The More Things Change in China – Hershey’s Chocolate Edition

The other day I was scanning headlines and came across an interesting item: earnings are suffering at Hershey’s chocolate due to a disappointing China performance. That’s not how it was supposed to work out: back in 2013 Hershey, in an expansionist mood, acquired candy maker Shanghai Golden Money for $584 million, in hopes that it could become China’s biggest chocolate player.

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What went wrong? Was this just another case of China’s souring economy  dragging down another venerable American company? Or was there something else at play here – something more subtle. In search of an answer, I emailed a gentlemen whose judgment on foreign investments in China I trust, and who asked that – for the purposes of this blog – he be referred to as “Cocoa.” He took a look at Hershey’s attempt at an explanation, and used it to form his own. So, with Cocoa’s permission, I reprint Cocoa’s sound explanation for why Hershey’s is tanking in China.

“I think Hershey’s problems in China – and as judged by China – have nothing to do with Hershey’s chocolates taste which is acceptable, design and packaging which is okay, price which is reasonable and all in all an acceptable value (I pointedly dismiss all other products but the chocolates no matter in what form; peanut butter cups probably make the average Chinese gag). Rather, the company bought a pig in a poke, to wit Shanghai Golden Monkey which Hershey now understands has an “unstable distributor network” (call that distributors disloyal to the brand who can’t be won over to push sales without hefty rebates coming into their pockets) and so the “retail customer reach is not as broad as we (Hershey) believed it to be” (meaning the customer base is much, much smaller than was presented to Hershey) and so the consequence that sales in 2015 are US$90 million less than the US$200 million they expected – well, that’s 45% below projections which to anyone in industry is a sure-fire pink slip to all involved. In short, Hershey’s problems in China have nothing to do with chocolates but everything to do with newbies coming to China and being sold a bill of goods. Yep, it’s that simple.”

I have nothing to add to this except to say that, a) I agree, and b)  it’s remarkable that after three decades, well-heeled, established companies continue to allow their enthusiasm to run past their common sense when seeking growth in China.

Two Women, Two Systems – thoughts on Taiwan’s (soon to be) first female leader

When Chairman Mao famously declared that “Women hold up half the sky” in 1968, he probably didn’t expect that Taiwan – a renegade province in China’s eyes – would show up the Mainland in proving it. But that’s precisely what happened last weekend when the pro-China ruling Kuomintang Party nominated a woman, Hung Hsiu-chu, to run for Taiwan’s presidency. In January she’ll compete against another woman, opposition leader Tsai Ing-wen, all but ensuring that democratic Taiwan will have its first female leader in 2016.

That places Taiwan years if not decades ahead of China, where the top levels of government have remained almost the exclusive domain of well-connected men since Chairman Mao took power in the 1940s. For Taiwanese voters – and especially Taiwanese women – that’s a striking reminder of how China’s political system not only restrains political freedoms, but actually serves to hold back social progress. And come January, the election of Taiwan’s new president will only serve to emphasize how the gap is widening. Continue reading

Who Will Protest China’s Stock Market Plunge?

Last August several hundred protestors gathered outside the Shanghai sales office of China Greentown Holdings, a real estate developer, holding banners with slogans such as “300,000 yuan worth of assets evaporate within five days — years of work in vain!” That loss – around $48,000 – was the difference between what the protestor had paid for a home, and the current price at which Greentown was now marketing models in the same complex. The protest wasn’t unique. A few weeks earlier, homeowners at the Champs Élysées housing development in Hangzhou gathered to protest a similar developer price cut, holding banners with message such as “Return my blood and sweat money” while police formed barricades. Around the same time in Jinan, a city 500 miles north of Shanghai, a similar protest turned violent after yet another market-desperate developer discounted homes by 25 percent. And those were just the most recent permutations of a phenomenon – homeowners protesting their devalued homes – that goes back to 2011, at least. Continue reading

What Does Hillary Clinton Think About My Blog?

Last night the State Department released around 3000 of Hillary Clinton’s private emails to its website. To my great surprise, one short email exchange was concerning this blog (thanks to James West at Mother Jones for bringing it to my attention). The topic was a blog post that I’d written on the diplomatic fiasco that the U.S. pavilion for Expo 2010 (a.k.a the Shanghai World’s Fair) was then becoming. The people State had chosen to design, build and run it were becoming major liabilities, and I’d been very critical, both on this blog and in the U.S. media (especially at the Atlantic).

On July 11, 2009, I wrote this blog post. Not long after, Thomas Cooney, a U.S. Consular Official in Shanghai forwarded the post to several people, including Jose Villarreal, the U.S. pavilion’s commissioner-general, who forwarded it to Cheryl Mills, then Clinton’s Counselor and Chief of Staff, who in turn forwarded it to Clinton herself. Clinton then responded to Mills.

What did Clinton say? Clinton’s only email in the exchange – issued yesterday – is below. Readers will note that her comments – whatever they might be – were redacted, scrubbed!

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This is a grave disappointment. After all, it’s not every day that I get feedback on my blogging from a Secretary of State (even if that feedback is six years old). What happened? Did my simple post set off a profane rage in the Secretary? Or perhaps someone at the State Department simply doesn’t want the world to know that Hillary Clinton was/is a Shanghai Scrap fan.

Whatever the truth, I’d like to know it. So right here, right now, I’m ready to make an offer. If you have access to the original email, I’m willing to exchange a hardcover copy of Junkyard Planet: Travels in the Billion Dollar Trash Trade, for an off-the-record look at it. But wait! If you’re willing to go on the record, I’ll not only give you a copy of Junkyard Planet: Travels in the Billion Dollar Trash Trade, I’ll sweeten the deal by throwing in a case of the American-brewed beer of your choice.

Reach me via the Shanghai Scrap contact form; confidentiality assured.

Junkyard Planet Goes to China

I’m pleased – as in thrilled – to announce that the Chinese edition of Junkyard Planet has just been published. When I started writing the book four years ago, I always had a Chinese audience in mind. Nonetheless, for all kinds of reasons, there was never any guarantee that I’d reach that audience. So the fact that the book is now available in bookstores across the country is incredibly satisfying.

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I’m quite eager to see the feedback, and I’ll share it with my blog’s readers as it comes. In the meantime, I’d be very interested in hearing what Chinese readers think of the translation. Please reach out to me if you’ve read it.

Anatomy of a Myth: the World’s Biggest E-Waste Dump Isn’t.

Let’s start with two photographs.

The first was shot by me in China’s Hunan Province. It shows a warehouse that contains roughly 5,000 old locally-collected televisions awaiting recycling. This photo only captures a portion of what is a big inventory, and a big operation. Every day more arrive. Most people outside of China have never heard of this place, mostly because it is indoors, and difficult for journos and activists to gain access to.

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Next, a photo tagged “e-Waste – field of computers” that I came across while looking at a Google map of Agbogbloshie, a suburb of Accra, Ghana that everyone from the Guardian to Motherboard has called the world’s “biggest” or “largest” e-waste dump.

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There’s nothing good or right in the Agbogbloshie photo. The pollution it depicts is nasty. But if you can get past the shock and evaluate the volume of e-waste in the image, it’s not much – especially compared to what we see in the China photo. Indeed, despite the parade of Agbogbloshie slideshows posted by media outlets over the years, there’s a curious dearth of images showing large volumes of e-waste at the site. Rather, the genre is almost exclusively devoted to pictures of laborers, oftentimes not even processing waste – see this useless and exploitative New York Times slideshow, or this more recent one from Motherboard. My long-standing suspicion has been that there aren’t any great volumes of e-waste at Agbogbloshie, and that most of the journalists and photographers who go there – having had no experience with developing world recycling – document their shock, but not what’s actually happening, frankly because they don’t know better.

This matters. Agbogbloshie has become a global symbol for what’s alleged to be a vast and growing environmental problem: the export of e-waste from the developed world to West Africa. Yet in recent years, academic and UN-sponsored research has shown that the problem is far more complex – and, in all respects, smaller – than what’s being depicted. In other words – we’re not talking about the world’s largest e-waste dump.

So what I’m going to do is show how somebody with actual experience reporting in and around the global recycling industry – especially in the developing world – looks at Agbogbloshie. My background is that of a journalist who has been writing about and photographing the industry for 15 years, and has visited hundreds of recycling facilities, especially in the developing world. In March and April, I visited Accra. Continue reading

Junkyard Planet – the Paperback.

I’m very pleased to announce that Junkyard Planet: Travels in the Billion Dollar Trash Trade, was released in a paperback edition today, Tuesday April 14. I have a copy sitting beside me right now, and – as usual – Bloomsbury Press has done a terrific job packaging it. Like the hardcover, it contains 24 pages of full-color photos, as well as the original text (with a couple of updates). In other words: it’s the hardcover, only lighter, and a little cheaper!

To celebrate the release, my publisher, Bloomsbury Press, is giving away TEN copies on Goodreads to US readers. To enter, click here [this particular contest has ended, but …]. As for me – I’m giving away two SIGNED copies on Goodreads, in a contest open to Canadian readers. For that one, click here.

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Junkyard Planet, the paperback, is available anywhere you buy books in North America, the UK, and Australia. If you prefer to order online, the retailers in the column at right (usual suspects: Amazon, BN, Indiebound, etc) can take care of it. If you lack access to bookstores and you’re living in a country where Amazon doesn’t deliver, I recommend Book Depository. And if you’re new to the book, click here for a sample of the reviews and a few of the interviews I did during the hardcover release.

Sixteen months on, I remain extremely proud of Junkyard Planet and its impact. For now, thanks to everyone who’s supported Junkyard Planet. It’s been an amazing ride, and I look forward to keeping you updated with plans for the next book.