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BLUFFTON MBA GROUP GETS LOOK AT BUSINESS IN CHINA

Chad Kinnear is a sales engineer for Latrobe, Pa.-based Kennametal Inc., covering much of northwest and west central Ohio from his home in Lima. For two weeks in June, though, he had a rare opportunity to see how his company, a supplier of metal-cutting tools, does business on the other side of the world.

Kinnear, who is pursuing a master of business administration degree at Bluffton University, was among the eight members of a delegation that represented the university on a study tour of China. Led by Dr. Karen Klassen Harder, professor of business, and also including Dr. George Lehman, Howard Raid professor of business and director of graduate programs in business, the group visited manufacturers with ties to northwest Ohio, as well as a hospital, a university, a farm and several tourist sites.

Kinnear was one of two current MBA students who went on the trip, which could be taken for credit in the program. Three graduates also joined the delegation, the second from Bluffton to see China. Both study tours—the first was in 2008—were facilitated by Mennonite Partners in China and its director, Myrrl Byler.

This year’s stops included a visit to a Kennametal plant in Tianjin, south of Beijing, where Kinnear looked forward to seeing the quality of the company’s China-made goods. "I felt very comfortable with the product," he said. "They use the same machines and technology we use in the U.S."

He was also anxious for a look at China’s "massive growth," an economic development effort in which Kennametal’s "an active player," he said. Driving the roughly two hours from Beijing to Tianjin, "it seemed like every 10 miles, you’d see a new highway being built running east and west," said Kinnear, adding that construction cranes are a common sight in every city skyline.

The trip’s goals included "trying to get a picture of this phenomenal development process," Lehman noted. China, for instance, is closing in on the U.S. in terms of interstate highway mileage despite having begun major construction only in the late 1990s.

A rapid rail system is under development as well, said Harder, who has been to China three times and also pointed out that the number of foreign luxury cars in the cities seemed to have increased since her last visit.

But automatic car washes haven’t been introduced there yet, Kinnear said, citing that as one example of services that are taken for granted in the U.S. but make China "the place to go" for people interested in entrepreneurial success.
Still, cars, trucks and buses share the roads with bicycles and carts carrying goods, said Lehman, recalling the frequent sight of people on major city streets pulling heavily loaded handcarts through traffic.

Personal income isn’t generally that high, but it has grown considerably, he said. "People are much more comfortable than they were 10 or 20 years ago," added Harder.

The government is focused on providing growth and social stability, and citizens appear to accept constraints on their personal freedom in return, observed Lehman, also chair of Bluffton’s economics, business administration and accounting department. "It’s an economy in which the government takes a significant role in creating development and opportunity," he said, noting that China has become a global economic power despite moving into the "modern world" only since the 1980s.

"There’s this huge level of energy that’s just stunning," he continued, also pointing to a boom in new housing and office complexes in the nation of about 1.4 billion people. At a planning museum in Chongqing—the largest municipality in the world—the visitors saw a model train-like map that envisioned new high rises throughout a transformed city.

The delegation also visited the 2008 Summer Olympics site in Beijing. The venues were off limits during the MBA trip two years ago because of pre-Olympic security but are now a tourist attraction. Among the sights was a man walking a high wire across the top of the "Bird’s Nest" stadium—attempting to set a Guinness world record—while children played on the track. "The Olympic site is amazing in terms of its scale," but its future use is still uncertain, Lehman said.

Northwest Ohio-related stops on the tour were at a Sauder affiliate and Tokai Rubber Co. Ltd., whose network includes Bluffton’s DTR Industries Inc. The travelers also went to the Beijing office of the Cincinnati-based law firm of Taft, Stettinius & Hollister, one of whose attorneys offered an economic prediction to Ginger O’Malley, a Bluffton graduate in the group.

As the cost of labor is rising in China, he told her, companies are moving their operations to Vietnam and Cambodia but not finding the needed labor force, O’Malley said. As a result, he forecast the return of factories to the United States, and to the Midwest in particular, saying "we should be ready for this," added the Ottawa resident and community volunteer.

She also said the visitors’ Chinese hosts made them feel welcome. "We were almost treated like trade ambassadors," said O’Malley, who earned a master’s degree in organizational management from Bluffton in 2002 and was traveling with her husband Michael, an attorney and Putnam County Court judge.

Hoping to return again in two years, Harder and Lehman have encouraged members of the delegation to speak to alumni groups and community organizations about the trip. Harder called it "an excellent experience," due in part to the access afforded by Byler’s career and connections in China. It’s an opportunity for those who are curious about the country to "get more than you can get just by reading," she said.

Scott Borgelt, 7/19/10