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The effect of new media

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Yesterday was a special day in modern China’s history. This is a time the leaders don’t want to talk about, and generation Y (young people born after 1980s) don’t know much about. I was a high school senior at the time, and we worried we would get into a sort of cultural revolution considering chaotic situation at that time. All right, I don’t want to get into the politics and the details of the event. All I want to say is I have lots of sympathy to the people lost loved ones in the event, and I was pleased to see the positive development in our country in last 20 years.

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What Wangshi and KFC dont know

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We all know the terrible earthquake happened in China, and the Chinese goverment and people are doing the best helping the survivors. There are many many heart touching stories since May 12 when the quake hit. NPR Melissa Block and Robert Siegal (read their Chengdu diary) did a good job from a foreign journalist perspective.

Wang Lao Ji tea drink pic

But I also noticed it is not free of controversies in this all out effort to save lives and help the needy. Notably, Wang Shi (王石), the chairman of Vanke (largest home builder in China), is inadvertly got into this “donation gate”.

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Wang Shi spoke about housing price

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Q&A about housing price in China, by Vanke (000002.SZ) Chairman Wang Shi. He wrote those Q&A in his own blog.

I put it together here because it’s a bit hard to read 7 articles separately. I left out couple tables because it’s hard to paste.

I’m interested in the Chinese housing for two reasons:
1) My wife and I are thinking about work and live in China in the future.
2) Like the Chinese stock market, the China housing market is also very interesting. I think there is a lot to learn from the leader like Vanke (how they got here, which direction are they going), either from business or social point of the view.

Q7 问:高档住宅供应少,调整的可能性不高,不是吗?

Q6 问:工厂化生产的住宅更贵,性价比并不高,您怎么看?

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Sohu and Chinese Internet Companies

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The other day I saw Charles Zhang Chaoyang on the “Boss town”, No. 1 Caijing’s (China-CBN) talk show between CEO and guest commentators. This reminded me that Chinese Internet companies are coming of age. Two interesting stories Charles told on the show:

1) Two MIT professors are the earliest investors for Sohu, they put in $ 75,000 each, and it’s worth $30 mil later. Charles is a graduate from MIT. Obviously he knows how to talk to his professor.

2) He went to New York to talk to potential investors in 1996. He wasn’t successful; and found a phone booth calling his lawyer (in crying tone). He had to insert coins to keep the line alive. People waited behind him became impatient. At that time cell phone is still rare in the US.

Keso had a good article about the current status of Chinese Internet companies.

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Wang Shi and Vanke

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Among Chinese CEOs, I think Wang Shi is real good. I read his book “Road and Dream” lately. Very impressive. Consider what he and his team has done in last 20 years: from nowhere to No. 1 residential real estate developer in China; more importantly, they create a “Vanke” community, the kind of community Chinese middle class are enjoying.


He talked many things in that book, some of the things I liked:

1) Don’t seek abnormal profit margin: he said Vanke will only do the project with less than 25% profit margin. More recently he is talking about the bubble in Chinese real estate market. Will other real estate company’ chairman say that? Unlikely.

2) Organization and efficient: as a company grows, it will usually become less efficent. The cost of management rises. If a company does not pay attention to this, eventually its internal cost will exceed the money it could make. In other words, it will no longer be profitabble. How to stay nimble as company growing big is very important.

Wang Shi Vanke

Interestingly, Wang Shi’s wife got into the “stock insider sell” controversy lately. You know what did Wang Shi do? He returned the profit from the stock sell to the company.

From management point of view, Vanke is solid because it already has a team of professional managers. Mr. Wang gave up day to day operations and CEO title to someone else, and is enjoying “mount climbing”, partitipating “Boss town”, giving speeches, etc.