polymorphism

When I was a student in China, I rode the train every year for this or that reason. Now it has become a rare experience. The last time I took a train was in Italy. I walked into the rail station, easily and quickly checked in, and saw my train quietly waiting there. The train looked like an old and reliable friend to me. It’s going to take me to a fun place far away.

We mostly travel by car, by air, or by train. I like them all. They all have their advantages. Traveling by train is a unique and comfortable experience. No harsh security checks. You don’t have to get to the rail station two hours before the departure time. Trains are mostly on time. Hopping on it one minute before it leaves is just fine. You don’t have to turn off your cell phone when the train is leaving or approaching a station. Carriages are much more spacious than planes. Your luggage is with you. You can get your belongings when you need them. No lost luggage. Trains slides on their rails, smoothly and quietly. When the train stops and rests at a small station for a while, you can take the time to explore the environment and people. Traveling by train is easy, because it’s natural.

Trains are no longer the old fashion trains I used to see. On Dec 26, 2009, the world’s fastest train service started operation between Wuhan and Guangzhou. It finished 1,100 kilometers (684 miles) within three hours. The average speed of the train is 350 km per hour, with a maximum speed of 394.2 km per hour. The speed described by passengers was “like flying over the ground.” It’s a significant increase in speed compared to the world’s existing railways. The average speed of high speed railways in Japan is 243 kph, 232 kph in Germany, and 277 kph in France. In a TV news program, to demonstrate how smooth the train is, the correspondent put a cigarette upright on the table when the train was running. The cigarette didn’t move a bit.

However, high speed train travel, in many cases, is not economically feasible. Ticket price is the major complaint from the public about the Wuhan-Guangzhou rail line. The lowest fare is 490 yuan ($72), while the airline price for the same journey starts from 250 yuan ($37). There will predictably be more direct competition between airlines and railways. It doesn’t seem to be an uncommon problem of rail lines. For example, it’s cheaper to take a plane than a Eurostar train between Paris and London. However, travelers may choose to take the train for a combination of many reasons. For example, rail stations, unlike airports, can be located in the city’s central area. It can save overall travel time.

The advantages of high speed rail over road travel and air travel are more than that. Travel experience is an important factor, as I mentioned earlier. Trains also consume less fuel per passenger per kilometer. And compared to air travel, rail travel is much less affected by severe weather conditions such as heavy snow, fog, and storms.

The Wuhan-Guangzhou railway is only a small part of China’s ambitious plan. China already has the world’s first operational maglev (magnetic levitation) train service that was inaugurated in 2002. By 2012, a 13,000-kilometer high speed rail network will be completed. That’s more than half of all high speed lines currently on the planet. The total construction cost of the rail system is $300 billion. By 2020, China will have the largest and fastest railway network in the world.

Can we have high speed railways in the U.S.? It’s a complicated matter. The U.S. mainly invested on highways and airports, for good reasons. A big difference between North America and Europe and Asia is population density. Railways are more competitive in areas of higher population density. And railways work better with connections to other mass transit system. Our public transportation system isn’t as extensive as other developed countries’.

Suppose we have a rail line between Madison and Chicago which takes only half an hour for the trip. No taking shoes off at security check, no turning off cell phones, no seat belts, no lost baggage. It sounds very attractive, but we have to take everything into account. Because population density is relatively low and places are sparsely located, trains, buses and metro lines can’t conveniently carry me from where I live to the places I go. I would drive to the rail station where I would pay for a parking fee. When I arrive in Chicago, I would rent a car (and pay a rental fee, of course) and then drive to the places I want to visit. On the other hand, if I choose to drive from Madison to Chicago by myself. It takes longer but costs much less and is convenient.

Having said my concerns, I see many potentials of a high speed rail system in the U.S. Whether the system turns out to be a success or a failure depends on how it’s designed, implemented and operated. I dream to have a modern rail station in our city. That is a high speed future I’m looking forward to.

Factories are closing down and moving to new locations due to rising wages and strict labor laws. Unemployed workers are hiring lawyers to sue their former bosses… Does it sound all familiar? This new is not from America, however, but from China.

Outsourcing, off-shoring, and consequent job losses have been a key political topic this election year. Should Americans blame globalization or countries like China and India? The answer is not within the boundary of the U.S. Even though China is supposed to be the destination of manufacturers, the industrial migration can happen everywhere.

Guangdong province has been a front runner in manufacturing since China’s economic reform. But this year, media reported unusual high factory closings in the Pearl River Delta of Guangdong. According to Federation of Hong Kong Industries, 10% of an estimated 60,000 to 70,000 Hong Kong-run factories in this region will close this year.

The change already started occurring in the past few years. Starting in 2002, labor intensive industries, including clothes and toys, experienced labor shortage. Apparently, there was no absolute labor shortage in a country of more than 1 billion people. But factories found it more and more difficult to hire enough experienced workers at the low salaries they offered.

This year, the labor market was profoundly reshaped by a new labor law. This law requires that employees be on formal-term contracts, and that they can only be terminated for cause. It is closer to Japan’s “employment for life” than the U.S. practice.

Another factor is the revaluation of China’s currency. Chinese Yuan, or RMB, used to have a pegged rate of RMB8.27 to US$1. The policy served well for its export-oriented economic development. In a floating exchange rate system, when a nation’s export volume surges, its currency tends to rise against other currencies. This appreciation will inversely repress further increase of export, because their products become more expensive. So a floating exchange rate system works like a stabilizer of international trade and present world order. Understandably, developed countries favor this system, while new emerging economies see it as an obstacle to overcome.

However, a pegged exchange rate is a double-edged sword. With a devalued currency, a country can sell cheap. On the other hand, it has to pay more for imported goods. Many economists believe that RMB is undervalued. In 2005, RMB started to appreciate, and it will continue, it seems. Since the beginning of this year, RMB has raised 4% against the U.S. dollar. This, too, will increase Chinese factories’ costs.

Yet another new phenomenon is high inflation. China had been growing fast under reasonable inflation for over a decade until last year. Inflation first appeared in the price of pork, when animal disease caused a pork shortage. Just when people thought the price hike had passed, a nation-wide snowstorm this February caused food prices to rise again. The government has frozen key prices — ranging from food to gasoline. It no longer matters whether the inflation was initiated by a series of accidents or by fundamental economic change, when the expectation and momentum of inflation is formed, it is difficult to control.

The closedown of many factories might also be a foreseeable result of policy change. China used to encourage export by giving these companies tax rebates. Now tax breaks are diminishing, and taxes have increased from 5% – 8% to 12% in some factories. Guangdong provincial officials, feeling competition from Shanghai and Yangtze River Delta, are trying to persuade low-end businesses to move to inland counties, where wages are lower, so that well-developed cities can upgrade their industries.

New labor law, currency revaluation, inflation, and policy change; all these factors add up. The industry’s cost is increasing unexpectedly. This comes at a bad time, when the U.S. economy, the largest client, is slowing down too. Some companies are considering relocating to other countries, while some simply shut down. The most dire situation would be that all these factories move out of China, leaving nothing but a memory of a short period of prosperity.

China still needs labor intensive industries to keep unemployment rate down. To maintain their competitiveness, companies are investing more in technology, management, and their employees. The productivity of Chinese factories is still much higher than other developing countries. Another advantage is economy of scale. Businesses tend to live closer to their suppliers and clients. If an entire industry is in China, it costs a company more to relocate to another place alone.

Industrial migration will eventually happen. But if the factories can be gradually guided to inland provinces, and the country can develop a service-based economy and a mature domestic market in time, people will benefit from the shift.

In his book “The Age of Turbulence”, Alex Greenspan says that even mighty economies like the U.S. and China cannot prevent globalization. I think this progress is not automatically good for everyone and will cause sacrifice. But the outcome depends on how smart everyone plays in the game. There will be a lot of challenges awaiting the U.S. and Asian countries alike. Will China’s lessons, good or bad, be learned by the rest of us?

Good news! Two new Kung Fu movies are coming this summer: “Kung Fu Panda”, and “The Forbidden Kingdom”. Kung Fu Panda is an animated comedy film by DreamWorks, featuring Jack Black as the leading voice actor. The Forbidden Kingdom is a mythical adventure movie about a Boston boy who teleports to ancient China through a mysterious force and meets — guess who? — the Monkey King! For Jackie Chan and Jet Li fans, the movie is a must-see, because this is the first collaboration of the two actors.

Many Hollywood movies incorporate kung fu elements in them, including The Matrix, Kill Bill, and movies made by Jackie Chan and Jet Li for Hollywood. In the case of Kung Fu Panda and The Forbidden Kingdom, the stories are even set in China. Despite this, they are not typical kung fu movies. Yet, kung fu movie, as a genre, probably cannot be narrowly defined. It has been evolving and changing since its beginnings.

I know little about kung fu movies prior to the ’80s. Of course I know Bruce Lee and really liked some of his movies. Compared to later generations, I have to say the actions in old movies are much slower. Jackie Chan changed kung fu movies with his action comedies, which are often set in modern times. He is fast, strong and astonishingly flexible. Every ordinary place can become a battlefield for him. Everything in his hands can become a weapon. Chan’s sense of humor and popularity has transformed him into a cultural icon. Regardless of their age, fans in Hong Kong call him “big brother”.

While Jackie Chan is a trained kung fu master, not everyone can act like him. The film industry changed kung fu when it incorporated wired acrobatic technique into filmmaking. When the wire technique was combined with wide-angle camera and quick montage, filmmakers created a new and wild visual effect. It seemed very real. Actually it’s better and cooler than real! People could fly, and fight in a seemingly impossible way, as if gravity didn’t exist. The most successful ones from this period were Swordsman 2, and New Dragon Gate Inn, a remake of classic Dragon Gate Inn.

Moviegoers loved this new creation. But it rendered a new problem to actors. Their kung fu skills became more and more irrelevant, because everyone could instantly act like a master. Moreover, the market for kung fu movies had cooled down. Jackie Chan and Jet Li moved to Hollywood, leaving a vacuum in the Chinese film industry. Many don’t realize its profound consequence. To me, I see a gap between kung fu superstars. Bruce Lee was born in 1940, Jackie Chan in 1954, while Jet Li in 1963. Every decade has its own superstar. But this cycle was broken. In the nineties, there were notable efforts to create a new and younger superstar, though the industry failed in doing so because of the change in the market’s landscape. Will there be any more kung fu superstars? I hope so.

New opportunities in kung fu movies appeared from an unexpected director, Ang Lee (Sense and Sensibility, Brokeback Mountain). In many respects, Crouching Tiger Hidden Dragon was a strange movie. It was written, directed and performed by Chinese, but it was produced by Hollywood and targeted to the American market. Despite its success in the U.S., the movie received only a lukewarm response in China. Only many years later, I could imagine how much the movie inspired other Chinese filmmakers. Their conclusions seemed to be that Chinese film industry could operate like Hollywood, and kung fu was the key to entering the American market.

Zhang Yimou made “Hero” in 2002. And everything changed.

This was yet another surprise from an unlikely director. Zhang Yimou was not a commercial director at all. He made art films and was a frequent winner of different European film awards. With Hero, he defined an aesthetic standard. Equally importantly, he copied Hollywood business modes. Yes, it’s about money. Build an all-star cast from different regions, be it Hong Kong, Taiwan, Korea, or Japan. This will guarantee a movie’s success in overseas markets. Invest heavily in filmmaking and marketing alike. Big budget makes it possible for directors to pursue their perfectness, and generate lucrative profits. In this decade, we’re witnessing a wave of ever higher budgeted movies from the Chinese film industry. Some failed miserably; some won applause. Fairly speaking, they’re making good progress and have attracted more people back to the theatre.

Kung Fu Panda and The Forbidden Kingdom both promise to be good choices for summertime entertainment. Back in the Chinese market, this year will be dominated by war movies. The most anticipated one is Red Cliff, directed by John Woo. Its cost has approached US$100 million. I hope it is worth the money, and I am ready to feel the trembling.

In January, four Chinese automakers showed up at Detroit’s International Auto Show: BYD, Geely, Changfeng, and ZX. This was not the first time that Chinese companies came to the show. But this year I saw more reports in the media about their presence, probably due to their improved quality and design, as well as rising concerns on China-U.S. trade issues.

It’s very clear that you won’t see Chinese cars in America this year. But it’s equally clear that their arrivals are inevitable and more competitions in the auto market will benefit consumers.

China’s auto industry is a fast growing sector. China produced 2 million cars in 2001. In 2007, the figure leaped to 9 million, only trailing the U.S. and Japan. During this progress, several local companies have emerged as promising players. I will briefly introduce three of them.

Chery
Chery is the largest homegrown auto company. Unlike giant Shanghai Auto and First Auto that make cars under foreign brands, Chery developed its own business model. In many respects, Chery is still a low-technology company. They outsource many design jobs to Europe. But over years, they have accumulated experience managing the entire car-making process, and have established their own brand. Last year, Chery signed a cooperation contract with Chrysler to design and build small Dodge-branded cars that target overseas markets. The contract was perceived as a confidence vote from a major auto company on Chery’s quality control.

Chery is a good example of how to succeed in the age of globalization. Consumers don’t care in which country a product is designed, manufactured, assembled, and where its components come from. What is important are the expertise and available resources tapped right. Chery has demonstrated the ability to incorporate these resources to meet customers’ needs.

BYD
Even among Chinese car companies, BYD is one of the youngest. BYD is a dominating manufacturer in global battery market. 72% of cell phone batteries are made by this company. The profit from their core business enabled them to expand to the auto industry in 2003. And their strength directly stems from their battery technology.

In the Detroit show, BYD attracted a lot of attentions with their plug-in hybrid car. The power system of a hybrid car consists of a gas engine, an electric engine, and a battery that supports the electric engine. Today’s hybrid car charges the battery by the gas engine and the momentum of the car itself. But a plug-in hybrid can be charged directly by home electricity. You can park your car in your garage, plug it in, and it will be fully charged for you the next day. It is even more energy efficient.

BYD developed a new kind of battery called ferrous battery, different from the lithium batteries widely used today. The technology boosts the performance of BYD’s hybrid cars. Their plan is to commercialize this technology this summer. If they succeed, this will be the first car of its kind in the world, at least two years ahead of Toyota and GM, who both announced their plans to introduce plug-in hybrids in 2010.

Brilliance
Brilliance is among the few high end Chinese brands. They initially built their high quality image through a joint venture with BMW. They make BMW cars for the Chinese market, and their own brand designs are significantly influenced by BMW. Even though some Chinese companies are accused of stealing ideas from established brands, it never happened to Brilliance. I like their style very much and personally think they build the best looking Chinese cars. I, myself, will seriously consider owning a Brilliance when they become available in the U.S. As of today, Americans may think it’s a bizarre idea to buy a Chinese car. But I believe when consumers see a real car in the showroom, or even have a test drive, that idea will become tangible.

So that begs the question: when will we see Chinese cars in America? They have been selling in the Middle East, North Africa, Russia, and Europe. But it will still take years for Chinese companies to get ready for the U.S. The U.S. auto market is the most competitive market in the world, and is likely the last country for the Chinese to work on. But according to some news, a small company called Zhongxing (or ZX) will start selling SUVs and pickups as early as 2009. Most Chinese companies don’t have marketing channels in the U.S., but ZX has a North American distributor CHAMCO. This might be their unique advantage to become the first Chinese car in the U.S. Will they succeed? We’ll need a little patience to wait and see.