Vol. 4, #7, August-September 2014, No. 41img1.midea.com/global/about_midea/publications/... · and...

Advances Newsletter, August-September, 2014

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Vol. 4, #7, August-September 2014, No. 41

Weeklong Training Session Held in Germany

28 Midea staff had the chance to learn from Germany’s leading companies


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ADVANCES Newsletter

Contents

Midea Advances Newsletter is published monthly

by the International Strategy Department of

Midea Group. We welcome all comments,

suggestions and contribution of articles, as well as

requests for subscription to our newsletter. You

can reach us by email at: [email protected]

Address:

ADVANCES, International Strategy Department

Midea HQ

No. 6 Midea Road

Beijiao, Shunde, Foshan, Guangdong

P.R.C. 528311

Tel: +86-757-23270461

Web: www.midea.com/global

Managing Editor:

Kevin McGeary

Regular Correspondents:

Anggie Cai

Tony Miao

Yan Li

Kuang Xiexing

Xia Zhiqiang

Crystal Lun

Zhang Bo

Liu Yonggang

NEWSLINE

Latin America Conference

Held in Miami PAGE 5

Half Year Net Profit at

US$1.07 Billion PAGE 3

CAC Wins Pakistan Wind

Farm Project PAGE 4

Group Receives Certificate

from Canadian Standards

Association PAGE 6

www.midea.com

A Putter Together of Products PAGE 15

Big Picture

People

Idea

Idea of the Month: The

Decline of Modesty PAGE 14

Midea Employees Attend

Weeklong Training in

Germany PAGE 7

Employees Enjoy Mid-

Autumn Festival in Vietnam PAGE 10

The Exodus from China PAGE

13

India Training Session:

“Selling Doesn’t Stop with

the Transaction” PAGE 6

Midea Helps World Cup

Stadium Reach Green

Standards Page 11

Water Heating Division

Receives Major Korean

Certification PAGE 10

How Washing Machines

Changed the World PAGE 12

Fun Facts CAC Holds Seminar in

Ecuador PAGE 9

M-Smart Debuts at Berlin

Exhibition Page 8

Residential Air-Conditioning

Launches Kids’ Range Page 12

RAC Wins National Award at

Beijing Forum Page 12


3

Half Year Net Profit at US$1.07 Billion

By Yan Li

M idea Group‟s financial report for the first half of

2014 was announced on the evening of August 19, showing a

period of continued robust growth. Midea Group Co., Ltd.

(SZSE: 000333) made USD12.6 billion in the first six months

of the year, a year-on-year increase of 18%. Among this, net

profit was USD1.07 billion, a year-on-year increase of 58%.

Earnings per share were USD0.26, a year-on-year increase of

58%.

At the same time, the group announced its projection

on performance for January-September as well as a stock re-

purchasing plan, a long-term plan that is aimed at increasing

shareholders‟ returns. Net income for January-September is

expected to grow 45-60% year-on-year

In the domestic market, Midea saw sales of USD7.3

billion, a 25% increase year-on-year while in overseas markets

there were sales of USD4.4 billion, a 7% increase year-on-

year. E-commerce saw sales of nearly USD650 million, a year-

on-year increase of 160% and exceeding the sales figure for

the whole of 2013.

Large appliances such as air conditioners, fridges and

washing machines accounted for USD 8.35 billion in sales, a

year-on-year increase of 19%, while small appliances such as

rice cookers and microwaves accounted for sales of USD 2.89

billion, an increase of 18%. The gross margin was 25.85%, an

increase of 2.92 percentage points.

Midea Group attributes this healthy performance to its

emphasis on and investment in consumer-focused innovation.

It is also improving its ability to position Midea products in

the market. According to China Market Monitor Co., LTD

(CMM), Midea and its subsidiaries were in the top two in

online sales of air conditioners, refrigerators, water heaters,

rice cookers and other small appliances in China. Online sales

are central to the company‟s long-term strategy. All of the

above have allowed Midea to reach 35th on the Fortune Chi-

na 500 list and top home appliances companies.

This year has also seen the launch of Midea‟s M-Smart

platform, the company‟s integrated approach to delivering a

„connected home‟ solution. Using intelligent, interoperable

technology, it aims to bring unprecedented levels of comfort

and cleanliness to the consumer. Midea is already building a

new M-Smart research institute. To fulfill the potential of this

platform, Midea will be working with Alibaba, Huawei,

JD.COM, Qualcomm, Neusoft, BAT, LeTV, and Hong Kong

University, to name a few.

In the 1st half of 2014, Midea founded an E-commerce

company, launched its official flagship store on Tmall, speeded

up the mix of Midea‟s online and offline businesses, and ad-

vanced the “last kilometer” service level for E-commerce busi-

ness. In the 1st half of 2014, Midea Group‟s E-commerce sales

revenue reached USD639,346 million, representing a year-on-

year increase of 160%. At the same time, sales revenue of Midea

Group on the JD.COM platform reached USD265,174 million,

a year-on-year increase of 220%, and the sales revenue of Midea

Group in Taobao (including Tmall) reached USD318,859 mil-

lion, increasing by 132% year-on-year. Midea became the num-

ber one brand for sales in small household appliances on

Taobao (including Tmall).

As flagship stores are significant links in Midea‟s E-

commerce strategy, the company pushed forward the opening

of Midea flagship stores and positioned them as providers with

the functions of retail, aftersales service, delivery and installa-

tion. As at the end of June 2014, about 1400 flagship stores had

been set up, the capability of comprehensive aftersales service

for whole product categories was upgraded, the value and effect

of Midea flagship stores as the strategic channels of Midea

Group with special competitive advantages had been showing,

and the O2O converged business of E-commerce mainly based

on flagship stores is gradually being implemented.

After years of development, Midea has a forged a strong

corporate identity and a decentralized management structure,

which has laid the foundation for its continued development.

From 2011 to 2013, Midea undertook an internal reorganiza-

tion. This involved advancing its internal management system,

improving its business management system, ensuring the indi-

vidual strength of each division, refurbishing the company

headquarters, and improving operational efficiency. There was

also a middle-management equity incentive plan in a bid to

serve the interests of all parties involved.

NEWSLINE


4

CAC Wins Pakistan Wind Farm Project

C onsidering the environmental prob-

lems that the world is facing, wind farms are

expected to be a big part of our future and com-

panies are falling over each other to win govern-

ment contracts for such projects. In the recent

bid to provide ventilation and air-conditioning

equipment for the Three Gorges Pakistan First

Wind Farm Project, Midea Commercial Air-

Conditioning (CAC) spared no effort and even-

tually won out.

The equipment has already been made and

the shipment was done in July ahead of the in-

stallation which will take place later this year.

Constructed under China Three Gorges Corpo-

ration and valued at US$130.3million, the Wind Farm Pro-

ject has a total installed capacity of 49.5 Mw (megawatt).

The Wind farm will be situated in Sindh Province, 90

kilometers west of Karachi City, the largest port and indus-

trial center, and 80 kilometers off the southern Arabian Sea

coast. The project is part of a campaign to solve the energy

shortage currently facing Pakistan. The subtropical climate,

hot ambient temperature at 50 ℃ , and high humidity pose

higher demands on air conditioning equipment.

Apart from that, the equipment is required to have

remote monitoring and control. Due to the extreme local

climate, Midea CAC chose trop-

ical digital VRF systems to deal

with the extreme weather in the

area.

The system operates smoothly

to offer a continual cooling

effect to the power station and

will be another feather in the

cap of CAC.

NEWSLINE

By Anggie Cai


5

Latin America Conference Held in Miami

By Tony Miao

M idea CAC Latin

America Partner Conference 2014

concluded on July 19 in Miami,

USA. A total of 45 clients from

Latin and North America attend-

ed the three-day conference repre-

senting 15 distributors and agen-

cies of Midea or MDV brands.

The first day saw market

information and Midea‟s market-

ing policy laid out. It was generally

believed that the company‟s varia-

ble refrigerant flow (VRF) busi-

ness will enjoy an increasingly

robust profile in Latin America

over the next few years. It cur-

rently holds an almost 10% mar-

ket share in the global AC indus-

try and increases at a yearly

growth rate of more than10%.

All the distributors were there to help develop the scheme

for the company‟s VRF business in the region. The other two

days focused on CAC products and technical training. Flagship

products were presented and introduced. These included Midea

super inverter VRF system which has been praised for attaining

the highest technology level in

the VRF industry. The fourth

generation web controller IMM

(Intelligent Manager of Midea)

and VRF system installation and

commissioning were also intro-

duced.

Midea CAC‟s team also held

meetings with each client individ-

ually, discussing future plans and

further cooperation. They all had

the same goal of expanding busi-

ness in the Latin American mar-

ket and shared ideas on product

development and marketing

strategy to stay ahead of the com-

petition.

NEWSLINE


6

Group Receives Certificate from Canadian

Standards Association By Anggie Cai

M idea Group received a heating, ventilation and air-

conditioning (HVAC) standard certificate from the Canadian

Standards Association, a global certification and testing organi-

zation, on August 4. This certification

confirms that Midea meets the latest

uniform HVAC standard (Standard

CAN/CSA C22.2 No.60335-2-40-12)

for the United States, Canada and Mexi-

co.

Currently, the requirement is based

on the globally recognized IEC Standard

(IEC 60335-2-40). The additional re-

quirement of the standard deviation

between USA, Canada and Mexico is

minimized to help manufacturers apply

products of the same design all over the

world.

Products that are authenticated by the new standard see

invariably their international credibility increase. It also helps

manufacturers shorten the product development cycle and re-

duce costs.

“Particular Requirements for Electrical Heat Pumps, Air-

Conditioners and Dehumidifiers” as stipulated in the latest

HVAC standard for North America

will be put into compulsory imple-

mentation from December 30, 2022.

As a mature market, North America

places the highest emphasis on prod-

uct safety and has stringent quality

requirements.

Standards for products are set based

on this and make it hard for new-

comers to access the market due to

technical barriers. Midea‟s reception

of this certificate will help streamline

its access to markets in North Ameri-

ca and around the world. It also marks a milestone in the

group‟s development.

NEWSLINE

By Kuang Xiexing

India Training Session: “Selling Doesn’t Stop

with the Transaction”

T o boost Midea‟s po-

tential for brand recognition and

inspiring brand loyalty, the Water

Heating Division held sales train-

ing sessions in three Indian cities

in August focusing on after-sales

service and installation.

The division sent research

and development engineers to

guide staff in products‟ selling

points and demonstrate installa-

tion.

The EYC series of water

heaters are the latest products that the division is promoting in

India. For the product to be success-

ful, customers must enjoy a problem

-free installation and appreciate the

full range of benefits that the prod-

uct offers.

The session lasted a total of eight

days, taking in Mumbai, Delhi and

Hyderabad. Those receiving the

training included marketers, techni-

cians, and repairmen.


7

Midea Employees Attend Weeklong Training

in Germany By Xia Zhiqiang

M idea held a weeklong training session in Ger-

many from September 1-7 to enable some of the compa-

ny‟s employees to learn strategy from their German coun-

terparts. Twenty-eight Midea employees attended the ses-

sion which covered topics such as innovation, global strate-

gy and development.

For the first five days, attendees examined eight lead-

ing German companies to learn case studies. These includ-

ed SUSPA, BMW, Aldershof, and Siemens. They were giv-

en the chance to meet representatives of these companies

and take a look at their operations for an educational expe-

rience.

On the nights of September 2, 4 and 5 respectively,

training sessions were held on the topics "The innovation

and technology management of German manufacturers",

“The champions among German companies,” and

“German green appliances.” All of these topics proved

relevant to the situation of Midea and its future aspira-

tions.

Speakers at these events included president of Sie-

mens stock company Professor Sandra Muller, Germany‟s

minister of industrial and economic policy Dr. Hass, and

consumer protection expert Mr. Mezari. Although their

ideas were diverse, all had useful things to say about how

German companies follow the principles of innovation and

low energy consumption and have largely withstood the

Global Financial Crisis of recent years.

Then on September 6, the Midea employees attended the

Internationale Funkausstellung Berlin (IFA), the world's leading

trade show for consumer electronics and home appliances.

There they could take a look at some of the industry‟s cutting-

edge products and be influenced by some of the leading think-

ers in the field.

Those who attended the training session had their eyes

opened and broadened their understanding of how German

companies have been so successful around the world. In the

long-term this training session will help improve Midea‟s prod-

ucts and its ability to promote them.

NEWSLINE


8

M-Smart Debuts at Berlin Exhibition

By Crystal Lun

next three years, total investment in research and

development will reach 15 billion RMB. The M-

Smart research and development centre, which is

being built near the group headquarters in Shun-

de, will cost 3 billion RMB.

Midea representatives in attendance included

group chairman Fang Hongbo, vice president and

head of international strategy Andy Gu, and Mao

Hongjian, M-Smart‟s head of research and devel-

opment. They and their colleagues were proud to

show off the development of a platform that

could revolutionize people‟s relationship with

their appliances.

NEWSLINE

M idea attended the 2014 Internationale

Funkausstellung (IFA) Berlin, the world's leading trade

show for consumer electronics and home appliances, on

September 5-10. The event saw Midea promote the M-

Smart platform of intelligent, interoperable appliances in

Germany for the first time.

Midea unveiled an App that can control household

product categories including large ovens, microwave ov-

ens, dishwashers, refrigerators and air-conditioners. M-

Smart is already able to boast three major functions: Intel-

ligent home appliances operation management, home

appliances operation data management, and home ap-

pliances all-weather service.

M-Smart has automatic access to environmental

data, automatically remembers consumer habits, and is

capable of automatic adjustment according to consum-

er habits and outside temperatures. In March this year,

M-Smart unveiled its 1+1+1 strategy, which is

“intelligent housekeeping system + M-Smart commu-

nity + the M-Box management centre.” The ultimate

goal is to bring home appliances into an eco-friendly

circle.

In 2014, Midea will invest 4 billion RMB

(US$651,820,349) in research and development. In the


9

By Tony Miao

CAC Holds Seminar in Ecuador

A professional training semi-

nar covering both products and tech-

nology was held in Kuyaquil, Ecuador

on July 21-22. It is organized by Midea

Commercial Air Conditioning (CAC),

together with the local distributor.

A total of 40 product and tech-

nical engineers attended the seminar

which concentrated on Midea VRF

systems and chiller systems. It was di-

vided into two parts. The first part fo-

cused on product training about the

product lineup, product selection and

basic design for the projects. The se-

cond part centered upon technical train-

ing on topics such as product installa-

tion, system commissioning and trouble

shooting.

This is the second year this seminar has been held in Ecua-

dor. It has generated a lot of enthusiasm among local distribu-

tors. Through the training program, we can share product and

technical information with the installer and obtain first-hand

market information to improve our products and services.

Midea VRF market share is No.2 in the Ecuador market thanks

to the swift response of the engineers who took regular tech-

nical training arranged by CAC. Most installers and contractors

have claimed to have had a positive experience with the Midea

VRF system.

For the whole commercial air-conditioning industry, Latin

America is a promising market. Midea promotes VRF and other

commercial air conditioning products in this

market and currently has a full range of 60Hz

products including VRF, chiller, and rooftop

package units.

The current strategy involves promoting CAC

products with local distributors. Through quali-

ty products and technical training, the local dis-

tributors have become familiar enough with

Midea to provide sufficient support to the local

market.

Additionally, the local VRF training center pro-

vides a real-time operation experience to all

installers and technical service engineers. This

has given Midea yet another reason to be opti-

mistic about its prospects in Latin America.

NEWSLINE


10

Employees Enjoy Mid-Autumn Festival in

Vietnam By Zhang Bo

M id-Autumn Festival, which fell on Sunday Septem-

ber 8 this year, is the second most important festival in Chinese

as well as Vietnamese tradi-

tional culture. In China it

became a national holiday in

2008 while in Vietnam work-

ers are allowed to get off

work two hours early, which

means the day‟s quotas can

still be met.

There are around 2

million Chinese in Vietnam,

most of whom are in Ho Chi

Minh City. The Chinatown

in the city was predictably

packed on the day of the

festival. Lanterns are a major part of festival celebrations in both

countries and the city was a galaxy of the things on the night of

Mid-Autumn, which is also known as The Moon Festival.

As an engineer at Midea‟ washing machine factory in Vi-

etnam, I and some Chinese colleagues made a beeline for the

Chinatown as soon as the day‟s work was over. Many of the

products sold at the

countless stalls in the

Chinatown were made in

China so it felt just like

home.

Upon arriving at our

dorm at 11 p.m. we called

our families and finally

opened the box of moon

cakes that the company

had gifted each of us.

Unfortunately, we never

got time to glance at the

full moon, which is one

of the most important Mid-Autumn Festival traditions, but it

was a full day nonetheless.

NEWSLINE

Liu Yonggang

Water Heating Division Receives Major

Korean Certification

industry-leading evaluation centre,

and comprehensive system man-

agement all made a positive im-

pression on KGS. At the sum-

ming up meeting on August 15, it

was confirmed that the AB135

standard had been attained.

This will enable Midea to step up

its cooperation with Korean heat-

ing giant KyungDong Navien and

the Water Heating Division to

grow in the Korean market. It will

also boost the division‟s credibility

around the world.

A uditors from Ko-

rean Gas Safety (KGS) were

at Midea Water Heating Divi-

sion‟s Wuhu manufacturing

base from Sept. 11-15 to test

for the AB135 standard,

which is essential to opening

up the South Korean market

for gas water heaters. The

division took months to pre-

pare for the audit.

The division‟s world-

class production workshop,


11

By Anggie Cai

Midea Product Helps World Cup Stadium

Reach Green Standards

G overnments and non-governmental

organizations across the globe are taking

measures to back sustainable buildings. When a

building is described as “green” it means there is

something environmentally friendly about the

design, construction, or operation. Leadership

in Energy and Environmental Design (LEED)

is one of the world‟s most influential rating sys-

tems for green buildings and is implemented in

around 130 countries.

Located next to the river Rio Guaíba, Beira Rio stadium

has a capacity of 60,800. It is the biggest stadium in southern

Brazil and its pitch has recently been voted the best by captains

of 20 professional Brazilian football teams.

Located in Porto Alegre, it overcame fierce competition to

host several matches at the 2014 FIFA World Cup. Moreover,

Beira Rio, which has installed Midea products, has been granted

the LEED silver certification issued by the U.S. Green Building

Council.

This means that it met the requirements of environmental

friendliness, energy saving and sustainability. It is also in line

with international standards of green buildings.

Midea, a world leader in HVAC solutions, played a huge

part in the certification by providing the highly efficient VRF

heat recovery system V4 Plus R series to the venue. V4 Plus R

series VRF, features top cooling and heating effect. It can

achieve simultaneous cooling and heating, which greatly reduces

energy consumption and helps cut the running cost.

Besides, it is friendlier to the environment as it emits less

carbon dioxide and makes the place more comfortable for fans.

Throughout the years, Midea CAC has been dedicated to devel-

oping green products and has attained great achievements in

energy saving and green technology. In Brazil, less than 1% of

buildings have certification of sustainability, let alone something

as high level as an LEED rating.

LEED is an internationally recognized green building cer-

tification system, providing third-party verification that a build-

ing or community was designed and built using

strategies aimed at improving performance across

all metrics that matter most: energy savings water

efficiency, CO2 emissions reduction, improved

indoor environmental quality, and stewardship of

resources and sensitivity to their impact.

Developed by the U.S. Green Building Council

(USGBC), LEED provides a points system to

score green building design and construction. The

system is categorized in five basic areas: Sustainable

Sites, Water Efficiency, Energy and Atmosphere,

Materials and Resources, and Indoor Environmen-

tal Quality. Buildings are awarded points based on

the extent to which various sustainable strategies

are achieved. The more points that are awarded the

higher the level of certification achieved from Certified, Silver,

Gold, up to Platinum.

NEWSLINE


12

Residential Air-Conditioning Launches Kids’

Range By Crystal Lun

R esidential Air-Conditioning (RAC) launched a range

of childrens‟ products in Wuhan in September that boast, among

other fea-

tures, a

thermal

infrared

detection

system

that can

detect

when

a child

is

kick-

ing in

bed.

Tem-

perature and

wind speed

are automati-

cally regulat-

ed and there

are both

“prince” and

“princess”

versions de-

pending on

the gender of

the child.

RAC

hopes to

make parents

unprecedent-

edly safe in

the knowledge that their children are sleeping in an appropriate-

ly cooled and ventilated room.

NEWSLINE

RAC Wins National Award at Beijing

Forum

long stuck to the principle of

advancing the industry while

improving people‟s lives. It has

the simple philosophy of

“whatever you do, do it well.”

This is manifestly paying divi-

dends as the awards keep rolling

in.

On August 1, RAC

launched its 2015 ”smart house-

keeper” model at an exhibition

of new products. Midea will play

its own part in Midea‟s bid to bring intelligent air-

conditioning to users‟ homes.

R AC was awarded as a leading brand in inverter air-

conditioners at the 2014-2015 Chinese Air-Conditioning Indus-

try Development Forum in Beijing on August 28. The forum

was jointly held by The State Information Centre, The Infor-

mation

Resources

Develop-

ment De-

partment,

and China

Appliances

Network.

CAC has


13

By Advances

How Washing Machines Changed the World

In the “Fun Facts” series, Advances shares some largely forgotten

stories about household appliances and how they have revolutionized the way

people live.

Life before washing machines: Laundry was first done

in watercourses, in which the washer would hold the clothing in

flowing water. Laundry is still done this way in some less indus-

trialized areas and rural regions. Agitation helps remove the dirt,

so the laundry is often rubbed, twisted, or slapped against flat

rocks. Wooden bats or clubs could be used to help beat the dirt

out. These were often called washing beetles or bats and could

be used by the waterside on a rock, a block, or a board.

Washhouses: Laundry was also done in communal or

public, especially in rural areas of Europe or the Mediterranean

Basin. Water was channeled from a river or spring and fed into a

building or outbuilding built specifically for laundry purposes

and often containing two basins - one for washing and the other

for rinsing - through which the water was constantly flowing, as

well as a stone lip inclined towards the water against which the

washers could beat the clothes. Such facilities were much more

comfortable than washing in a watercourse because the launder-

ers could work standing up instead of on their knees, and were

now protected from the elements.

Earliest washing machines: A drawing of an early wash-

ing machine appeared in the January 1752 issue of

"The Gentlemen's Magazine", a British publication. It

consisted of a wooden box that was filled with clothes

and rotated by hand.

One of the first innovations in washing machine

technology was the use of enclosed containers or ba-

sins that had grooves, fingers, or paddles to help with

the scrubbing of the clothes. The person using the

washer would use a stick to press and rotate the

clothes along the textured sides of the basin or con-

tainer, agitating the clothes to remove dirt. It was the

most efficient way yet invented to clean clothes.

In 1862, after the appearance of steam power, a patented

"compound rotary washing machine, with rollers for wringing or

mangling" by Richard Lansdale of Pendleton, Manchester, was

shown at the 1862 Lon-

don Exhibition.

Entry into the

mass market: The first

mass-marketed electric

washing machine was the

Thor, a tumble washer

produced by the Hurley Machine Company in 1908. The ma-

chine worked by tumbling clothes with a wooden drum, in two

directions, at eight revolutions per minute. The drum‟s rotation

mechanisms were powered by a single Westinghouse Electric

Company electric motor and connected together via drive belts.

Most innovatively, however, the Thor featured an integrated

clutch, which allowed the machine to switch revolution direc-

tion and also be held in a stationary position once power was

supplied.

The Chinese Laundromat: In the United States and

Canada in the late 19th and early 20th century, the occupation

of laundry worker was heavily identified with Chinese immi-

grants. Discrimination, lack of English-language skills, and lack

of capital tended to keep Chinese-Americans out of the most

desirable careers. Around 1900, one in four ethnic Chinese men

in the U.S. worked in a laundry, typically working 10 to 16 hours

a day.

Role in women’s liberation: The washing ma-

chine is strongly considered by academics as hav-

ing done more for women‟s liberation than the

birth control pill. Home appliances freed up wom-

en‟s time, allowing them to enter into the work-

force and develop other skills which might serve

them well in industry.

Ancient practices adapting to the modern

world: In India, Dhobis, a caste group that special-

izes in washing clothes, are adapting to modern

technology. Since most modern homes are equipped with a

washing machine, many Indians have dispensed with the ser-

vices of the “dhobiwallahs.”

Fun Facts


14

The Big Picture: The Exodus from China

By Kevin McGeary

T he People‟s Republic of China is losing some of its

most successful and capable people to emigration. This exodus

of the wealthy could harm both job creation and innovation.

A survey by Shanghai research firm Hurun Report shows

that 64% of China‟s rich, defined as those with assets of more

than US$1.5 million, are either emigrating or planning to. Last

year, the United States issued 6,895 visas to Chinese nationals

under the EB-5 program, which allows foreigners to live in

America if they invest a minimum of US$500,000.

Reasons cited for the exodus include problems such as air

pollution, food safety, and the stultifying education system. The

ongoing crackdown on corruption, though necessary, is also

causing wealthy people to fear for their assets and freedom.

Although more than 90% of Chinese feel they enjoy a

higher standard of living than their parents, a Pew Global Atti-

tudes survey found that people are

worried about domestic issues such as

inequality. China‟s rise to becoming

the world‟s second largest economy

should not take attention away from

the fact that, in terms of per capita

GDP, it still lies outside the top 80.

“Why I‟m Leaving China” arti-

cles have been something of a meme

since 2012 when high-profile expats

such as publisher Mark Kitto, blogger Charles Custer, and New

Yorker correspondent Evan Osnos led a nominal exodus from

the Middle Kingdom.

Overseas Chinese have and will continue to play a big part

in the country‟s development. Many of the most important fig-

ures in 20th century China were educated abroad, from Sun Yat-

sen and Deng Xiaoping to Lin Yutang and Lu Xun.

However, there is a difference between fleeing an econom-

ic and intellectual backwater and leaving the world‟s rising super-

power. This is why the government is concerned and has intro-

duced policies to make sure emigrants remain connected to the

motherland, according to The Wall Street Journal.

There are some 48 million members of the Chinese dias-

pora, more than double the number of Indians abroad. The

Overseas Chinese Affairs Office of the State Council sets out to

make use of this strength in numbers by safeguarding the patri-

otism of those who leave.

The council has a hugely successful and concerted cam-

paign through overseas Chinese websites, newspapers, schools

and church groups to foster a continued connection to the

homeland. Students can be ambassadors for China. Scientists

and engineers can use their knowledge to help their country‟s

continued growth.

This exodus is something that the current government can

turn to its advantage. Historian Odd Arne Westad has asserted

that overseas Chinese “were and are the glue that holds China‟s

relations with the world together, in good times and bad.”

The best periods of China‟s history have invariably come

when it was in dialogue with the world. These include The Tang

Dynasty when there was a thriving Middle-Eastern community

in Guangzhou and The Ming Dynasty when Zheng He‟s fleet

landed in Africa and the Middle East.

As for people fleeing for higher living stand-

ards, the London and New York that we know

today became what they were in the nineteenth

century when the air and rivers were hardly

clean and it was necessary to do morally dubi-

ous things to get ahead, just like most major

Chinese cities today. Today‟s China reminds

New Yorker correspondent of America‟s

“gilded age” during which the country went

from having fewer than 20 millionaires in 1850 to 40,000 in

1900.

However, China has given itself an unnecessary disad-

vantage when it comes to migration. As Eric Liu pointed out in

The Wall Street Journal recently: “America makes Chinese Ameri-

cans. China doesn‟t make Americans Chinese.”

What China lacks and the first world countries of Western

Europe, North America and Oceania have is a willingness to

embrace diversity and accept a fluid definition of what it means

to be of this nationality. A naturalization procedure is found

under China‟s Nationality Law but precious few people pursue

it and fewer still are encouraged to.

China is exercising a great strength in its harnessing of

overseas Chinese, but it missing a trick by having such a rigid

definition of what it means to be Chinese.

BIG PICTURE


15

IDEA

Idea of The Month: The Decline of Modesty

By Kevin McGeary

A ugust saw a public confession by 23 year-old inter-

net celebrity Guo Meimei take valuable air time away from hu-

man tragedies such as a factory explosion in Jiangsu and an

earthquake in Yunnan. This is a sign of the celebrity-soaked

culture we live in. As one joke goes, the inventor of the selfie

needs to take a look at himself.

Tireless self-promotion has in a short time gone from

being a social faux pas to a norm. This is understandable con-

sidering the competitiveness of today‟s labour market. The

number of college graduates in China will reach a record 7.27

million this year, up from 6.99 million in 2013, according to the

Ministry of Education.

Although the job market is slightly less tough than last

year, the most competitive in the nation‟s history, this picture of

a graduate job fair lets you know how

important it is to stand out. Unlike their

parents‟ generation, today‟s youngsters

are not assigned work, so modesty is a

luxury for those who don‟t have to mus-

cle their way ahead in the rat race.

There is a TED talk that claims

that the Curriculum Vitae/resume is an

obsolete phenomenon and what is now

important is what shows up when you

get Googled. In other words, you need to have strong profiles

on all of your social media, a world in which modesty gets you

nowhere.

The Chinese language contains the phrase “excessive

modesty is a form of arrogance,” but this simply underlines a

culture in which modesty has long been the standard among

people of refinement. The expression “哪里，哪里？” (lit.

“where, where?”), which is still in common use, is the polite

way of taking a complement.

A culture should value modesty. There is plenty of evi-

dence that quietly competent people are better to work with

and work for than brash and over-confident ones. According to

the book “Confidence” by psychologist Tomas Chamorro-

Premuzic, lacking arrogance “frees you from the dangers of

over-optimism, stops you ignoring negative feedback and keeps

you motivated to acquire skills. Disasters of recent history such

as The Iraq War and The Lehman Brother‟s collapse were the

work of excessively self-confident people.

Gu Cheng, one of the greatest Chinese poets of the

twentieth century, once wrote in a letter to a fan: “I hope to

see your poetry but I cannot give a critique. I don‟t understand

theory or standards, I only understand emotions.” He would

have struggled to have had much of a career in the age of

LinkedIn profiles and microblogs.

This loss of modesty may be most evident in the world

of the arts. The heroes of the great nineteenth century novels

are overwhelmingly middle-class people characterized by de-

cency, stoicism and humility. Now the novel is a marginalized

art form and film reigns supreme. The film industry, judging by

the lavishness and frequency of its awards ceremonies, is a

contender for the world‟s most immodest. Its spiritual and

commercial capital, Hollywood, is a place that has little pa-

tience for the low-key.

In the media age, it is easy to forget that, by

and large, the people who do the most im-

portant work in the world are still barely

visible. David Zweig‟s recent book

“Invisibles: The Power Of Anonymous

Work In An Age Of Relentless Self-

Promotion” introduces characters such as a

concert piano tuner; a magazine fact-

checker; the structural engineer responsible

for some of the world's tallest buildings and

a UN interpreter. It celebrates “a reverse attitude about life, in

a culture that seeks endless pats on the back.”

Being motivated by things beyond our control such as

popularity can damage creativity. However, people tend to go

where the respect is. Due to media saturation, astronauts are

overrated and nurses are underrated. Singers are overrated and

firefighters are underrated. That the quest for fame is folly has

been common knowledge for centuries. Anton Chekhov‟s

short story “The First Class Passenger” is one of the wittiest

ever takedowns of those who aspire to be famous.

Sadly, a degree of self-promotion that would have been

frowned upon a generation ago is now unavoidable. However,

a person‟s meaning and identity does not have to be derived

from awards, job titles and other diversions.

People should boost their LinkedIn profiles by all means

but this is not what matters most. Harry Truman put it best:

“It‟s amazing what you can accomplish when you don‟t care

who gets the credit.”


16

A Putter Together of Products

By Kevin McGeary

Du Fu Production supervisor

The Midea Group headquarters were described by a

previous Advances interviewee as like a five star hotel.

This magazine has also interviewed Midea employees that

were doing important work for the company in places as

diverse as Indonesia, Brazil and the United States.

However, the heart and soul of a manufacturer is the

worker who assembles the products. Midea has factories

scattered throughout China, in Belarus, in Egypt and in

Brazil. There are also multiple factories in Shunde, where

the group headquarters is located and

Midea is one of the biggest local em-

ployers.

Du Fu, 32, is a production supervi-

sor at Midea’s cleaning appliances fac-

tory in Shunde, where he has worked

since 2004. He has kindly taken the

time to talk to Advances about his life

and work

Advances: How long have you been

at Midea?

Du Fu: I have been here seven years. It was my first job

after arriving from my native Sichuan, where I went to college

but didn‟t take my degree. There‟s a lot I like here, my family is

in Shunde and I get

along great with my

colleagues. If things

had worked out dif-

ferently, I may have

become a doctor. But

China can be a very

difficult place in

which to be a doctor.

Advances: Is your factory safe?

Du Fu: There are some factories in China where the work

is dangerous, but ours is not. There has never been a serious

accident in my time at the factory due to the nature of the work

and the stringent safety standards.

Advances: How are you treated?

Du Fu: The line leaders treat ordinary workers well,

though everybody at the factory is held to high standards. Meet-

ing these standards is a challenge but that is to be expected.

Advances: How do you get along with your colleagues?

Du Fu: The best part of my job is the camaraderie. At

some factories in China, workers get hoarse from shouting over

loud machinery all the time, but at our factory it is quiet enough

to be able to chat with people on the same line.

After work we often eat and have beer together. Also, the

company occasionally takes us on out-

ings.

Advances: You are from Sichuan, how

about life here in Shunde?

Du Fu: I live with my wife who I met

through a matchmaking activity, and my

father also lives down here. She works

in his restaurant where the busiest time

of day is breakfast. We go back to Si-

chuan to visit my mother every New

Year.

Advances: What do you normally do in your free time?

Du Fu: As well as hang out with colleagues, I spend time

with my six year-old son and try to help out with his education.

Advances: Is your house full of Midea products?

Du Fu: Of course. Our air-conditioner, washing machine,

fan and fridge are all Midea.

Advances: Do you think you will be in your current job

indefinitely?

Du Fu: Maybe. I follow business and I like to dabble in it.

Who knows what opportunities may one day arise?

PEOPLE


17

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