999 now houses over 550,000, with a floating population of 80,000 laborers, 300,000 visitors from the mainland on a weekend (it is THE gambling magnet for a population that loves to gamble), not to mention the ferry boats from Hong Kong that brought us and other throngs to the peninsula. It’s only an hour away, and you get a passport stamp!  Plus, for me and Ruth Ann, there’s a seniors line that is at least fifteen minutes shorter through customs.

 A former Portuguese possession, Macao’s separation from China was by “accident”.  Portuguese sailors (and it’s hard to imagine, standing in Lisbon and looking out at the great unknown ocean) pushed the known (European) world boundaries around the Cape of Good Hope and into Asia, abetted by the Pope’s division of the colonial world between the Spanish and the Portuguese (which made Brazil a Portuguese colony as well).  They landed in Macao in 1517 or so, but a half century later claimed they were “shipwrecked” and eventually got a  foothold that became the base for European trade and missionary expansion.  The great Jesuits passed through Macao in their efforts to penetrate China (we’re likely to see the observatory and the astronomical gifts that won Father Ricci a place in China, having honed his skills in Macao, which had the first Western-style university in Asia). The Portuguese fought off the Dutch in the 17th century, and provided the base for other European traders in the 18th.  The first US ship appeared off Macanese waters in 1786, the beginning of a long history of Sino-American trade.  It was also in Macao that Caleb Cushing, an American diplomat, signed the treaty of Wanghsia in 1844, giving Americans the same rights that the British had won in the Opium War, the so-called unequally treaties that ushered in what the Chinese call “The century of humiliation.”  It was, in fact, in Macao that Chinese commissioner Lin Te-hsiu  burned the opium stored in the colony, triggering the Opium War. The foreigners had, up till then, been permitted to trade only in Canton, living there temporarily during the trading season, then packing up and returning to Macao—until Hong Kong displaced it.

 Macao definitely has a Mediterranean feel, and for those who have followed my blogs, you know that because of my fascination for this pastel-colored community, I had to go to Portugal (well, I wanted to). I found that the pastels were Portuguese: the governor’s office is a coral pink, as is the King’s Palace in Lisbon for example. The egg tart, one of the prime desserts in Portugal, has its counterpart in Macao (and there are some other foods that you find only in Portuguese possessions; many years ago when I stayed in Macao with students, we dined at the former officers’ club—also pink—which had a rather long list of port wines, certainly one of Portugal’s main products).  And I got into Leal Senado, the library cum legislative headquarters, with its blue and white tile garden that could have been in Lisbon or Porto or….

 Although there were few Portuguese in Macao, the Portuguese left other legacies.  Portuguese is one of three official languages in what is now a Special Administrative Region.  As Portugal honors its former colonies in Lisbon (when you’re there, visit the Museum of the Far East), Macao has not turned its back on the Portuguese background.  It plays up the tourist dimension of the historic center, focused on a kilometer- long area from Leal Senado (the main public square with pastel-colored colonial buildings, one of which hosts one of the most interesting McDonalds, another doing the same for Starbucks) to the shell of a 17th century church/fort which was devastated in a fire.  The façade is left, and is one of the most famous non-buildings, I would think, in the world.  The former Church of the Mother of God, it has become known as St. Paul’s ruins, including the remains of that Jesuit college that pioneered high education in Asia, and trained generations of missionaries. In looking at it, I realized why the Jesuits got banned in 1762.  On the top of the building are Chinese dragons.  The Jesuits got caught in several controversies—including the so-called “Rites”, where they accepted into Catholic theology the notion that local practices were not antithetical to Christianity.  Heresy in 1762. In any case, there is a building heritage of churches .  I think our guide noted there were 27 churches and 28 casinos, the latter with far more devotees.  (There’s a lesson in those numbers!).  One nice addition to the Jesuit-built fort (which withstood a Dutch invasion on St. John the Baptist day, making him the patron saint of the city) is the development of a museum that combines history and business and culture.

 One place I got us taken to is the Protestant cemetery, which I learned was maintained by the East India company, one of those links that tie China and India together historically.  The Honourable Company (see John Keay’s book) brought opium from India to China in exchange for teas, silks, pottery, etc.   The cost was sometimes high, as the cemetery gravestones makes clear; death aboard ships in war and peace, in childbirth, from dysentery and plague, storming the heights of the Boca Tigris forts at Canton, etc.

 The main business of Macao, however, is tourism, and as I’ve said, it’s THE gambling spot in a region that loves to gamble.  Until 2002, Macao gambling was the monopoly of Stanley Ho, whose four wives occasionally make the news in their squabbling to divide his wealth (he’s in his 80s).  The “opening” of the gambling trade (that’s supposed to be a pun on the opening of the China trade and the open door policy that it helps to be a Ph.D. to recognize) brought a number of US companies into the picture—Wynn and the Sands, for example, and today the revenues from the casinos in Macao are much higher than those in Las Vegas.  In any case, Mr. Ho built a “Grand Lisboa , a bigger and better version of the “Lisboa” to welcome his new rivals, and we spent about 45 minutes ogling the décor—chandeliers and 4 foot long carved ivory tusks, gold boats, etc.  40% of the revenue is taxed, making Macao one of the most prosperous provinces of China.  The casino was mobbed, but not hot; the streets were hot, flat, and definitely crowded.

I think it’s been Hot, Flat, and Crowded for a long time; I’m convinced that humidity can be more than 100%, but for me, it was also fun!

Eating, shopping, and touring: HK

Our Peak Experience

Everybody loves Hong Kong—and with good reason.  One is the setting, unlike almost any city in the world, with its center on Victoria Harbor which separates Hong Kong island from Kowloon on the mainland.  This is the tourist hub, and the bright lights and shopping meccas that are a second reason that Hong Kong is a popular destination.  That has been so since the 1840s, when, as a result of the Opium War—when the Chinese attempted to interdict (look that word up) the opium trade (from India, which is one connection for the course theme), the British sent in troops.  In 1842, the Treaty of Nanking, ending the Opium War, started what the Chinese call the century of humiliation.

Out of that treaty, the Chinese ceded Hong Kong in perpetuity to the British; two decades later, another war, and another Chinese defeat ceded the Kowloon peninsula to the British.  At the turn of the century, the foreign quest for spheres of influence led to the addition of the New Territories on a 99 year lease as part of the colony of Hong Kong.  It was the end of that lease that prompted Sino-British negotiations that led in 1997 to the return of all of Hong Kong to the Chinese.

We arrived in Hong Kong Thursday around noon, and had much of the afternoon to explore or shop (shopping and eating are the favorite pastimes of most tourists here, and most Hong Kongers, now that I think of it). Some of the students, though, reacted to being up for 36 hours by exploring the sleeping arrangements at our hotel.  For me and Ruth Ann, it was a visit to a tailor we’ve used for years, and it’s always fun to visit him (and come away with some apparel that fits!).

In the evening, my friend Eleanor—whom I met years ago in Viet Nam, and who has been a good friend to me and to IWU students over time—took us to a restaurant for a meal she had ordered.  I told the students we’d probably be taken to a building, go up an elevator, and be in a restaurant where everyone would turn to look at us (because we’d be the only foreigners), and none of the help would speak English (or, because this is Hong Kong, a special administrative region of China, under British common law—not the mainland—not Mandarin, either; they speak Cantonese, a tongue in which I know 2 words—bok choi, a green vegetable, and joe tsang, which is good morning).  What I did not reckon with was that this year, she took us to a wedding hall, where, for a while, we were the only people present.  The meal was as different as could be from Indian, but every bit as sumptuous as our farewell dinner in Bangalore.  We sat around a huge table with a lazy susan, with dish after dish passing in review. Professor Eleanor Zhang (a management professor at  the City University) knows of my fondness for Peking Duck, so that was included, but it was one of about 10 different dishes she had ordered.  I have good memories 24 hours later—though some were off put by the chicken head that was on the plate with the chicken—as I said, that’s how you know it is what it is, and is genuine.  At least they did not bring it live, like they do when you order snake!  Food, as I’m reminded, is incredibly cultural.  I think I was the only one of  our group who had dim sum (egg rolls and dumplings) and congee for breakfast, but our hotel also offered omelets, waffles, cereal, fruit—and, since it was a British colony, roast tomatoes and baked beans.

This morning we took a tour of the city, which meant crossing from Kowloon to Hong Kong side, where we circled past Ocean Park (a pre Disney rival to Disney), viewing some of the mansions  (90% of the population at least live in high rises, about half of them in public housing); land is very expensive in Hong Kong.  Our guide told us that free education is provided only through second year of high school, which is kind of surprising given that Hong Kong has a highly educated population.  On the perimeter of the island, we saw beaches, a few spectacular mansions (if you’re the right age—mine—you may remember “Soldier of Fortune”, a very bad Clark Gable movie, whose saving grace is a mansion we passed and Susan Hayward as Mrs. Hoyt),and Wan Chai, home of the world of Suzy Wong (Hong Kong was pretty sleepy until the “fall of China,” which brought it many Chinese refugees, including Li Ka-shing, who is frequently listed as the world’s richest man, and then the Korean War, which brought a lot of US sailors and foreign aid). It was also China’s trading port to the world, a distinction it is losing for central China to Shanghai, and to an extent for the South to Guangzhou.

I remember when I first came here 20 some years ago, there were still factories in Hong Kong, but today they’ve moved to South China, though many managers still live here.  Ironically, with the handover and the ease of cross border movement, some managers of Hong Kong companies now live on the mainland and commute the hour to Hong Kong because the cost of living is so much less.  We wound up at the Stanley market, which like Hong Kong has transformed from a ramshackle collection of interesting shops, many dealing in Western brands to more of a mall, as Hong Kong has transformed from manufacturing to services (much like Bloomington-Normal, though that took close to a century).

There’s a palpable energy here that is quite distinctive, and a cosmopolitan lifestyle that involves, as I said, shopping and eating for tourists and locals, and hard work, mostly in services, for the 7 million locals.  There is a lot to do here, 24/7. Tonight, for example, Ruth Ann and I had a Korean meal (I love bibimbap), and then I went to the Hong Kong Philharmonic where the centerpiece was a Max Bruch  concerto. I came back via the Star Ferry (which is free to senior citizens) and the metro (half price to those of us older and wiser), a rather nice evening for me. Our students were sampling the nightlife in Hong Kong—sipping it, I should hope, since we have an early morning ferry ride to Macau, which was the last European possession in Asia.

Palaces and Gurus

Palaces and Gurus May 9-11
Today’s long day (8o miles in 4 hours—each way!) helped us understand a little bit more about South India. We’re 1070 miles from New Delhi, near 12 degrees latitude, which demonstrates in part that India is a country with size and variety.
We’re in the state of Karnataka, one of 28 states in India. I’ve been told that the state divisions were based on languages (roughly)—which should give you an idea of how many languages there are in India! 14 or so are “official”, and where they are, Hindi is taught as a second language. Certainly, most educated people (and people in the tourist trade) speak English. Kanada is spoken and written here, eh? I can’t read it, but the script looks different than Hindi (which I also can’t read). Here, the crops are rice, coconuts, and silkworms. The state runs wholesale centers for cocoons (we’ll probably see them somewhere in our trip in China) and coconuts, which we passed on the journey from Bangalore to Mysore. We also passed a number of textile factories, with workers, mostly women, wearing the clothing that they may be making walking to the factories—as typical in India, colorful.
The highlight for me was probably taking students into my world—the world of yoga. I talked with our guide about the possibility of doing yoga in Mysore, because I knew (partly from my trip in January) that the area was a hotbed of yoga instruction, and my instructors back home all knew someone who had become a guru by spending time in Ashtanga Ashrams in Mysore. Fortunately, she was able to tie a yoga class with a lunch visit to a farm run by members one of the smaller communities in India. The yoga master appeared on the porch with mats for each of us, and gave about a 45 minute introduction to yoga moves, breathing, and meditation. Who knows, some students may take it up when they return to IWU. The meal was appropriate to the particular community, which numbers 19,000, has its own dialect and clothing, and lives in the mountains farming—including coffee.
There is substantial tourism in Bangalore/Mysore, mostly domestic, and we encountered it because the schools are out and this is vacation time; much of it centers on 18th century heroes, the Muslim leaders Hyder Ali and Tipu Sultan. Hyder was a soldier in the armies of the Maharajah of Mysore, who overthrew the Maharajah and made himself Sultan. The result was a protracted and bitter series of wars in which Hyder, and later Tipu, enlisted French mercenaries, while the deposed Maharajah brought in British forces from the East India Company (British India proper began in 1857, after what the British suppressed the Sepoy mutiny and abolished the Honourable Company), while local nabobs like the Nizam of Hyderabad switched sides as it suited them (or to whichever paid best). Hyder and Tipu won the first two wars, and became the great hope to block the growing spread of British rule. As I’ve suggested, this was part of the great world wars between France and Britain that culminated at Waterloo (and included our versions, the French and Indian War and the American Revolution). Tipu in particular hated the British so much he composed a diary in Persian in which he dreamed of a victory over the British. When one of his nemeses died in battle, Tipu had a toy built—it was a mechanical tiger that devoured a British soldier. When Tipu died in 1799, betrayed when one of his officials, bribed by the British, opened a passageway and let British troops in, the British supposedly drank on the corpse, toasting, “Death to India.” The tiger-toy now reposes in the Victoria and Albert Museum, while millions of Indians toast Tipu. Ironically, he was defeated by troops led by Lord Cornwallis, fresh from his role at Yorktown. We saw two of his summer palaces, one near Mysore which was occupied by Arthur Wellesley, better known as the Duke of Wellington, who cut his teeth in India before chomping Napoleon; the other was in Bangalore. Both were fine examples of Islamic art, with the arches, open air sections, with some explanations about Tipu and his wars with the British.
The other major attraction of Mysore is the palace, built by the Wodeyar family, the rulers of Mysore whom Hyder Ali had shoved aside. Restored to the throne by the British (whose resident built an equally magnificent colonial building) , the Maharajah has an Indo-Saracen palace which is open to the public. The family lost the privileges in 1947, when the new Indian government stripped the princely states of political power, though leaving them with some privileges, which were further reduced in the 1970s. The Maharajah and his family still live in the palace, but as I said, have opened up large areas to the public, including what used to be the public assembly hall, which in size and decoration rivals palaces in Europe. It Is said that the Maharajah burned down its predecessor in 1897 because he wanted the opportunity to rebuild. It has lots of carved teak features, inlaid gold and silver doors, chandeliers imported from Europe, and a display of possessions that includes an 80 kg gold howda for riding the royal elephant and a 200 kg gold throne.
One of the businesses that has sprung up offers the opportunity to ride elephants around the grounds. Of course, it was something we had to do. I could only imagine going into battle on one of these beasts as we swung and swayed—rather like riding the bus on the 80 mile ride from Mysore to Bangalore. One of the reasons it took 4+ hours was the construction in Bangalore of a metro system. The other was the fact that the highway goes through every town, and to make people slow down, has speed bumps and a series of barriers that you have to dodge around.
We toured Bangalore today after an interesting talk from a real estate agent from Jones Lang, and LaSalle, an American firm based in Chicago that manages corporate headquarters (among other businesses) for companies like Dell. He pointed out that India’s conservative financial system spared it the Western meltdown. Our observations tend to concur. Spending an hour or so on “Commercial Street,” fostered the belief that consumerism is alive and well. So did our dinner at a mall that housed the high end brands.
I’m writing this at 2 am, awaiting our flight to Hong Kong with some regret at leaving India. I’ll miss my dosa breakfasts, but am leaving with both good memories and a belief I did not have years ago of progress. One quick vignette: on the road to the airport, indeed, within the airport, the road had speed bumps and a series of screens to slow down traffic. We could not have had a greater contrast when we arrived early the next day (it’s a 3000 mile trip to Hong Kong from Bangalore) at the Hong Kong airport. Once we got on the bus and zoomed to our hotel in Kowloon, the infrastructure contrast between Hong Kong and India could not have been more apparent.
They say business (if not life) is about relationships, and for the India part of our trip, I’m glad Sambit went to IWU and had me for class, and that I went to India in January. Anup Nair at that time not only became a good friend, but a trusted travel agent, who made for an outstanding visit in India, which is, happily, more than infrastructure!

Business Lore from Bangalore

Doing business internationally May 8
I think we got a pretty good feel today of what it’s like to conduct business internationally. Our wake up call was at 4 am, so that we could be on the bus by 5 am to be at the airport at 6 am to take the 2 ½ hour flight to Bangalore to take a 1+ hour bus ride to Infosys for a tour of the facility and a presentation on the nature of the IT industry in the heartland of the IT industry in India….just like real business people do.
The Infosys campus is one of those “islands of excellence in a sea of chaos” that one reads about in India. Going through security, one enters a campus that now contains 50 buildings, with 25,000 young people (the average age is 26, and the standard deviation appears to be +/- 2). Well-educated and better trained employees (the company hires around 25,000 a year, and offers training for 13,000 at a time on the 100 acre Mysore campus). Although there are 140,000 employees in 64 countries, the bulk of the top-end work, I believe, is done in Mysore. Though Infosys started in Business Process Outsourcing (it used to be call center), it has, like many of the Indian backroom companies, moved up the value chain. The man who spoke to us is part of a project team working with Boeing to develop lighter and fuel efficient airplanes.
The campus is one of the most pleasant places in the work world; as they explained, the facilities are geared toward a younger generation, but the buildings and setting are definitely world class. The company started with 7 men and a total of $250 in Pune (a city north of here), and gravitated to Bangalore because of its reputation as a center of scientific research, partly because in the Raj days it was one of the major air force encampments. That led to aerospace research, which led to (a favorable state government helped), and as a result, most major multinationals, including the Indian ones, have some presence in Bangalore, usually in a gated community, many in the Electronic City (as is Infosys).
When I asked about Corporate Social Responsibility, I got an interesting answer: the company has attempted to make itself sustainable (the recycled river through it is the only place in India I’ve seen where I’d consider canoeing—or even touching!), with green buildings. It has also turned that focus into a for-profit unit, advising other countries on how they might handle the challenges of limited resources on a frail planet.
Perhaps the most impressive feature was not just the rich culture we saw, but the confidence Infosys employees have in the future of India and their company. The company pioneered the Global Delivery Model, which was based on taking work to the location where it could be done best—most cheaply and most efficiently, and has become a 10$ b company. One of the founders of the company, Nandan Nilekani, you may recall from Friedman, The World is Flat. It was in Nilekani’s office that Friedman developed the idea that the world could be flat. It’s also a measure of the “India Way” that Nilekani, retired from the company, is heading up India’s efforts to create a unique identification system.
Although it was nice to have the rigor of doing international business (flying somewhere and getting off the plane and doing business), it was nice when we got the hotel around 5 p.m. and were able to have the night off. As I tell my students, they ought to admire people who do this regularly. Now they know why.

Doing business internationally

I think we got a pretty good feel today of what it’s like to conduct business internationally.  Our wake up call was at 4 am, so that we could be on the bus by 5 am to be at the airport at 6 am to take the 2 ½ hour flight to Bangalore to take a 1+ hour bus ride to Infosys for a tour of the facility and a presentation on the nature of the IT industry in the heartland of the IT industry in India….just like real business people do.

The Infosys campus is one of those “islands of excellence in a sea of chaos” that one reads about in India.  Going through security, one enters a campus that now contains 50 buildings, with 25,000 young people (the average age is 26, and the standard deviation appears to be +/- 2). Well-educated and better trained employees (the company hires  around 25,000 a year, and offers training for 13,000 at a time on the 100 acre Mysore campus).  Although there are 140,000 employees in 64 countries, the bulk of the top-end work, I believe, is done in Mysore.  Though Infosys started in Business Process Outsourcing (it used to be call center), it has, like many of the Indian backroom companies, moved up the value chain. The man who spoke to us is part of a project team working with Boeing to develop lighter and fuel efficient airplanes.

The campus is one of the most pleasant places in the work world; as they explained, the facilities are geared toward a younger generation, but the buildings and setting are definitely world class.  The company started with 7 men and a total of $250 in Pune (a city north of here), and gravitated to Bangalore because of its reputation as a center of scientific research, partly because in the Raj days it was one of the major air force encampments.  That led to aerospace research, which led to (a favorable state government helped), and as a result, most major multinationals, including the Indian ones, have some presence in Bangalore, usually in a gated community, many in the Electronic City (as is Infosys).

When I asked about Corporate Social Responsibility, I got an interesting answer: the company has attempted to make itself sustainable (the recycled river through it is the only place in India I’ve seen where I’d consider canoeing—or even touching!), with green buildings.  It has also turned that focus into a for-profit unit, advising other countries on how they might handle the challenges of limited resources on a frail planet.

Perhaps the most impressive feature was not just the rich culture we saw, but the confidence Infosys employees have in the future of India and their company.  The company pioneered the Global Delivery Model, which was based on taking work to the location where it could be done best—most cheaply and most efficiently, and has become a 10$ b company. One of the founders of the company, Nandan Nilekani, you may recall from Friedman, The World is Flat.  It was in Nilekani’s office that Friedman developed the idea that the world could be flat.  It’s also a measure of the “India Way” that Nilekani, retired from the company, is heading up India’s efforts to create a unique identification system.

Although it was nice to have the rigor of doing international business (flying somewhere and getting off the plane and doing business), it was nice when we got the hotel around 5 p.m. and were able to have the night off. As I tell my students, they ought to admire people who do this regularly.  Now they know why.

Don’t you wish you could have a day like this one for YOUR birthday?

Don’t you wish You could have a 21st Birthday like this?
May 6 in Delhi
I had always wondered why I seemed to know more about Muslim or British India than Hindu India, and today provided a good answer based on my trips to India, two of which had been exclusively to New Delhi; the answer was provided by the Qutub Minar, a major symbol of the city. This 180+ foot stone tower was built in 1193, by the Mamaluk King who put an end to Hindu rule, celebrating his victory. That battle essentially marked the end of Hindu domination in the Delhi area, and began the 600 or so rule by Muslims. It seemed ironic to me that the tower was chosen as a symbol of a predominantly (now) Hindu dominated country, when the complex, which was the palace and tomb of the Muslim conqueror not only celebrates his victory, but does so using stones extracted from a previous Hindu temple on the site. It also includes the so called Iron Pillar, which commemorates a previous Hindu chieftain’s victory, centuries earlier.
To answer my own question, I can only point to the fact that Delhi, in particular, and much of India in general, especially northern India, has not been Hindu for the past millennium—until, that is, the emergence of an independent India in 1947. Ironically (and I do love irony), I read somewhere that the British created a Muslim-dominant Pakistan (which then was East and West) surrounding India in the belief that the Muslims would be helpful in minimizing Hindu nationalism and keep the Hindus in check, culminating a very typical British imperial policy of divide and rule that allowed a handful of Englishmen to rule the country for most of 200 plus years.
Most of the memorable tourist spots, as a consequence, are either British or Muslim, and we saw several of them today. The British laid out New Delhi, which may account for the broad streets, tree lined, roundabouts, and bungalows that once housed colonial officials, and today house government agencies. Two British architects designed the parliament buildings (one was a House of Lords in the old days; today it contains a number of very famous Indians, not necessarily politicians), They also built the India Gate to commemorate the move of the capital to New Delhi from Calcutta in 1931, though today it is a memorial to the 90,000 Indian soldiers who died defending the Empire (the Japanese did recruit an Indian National Army to fight for independence from Britain, but that’s a story left to a wonderful book on Churchill and Gandhi), and so on.
The other major stamp of the city, is from the Mamaluk through the Moghuls, a series of Muslim rulers from 1193 until the Last Mughal in 1857, when Britain finally became, especially for foreign policy, the ruler of India. I had a real treat this morning when I woke up early. I had heard Lodi Garden, about half a mile from here, was worth a visit, but I had no idea why. Turns out, it was the tomb (and I suspect the palace also) of the Lodi dynasty, which ruled the area briefly in the 15th century. In addition to Sikandar Lodi’s mausoleum, there were two or three other magnificent buildings, including mosques, and, as promised, a garden. Not just a garden with parakeets—a butterfly garden, a herbal garden, and, best of all, real people doing real things—in other words, it was tourist free.

That was not true of Old Delhi, started by Shah Jahan, he of the Taj fame, who moved the capital from Agra to Delhi, and built two landmarks. One

Appropriate attire was necessary in the Masjid

was the Red Fort, a twin more or less to the Red Fort in Agra. The other was the Jama Masjid, the Friday Mosque that is one of the largest in India. Built in the familiar red sandstone characteristic of the period and the place, it still encompasses the bazaar between it and the Red Fort that was a characteristic of the Moghul city. It was mobbed with people shopping for clothing and shoes, which we were able to observe from a safe distance in our cyclos, a bicycle driven rickshaw that I am sure we will see again (in Beijing for sure). I think during the week it may be a more general market. I remember when I was there a section of Tibetan refugees, selling the goods more appropriate to Tibet (or as the British called it in the last century, Thibet). The one thing I learned this time (and it surprised me), is that the British closed the mosque in 1857, following a rather brutal suppression of the Sepoys; it reopened after Independence.

We also visited a Hindu temple, the largest mandir in the world (I think that means temple). It opened in the last few years, the project of one of the sects of Hinduism. It is certainly an impressive building and one of our students said that it attracts a million guests on Sunday. It seemed like they were all there this Sunday, since it took us ½ hour to clear security. I was reminiscing with our students about my trip to the Vatican last summer, where the lines were as long, and the movement as slow. When we finally got into the temple, it seemed the analogy was even better; it was as big and as decorated as St. Peter’s. It was white marble, and enough gold to qualify (in my mind anyway), as baroque.
I just got back from a memorable birthday party for one of our students, Katie Bauer. It is her 21st, and I’m certain she’ll remember it! Don’t you wish you could have a day like this one for YOUR birthday?

The Taj Mahal

The Taj Mahal May 5, 2012
I think digital cameras were made for days like today, days when you would never have had enough rolls of film to capture the great sites of the world—and we saw three today, all associated with the Moghul dynasty, seven rulers that brought much of India, especially northern India, under the rule of this Persian-based Islamic group that brought India to the height of fame and wealth, only to become shadow rulers under the British, who abolished the dynasty following what the British call the “Sepoy Rebellion” and the Indians call the first war for Indian Independence in 1857. The seventh and last Mughal emperor (see the book by William Dalrymple—any of his on India, in fact), more a poet than a ruler, died, exiled to the Indian then-province of Burma, his offspring murdered to prevent a successor.
The heyday of monuments were the three who ruled in the 16th and 17th centuries—Akbar (the Great; Akbar means the Great. It’s part of Muslim prayers), Jahangir, and Shah Jahan, who built the Taj.
Akbar moved the capital to Agra, and built the red fort that has housed successive armies, culminating in the Indian army barracks that are there today. He has probably the best reputation because, among other things, he tried to resolve the multi-religion problem that still troubles India today. He synthesized the main religions and created his own, attempting to facilitate discussion among his subjects—including his three wives. One Muslim, one Hindu, and one Christian—and our astounded guide said, “He did not make them change their names or their religion”. The red fort was his palace, and remained at least one of them during the Moghul Empire, but Akbar to build a new capital, Fatepur Sikri, about 20 miles away. Sparing no expense, he moved everyone to the new city, which had massive water problems, but was abandoned largely because of pressures on the Moghul state from the Northeast (read Persia/Afghanistan). The Persians would eventually sack the Red Fort in Delhi, and take the famed Peacock throne away. The stone buildings of Fatepur Sikri remain, architecturally wondrous, and a visual treat.
The Jewel in the Crown, though, is the Taj Mahal. It’s the fourth time I’ve seen it, and I feel truly blessed to have seen it at least once. Marketers usually overhype something, but as magnificent as the prose for it is, it’s even better in person The scale (about 300 feet high) and the setting (stressing symmetry) and the marble work, the paired mosque like buildings that surround it, its prominence on the river bank—are impossible to capture even if you have a 16 gigabite card, but at least with a digital camera you can keep taking pictures!
Shah Jahan, you may know, built the Taj in memory of his favorite wife, who died giving birth to their 14th child at the age of 39. The ruler himself spent 22 years and used 20,000 artisans to construct the tomb. Ironically, he pondered building a black marble tomb for himself, and actually started to raise taxes to start the construction, but the taxes were so onerous that his son, Aurangzeb, overthrew his dad, and imprisoned him in the Red Fort in a room with a beautiful view of the Taj.
Agra is only about 120 miles from New Delhi, but getting there and back demonstrates one of the major challenges of India— our guide mentioned, distribution. The 615 am Shabadti express was smooth, on time, complete with a free newspaper and a (mediocre) meal, and took two hours. It’s no wonder that India Railways employs 1% of the workforce.
Coming home, however, was a different story. It took us about 5 hours, which included a dinner, and a 20 minute breakdown in Delhi, which ended with cars taking us back to the hotel around 10 o’clock, on a spectacular day that began at 5 a.m.
The point of the 3 edifices might well be a reminder that, “What was, isn’t, and what is, might not be.” Isn’t that a nice yoga-like note to end this long day on!

The Time Machine in Delhi

On a time machine in Delhi May 4, 2012
If you want to go skiing in the mountains, I’ve always felt, or be at the beach the same day, move to Los Angeles.
India offers not only the chance to travel high (the Himalayas) or in the Ocean, but also backward or forward in time. Today we were somewhere this side of 1500 and the other side of 2012, the same day, at two locations almost within sight of each other.
The pre-1600 was at a village that had been bypassed by the rapid sprawl of Delhi, whose population has increased over 15 X since independence in 1947. Somewhere between 300 and 800 families live in the village we visited; with family size in the rural areas swelled by 5-7 children (there was a prominent case in the paper today about a man who divorced his wife because she would not use birth control devices on their honeymoon!), that meant 1500 to 5600 people live in the village. Our tour company took us there because the founder, Anup, decided his company had to exercise corporate social responsibility. With financial help from one of his tour groups, Anup’s company adopted the village and tried to make significant contributions in health care. The village had no doctor, no clinic; initially, Anup fostered diagnostic health care, checkups, etc., but realized that there was no commitment from the village to support the program if his company were unable to continue the work.
By partnering with a nonprofit, the travel company fostered a community group that took responsibility for building and maintaining a hospital, with financial help from the travel agency, the not for profit, the government and the town itself. Anup setting up the group, which is building a clinic, hiring professional staff (a doctor comes from nearby Gurgaon, the IT satellite village near Delhi 3 hours a day),etc.
That’s the background. A sense of corporate social responsibility led his small company to try to make a dent in the village, which has increasingly been drawn into the vortex of suburban New Delhi as the voracious growth of the city has sprawled and overcome the countryside.
We turned off a recently built four lane expressway onto what in effect was an alleyway, and proceeded about two miles, getting further and further from the 21st century. “We’re not in Kansas anymore,” deadpanned one of the students when a camel sauntered by and everyone rushed over to take pictures. Nor would you see in Kansas the main source of fuel—cow manure, drying on the top of walls, then piled in a picturesque way for further use later.
We went to the “hospital” and spoke with the doctor and nurse, both of whom come from the nearby Gurgaon. The hospital was rejoicing—electricity was about to be joined to the new, four room building, and so the office person could use a computer to track patients, etc. Bear in mind we were not far from the world class Apollo group, which attracts 20 million people from 55 countries for medical care. I think the doctor told us that a doctor visit was 35 rupees—roughly 75 cents.
Next door was a government sponsored day-care service (some of the villagers I suspect make the commute to Delhi to work) , where children can learn the two most common languages (of the 18 or so official languages)—Hindi and English—at least those were the charts on the wall. More poignant was the government school, which had a lot of young people (schooling is free till sixth grade), but Anup said the teachers tend to show up only on pay day; one of the consequences of this unofficial elected board that is building the hospital is the activism it has generated, and the villagers have begun to pressure the government to monitor education and actually supply funds for the kindergarten, etc. He was proud of the empowerment he’s seen since his company adopted a small role in a large puzzle: where to start and how to affect lasting change.
One of the most poignant stops on the tour was a “commons” that until recently had been for the common people—the untouchables. Though Gandhiji, the father of modern India, had sought to batter the caste system that locked people and their descendants into one class—and I think it is technically illegal to discriminate based on caste—old habits die hard. The untouchables until recently could draw water only from their well. You aren’t old enough to remember it, but when I went to Florida in the early 1950s, we had a similar system in the United States for water fountains and toilets, based on race.
At least in the United States, the dream of rising above caste and class was possible. The iron clad system may be changing in rural India. School stopped and we became the main source of “education” in the village, as everyone followed us around. One of the local teenagers told one of our students that his ambition was to move to New York and become famous. That’s change!
We went back to “an island of excellence in a sea of chaos,” Gurgaon and the 21st century IT bastion, less than an hour and several centuries away from the village in a much more somber mood. 65% of India is rural, and what we saw might be more typical than we’d like to believe. Someone told me that over 35 million Indians live on 35 rupees a day.
The contrasts at IBM were quite stark. This global multinational, with its $100 billion in revenues, is housed in a modern office building surrounded by other office buildings. We went to a call center, but we were hosted by the director of HR for India (a relative of one of our IWU alums who set up the appointment). It may be because he was the director of HR, but most of what he told us was about the results of the $5 billion in research that IBM devotes to research, and the need for innovation and invention in the world today. IBM, which used to make machines, now derives 40% of its income from the provision of services, while Lenovo makes the machines that were once synonymous with the company (IBM invented the laptop), One of the projects is a joint venture with the National Geographic Society to genetically map everyone, and to use technology to provide solutions to the problems we saw not too much earlier and not too far away. And some of your customer service calls, in the meantime, might be answered in the call center located in the building we were in.
At dinner, one of my students from the early 1990s joined us. He’s now head of the Indian operations of a Chicago-based consulting company that among other things managed the New Delhi airport construction in record time, replacing one that was memorable to me for recreating the 1940sl! The last time I visited Sambit was in London in 2001 on a May term trip that took us around the world, but he still remembers IWU and Fred Hoyt fondly. One of his best summers, he told me, was when he worked in Colorado. He said he came from a poor background in West Bengal (one of the poorest states in India) and could not afford the fare to go West. He piggybacked with Troop 19 on our trip to Philmont, and helped sing our troop song at 13,000 feet. I still have the picture, at least in my mind. He also reminded me that he had been hungry and without money one day, and I had loaned him $20. I guess I also practiced corporate social responsibility, and was satisfied that somewhere along the way I had made a difference! The help he gave us here (he was responsible for the factory visit yesterday)—and his success—are certainly payment in full. Today, he’s head of Indian operations, and will take over China in a few months. He and his wife live in a gated community, his two children go to the American school, and he has 20 servants, including two chauffeurs. It is possible…
We are leaving for the Taj Mahal, which, at least for me, defines that Island of Excellence, at least under the Mughal Empire. Sometimes it’s good to go backwards in time! Even at 5 am when we’re leaving our hotel for the fast train to Agra….

Where are we? Oh, in New Delhi

May 3, 2012
New Delhi
While it seems as though we’ve been in New Delhi since the beginning of time, I think that impression might come from having arrived this morning around 1 am, following an 8 hour flight to London that gained 6 hours on the clock, a less than 3 hour layover at Heathrow Airport in London (where, fortunately, we did not have the three hour waits at security that were featured on Monday evening’s news, but did have to navigate the tube from terminal 3 (American Airlines)to British Airways in terminal 5), and then another 7 hour flight gaining another 4 ½ hours to the new airport in New Delhi.
Anyway, our day began around 7 hours later, with the usual outstanding Asian breakfast; for me it was lots of fruit, good Masala chai, and dosa—a wonderful pancake type stuffed with spicy potatoes. For others, it could have been waffles, egg omelets, toast, cereal—etc. But it should be no surprise. We are in India at one of the hotel chains managed by the Tata group, India’s largest business (and one of the best); my guide from January, whose agency arranged our India trip, joined us for dinner, where he noted that Tata announced it is developing a car that can run on water! I sometimes think that the guru of the group, Ratan Tata, walks on the stuff!)
It was obvious on our trips around New Delhi that Indians had been working on one of the main challenges it faces, infrastructure, since my last visit here 5 years ago. Simply put, one of the biggest economic differences between India and China was in transportation and especially roads. New Delhi, the fifth city to emerge in the area, had somewhat of an advantage because it was built by the British early in the 20th century to accommodate the political functions as capital of British India. That means wide, leafy streets, cantonments and large colonial, magisterial buildings, roundabouts (to my horror; I am so glad someone else is driving!). What has changed since the Raj moved from Calcutta in 1931 is the addition of people and cars. Delhi is now more than 15 times the size it had in 1947, and the number of vehicles has escalated even more. Since my last visit (I understand largely as a result of the Asian games a few years ago), there are now major toll roads and the world’s largest metro (subway) system (I think the fares are really cheap; a tourist day pass is less than $2). I understand that the government will be opening a 12 lane highway to Agra, but that will come next year. It was 12 lanes last time I was on it, but only four of those were ‘roads’ ; the rest were cars, trucks, and creatures (camels, oxen, horses, and even a dancing bear) creating the additional lanes!
We had three visits to businesses. One was our lunch stop—at a business you might have heard of—McDonald’s, partly because we needed to eat somewhere, and I knew we were going to have a spectacular dinner that night (at a restaurant designed by a fashion designer, and it showed). I also wanted students to see what adaptations a global corporation, one best known (and sometimes reviled, as in “the McDonaldization of the world”) had to make to adapt to Indian tastes. One adaptation occurred when the company came to India, where the Hindu majority (75% of the population) does not eat beef, the cow being sacred (and that’s another thing I’ve noticed here—a lot fewer cows roaming the streets). When I was here in 2001, we stopped at McD’s and had a “Maharajah Mac” that featured lamb. About 5 years ago, in response to an animal rights attack, the company abandoned lamb for chicken. So we had, at the recommendation of our IWU student who is Indian, variants of the spicy chicken that is the featured meat. And it was spicy!

The second visit was to a company named Britannia (how’s that for indicating India’s heritage as a country which had been ruled–certainly in

Thanks for the biscuits!

terms of its foreign policy–by the British, who linked together British ruled India as well as Pakistan and Bangladesh and Burma with states run by maharajas and sultans, depending on whether Hindu or Muslim) into the “Jewel in the Crown”). The conglomerate, which also owns an airlines, has a major share of the biscuit (again, a British term—for cookie) market in India. We visited a factory, which for many of our students was their first exposure to any manufacturing facility. The 800 employees make several lines for north India, which the company trucks take to 14 warehouses for further distribution to the variety of retailers; India is, by and large a country of small businesses. Laws have blocked the emergence of multi-brand stores, a synonym for Walmarts or Carrefours (French) or Metros (German) or Tescos (British) or Lottes (Korean) or Mitsui (Japanese), so common elsewhere. When I asked students what they saw, they remarked on how labor based the production was. Telling for me was “quality control”—where men (the facility was mostly male) stood looking for the ‘non acceptable’ cookies—whether because of shape or shade or size or broken—and physically pulled them from the line. Men physically put the cookies in sleeves and packages, then put the packages into boxes for reshipping. The factory manager told us—and this is typical of what I’ve seen of manufacturing in India—that ¾ of his employees are contract labor, who are seasonal workers, going back to their villages when not needed. Though the manager assured us that the contractors get the same benefits as the regular employees, they do give some flexibility to management in a system that has been working to become more “free trade” since 1991, when the License Raj—very government controlled or regulated—system collapsed. The company practices “kaizen”, a Japanese process which encourages employees to make continuous improvements, sort of a “suggestion box”, but routinized; throughout the factory, we saw pictures posted of the changes that indicated Japanese manufacturing practices are world class. One other corporate initiative I saw—and questioned—was to go international and reposition cookies from baked goods to healthy snacks. The cookies are already exported, mostly—and this is typical for Indian companies—to the Middle East and nearby SE Asian countries. The health is partly aspirational, and partly new ingredients. I am munching on fiber cookies as I type.

The other business visit was to the Apollo Group, a private 54 hospital chain (India and Middle East again) with 2200 pharmacies (a new one opens every few hours), which has a hand in education of medical personnel as well. Many of its patients are foreigners, as part of what could be called medical tourism—people who come for surgery (over 10 major operations per day) and stay for a tour of the Taj Mahal when they recover—at bargain prices. The one operation that sticks in my mind was heart bypass, which might be $150,000 elsewhere, but is around $7, 500 in India. Our guide told us that many middle-class Indians use the doctors for diagnosis and consultation, then maybe wait for the free health care at government-run hospitals. Incidentally, the $7500 includes amenities such as pickup at the hospital and a translator. The suites we saw have microwaves in a separate room for family members….
If you think low labor costs keep manufactured prices low, I went into a shoe shop nearby which custom made shoes. I don’t have any, and asked, “out of curiosity”, how much would a pair cost. $500, he said. “My curiosity is satisfied,” I said.