notes from China

I have had an awesome run as far as tech is concerned in the last couple of months. Last month I was in San Fransico meeting all the tech firms and last week, I had a chance to be in China, meeting the tech firms there. I read somewhere that the startups try and get distribution before the big firms get innovation. It’s an interesting run. A tight fight where everyone is trying to outrun each other.

China is especially fun on the world circuit. It has a closed start up tech eco system as most the world biggies are not allowed to operate there. This is because the government wants data and insights into their citizen’s online behavior and the firms from the valley refuse to toe the line. So home grown startups that blatantly copy the startups from the west have sprung up and are dominating the ecosystem. But to simply paint them all with one brush is the wrong thing. Two of them are innovating and are leading the world in their own fields. One is the chat platform WeChat and the other is the ecommerce platform Alibaba. Both are now moving into fintech and are using data to understand consumers and then using it for lending operations. This is now very interesting and dangerous territory. WeChat through WePay wants to lead in the high frequency payment ecosystem like food, taxis, groceries etc. Alibaba counterpart is AliPay following everywhere and online. Both premises are simple – one pushes through the chat interface and allows for people to use chat for commerce and transactions. The other creates an ecommerce platform and sees where it can extend its wallet services to. The world is watching what the real deal will be. Will payments be won by chat or by ecom. Payments is the main stay of the new economy. Banks for long have dominated income and investments and used that as a data point to give credit. These wallet companies have side stepped this and said that people spend more than they invest. Day to day spending and online behavior may be a better indicator of propensity to repay credit than anything else. All sorts of data can now be used to understand the consumer better. Now big data starts playing a huge role.

Any and every data set will be used and leveraged for creating credit persona and score. This is very exciting. Both chat and ecommerce are sitting on a gold mine of data. Appreciably this data is lethal. A simple case can be that people who buy kiddie stuff or chat with other people with high credit scores are less likely to default than others. Alibaba also is understanding the merchandise sold by the merchants and their ability to sell their wares. This is creating a credit score on which Alibaba can offer credit to their merchants at a better rate and velocity than the banks. With high amount of data and online mode of delivery these new players can potentially disrupt the finance space at low operating costs and create a crazy disruption that traditional banks haven’t seen. And they are ahead of regulation. They innovate and regulation tries catching up with them. Alibaba started shifting money lying idle in the wallet to a money market mutual fund and overnight became one of the biggest mutual funds on the planet. They could now give 6% returns where previously the consumers were getting only .5% at their local bank. Huge monies shifted in till the government limited the amount of money you can keep in a wallet.

One big lesson that I learnt is that never underestimate the power of the old lender. I visited these places with my boss and his boss. Both of whom have built their lives giving loans in the credit business. At first we heard that the bad debts are only at 1%. Which is a phenomenal number. That’s lower than anything else. My only concern was that this belies the fact that the small amounts that these people lend, makes collections impossible. The cost of collection is still far higher than anything else. My boss had another point. He explained to me that in a fast growing credit market like China (this is a two year phenomena) bad debts will always be low. Because you are constantly giving away larger and large amounts of loans so your denominator is increasing like crazy. It takes a little time for the loans to go bad and in that time your fresh loans hit the book and the numerator which is the bad loan number looks bad. This is great till you are constantly growing. The denominator keeps looking bigger and the ratio looks good. But what we don’t see is two things – infant delinquency and bad debts via aging of the book. Infant delinquency is simple – how fast do the loans go bad. If loans go bad after a couple of years of good payments, then you can blame the macroeconomic environment. But if they are getting bad closer to the time you lent them, then you are talking about faulty process in credit appraisal. The other one is an extension of the first, it’s about understanding each month of credit. You have to analyze not the entire book but each month of loan given as they age. You will then get a sense of the looming danger. So at a book level 1% looks good, but most of that is from the start of the book then as time wears on, slowly the old book will also start defaulting and stress starts on the whole book.

This simple math helped me understand the credit business and the ability to look at credit from a different perspective. So while I went into China dazzled by their stupendous success in credit, I came back quite skeptical of the whole system. They have lent billions of dollars in easy credit and they just could be sitting on a bubble. Something amiss is happening in China and this could be just another subprime crisis of the east.

I have been critical of the startups in FinTech. They are started by a bunch of kids who haven’t seen credit cycles and believe that black swans don’t exist. All are looking for innovative ways to lose money faster. Yes data is now abundant and there is serious analytics that can be brought to the table but I always had a serious healthy respect for people who understand credit. I think the firm that I work in has built itself by precisely understanding this – risk. It understood that in finance, return of capital is far greater than return on capital. Credit follows cycles and when you outlive cycles you see growth and prosperity. Sometimes the simplest rule of growth is survival.

On another note, I had the chance to visit the Nanjing Massacre Memorial, while I had a couple of hours free. It was seriously the best designed memorial / museum that I had been to. As a marketer I see every ad and think – what was the brief, what was the desired consumer response, who is the ad meant for and what is the objective / problem to be addressed? When I saw the Memorial, I was in love with the architecture / design of the place. The entire memorial was designed to a specific brief (my reading) - “Bring alive the horrors inflicted on the Chinese race by a brutal aggressor, in a way that we will never forget.”

Bring alive is an important part of the brief. After their defeat the Japanese destroyed a large part of their war records so that it could never be sued against them. Many disputed that these massacres ever occurred and if at all, the Japanese dispute that the death toll was high as three hundred thousand.

The Architect was clear in his design. At first he designed the entire monument in black and grey. Outside the memorial are status designed to evoke a sense of empathy towards the horrors inflicted. They refer to the enemy as the devil which came, tortured the citizens, killed children, did not spare the old and raped the women. The word Devils is used again and again. The place has landscaping done in a desolate grey with stone pebbles used instead of grass for any landscaping. You fell the solemnness of the grey all over at the entrance. You enter the building and you go down – two floors. As you go down the first thing you see alongside the steps are the rows of folders marked with the alphabets. I don’t know for sure, but it felt like this was the catalogue of all the people who died at Nanjing. They had arranged it like a library with a ladder as well in case someone wanted to climb up and seek a particular folder from eth catalogue. Of course no one would cross over and pick up a book, but the recreation was thus. In many ways the first thing the curator wanted was to tell you, that is a work of research and not simple baseless propaganda. Once you understand that you are ready for the next exhibit.

All the while you go underground, light fades away and blackness takes over. The lights are dimed out and there are grey walls, black floors and ceiling. The lights are focused only where you want the audience to see and only enough to see the exhibit and nothing more. You enter into a large hall with the letters 300000 etched on a stone emphasizing that this large number is the victim count. On both sides of the door as you enter are color pictures of people who lived till the opening of the memorial from the Nanjing massacre. Eyewitnesses who lived to tell us of what transpired. Then the walls are filled with sepia photos of people who died and in the middle stone blocks taken from the scene of the massacres as a silent testimony of the truth that they could tell, if only!

Now that it is proved as a scholarly work and a number is etched in your brain, you are ready for the museum, which talks about the incident. Photos from Japan of the cabinet meetings where they discussed the invasion of China and the advance of the Japanese. They had exhibits of the Japanese uniform, extensive photos, articles etc. All beautifully arranged and explained in Chinese and English. They had the exhibits in audio video as well with movies played in loop with victims explaining in graphic detail how they were tortured, dismembered and what they saw. Every tool available is used well. They recreated the destroyed cities on a life scale. After a few halls that you pass through you are now ready for the big bang. I walked in a little more and saw that there was a gallery like structure created where you can lean on and see what was there under your feet. Like a massive open hole in the ground to show you the ground on which the memorial was built. There – numbered on the ground were skeletons exposed as they were stuck to the ground. It hits you that you were above a massive graveyard where the bodies were dumped after being massacred. Some were even dumped alive (as claimed).

Oh dear. That hits you. You are now suitably numb as the museum unfold for the next one to two hours and they keep at it. You exit from one building to be lead into another. You still see grey with some small smatterings of grass grown strategically in patches. Next build is an even larger uncovered dumping site with more exposed skeletons. They haven’t spared the dignity of the dead in order to show case the brutality. I don’t know how important it is to expose this in reality to the people visiting.

You at the end exit into sunlight with a small exhibition on peace and a massive white statue of a lady releasing dove in the open. One small gesture just to show that the objective of the memorial is peace and not to incite wounds. Bull shit. I am no Chinese but even I feel angry at the incidents and at the absolute horror inflicted by the Japanese. I release what the Chinese are meant to feel after they visit the museum. I realize now why at the start of the museum, there are flower and flag sellers. It is a monument to Nationalism. That a weak nation will be at the mercy of the brutality of a stronger nation. Fewer Japanese in number attacked and brought about misery to a larger population, something that was explained at the start of the memorial itself.

The memorial is not peace but for solidarity and for the promotion of a united front against a stronger adversary. I felt no peace after the end. I felt no feeling of the futility of war but a seething anger against a brutal oppressor. It was not a neutral version of history, devoid of emotion but a clear retelling of the Chinese side.

That is the magic of the architect and a curator sticking to a brief. A single minded brief - “Bring alive the horrors inflicted on the Chinese race by a brutal aggressor, in a way that we will never forget.”

I felt completely overwhelmed. Any design, architecture, advertising student must see this for themselves to understand how design can play with your emotions and feelings. This is propaganda at its best. The highest level. Propaganda is best when you don’t know you are being sold to but you are sucked inside by a vortex devoid of rhetoric.

And yes – the memorial doesn’t have an entry fee.

keep renning

Teaching Jispa is to go on a journey yourself. Now more and more I am the guy in charge of the studies. In many ways I am the fall guy if anything happens to Jispa academic pursuits. Haha! I think this has come about thanks to two things – first Jasmine just doesn’t seem to have the patience to deal with the all the extra science and history and everything else. She would really need to up the ante and keep researching if she needs to be relevant. And second – more importantly – Jispa drives her up the wall. I think these two aren’t really designed to coexist and learn from each other. They are designed to be happy if they decide to let each other be.

So I am the guy. Buts interesting and its helping me in more ways than I can imagine. It’s a enriching experience. What Jispa learns in school is completely different from what I have been taught or in the way that I have been taught.  Her geography text book is with every penny and her history teacher forces her to think and research. They push the child into thinking and having an opinion beyond the syllabus or what’s written. While I was growing up, the rules were simple – textbook wrote – you memorized and you puked on the exam whatever you retained. Independent thought and inquiry was not really encouraged except for the personal beliefs of certain professors who naturally brought it into their teaching styles.

So I like it when we do geography its important to understand the history of the place and some other associated facts. Like right now we are doing China in Geography. If I have to teach her I better learn a lot more than what I know, as it helps in the discussions. Here of course learning channels like youtube have helped a lot, where some seriously talented people are putting their talent to good use. The Crash Course channel on youtube is especially useful for understanding history. So while learning about China I heard a few terms on Confucianism which I then further researched and its quite interesting that these principals are pretty universal in nature and that at the core of it, they can be applied to various situations that we face today.

Here in Confucianism, the Sage archetype is the ideal but it hard to achieve and hence there is another one for us mortals to get –  Junzi. I like this guy. ‘A superior person’. This man can stay in poverty, does more, speaks less, loyal obedient and knowledgeable. He disciplines himself. This man stands in contrast to the Xiaoren. The xiaoren is the ‘petty person’, someone who doesn’t grasp the values of virtue and goes only for immediate gains. These two archetypes are the types you get in offices. The text says that a ruler must be surrounded by junzi and not xiaoren. Which is true. I have seen it many times that good nice leaders quickly get surrounded by xiaoren and this starts clouding their judgment and affects how they behave. I have seen them in all orders and magnitude. The typical xiaoren is the insecure idiot who butters up his boss, surrounds himself by stooges, keeps his stooges insecure all the time and pumps bad blood in the system. These xiaoren have to be exterminated if the organization has to function. You have to keep these away from you, as far away as possible if you don’t want to turn into one yourself. I have seen it here where a leader whom I trusted and respected was clouded by the xiaoren in his coterie. He ate up the system form inside and left a lasting legacy of distrust and infighting. The leader, who is a good guy, had only one fault – he let the Xiaoren in. When you let one come in – you not only allow him to come in but in effect you also keep the junzi out. The two cannot co exist. The Junzi slowly stayed out of the leadership and were marginalized.

As a marketing head – I have had the experience of leading teams. I see the insecure people everywhere. Some of them in the team try and become my friends – close friends. Sure – I am all for friendship but then they quickly realize that just by being close to me doesn’t really mean that they get any preferential treatment as regards special coaching or perks or salary. They get equally jammed when make mistakes or have issues. Typically I have learnt that they like to hog time like pac man and let anyone else come in. The more time the xiaoren spend the less time the junzi have. By definition the junzi is a superior man – he doesn’t stoop so low as to fight. So you have to allow the junzi in. call him or her inside the circle, take an effort to listen to him and to understand his point of view. Often it’s not the junzi who is eating away your time – it’s the xiaoren.

So the leader must fight and fight hard to push these characters into their respective places. Bring the good guy in and push the bad guy out. Slowly of course as you do this – I have seen the insecure form a clique of their own and then branch out to other trees where they can fertilize seeds from their own toxic poop. Hehehe… I like that metaphor. It seems so apt. so these negative guys will slowly go away and you will be better off. Ofcourse you will miss the attention that these jokers gave you, but will live to be a stronger and wiser person. To become the Sage, you will have to wean yourself off from the licking that the xiaoren will give you.

So what’s the hope for people to more to the junzi archetype? Here also Confucius has given us an answer. To become the Junzi the core is Ren. So WTF is Ren? “Ren is the  virtue denoting the good feeling a virtuous human experiences when being altruistic.”  If that sounds impossible to achieve – our friend has given us simpler solutions as well - "Ren is not far off; he who seeks it has already found it." Ren is close to man and never leaves him.

 Also –

Ren relies heavily on the relationships between two people, but at the same time encompasses much more than that. It represents an inner development towards an altruistic goal, while simultaneously realizing that one is never alone, and that everyone has these relationships to fall back on, being a member of a family, the state, and the world.

Ren is not a concept that is learned; it is innate, that is to say, everyone is born with the sense of ren. Confucius believed that the key to long-lasting integrity was to constantly think, since the world is continually changing at a rapid pace.

The more I read about all this , the more I realize that all of this is open to interpretation and the answer is in many ways for each one of us to seek for ourselves. I think the essence of both Indian and Chinese thought is to look inside and seek for truth. This truth I think, is different for each one of us. The truth that lets humanity survive and thrive and progress is the truth that takes into consideration the truth of others. The duality of truth or the acceptance that various different truths can co-exist at the same time is the essence to being Humane, or experiencing ren. That’s why I think he says that Ren means to constantly think. I think it means to constantly evaluate our ideals and beliefs in relation to various different things. What the society now is thinking and what it means today to live or the force of technology or cultural change or whatever. Constantly think and relook at your self and see if you are indeed humane. Thast why he says – anyone can ren. Its inbuilt, one only has to search. The act of searching itself is to find ren. That itself is ren.

From here on there are two other interesting words – li and yi. “Li is the action which has been deemed appropriate by society, yi is the action that is indeed correct”. This is also very deep. Many times we do ‘li’ because that’s the path of least resistance. Change in society happens when ‘yi’ is done by the unreasonable man, even when it contradicts ‘li’. Many times we see ‘yi’ in action and we condemn it. Only when you have ren, will you reflect and figure if there is li in the action and then think twice when you pronounce judgment.

 These are such amazing references from philosophy or history. I loved reading about it and thinking about it. The internet is a lovely thing of course but it also requires you to have some ren on your own. It can give you a lot of information, but what you make out of it and refer back to your life is yours alone. I am glad that I had a daughter as early as I did. Thanks to Jispa, I am physically fitter than what I would have been and my diet is much better, as I am forced to follow her swimming life style. But also thanks to her questions and her education, I dare say, I am smarter than what I would have been. It is finally what you make out of it. There are sponges filled with water everywhere you look, how much you squeeze out of it is your problem.

Some days I aimless surf the net and see videos, but here, one led to another and the reason to surf was pointed. It was a geography class topic. China. Who knew how it would pan out? and definitely philosophy was not I was aiming for… but the mind – it’s such a lovely thing, isn’t it? keep ‘renning’

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Here is a video on our hero. I don’t necessarily agree blindly with all his ideas but – its an interesting point on the never ending , ever expansive map of philosophy.

China Diary

In the middle of the work mess that I am coping with, I forget to note in this blog that I went to China. Ah china. I was always fascinated with China. Especially in the last decade or so. I wanted to see China once. The economic miracle that is China. Where there is money and opportunity, the country that will rule the world, the country that exports tons of stuff and the country that India should look forward to emulate. I have been only to Hong Kong (and schenzen) if you call that China. But never to the proper mainland. China is not a place that I think I might go with family. I don’t think it’s a backpacker’s delight. It has interest from me merely as a professional and not as a tourist. I would like to visit China on work not on tourism.

Every year one firm likes to call us for a jaunt. It kept selecting Bangkok as a location. The first time I sent someone from my team; the second time they wanted me but I politely told them – of all places, I am not coming to that place. I don’t intent to have Bangkok fun and I definitely don’t want to go there and get everybody to sneer at me. I have been there once before and that’s no place for me to go. So this time they came into tell me that they have noted my suggestion and this time they have selected Shanghai as the place. Shanghai…. Hmmm.. not bad. Shanghai to China is what Mumbai is to India.  An erstwhile trading port becoming the center of finance of a country. Mumbai should emulate Shanghai is what everybody says. So I accepted the invitation.

So what’s my impression? Not that I have too many impressions. Of the three and a half days, one day was spent in the plane, one and a half in a conference room and one for sightseeing and two hours of shopping. Bah!

I have  few impressions – ofcourse no one of them speak English. For a modern city of the future, not speaking English is a big no no. I think the Chinese need to correct that. That is stopping them from taking over the world completely right now. But the other view is that – the world will learn Chinese.

The other – no Facebook. Hahaha. Yes to instagram and no to facebook. But you knew that – didn’t you.

Big city – yes. Really huge, built for scale. Tons of flyovers, freeways and these are built one on top of the other. They are five highways on top of each other. At some point you look outside the window to get – a tenth floor of a building. Wow. Scale. The Chinese know what scale is. Everywhere there are flyovers trying to move the traffic. The result – traffic jams. Yup. Not as bad as let’s say Bangkok, but yes there are jams. Contrast this with the London model, where I hardly saw any flyover megaliths. The British are very clear – you want to move – here is the public transport. What’s your excuse to take the car. Mumbai following Shanghai is stupid. The model is London. Get enough of public transport and you can move cities with less pollution and greater efficiency. You can’t build enough flyovers and have enough parking. There is no such thing.

The other bit – They managed to teach the Chinese to be clean. The city is largely very clean (not Singapore) but clean enough. I think it was as clean as London or possibly cleaner. But the Chinese can shit without a smoke. Yup. They smoke like crazy. My hotel room smelt like a smoking corner everytime I entered it. And so the public loos. At the five star hotel – I entered the loo only to run out. I spoke to the manager and he apologized. He says – he spends the whole day trying to get the Chinese to smoke outside the hotel. But he can do jack about the loos. They smoke in loos all the time. In fact there is nothing anyone in China can do about it. I told him to simply install smoke detectors; and he replied that installing them would mean stopping all banqueting business. Oh dear. Every loo I visited in China was reasonably clean but the men in the loos would simply light up and have a go. You can’t just shit in the public pots in China. And with people with severe distaste for smoking like me – nothing I could do. Malls, hotels, public loos, restaurant loos, temple loos… everywhere. They simply light up and to go.

Shanghai, China – yes it a mega city. They definitely build to ego and size. Completely phallic. But I am not to judge. I did not get any more insights on poverty (not seen), hunger (ditto); some insights on religion (largely atheist), and just simply strengthened my belief in mass rapid transit. It’s a cold country for outsiders. I did not really like it. And yes – like all places – there is one shop that the guide insists you got to to shop for pearls. They have a stopover there for sure. Crap tourist commission place that mixes some education on pearls before selling you the same. Screw you. I used the time to go out and roam around. It was cold and the drink I had was some variation of a hot lemon juice. That was pretty cool.

That’s my simple China blog. Not much but enough to be sure not to include it in my places to go with Family. But yes, at least it’s off my list. This was the easiest way to get it off. I am happy.

Ah – one more thing I checked off – in the evening, opposite the place we had dinner some of the guys noticed an exotic toy shop. Hahaha. That was one hell of a shop. But they sold it with all seriousness. Some of the exhibits were displayed like a museum. Very clean and nothing sleazy about it. that was impressive. Sales girls in formal attire selling and explaining some of the stuff, very seriously. there – one more retail format visited. Now to see Walmart and Ikea.