David's Big Adventure in China

In my last post I said I didn’t want to go back to a traditional job. Well it looks like I will be doing just that. Although, maybe it’s not entirely a traditional job. I have accepted a position as an independent contractor to develop the accounting and financial reporting systems for a JV (joint venture) between an American company (M2P2 Inc.) and a Chinese company (AgFeed Inc. listed on NASDAQ as FEED). I will start as soon as the school semester is over. I will continue to live and work in Nanning with some travel to other places in China and the states. The initial agreement will be for 1 year. The strategy of the JV is to build American style pig farms in China with American style management systems to improve the productivity of pork production here. The productivity of the farms here is significantly lower than in the states. That is true for most agriculture industries here. Pork is the primary meat for Chinese so the pork market here is many times that of the states. I will still travel to the states in July but some aspects of my previous plans will change. They need me to start work asap so I will cancel my Peru trip and perhaps also my Florida trip.

Children’s Day was last week here and I happened upon a Children’s Day presentation at the auditorium on campus. I quickly snapped some pictures inside and outside the auditorium. I didn’t want to stay long inside as it was about 90 degrees F outside and with no a/c and about 500 people inside it had to be close to 100 inside. I have posted the pictures for your enjoyment. Click “Pictures!” under the heading “My Links” on the right hand side to see them.

Factory worker dissatisfaction has been a big topic in the news here recently. There have been more than a dozen suicides at a large factory complex in Shenzhen owned by the Taiwan company called Foxconn. The workers have been jumping off the top of the tall dormitory buildings. The workers work 10 to 12 hour days, 6 or 7 days a week in buildings where the temperatures can reach 100 degrees and the management style is militaristic. There are more than 100,000 workers at one factory and Foxconn has over 300,000 workers in Shenzhen (a city next to Hong Kong) that assemble i-phones, i-pads, many famous brand computers and similar products. The average pay for the assembly workers there is less than $300 per month even after a recent 30% pay increase. The company does provide dormitories (very basic living conditions) and food for free but fines the employees if they don’t eat all their food. Why do the employees stay there? Because it’s the best option they have for making money and hundreds of people line up every day hoping to get a job there.

There have also been strikes at some of the auto industry factories here demanding better pay and working conditions. Strikes are technically illegal here and there are reports of union members fighting with the workers over the strikes. Union representatives here really work more closely with the management and the government to keep harmony and try to prevent workers from striking. There have also been reports that censors have prevented reporting of these strikes. The strikers have been successful in getting wage increases of 20% to 35% and their pay is similar to that at Foxconn. Why does this matter to you? Expect to pay more for Chinese made goods as the costs are increasing. And that’s before the much anticipated rising value of the Chinese currency.