Shanghai, the city’s on the water, is fabulous.

The trip did not start too well as we had to wait for a couple of hours in Singapore airport between midnight and 2m to catch our red eye flight. Without any proper seat, it was difficult to indulge in a nice little nap. Everything else went very smoothly.

We got to Shanghai 5 hours later, landed early in the morning, hitched a ride to our hotel. We first reached the Renaissance Yangtze, before realizing that it was to a different Yangtze Hotel that we were staying at, close to People’s Square. In class, we had heard about the Chinese screwing everybody. Yet, on a couple of occasions, our taxi drivers stopped the meter if they made a mistake. On these occasions, our share of responsibility in the mistake was fairly high.

The hotel was very nice, sort of old-fashioned building, with a huge restaurant and a small business center. Everyone spoke English and was extremely helpful. Chinese do not queue. They pushed you aside and take your place. Apart from this, everything was fine. Did I say that Shanghai’s fabulous already?

Shanghai is not quite the most typical representation of a communist city.

There seems to be more private initiative in Shanghai than in the whole of Europe!

16 million people. Construction work everywhere. Very stylish skyscrapers, old colonial buildings, large shopping avenues, high end elegant shopping malls, neon lights a la Picadilly circus, small Chinatown-looking streets with push cars. The city is buzzing with life, with shops, with bars, music, restaurants, shows, cinemas…Buses, cars, bikes, mopeds, motorbikes, cabs everywhere. People people people…

In the end, we had too many people to meet so there were a few phone calls that we did not make. We managed to meet a lot of INSEAD alumni, and senior managers that other people had recommended to us. The haste with which people were willing to help us was amazing. CEOs of firms were too busy to meet but were organizing meetings with their staff. We got phone calls from people who did not know us, and about whom we knew nothing about offering up their evening to meet us. I am not sure that I have seen this in the West. Some people were expat. Some people were Chinese. We were stunned at such diligence to support our visit.

The reason for our visit to Shanghai is a case study that we are writing for our Strategy for Asia Pac class. We have selected a Chinese Private Equity firm based in Shanghai and we had decided to go and meet the company.

On that Sunday, we started with a nice brunch at a Cantonese Dim Sum place, extremely trendy, across the road from Qu Bei Carrefour. The whole place was crowded with Chinese people and everything was in Chinese. I tried to order vegetarian or fish only dishes: the version of a Vegetable Dim Sum featured pork slices ;-)

We then hopped across to People’s Square, and strolled around to take advantage of a lovely sunny afternoon – with an extremely pleasant 15 degrees Celsius. All of the sudden, a crowd of well over 20 people surrounded each of us, pressing us with questions, in English. We were very surprised to first hear that everyone in Shanghai spoke English so well, and second that we were so famous. This reminded me vaguely of my photo taking experience in Prambanan, Indonesia. After we explained our origin, name and what we were doing in Shanghai, the next question was: how did you heard about the English Speaking Corner in People’s Square? Turns out that these people all study English and meet up every Sunday afternoon to practice. We were obviously the main attraction of the day, since they could practice their English with foreigners. We left with a letter for George Bush, somebody’s picture and somebody’s business plan.

In the morning, we received the first piece of bad news: the English speaking person that we were supposed to meet refuses to see us.

First thing we see when getting to the crowded Shopping Mall area was McDonald’s, Starbucks, Louis Vuitton, Versace, Dior, etc.., etc…
We then moved onto the Citic Center, close to Place/Square 66 shopping mall to meet with a consultant who used to work for another consultancy firm and who had worked on the deal. In Singapore we had already met with an investment banker who advised on the deal, which is three years old. Great quote from the meeting: “this acquisition can be an example of companies sharing the same bed, but not the same dream”.

As soon as we left the building, we put a call to the head of the alumni association in Shanghai – who invited us for a cup of tea at his place. His place was literally 20m across the road. Spooky. Eric was extremely kind (and I am very jealous of his apartment) and helped us tremendously. He is full of contacts and resources and offered it all to us. Interestingly, he told us that the high end shopping malls were full of Chinese and the fake copy market was full of expat. We spent a couple of hours with Eric before heading to the Fake Market.

This is a crowded little place, full of small shops offering fake Nike t-shirts, fake Reebock shoes, fake Oakley shades, fake Lancome fragrances at very low prices. We started off negotiating for a couple of t-shirts, and ended up paying 60rmb each. Next stop was to buy a pair of gloves which went for 5rmb. We got ripped off on the t-shirts. We bought some other probably useless items, for next to nothing and enjoyed very much the process of arguing the price down. Funny: a pair of jeans started off at 200rmb, and was at 280rmb the next minute, as soon as we opened our mouth. We brought it down to 150rmb, but I am quite sure we could have got it for 80. DVD copies are illegal, even in China. However, people approach you and offer some to you. If you show interest, they take you to the back of the shop, lift up a stack of shirts, or open up a seemingly empty suitcase that was on sale and unveil a whole series of fake DVDs. Some of it are movie theater quality: meaning that someone turned up at a movie theater and filmed the whole movie. Sound quality is appalling and you get to see the heads and arms of the people sitting in the row in front of you.

We stayed there until our next appointment, with a Corporate Finance Manager, a HR Director and a Marketing Manager of a US firm operating in China. All of them were either from Singapore or from Shanghai, all based in Shanghai. It started to feel like we were spending all our time drinking and eating with people. The finance sector in Shanghai did not look too developed. Most transaction were through borrowing and private equity. Hedging’s illegal in China so there is no space for a hedge fund (but then satellite broadcasting is illegal and I have counted twelve operators so far). I managed to hand over the Valentines’ gift that I had brought from INSEAD for a student’s wife. She was very surprised as she certainly did not expect some weirdo looking foreigner to carry chocolates all the way from the tropics.

Next stop was with an American friend of a friend’s who took us to a phenomenal Shanghainese restaurant, in the middle of nowhere, before ending up in the Xintiandi (or New World) district. This area is restored, in the style of Shanghai in the 1920s and is full of the most exotic and trendy bars and shops. A design furniture shop caught our attention, there was a jazz bar, a McCafe, a Latinos café – where we ended up drinking cocktails and dancing salsa for most part of the night.

Exhausted, we grabbed a cab and returned to the hotel for a well deserved night’s sleep.

On the Monday morning, after a copious breakfast, we got ready for our first appointment of the day. We were going to visit the private equity firm that we were writing our paper on. We had gotten the name of the General Manager of their investment arm and had just written an email to the guy, indicating that we wanted to talk to him. As we reached the luxurious office building (worth all I have seen in Silicon Valley), we did our best to look very important and professional and requested to be shown in. The receptionist sent us to a meeting room, where he might never have turned up. Fortunately, someone redirected us to his office where he was about to send us a reply, indicating that he had no time for us. Fortunately, a quick glance at his timetable indicated an hour slot had just freed itself up just now. So we sat through a very comprehensive powerpoint presentation and gathered a lot of information for our project. Interestingly, there were at least 10 slides with pictures of government officials (including Jintao himself) visiting the company, or meeting senior executive. In the West, this would have looked very dodgy, here it seemed part of the standard marketing pitch. Quanxi – relationships do seem to truly matter. Their ambition was simple: to become a Fortune 500 company within 3 years. They currently owned over a hundred private firms and controlled over 15 public companies, mostly in China, but with a couple of investment overseas.

Having accomplished our mission, we headed back to the hotel for an Asian curry with a British alum, with a fantastic little story – like all the alumni that we met.
We then took us to the Grand Hyatt, near Pudong area (where the private equity firm happened to be). This is meant to be the tallest hotel in the world, with 88 floors, a very avant-garde design and a stunning view over the city and the river. The 88th floor was closed until 6pm but we reached up to the 86th floor which I bet gives you a very similar impression. The first 55 floors are leased to companies. The rest if the Hyatt. Even though, our fruit juice was just as expensive as our whole lunch, it is worth a stop.

We then crossed over to the Bund, in order to see the old Shanghai, with centuries old building on one side of the river, packed with traffic, and the new Shanghai, city-like skyline, with very advanced and personal designs. We stopped for another drink at the Peace Hotel, and old colonial style building, with wooden ceilings and draperies, facing the Grand Hyatt, on the other side of the river, before heading to Nanking Road, Lu, for another shopping spree.

I was traveling with someone who was learning Chinese. Or so I thought. We got into this taxi and tried to pronounce the address of our next date. So much for Mandarin lessons, we ended up on the highway heading for the airport. My friend could not say Wait, Stop, Hold On, Please Go Back. Apparently, he could ask for stamps, tell the time or the day of the week, fairly useless phrases in our situation. We managed to have the cab turn around on presentation of our hotel card, stopped at some random hotel and called the Mauritius-born alum that we were meeting. She directed the taxi driver and greeted us with a much appreciated glass of Merlot at the Cottons Bar, near the French Concession. Fantastic conversation with a female entrepreneur who decided to just kick off a business in China because she did not find the jobs she was getting on the open market – and who has been extremely successful since. She helped us find our next destination: a high end expat residence in the French Concession and we headed for a spicy Chinese dinner and delicious Pumpkin Doughnuts with custard. I have never eaten so much in my life! The INSEAD alum that we talked to had started work in Shanghai after graduation. She was also extremely helpful, showed us around her apartment, gave us loads of hints and tips, offered her help in the future and lent her mobile phone so that we could call our next date.

The final date of the day was a friend of one of our classmates. Both of them are Chinese. She is not quite your traditional Chinese woman. Young, strong-headed, independent and busy business woman, she takes us back to the river to the trendy Red Dot for a coffee. Great view over the shopping area, Nanjing Road and the Peace Hotel, illuminated. We joked around a few rounds of drinks until the early hours of the morning. As we left the park, the gates were already closed. We reached the hotel completely exhausted but full of happy memories.

Did I say that Shanghai was a vibrant 24hr city? Even the construction workers right next to our room did not stop. My friend woke up enquiring about what the pounding noise that made it all the way into his dreams could have been. Well, this pounding noise kept me awake the whole night.

We missed two days of classes in order to participate in this discovery. We feel so privileged. Now, there is still a paper to write, which I must return to…

Traveler of the seven seas, do stop by Shanghai. It is well worth it.