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Is China ready to help save the world?


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    A China Chevrolet logo at a dealership in Shanghai, China.

    - Marketplace

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    Three eager to help sales people at the dealership. 99 employees work here in total.

    - Marketplace

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    Chevrolet - "Wei Lai Wei Wo Er Lai" means "The Future Is Coming For Me". The company wants to tap into where they think their customers are in their life stage - optimistic, confident, passionate - and that through perseverance and, buying a Buick, will they fulfill their dreams.

    - Marketplace

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    Audio engineer Jeff Peters grins as Miss Wu, sales manager at the dealership tries her pitch out on Kai.

    - Marketplace

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    GM workers in Shanghai take a break for lunch.

    - Marketplace

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    Kai visits a Buick dealership in Shanghai, along with Marketplace bureau assistant Yiying Fan, engineer Jeff Peters and Brian Uhl, senior manager of general assembly for Shanghai GM.

    - Marketplace

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    GM's EN-V (Electric Networked Vehicle)concept car could be the future for personal mobility, but futuristic does not mean comfortable.

    - Marketplace

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    A good fit for sales manager Miss Wu. College-educated, she makes more at the dealership than her husband, a kindergarten teacher.

    - Marketplace

Tess Vigeland: Kai -- as we've been noting this week -- is on assignment in China. You may remember he and a crew broadcast from Shanghai and Chongqing five years ago. A lot's happened since then both in China and globally. First and foremost, the financial crisis and Great Recession. So they are back visiting those two cities for an update.
'Cause after all, we're all kind of counting on the Chinese economy to step up and help save the world.

So Kai joins us from Shanghai. Hey Kai!

Kai Ryssdal: Hey Tess.

Vigeland: Or I suppose I should say ni hao?

Ryssdal: Ni hao, there you go. That's pretty good.

Vigeland: Thank you very much. So anything interesting happen so far?

Ryssdal: Lots interesting. You can't come to this country and you can't come to Shanghai without interesting things happening. But here's just one: We were out doing some stories on American companies here and Chinese consumers and we talked to some folks at GM. And we went out to a Chevy dealership, the biggest one in China. And I was talking to the sales woman there about how she sells to Chinese customers. So I said all right, well listen, give me the sales pitch.

Vigeland: How'd she do?

Ryssdal: Well she did pretty well actually. First of all, she's saying it's got good gas mileage and it's a good value for your money. So I decided to throw her a curve ball and I said, "Listen, I'm sorry but I have four children and they are just not going to fit in this car." And two things happened. One was you could see a look come across her face 'cause nobody's ever going to walk into a Chinese car dealership and say I've got four children because of the one-child policy. But the other thing she said was, "Well sir, then I think you' ought to buy two." So you give her points for thinking on her feet, right? But it's also a little insight as to why GM is doing as well as it's doing here. Which is by the way, really really well.

Vigeland: Well let's about GM for a minute since they might be one of the biggest American success stories there, aren't they?

Ryssdal: Yeah, they are absolutely one of the biggest American success stories. And I'll give you an example: the Buick. You see 'em all over the place over here. They are a status symbol for a certain section of the market. There's a part of the Chinese car-buying public that buys cars not to drive them, but to be driven around in. So what GM said was listen, we need to make a car with a longer wheel base that gives more room in the back end for the person who's being chauffeured around. So they kind of figured out that little thing. But I was having a conversation with the head of GM China the other day and I asked him about the company's growth because it has been unbelievable. They went from 500,000 cars a year five years ago when Marketplace was here to 2.3 million cars every single year. That's like the definition of explosive growth. And I said how do you plan for that? And he said, "Oh, I just plan to stay a full factory ahead." So this guy is selling more cars in China than GM North America. He's making billions of dollars. And what he's doing is he's planning, by the factory-full, his expansion. Which is kind of amazing.



Kai at a Chevy dealership in Shanghai.

Vigeland: Boy, that just says it right there. So good for GM, also seems like it's good for the U.S., the world even. You've got the global downturn. Industrialized nations growing at 3-4 percent at best. China still going great guns at 7-8 percent. So are you getting the sense that Chinese people are ready to step up and help drive the rest of the global economy? Are they ready to spend?

Ryssdal: So here's the thing. So when we came here the last time, the basic question we were asking was: Should Americans be afraid of China and its growing economic power? And our reporting at that time basically led us to the conclusion of no because there are so many other things going on here. That's exactly the same now. I think in a roundabout way of answering your question, they just have their hands full over here. Yes, there are some problems in the American-Chinese relationship, right? They control our debt. We've got a trade gap. All of that stuff. But I think if you go out on the street outside my hotel and you ask the average person, they are way more worried about inflation at 5 percent, what food is going to cost next month, than they are about what their purchasing power means for American GDP. I'll give you one more example on the possibility of a downside risk here. We did some interviews yesterday about real estate in Shanghai, which is unbelievably high. We talked to this 24-year-old guy who owns his own apartment. He just bought another one last month at the top of the market. So I said to him, aren't you worried that this is all going to come crashing down? And he looked at me and he said, "No, Shanghai real estate will never lose money." So I tried to explain to him the whole American real estate crash thing, and he looked at me and said, "Shanghai real estate is different." So we agreed to disagree, I guess.

Vigeland: All right. Kai Ryssdal joining us from his hotel room in Shanghai. Hey, do me a favor would you? Teach me how to say goodbye.

Ryssdal: Zai jian.

Vigeland: Zai jian.

Ryssdal: Zai jian. Literally I will see you again. Zai, again. See you, jian.

Vigeland: Auf wiedersehen.

Ryssdal: See you later.

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What the heck is "joi gin"? The proper rendering of the Chinese word for "goodbye" in the Roman alphabet is "zai jian" -- unless perhaps Kai was teaching Cantonese instead of Mandarin. But they don't speak Cantonese in Shanghai or Chongqing ... or anywhere else north of Hong Kong and Guangdong. So all you Marketplace editors need to tighten up on your Mandarin.

David Neal wrote:
"I listened with sadness and dismay as Kai and Tess gleefully praised the out of control growth of the automobile industry in China as being "good for the world." In fact, it is quite the opposite."

Tell me about it! I am supposed to be civil in these comments, so I must restrain myself. But the ignorance and foolishness of this slavish adulation of the ruinous auto insanity goes beyond the pale.

I listend with sadness and dismay as Kai and Tess gleefully praised the out of control growth of the automobile industry in China as being "good for the world." In fact, it is quite the opposite. Every week we hear of massive traffic jams paralyzing major Chinese cities, causing pollution and depletion of resources---including human time, which has a negative effect on worker productivity. Also, there is no way the Chinese highway infrastructure can keep up with GMs "per factory" growth ambitions, so their model is not only irresponsible, but simply unsustainable. Another example of American scorched earth economic imperialism at its worst.

So, this begs the question: is GM really a Chinese company now? It sounds like GM is building cars for the Chinese market in China, so these don't count as exports for the US. Plus, given all the tax dodging by the Fortune 500 like GE, GM probably isn't paying US taxes on those profits. Should we really look at this as an American success story?

My wife came from Shanghai to the US in 1990. She did not return until 2005. The changes were astonishing. Since then we have been back about a half dozen times, bought a 2 bedroom condo, last visited in 2010 and will return in October of this year. In 1990, there were no subways. The system was impresive in 2005 and they have doubled in size by 2010. We visited Bejing for the first time in 2010 and found the pollution there much worse then Shanghai. Shanghai pollution today reminds me of LA pollution back in 1978. Lets hope they can get a handle on that. Final comment, the driving in Shanghai is insane compared to the US and the price of labor is very cheep (think 1 dollar per hour). I can understand why people have drivers.

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