Today's Notables

Shanghai Business Travel Log (Part 2)

June 2002
Hisashi Furuichi
President and C.E.O.

The following morning after my arrival, I was picked up to begin introductions and tour the plant. The busy streets were almost unbelievable from the previous evening. The street was filled with activity where it was only just the person who picked me up the previous night. The driver was young and even more so, drove with equal youthful vigor. Whatever the case, vehicles have priority. Pedestrians, bikes, motorcycles and vehicles all travel on the same street, crossing every which way. Cars, by virtue of size only, get the right-of-way and if a pedestrian tries to cross at the wrong time, they are often met with a loud honk and a yelling driver: "Get the heck out of my way." People even cross freeways, often causing accidents here and there.

Everything I saw in the streets was new and I kept the person accompanying me busy with questions. One of the first things I noticed were the cars. Most were Volkswagons. It seemed like about 70% of passenger cars were Volkswagon Santanas with the rest, Passats or Audis. There were very few vehicles made by Chinese companies so there was very little variety in vehicles on the road. Although I saw a few imports, import duties end up doubling what they cost in Japan, putting it out of the hands of the average person. Recently Taiwanese companies (they often get preferential treatment) have begun to make inroads into China. Most of the people driving a Mercedes Benz or Toyota Celsior were Taiwanese. At twice the Japanese price tag, the Celsior runs about 16 mil yen. If you can buy a Benz S Class in China, you could buy a Rolls in Japan. Even still, vehicles (other than those used for commercial purposes) are becoming economically within the reach of the normal person, naturally causing an increase in the number vehicles on the road and the congestion that goes along with it.

There are 18 golf courses around Shanghai. At an average membership of about 1 mil to 1.5 mil yen, golf is not a sport that is played much at all. In fact, taxi drivers often ask questions of passengers with golf bags, because it is such a rarity.

Chinese currency is the yuan that converts to 16 yen, but 1 yuan will get you about the same thing as 100 yen. In that case, one would think everything is very cheap, but that is not necessarily the case. Even normal things other than luxury items like automobiles and golf memberships, that you would think would be reasonable, are exorbidant. For example, an average condominium in a new, 3-story building sells for 7 mil to 10 mil yen. Even a fairly good size condominium at 150 sq. meters, it is still expensive. In smaller towns in the US, you can buy a 1500 sq ft. used house for around 10 mil yen. Something that size in Shanghai seems high at 7 mil yen. You can't own the land either. It reverts back after about 30 years like land in Japan.

The average entry-level salary for a college graduate is only 20,000 yen. Unless you are in a computer-related field such as systems engineering, which generally is higher paying because of the demands of the fast growing economy, salaries are not that good. People also have a tendency to job hop as opposed to staying a long time at one company, to try to get a better salary and working conditions. Therefore, its difficult to determine what an average salary is because even within the same company, it is highly dependent on the individual.

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