By Jack Perkowski

Now that we are counting down to the 2008 Olympic games, first-time and not so recent visitors to China are no doubt wondering what they will see when they land in Beijing next August. In the run-up to the games, we will take every opportunity to describe the changes that are taking place in China and paint the picture of how the country will look in another year.

With China’s continued economic prosperity and the increase in wealth it has meant for hundreds of millions of Chinese, one sector that is changing rapidly and is getting added impetus from the expected onslaught of visitors next year is services. China has made its mark so far as a manufacturing powerhouse, but some of the biggest areas of growth and the best investment opportunities going forward are likely to be in providing an upgraded and larger array of services to an increasingly affluent class of Chinese customers.

Certain consumer and business services such as food service, lodging, air transportation, logistics, distribution, health care and beauty are basic to any economy. While these services have existed in China in some form for a number of years, the quality of the service that is being provided is being dramatically upgraded. Take air transportation. In the early 1990s, airports were 1950s vintage, and finding yourself on an old Tupolev plane was not at all unusual on many domestic flights. Today, nearly every major city in China has a modern airport built within the last five years, and China boasts one of the most modern aircraft fleets in the world. In a post-9/11 environment, travel around China is in many ways much easier than in the United States.

In addition to the general upgrading of basic services that is taking place, enterprising companies are now segmenting the market to appeal to different classes of consumers. Haircuts, both women’s and men’s, is a good example. Ten years ago, you could get a haircut for a few yuan at hundreds of shops or streetside barbers in any decent sized city, or you could pay 1,000 yuan in a Western-oriented beauty shop, most likely in one of the city’s five-star hotels. There was nothing in between. Today, a wide range of prices to fit any consumer’s pocketbook can be found in beauty shops scattered across the same cities.

Finally, services previously unheard of in China are now being offered. One simple example is getting a shoeshine. In a country where it has been easier to get a foot massage at 10 at night than a shoeshine at 10 in the morning, I was pleasantly surprised to see a shoeshine stand near my gate at Beijing’s Capitol Airport on a recent trip within China. Since then, I have noticed similar stands popping up where none existed before. Beginning my career in the States where “dressing for success” included a pair of clean and well-polished shoes, it took some adjustment to get used to seeing shoes that were anything but that when I first moved to China. This was understandable when dirt roads and walkways were common and everyone came to work on a bicycle, but China has come a long way since then. Anxious to do my part to ensure the success of the new shoe shine stand, I took the extra five minutes to have my shoes polished. The shine was as good as I’ve gotten anywhere, and the price was right at 10 yuan.

Jack Perkowski, Managing the Dragon
Chairman and Chief Executive Officer of ASIMCO Technologies