Fabrice Grinda

On Tuesday evening, I had the pleasure of attending a seminar sponsored by McKinsey on China’s Business and Policy Evolution at the Asia Society (http://www.asiasociety.org/) in New York.

The panelists were Howard Chao, Partner and Head of the Asia Practice of O’Melveny & Myers, Nicholas Lardy, a Senior Fellow at the Peterson Institute for International Economics, and Jimmy Hexter and Jonathan Woetzel, Directors at McKinsey & Company who co-authored Operation China: From Strategy to Execution.

I learned a few interesting things:

• While China is not becoming a democracy in the traditional sense of the word, it is becoming much more open. For instance, they took the rather unprecedented step of posting their new energy policy law proposals online and inviting experts, including foreign experts and McKinsey to review it and suggest changes. The project will probably not be put into law at this NPC but it probably will be at some point in the next 6 months.
• Urbanization is continuing apace and by 2025 there should be 1 billion urban dwellers. This suggests that 40-50% of the population of many cities and workers at most companies will be migrant workers. As such the government and companies are going to have to be much more supportive of migrant workers than they are today.
• Despite rising labor costs, most multinationals are not going to move out of China given the complexities of changing their supply chain, the economies of scale that China offers and the lure of the domestic market. Last year Vietnam had $40 billion in exports, China $1 trillion. As such, countries like Vietnam do not have the infrastructure to accept a large scale move of companies from China there. Not to mention a large inflow of capital and companies in Vietnam would probably lead to higher costs there. In other words, while countries like Indonesia and Vietnam are going to grow and offer cheaper labor costs than China, China will remain a major manufacturing hub for most multinationals.
• Most companies in China were built on cheap labor with little effort made on organizational efficiency which provides great opportunities for productivity improvement going forward as companies bring their global management best practices to China.
• Interestingly a large portion of China’s exports are coming from foreign companies established in China.
• Inflation is becoming a problem and might be creating bubbles in real estate and stocks because the negative real rate of return offered on bank deposits is leading individuals to invest in any alternative they can find.
• China will let the Yuan appreciate against the dollar faster than it has in the past (it appreciated at twice the annual rate of 2007 in the first two months of 2008) to fight inflation and decrease its oil import prices.
• Economic growth is expected to slowdown to below 10% per year as a result of the global slowdown but will remain high (8-9% per year).

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New York is amazing this way: you can really find amazing things! A friend of mine was looking for tennis clubs in New York on Yelp and came across Wang Chen’s Table Tennis Club
(http://www.yelp.com/biz/wang-chens-table-tennis-club-new-york).

This amazing little club is in Harlem on 100th and Broadway. The place does not look like much, but the players are first rate. You can get an hour’s lesson for $40 with up and coming junior players and sometimes with Wang herself. Keanu Reeves and John McEnroe both play there.

Wang never made the Olympics for the Chinese team – she was ranked 4th in the world in 2000 and the Chinese team sent the top three players. Now a US citizen, she will finally go to the Olympics.

You can view a video interview of Wang at:
http://video.on.nytimes.com/?fr_story=7ac695ac0e11dd35b64c9a57542a5c8bb3b3fdda

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I live in New York even though I work on the Internet. That decision has always been for personal reasons. To maximize business opportunities, I should arguably be in San Francisco.

However, it seems that New York is going through an Internet revival with the ever growing number of events: Tech Meetup, Lunch 2.0, The Founders Roundtable, etc. and the emergence of Silicon Alley Insider (www.alleyinsider.com).

Silicon Alley Insider was created by Kevin Ryan and Dwight Merriman of DoubleClick fame. It covers the New York digital business community and is becoming increasingly influential. Its Silicon Alley 100 report on the 100 most influential people in the digital community in New York has been generating a lot of buzz (www.alleyinsider.com/sa100/).

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This summer, in an attempt to connect with my inner Carrie Bradshaw, I tried out trapeze on top of Pier 40 on the West Side Highway. It’s a lot of fun. You can even complete a catch – where a guy on the other trapeze catches you as you let go of the trapeze – on your first day.

You can see find out more at:
http://www.yelp.com/biz/trapeze-school-new-york-new-york#hrid:qSL_7L2FJ1eCcsXrnSuELg/query:trapeze

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I had the pleasure of listening to my good friend Einat Wilf (www.wilf.org) speak on the future of Israeli politics at Danny Gillerman’s house last night. She is ever the brilliant orator and made an impassioned speech on the continuing importance of politics and a plea for the next generation to participate in the political process. She then gave eloquent and well thought through answers on a variety of topics ranging from the potential separation of Church and State in Israel to the importance of conscription.

On a separate note the host of the event, Danny Gillerman, Israel’s ambassador to the United Nations, was recently in a very funny interview with John Oliver from the Today Show with Jon Stewart.

Watch the video below :)

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To some extent most of the large cities around the world are the same: cosmopolitan, diverse, offering tons of potential activities and a rich art scene. However, there is something quite special about New York. There is magical energy in the air that pushes you to want to be and do more!

Last night, I had the privilege of being invited by my good friend Mark Gerson to attend the Alexander Hamilton Award dinner organized by the Manhattan Institute. The Alexander Hamilton Award was created to celebrate New York and honor those individuals helping to revitalize this great city. This year’s award went to Edward Koch, 105th Mayor of New York, and Rupert Murdoch, Chairman and CEO of News Corp.

Ed Koch, ever the brilliant orator, gave a fascinating and funny acceptance speech. The crowd cheered as he explained how a liberal politician like himself could accept an award from a conservative organization like the Manhattan Institute. As he put it: “I am a liberal, but I am a liberal with sanity”. He went on to explain how he became sane.

Rupert Murdoch drew laughs with a “fake joke” that started with “Two rich guys walked into the Wall Street Journal… I forget how the rest of the story goes, but it ends well!” He then gave a cautionary tale for New York not to rest on its laurels and especially not to overtax and overspend in light of global competition.
Just as importantly both speakers repeatedly emphasized that it was the people of New York who truly make this city a special place. They praised their fellow New Yorkers for their amazing courage, resilience and vision.

I was truly moved. Now as much as ever, I am proud to be a New Yorker!

New York: I love you!

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