China Day 6: Two Different Worlds

Today we visited two vastly different companies. It felt as if at each company we had stepped into two completely different worlds. We started at Shanghai Weihua Manufacturing Ltd., a small manufacturing company who’s owner begged us not to forget him when we entered the business world in the hopes that one day we would bring him more business. Then we visited Danahar, an American company who fills four large buildings and is poised to dominate China’s ever expanding dental market.

Shanghai Weihua Manufacturing Ltd is a small family owned packaging workshop with about 20 employees. The company is owned by Mr. Zhu, Wei. His wife also plays a large role in the business by helping with management, finance, and accounting. This couple’s love for each other was evident and quite cute. They told us their love story about how they met when she was working in the plant for Mr. Zhu’s father. Mr. Zhu followed her around until he managed to get her to fall in love with him. Mr. Zhu made a point to express how greatful he is for his wife because she works so hard and does more for their business than most women would be willing to do. The company was founded by Mr. Zhu’s father in 2001 doing packaging and box printing, a few years ago the father passed the business onto his son. Mr. Zhu and his parents have vastly different ideas on the way the business should be run. The younger generation wants to grow the business while the parents are satisfied to keep the business the same size. A few years ago china implemented new environmental and labor laws which forces the Wei family to make some tough decisions about the future of the company. The elders wanted to purchase a 10,000 sq ft factory while Mr. Zhu wanted to purchase a 30,000 sq ft factory, which he did. This is where the work shop is located now. Mr. Zhu chose to go with the bigger factory so they have room for growth. He insisted to his father that although it’s a dangerous opportunity but it is still an opportunity none the less. Mr. Zhu did admit is too early to tell if he or his father was right, but time will tell. The new government regulations have driven up costs exponentially. Many of competitors gave up their business because they couldn’t pay for the costs this has allowed Shanghai Weihua Manufacturing more share of the market, however they are fighting to keep up their profit margins. Perhaps the most touching part of the visit was Mr. Zhu’s emphasis on how lucky we were to have our education because he only has a middle school education. He admitted that often time he had a hard time understanding the market and making smart decisions based on what the market is doing. He gave each one of us a card in hopes that one day in the future we would remember him and send business to them. Overall, we found it to be a very rewarding experience to see the not-so glamorous side of business in Shanghai. It was eye opening to see a business owner struggling to figure out how he is going to make it in an environment of ever rising costs and government regulation.

After grabbing lunch at Qi Bao Old Street, we went to see a vastly different company, Danaher. Danaher is Fortune 500 company that is based in the United States, but has a major presence in China. They are involved in sectors ranging from water filtration to brand imaging, but we met with Yihao Zhang, the President of their dental equipment marketing company KaVo.

Danaher’s building was a modern office containing research and development divisions as well as marketing. Mr. Zhang generously gave us his time to present the realities of operating aa an American based company in China. He stressed the need to think internationally, but in order to succeed in China, one must act like a local business. He also discussed the value of having employees both from and outside of the dental field.

It was interesting to see these two companies in the same day, as it demonstrates the wealth gap in this country. It was almost like we were in two completely different countries. Our visit in the afternoon would not have been out of place if it had taken place in New York, but our morning visit certainly would not fit. China is still a developing nation, and today’s visits showed both how far they have come, and how far they have to go.