Jimmy Weng '07
All Good Things Must Come to an End
1/6/07
A Final Note
Before I left for Hong Kong a friend once told me that this experience was a life-changing journey that would rather make me or break me as a person. It in fact did both. It forced me to start my life anew in a foreign country with no immediate friends or family and made me feel like a child again. However, I began to encounter colorful strangers and discover human kindness in all places across the heartland of Greater China once I immersed myself on where I was. Along the process, I also discovered who I truly was, while realizing unknown passions and career aspirations that ultimately changed my life. My final note is to live, learn and love the things you do. Explore a new culture or take in a distant scenery that can only be felt and experienced – not read about in books. Take every opportunity that presents itself because life is about chances you never get back. I hope you enjoyed reading about my journey as much as I enjoyed sharing it.
A Few Final Adventures: China, Beijing, and Lhasa
The China Factor - Quantity to Quality and Social Stability
While traveling across the Mainland, I witnessed a major shift in the focus of China’s extraordinary economic development from quantity to quality. The country’s reputation for producing a wide array of low-value added items including cheap toys and textiles is shifting toward technology and other high valued added products. As the country’s future becomes more reliant on innovation and knowledge-based breakthroughs, the central government now has incentives to protect its own intellectual property rights, and increase the value of intellectual capital. In fact, the Xiangyuang Market, Shanghai’s infamous fake market with more than 800 shops and 2,000 vendors, was raided by police and ordered to be closed down during China’s 100-day campaign targeting pirated goods in July. During my visit to Shanghai two months later, the area had been abandoned and the entire block walled off as if such a market never existed. In preparation for the 2008 Olympic Games in Beijing, the fourth largest economy with a population of 1.3 billion people and +10% growth trajectory year over year, has many other reforms on its agenda including environmental concerns to promote businesses, banking reforms to compete against international competitors and a revaluation of the renminbi to support global fair trade.
Perhaps the single greatest risk to the central government is maintaining social stability during the first phase of the China’s reform process. While many of the government’s decisions are made to nurture a modest growth environment, coped with low inflation, trade policies, domestic banking and capital allocations are still too immature to support entrepreneurship activities and meet international standards. As China integrates its developing economy, numerous issues surrounding private businesses and state owned enterprises continue to exist. Financial leverage for small business expansion opportunities are still lacking from commercial banking since domestic banks lack the capacity and sophistication to conduct project financing. Over 80% of all bank assets are still controlled by the state, which allocates according to political priorities over the most productive sectors. With a banking system still effectively run in large part by the state, entrepreneurship and generation of new businesses will become more dependent on venture capitalists instead while highest returns will not being seeded properly, leading to inefficiencies in the financial sector. My insightful discussions with individual business owners and personal visits in the region have led to a much more in-depth understanding of the issues plaguing China’s financial market and economy.
Beijing – A Cultural Landmark
While Shanghai acts as the gateway and financial center in China, Beijing maintains the political and cultural reputation as the country’s capital. My personal journey to Beijing was a step back in time as I ventured through the inner “rings” of the city and along the outskirts through high mountains and winding rivers. Within the center of the inner ring lies Tian’anmen Square, the largest square in the world, along with the Museum of Chinese History and the Great Hall of the People on the east and western sides. The Palace Museum is also located in the middle of Beijing and is the former palace of the emperors of the Ming and Qing dynasties. As crowds of people walked across open courtyards and small shops were bustling with tourists, I stopped to marvel at the well-preserved Chinese architecture and deep-rooted rich cultural traditions of the Square. Given a sensitive history on freedom of the press, China has taken a major step recently with regulations granting more freedom to foreign journalists, bringing reporting conditions closer to international standards ahead of the 2008 Olympic Games. The logo of the Games with a time countdown till 2008 on almost every block serves as a constant reminder of just how excited and prepared the city is to be hosting this international event.
Hungry? What better than having the best Peking Duck in Beijing! Take a stroll down Qianmen Quan Ju De for a wide selection of delicious ducks or hop on a carriage to Dong Hua Men – the snack street filled with a wide array of delicious original Chinese foods ranging from fried noodles to steamed dumplings. The shopping center of Wanfujing Street remains vibrant through late night and acts as the Nanjing Road in Shanghai with international brands like McDonalds, Nike and Giordano attracting shoppers. Beijing has an old history but it still maintains a young aurora with many attractions and locales to visit.
The China Railway - Lhasa Sky Train
When China opened the world’s highest railway connecting Beijing to Lhasa, Tibet in July this year, it marked the success of a $4.1 billion project that was decades in the making. While I wondered how such a 2,500 mile rail across such extreme altitudes was accomplished, I quickly thought back to the Great Wall of China and fell back in vacant reverie. I had the pleasure of riding on the Sky Train from the nation’s capital to the “Roof of the World,” to experience this 48 hour trip firsthand and view the rural life across the Mainland. It may be the longest and most elevated railway ever built on an inhospitable mountainous terrain, but the natural scenery of the Tibetan plateau combined with the mainly friendly Tibetan and Han Chinese people on the train allowed for time to pass quickly. The first class compartment accommodates four people, with an individual bed, flat-screen TV, radio, night-light and oxygen mask. The second class cabin accommodates six people in a tighter room while the economy class provides only sit-up seats. There were six stops along the way to Lhasa (all province capitals) and I made a note to re-fill my pack with food and water at each stop. Contrary to press releases and the media, I did not need a special oxygen mask nor did I incur any altitude sicknesses that would lead to nose-bleed, vomit and headaches.
Although the longtime dream of the leaders of the CCP have finally been realized, there are many controversial issues surrounding the journey since its opening as many believe the railway would disturb the Tibetans and their culture. I find this recent development as a boost to the region’s economy, however, by allowing easier access for goods, travel and tourism. Tibet should be an international tourist center with its grand natural scenery and diversified culture contributing to a distinct experience for all. To me, the empty Tibetan plateau seemed like the center of the universe because of its simple and peaceful nature.
Lhasa, Tibet – The Roof of the World
Upon my arrival around 9 PM, following a 48 hour train ride, I stepped off the platform and into the mysterious Buddhist holy city of Lhasa, a place I had only watched on the Discovery Channel. Looking out from the backseat of local taxi, I noticed a stream of rural huts and open fields slowly transforming into modern buildings and stores along Beijing Middle Road. The top destination and heart in this sacred place is the grand Potala Palace, official home of the Dalai Lamas and center for political and religious purposes. Many pilgrims are seen delivering prayers outside its walls as entrance into the gold-filled palace requires $100RMB. Following a long journey to the top of the palace, I witnessed some of the most fascinating ancient statues and scriptures depicting its age-old history and customs. The Jokhang Temple, not far from the palace, acts as the main Cathedral and houses many famous chapels in four levels. Many pilgrims conduct their prayers outside the holy temple as well. Surrounding the Jokhang is a busy street of vendors selling all sorts of tourist goods and jewelry for bargain prices. I paid a visit to several other temples along the outskirts of Lhasa before taking in the main local dish – dried yak.
Travels and Festivals
10/10/06
China – Drops of Miracle
“Drop by drop a river is formed.”
The Urdu saying above best describes China’s extraordinary reform progress since opening its doors to the world and its long and winding road ahead to becoming a developed nation. Already a major player in the global economy, with surging foreign direct investments, major urban development plans and low-cost, increasingly educated workers, the country’s economic fate will surely affect all individuals and businesses alike, whether directly or indirectly. The country has been synonymous to the world’s development success story and has had its share of international praise for balancing economic and political stability. However, if there’s one thing that financial wizards and investors are reminded of constantly, it is that past performance is no guarantee of future success. Several risk factors that seek to jeopardize its success include an inflexible currency structure, an export-led growth tied closely with the US, and a lack of internal private consumption to fuel expansion. These challenges may seem to cast a shadow over the opportunities in store, but don’t doubt for a second whether the central government has a plan. Every day is another drop in the river.
Shanghai – The Best of Both Worlds
My personal journey to Shanghai, the heart of China’s economic growth engine, during the country’s national “Golden Week” holiday has been a fascinating and memorable experience. As I ventured across the districts of Huangpu, Pudong, and Hongkou, I was struck by the city’s vibrant cultural spirit blended with its growing Western modern civilization. If Shanghai were a living breathing organism, it would be running backwards into the future. The international cosmopolitan city may be forging ahead with development plans to boost economic growth and tourism, but it continues to look back with nostalgia at its footprints that trace back to its traditional roots and cultural lifestyle. The past 100 years have been a turbulent period of transformation as Shanghai reinvented itself from a simple fishing village into China’s gateway to the outside world.
Huangpu
Among one of the top tourist locations in Shanghai, Huangpu is a modern commercial center for urban development. From the Bund, you can capture a full view of the modern building developments across Pudong or pass by the “Wall Street in the Far East” in the old Shanghai days. The glamour and grace of these old buildings stand as a reminder of the city’s deep and rich history facing modern financial institution developments from across the Huangpu river. Several places worth mentioning in Huangpu are the Yuyuan Garden, built in 1559 and still maintains the style of ancient Ming and Qing dynasties, the Shanghai Museum, built around the traditional Chinese concept of “round Heaven and square Earth,” situated in People’s Square, and Nanjing Road, referred as the “Number 1 Street of China,” with its large crowds, neon lights and shopping centers that welcomes all visitors.
Pudong
As the symbol of new Shanghai, Pudong is home not only to many large financial institutions, but also to other key areas such as the Shanghai Convention Center and the Oriental Pearl Radio and Television Tower. Standing 468 meters high, the Oriental Pearl Tower is the tallest in Asia and provides an amazing view of Shanghai from the top floor. The mesmerizing sights are however only an exterior view to the major forces at work down below, where the Shanghai Supercomputer Center is developing hi-tech infrastructure for accelerating the economic and social developments in Shanghai with financial support and backing by the Municipal government. The Shanghai General Motors Company is also cutting into the international automotive industry and looking to lead the domestic market with its competitive advantage in price, quality and efficiency. Within the Financial and Trade Zone lies hundreds of buildings that are still a work in progress around the Jin Mao – the third highest building in the world. Expect much more than just gleaming skyscrapers to dominate Shanghai’s skyline in the near future.
A Mid-Autumn Festival in Hong Kong
Lights, music, opera, dancing and lantern festivities – a preview of the 2008 Olympics in Beijing? Not quite. The Mid-Autumn Festival in Hong Kong was in full swing in Victoria Park as crowds gathered together in open fields and celebrated with friends and family. Games were held for children while adults enjoyed Chinese opera and concerts. Overall, spirits were high as the people of Hong Kong came out together to enjoy this once a year experience till the early morning. One family I spoke with came from the New Territories, nearly two hours away, to share mooncakes, light candles, and play with lanterns to continue an old family culture of bondage. “I can’t think of a better way to spend time with my family,” one man recalled as he watched his children covered in neon rings holding a rabbit and fish shaped lantern that lit up the night sky. These are the moments that make you appreciate life.
A Day in the Life
9/6/06
Macau - Ready, Set, GO!!!
Loosen up that collar and pull up a mini stool beside a crowd of rough-talking locals spilling beer over wooden round tables in a local joint in Sham Shui Po. Don't bother asking for an English menu, or any menu for that matter, because there are none. The multi-colored strips with Chinese characters taped across the wall serve as what is still available for the day. Without knowing how to say what you want in Cantonese, you're sure to miss out on some of the best hidden local Hong Kong cuisines. The suspiciously large pot of hot tea serves as more than just a choice of beverage. It is also used to pour over the utensils to cleanse bacteria and germs (just remember not to drink from the plastic bowl you poured into). Now imagine a place where price tags don't exist and brand names are sold at deep discounts. At the Ladies market in Mong Kok, you'll walk by booths selling everything from clothing to luxury bags all in negotiable terms. Just put on your poker face and know when to walk away. I came across a man named Allan in one of the booths selling menswear who took the time to talk to me about his outlook on Hong Kong. He notes, "It's time for major reforms to happen or Hong Kong will become just like China - growing a huge wealth gap where a large number on the lower end will find it difficult to make ends meet." A woman named May who works at Hong Kong's Industrial Center in Lai Chi Kok designing and importing women's clothing from China also spoke to me about her views. She notes, "Hong Kong has lost numerous manufacturing jobs to China in the past decade mostly due to cheaper labor, but this has allowed us [retailers] to buy and sell at cheaper prices and remain competitive in order to survive." Hong Kong's return to Chinese sovereignty in 1997 has created bigger forces at work including immigration issues from the mainland, a tighter squeeze on the labor market and structural deficit problems on Hong Kong's capital budget to support its growing economy. Even so, many Hong Kong citizens will tell you that this small island is and forever will be their only home.
A Taxing Issue
So what happens when the tax-free music stops? Let's all hope we won't be seeing more scissors flying out windows to protest the Hong Kong government's initiative to broaden its tax base and create a more stable revenue stream if and when it decides to impose a goods and services tax (GST). For the next few months, expect the public to voice their opinions loud and clear on the government's proposed framework and consequences upon implementation of the flat 5% GST. While a GST may negatively impact businesses in Hong Kong, especially small/medium retailers and the tourist industry as a whole, it will give the city an addition stream of much needed revenue to expand its education, medical, and environmental plans, while supporting its growing expenditures. The current tax system derives most of its revenue from the property market and business profits which are both dependent on market forces and is subject to volatile swings. With huge tradeoffs on both sides and an account balance at risk, one must consider the impact an imposed GST will have in practice on low-income families to the macro economy before turning to this alternative. The government will sure have a lot to consider during this consultation period.
The Reality of Globalization
I often find that some of the most resourceful and knowledgeable people to talk about a region or country with are none other than...taxi drivers. As local citizens who have lived in the city their entire life, most taxi drivers in Hong Kong share passionate stories about the people and environment with amazing clarity. In one instance, on the day after Fed chairman Ben Bernanke halted interest rates in August, a cab driver expressed his upbeat optimism that global markets would not fall into a recession, but rather act like a distance runner picking up a second wind. While I was slightly surprised that Mr. Bernanke has become a universal name since taking the helm this year, I was more interested on the global repercussions that the American consumer greatly influenced. In Hong Kong, where the currency is pegged against the US dollar, the Hang Seng Index moves in tight correlation to economic activities in the US. Concerns over interest rate hikes in the US may lead to a slowdown in demand and exports for Hong Kong goods, while encouraging central banks in other Asian countries to raise their benchmark rates as well. With higher borrowing costs, consumers are then left with no choice than to spend less on domestic goods and services. Keep an eye out on growth prospects in the next few months. You never know when that second wind will appear.
Jimmy Weng
Live from Hong Kong!
7/31/06
Hi All!
My first month in Hong Kong has flown by in a glance. I wake up to a new world every morning cut off from anything and anyone familiar to me. Although by appearance I blend into the crowd as a Hong Kong citizen, the slight accent in my Cantonese hints away my foreign background. I'm really enjoying my Co-op here with Morgan Stanley because I'm engaged in all client and investor meetings with Capital Introductions while also learning and working with different teams in the Prime Brokerage division. Many of my colleagues speak English and Chinese in the workplace as well so I feel comfortable communicating in both languages.
Take your pick: taxis, minivans, buses, trams, ferries, or the MTR subway that will take you across all of Hong Kong, Kowloon, Lantau, and the new territories that border mainland China. Nearly every other passing car will be a taxi so you're sure to catch one of those speeding red vehicles anytime, anywhere. The minivans, buses, and trams will take you to the more remote areas that the MTR doesn't stretch to. Although the trams may be crowded and slow, you're sure to enjoy the tourist views for only $2 HKD! When riding the MTR subway, you'll walk through spacious and clean corridors with plastered ads and flat screen televisions sets as you make your way to the train. A glass wall separates the passengers from the tracks while a ticker board displays the waiting time for the arrival of the next train, which usually comes every 2-3 minutes.
The Culinary Capital
The Shopping Paradise
Ladies, you are in heaven. Gentlemen, those seats along the isle are for you. As you make your way through crowded streets and malls at late night, you'll notice a stream of luxury brands including Louis Vuitton, Fendi, Prada, Gucci, and Dior dominating shopping centers. What's more amazing is the line piling outsides of these stores as Hong Kong's growing middle and upper class continue their lavish consumption on expensive goods and international name brands. Mercedes, Porsches, and BMWs also line the streets mostly in the Central district like taxis along Lan Kwai Fong, the upbeat center full of bars, clubs, and restaurants.
The Financial Hub
Jimmy Weng
Preparing for Hong Kong
5/31/06
In order to operate in an ever-changing global economy, I approach my Finance and Accounting education with a non-insular perspective. While the fundamental business concepts taught in the classroom have strengthened my background in analyzing problems and creating practical solutions, strong management skills with cross-cultural literacy is essential to succeed in a state of globalization. I realized early in my college career that the best way to understand cultural differences across borders is by entering the foreign country and developing a working knowledge of the way it affects business practices.It is my greatest interest to discover the cultural differences and business practices in East Asia, which is why I have pursued an International Co-op with Morgan Stanley in Hong Kong.
As I prepare for my International Co-op in Hong Kong from July 10 - Dec 29, 2006, I have built coalitions with several professors including Professor Thomas and Professor Boyson to support my independent research project on the economic and political environment in China. After establishing myself in Hong Kong, I intend to travel across Guangdong, Fujian, Zhejiang, and Shanghai to explore the urban and rural sides of the world's fastest growing economy. While researching the country's market environment, I will assess key risks and social tensions that arise when conducting business in China. Special thanks to Ms. Ketty Rosenfeld, Ms. Cynthia Sweet, and Mr. Leonard Morrison from the International Co-op Department for their hard work in making this amazing opportunity possible. From Boston,Jimmy Weng
Jimmy Weng is an honors student majoring in Finance and Accounting with a GPA of 3.9. Prior to his International Co-op with Morgan Stanley in Hong Kong, Jimmy has worked with Fidelity Investments and Lehman Brothers. He is Vice President of the Honors Student Council after serving as Treasurer for the past two years. He is also the recipient of the 2006 Financial Executives International (FEI) Boston Chapter Undergraduate Scholarship Award and was admitted to the Summer Venture in Management Program (SVMP) at Harvard Business School.