RDVP Class: China (10/25/2004) and conference report

The readings (articles from the NY Times) focused on 1) The growth of China and its web of intertwined impacts on the global/US economy; 2) The disparities between rural China and the eastern cities (told from the tragic point of view of a promising rural student who committed suicide because he didn't have the $80 for tuition.). A few of us had gathered for lunch in the lounge before the official start of the session, and we started chatting about the readings. Jose and Stuart were impressed by the potential of China: the vast population (and available market), the educational attainments, even the apparent success the government is having in pursuing its development policies. Stuart wondered with the focus on development by the governments of India and China (accounting for about 1/3 of the global population) is there really anything that can be done outside the auspicies of the government (ie, does RDVP have a role?) Helen agreed that everything that happened in China (esp. by the government) was intended for development.

Stuart mentioned that he had seen an article on Microsoft's encouraging of the development of a China software industry, figuring that only when there was a local industry would issues of IP and piracy be decided in favor of content producers. Greg pointed out that this was like books in the US (in the colonies, when no books were written here, anyone could copy anything). The difference in IP rights led to a difference in development, and China is now in the position where it needs to figure out how to produce knowledge goods--then it will be truly competitive. This will also help provide rural opportunity and prevent urban migration. For now, the Chinese currency controls allow an artificially low cost of production.

Stuart asked about the role of microfinance in China. Helen said that it was less important, because there was family to borrow from, or failing that, moneylenders who charge "only" 20%. (I guess I've been effective in telling people that microcredit rates can often be 30-40%...) Greg pointed out that under those conditions, official microcredit rates would likely be lower, but it's not clear that capital access is the problem. Chinese business is very relationship dependent, and those are easier to build and maintain in an urban setting.

Jose commented that the rapid progress of China in the 2000's echoed Venezuela's in the 1940's after the discovery of oil. They invited US companies in to build up the infrastructure, had urban migration, but fast growth in the 1950's to 70's. Three mistakes Jose felt they made (along with suggested improvements) were:

1. Built huge, inefficient central government. China should focus on making local government more effective.
   
2. Huge migration to the cities
   
3. Lack of urban planning led to rings ov poverty around the cities. Building rural infrastructure may have prevented the migration.
   

Venezuela ran into problems in the 1980's, leading to a currency devaluation. Now some grassroots organization is starting to build and demand service from the central government.

Durga wondered where the real information about Chinese poor was, figuring that it was being suppressed. He said that a recent ESW meeting, Chinese microfinance was discussed, but that it was run by the government, only in the cities. Moulaye was skeptical, saying that even if the government states they're doing something, you really need to verify it with the people and determine the impact on them. How are they getting money from those who migrated to the cities? Is it being used to improve the production in the countryside?

Helen said that the Chinese government is looking to import management skills and advanced technology. Jose wondered if the Suvayar project would enable local (rural) production to be sold via eBay with a cell phone to commit the transaction. Yann asked about other problems of urban migration, like housing and education, wondering how they were dealt with.

Stuart said that he felt Helen's project had identified three key trends in China:

• Cell phone penetetration
  
• Small business expansion
  
• Urbanization
  

Helen characterized it as helping people to help themselves, by giving access to a disctirbution channel. Greg claimed the root problem was an excess of labor, and posed the challenge of how to use it effectively. Could it be in a secondary gift/volunteer economy? Health care and education are two labor intensive industries that should absorv some of the excess. He asked Helen whether her project (using e-marketplaces) could be equally well solved by giving everyone a 800-number. While that idea appealed to Helen, I'm not convinced that it solves the problem: it's not just inbound communication that's needed, it's outbound marketing. And while a listing on a crowded e-marketplace is not great outbound marketing, it's better than nothing.

That moved us to thinking about information listing services, like Craigslist.org. Jose proposed a craigslist per village. Renee asked whether Helen had gathered input from real customers (she later suggested contacting Kavita of the Global Fund for Women to see what sorts of projects they are doing), and Greg suggested that input would be more helpful if they had a prototype to react to. He pointed out that the goal was to create opportunities, not businesses, so Helen needed to operate at "one level above", and really engage the local community so that they will participate. Yann argued for the benefit of keeping a specific community in mind, rather than trying to do something generic that might help the whole country. Stuart and Greg returned to the idea of Craigslist in a box, with Greg proposing a kiosk (he even drew a quick storyboard, currently hanging near his desk.) Stuart said that solving market exchange is partially an information problem, but not entirely (as followed from the example of trying to purchase chairs--clearly it's not workable for an individual craftsman to advertise and sell his chairs overseas: shipping costs would kill any savings.) Helen responded that while global interactions were enabled, so were local ones, and physical goods would probably be entirely local. Greg highlighted that there was the underlying assumption that eBay access enabled more buyers. I volunteered that assumption could be tested without building the mobile interface, but just taking a PC with dialup access to a remote village.

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Jose's conference report on IT Adoption by Non-Profits

He said that a key barrier was trying to obtain funding for IT support, especially for small NGO's. And when an organization did get some money, frequently experts would "parachute in" build something, and leave, without really training anyone there, and leaving no money for onging support. What was needed was a network of IT volunteers to support. He said that "single issue advocacy" (like banding togetehr to prevent a mall from being constructed in a neighborhood) was the most successful example of IT usage.

Jose said that perhaps the most valuable part of the conference was connecting with entrepreneurs, academics, and non-profits in San Francisco and East Palo Alto. He said that the digital village project in East Palo Alto was running into many of the same issues as El Limon. Some non-profits felt that their funders were pushing them to build a global net presence even when it wasn't strictly necessary. "You must be virtual to be real" (to the foundations) they lamented. IT volunteers and consultants often over-build. They really need to involve the community in the requirements gathering and definition.


Joanne Yoong from the Econ department gave a short pitch for interactions with her undergraduate class in Winter quarter focused on communication of economic policy institutions and economics of development. On the one hand she was looking for guest speakers (willing to make a 30-45 minute presentation), on the other hand she was offering student help for projects that would involve communication: program evaluations, web surveys or sites, PowerPoint presentations, etc. People interested can contact her at: jsyoong at stanford dot edu.