Having cynically followed Mattel and other foreign companies challenges down the supply chain with interest and sighing, wondering how they could let it happen, this Interview between Knowledge@wharton and Marshall W. Meyer, (professor of management at Wharton) caught my interest today. It introduces the concept of Cheng Bao wherein it is common to subcontract out some or all of a production run, thus making it difficult to control quality down the line.
For instance my experience at my local vegetable market today. I always frequent the same stall as I find the vegetables to be fresher and of a higher quality there. (the laoban also doesnt rip me off beyond what I can put up with given her happy demeanor and great attitude to foreigners) My particular mission on this occasion was to buy white button mushrooms, so I was dismayed t see none on display. So I asked, do you have those mushrooms i always like?
Vege lady: Sure! you want mushrooms?
Me: Absolutely
To which she scuttled off to a nearby stall which I decided to boycott months ago due to crappy vegetables and high laowai prices, and resold me some mushrooms.
Though I thought Meyer’s analogy was perfect and If you have ever backpacked within or had to take an illegal taxi in China (you know the illegal ones that signs warn you about but are allowed to operate unpoliced?) you are bound to agree:
Meyer:
…you get into a taxi in Shanghai and say, “Take me up to Suzhou,” which is a good long ride. It would normally be about 300 to 350 RMB on the meter. Let’s say that would be about $45 to $50. You agree with the cabdriver on a fare and say, “Don’t do it on the meter. I’ll just give you 400 RMB, tax, tips, tolls all included.”And you hop in the cab and he goes three blocks and then waves down his friend and says to him, “Will you take these folks up to Suzhou for 300 RMB?” And the next thing you know you are transferred to the other taxicab. The first driver pockets the difference and you’ll get your ride up to Suzhou. That’s not a problem. It’s interesting how transactional so many events are in China.
If you came here via google looking for the best way to get from Shanghai to Suzhou, the universally accepted taxi fare, tolls included is RMB450, though you could negotiate this down if you know Chinese of get a particularly desperate driver.
The reality I have experienced, when trying to take taxis between cities in China its that the drivers will often eject you at toll booths and make you wait until a suitable “buyer” arrives on the other side. BEWARE.
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