Where to base operations under today’s economic conditions?

In china business, philippines business by Michael Michelini16 Comments

So, its quite obvious I’ve been exploring where to base myself this year of 2010, and while many are jealous I am so free and have so many choices to make freely, it is kind of mind boggling.

In the past for some reason, my location has always seemed obvious….I was born in Connecticut, USA and always thought NYC was the place for me, so after high school, I went to college right across from Manhattan….and always targeting getting a job there. While working in New York, I saved as much as I could, and considered MBA, franchise, or start my own business….and China business seemed obvious for “hot money” and entrepreneurship, so I worked towards getting into China. I was mainly considering between Shenzhen and Shanghai, choosing Shenzhen because it’s a young city, near to hong kong (for visa border hopping) and high tech. Shanghai seemed more “big business” rather then startup, more expensive, and had to fly out of the country to renew my visa every 30 days (insane). I never considered Beijing because it’s so cold, horrible traffic jams, and it just feels like I am surrounded by government, kind of like Washington DC in America, couldn’t see myself there either.
But then after reducing my china sourcing business (process of finding products in China) in 2009 and focusing on the internet and ecommerce….I started thinking why am I in China? But still not enough reasons to pack up and leave. Then at the beginning of 2010 google left china ….the US dollar fear of mass decline, and just the annoyance of internet censorship by the chinese government (GFW, great firewall). So I really started looking to leave china…..and had some operations startup in Philippines in a small startup office to help with customer support for the ecommerce business of bar products (night call center) and some support for SEO content writing, and accounting and book keeping.

Bouncing back and forth between China and Philippines in first half of 2010….thinking maybe I can still sell in China, and have support team in Philippines…I was waiting to make a big commitment until my USA trip link. I was so close to staying in New York….but decided to calm down a bit, take my return ticket (prepaid) to Asia, and think it through. So that is where I’ve been past couple weeks, and now I am gonna lay it all out for you blog readers.

So these are the options I have been considering


Do I remain in china, its hard, I spent 3 years of sweat , tears, and sometimes some blood (from a china hospital visit and a 2nd chinese hospital visit…….) – and most of my full time development in entrepreneurship has been in Shenzhen china (except my san diego, california transition time in summer 2007. ) and there are a decent amount of business people I know here.
let’s look at the pro and cons of China:
Positives – manufacturing base, some web marketing clients, large growing economy hungry for foreign brands, loyal workers that want to return to work with me
Negatives – most of my work now is in English websites, inflation is going crazy – food cost, labor costs, currency is a big risk, GFW

As for each city:

Shenzhen china – I do have a fully operational registered company, assistant helping me while I’m away and when I’m here on a part time basis, a large network of friends, clients, semi-sales channels, and it has gotten pretty comfortable for me here. Yet I still am filtered by the great firewall, making risks high of having more websites and products blocked here, and living costs and labor costs are steadily on the rise here. I don’t have an apartment, subletted my office that then turned out to a full transfer of lease, and do have an office to work from, and renting month to month from Dave Ho at the moment while I think.

Fuzhou Fujian province, china – I have some partner offices here run by doing link trading, proving to me costs can still be low in China. The pro, low costs for living and operations, the city is near markets for product sources. Negative, no one speaks English, seems too far removed from city life…I would probably go crazy if I lived here (but would learn Chinese fast!)

Shanghai – commonly called the new york of china, its home to many international financial and consulting companies…..expensive, but a great base if you want to sell in china, requires a flight to get out of china (while Shenzhen is on hong kong border). I do have a few good contacts there that will support me fully if I base there. Seems like a good base for buying and selling to and from China…..and is tempting to base here to sell services into the growing Chinese market.

Ningbo port city, china – a couple years ago I was close to living here…..its a center of Zhejiang and that is the center of non-electronic manufacturing…but now I don’t see this likely though it is lower cost of living and I have support from some factories

Hong Kong – always really really temping place to settle down….outside of the “political constraints” of china as it’s a special economic zone so no GFW internet censorship….tons of international companies….but again raelly expensive all across the board…but is it in hk dollars so not as much chinese yuan us dollar currency risk. And I have been meeting a lot of great internet companies based there…and its close to Shenzhen when I need to get in. Its also a transportation hub, most of my flights are in and out of this airport. I have compared doing business in Hong Kong from Shenzhen and the main factor holding me back there is cost. SHOULD THAT BE A FACTOR?


As a country, its free from chinese government internet filtering….friendly people, lower cost of living and operations, and native English speakers. A breath of fresh air for an American who still hasn’t nearly mastered the Chinese language, and even Chinese complain about the ever changing, ever confusing Chinese laws. Negatvie – VISA for my passport, and work permit seem to be a challenge, and I would probably have to invest in opening a registered company there if I were to remain. Else constantly traveling in and out every 45 days (no walking border to Hong Kong like in Shenzhen) costing me more and more on airfare travel….taht is a negative I have to consider, or find a solution to.

But another main thing is…..you cannot really sell in the Philippines…..its purely a back office…..Whereas currently in China the market is becoming more like a sales center then a back office…so its tempting to sell in China more then ever.

Manila, Philippines – the metropolis of the Philippines, this capital city is where most major foreign corporations are – and currently where my small call center office is. Very densely populated. TRAFFIC sucks, high pollution…not much public transportation. Infrastructure is best in Philippines, electricity is 2nd highest in Asia after Japan, electricity brownouts are fairly common, normally suggested to have a backup generator. And Manila is massive, there are so many districts and zones like Makati (most famous outsourcing center), Quezon City, Eastwood, Tagig, Pasig, etc.

Secluded beach on the Philippines – as an internet dude, this one has always been tempting. I am talking to Marie, but again the risks here are electricity and internet may not be as reliable….harder to find workers than in a city…and those are the 2 main reasons besides the overall pros and cons of Philippines. But life would be much less stressful, and I prefer this over Manila.

Cebu, Philippines – Much lower cost of living than in Manila, but infrastructure is not as developed. A couple hours flight from Manila, and not as big of an airport. Know a few people here with call centers and connections, but not as many as in Manila / Makati.


Ahh, the good ol’ United States of America. Business flows easily there, people do what they say they are going to do, verbally without need of too many contracts. Costs are coming down with the high unemployment, but still overall higher than the rest of the world, unless you go far away from the cities. Most of my income still comes from America, northeast mainly.
New York, NY – still my favorite city in the world. Almost got me to stay there….most of my business relations, clients, friends, university is within a couple hours from here. Again, its mainly high cost of living….and I was fearful of risking having to get a dayjob if I stayed there too long.

Silicon valley, California – an internet entrepreneurs stomping grounds. I have never really been there…..when I drove cross country in 2003 with Scott, we stopped by San Fransisco, but I have not yet really gotten involved with business directly in Silicon Valley. Is this something I am missing out on? Would I find my way better, should I be like the many internet entrepreneurs and make or break myself out there. Would this be easier to get business partners, ideas, contacts, venture capital? Not sure if I am willing to go there at the moment, do have some limited relationships I can work on to better learn about the environment, but the internet bubble is way over now.

Other city in usa – I don’t think I would consider them now….sure I can live in Florida near my family, or in Connecticut with my hometown friends and some customers. But….it is just too quiet and calm for me. I need more insanity. I thrive in chaos. I want to meet new people every day. I don’t want to commute to an office aech day in MY CAR, guzzling gas on a huge highway. I only see New York as a city in USA that you can live without a car, and this is one of my requirements, really. Cars = money pit to me.

I had also considered Thailand…but seems more like a resort or retirement community then a place to do business…..costs are like Philippines, but English isn’t as good…so whats the business sense in that? Maybe if I make a million I can buy a resort there, haha.

So where does this leave me? I think maybe New York needs another year of preparation at least….I want to focus on the internet, English language, targeting USA. Still seems like Philippines, or maybe Hong Kong that make it to the top of the list.

Still tempted with the foreigner’s mousetrap to sell into China…..but I have to learn chinese and invest time and energy where I have not yet doneso in the past 3 years, so why would I start that now? My stills, strengths, and interest still live on the English language and on the internet….that is my VIRTUAL home…now where to find a physical home.


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  1. hey mike, sounds like you are exploring options and looking to make a well thought out decision. sounds like a good plan. sounds like you really hate the idea of owning a car (man – GUZZLING GAS) so NYC and SF look like your options in the USA. Tell me more about Hong Kong… is it just a city or are there any islands off hong kong that you can commute to via boat, that are outside GFW, but cheaper than Hong Kong itself? I say you roam, couple months here and here, couple months here, month in NYC, make it a point to get to FL once a year to see your folks for thanksgiving or some holiday. be a roamer with no real home 🙂 thats what you love right – freedom to roam the world. who knows what new places you will explore and will be on your list next year. if you want to see chaos stop by mexico city for a bit, that is a fun place with tons of energy. i hear toronto, vancouver and chicago are nice places too. what about dubai dude – gotta check that out. never stop exploring right

    1. Author

      Thanks Piotr.

      Hong Kong does have a bunch of islands, subways connect everything so no real need for a car. there are 3 main islands / districts

      a) Central Island – Kind of like manhattan in New York City, this is where the downtown is, and the main bars / clubs. But obviously the most expensive

      b) Kowloon Island – Kinda like brooklyn or queens or hoboken in the NYC area. A bit lower cost, has some companies – much bigger land mass.

      c) New Territories – pretty far away from central business district, but lowest cost, and almost all residential. Still has some subway stops, but an expensive taxi on weekend nights

      ROAM? cool man, not sure if you are being sarcastic or what there.. hehe …..but maybe i’ll settle down another year or so like I was doing in China 2008 – 2010.

      talk soon

  2. Mikey –

    Not possible to get a forward on Yuan I imagine with the nonconvertability issue, right?

    Hmm…quite the conundrum…..Hong Kong or Manila are definitely looking like the most logical options then my friend.

    1. Author

      Jonny!!! maybe I could get some futures on the Chicago Mercantile Exchange….but last time i tried taht in 2007 I got burned because it didnt move that fast as it was priced……in china, its CASH UPFRONT. so if you have some USD you want to exchange, let me know I have a good guy here for that.

      But I think I’ll just be between China and Philippines – flights are around $200usd round trip so just price that in.

  3. you will get answer if you
    stay in china
    usa still up side down

  4. Hey Mike, maybe you should try visiting Bangalore, India, the center for much of India’s outsourcing industry. Its the birthplace of India’s new, emerging middle class. Also known as India’s silicon valley, the city attracts a huge amount of university educated Indians looking for new opportunities and willing to work cheap. There’s a great appetite for anything backed by western interests, particularly American. Because costs are rising in all Indian cities, many firms have opened satellite locations in nearby places to take advantage of still-cheap labor (Hyderabad, Chennai).
    The tech firms are responsible for rolling black-outs on weekends and have their own power generation plants on-site.
    Lots of health issues involved with staying there, the daily chaos on the overcrowded streets is probably even too much for a new yorker to deal with beyond a few days. But, if you have the means to go, I say you should visit…just to be amazed by the contrasting culture, ancient history and to feel like you are the biggest rock star they’ve ever laid eyes on.
    They are fascinated with Americans and will agressively go out of their way to get near you for a closer look, so you’ll need an escort or two when out in public.
    Five years later and I am still awestruck with my experience there.
    Go, if you can.
    For a totally opposite experience, walk the streets of Paris and see if how you are regarded…ha, ha…

    1. Author

      Thanks Steve,
      Yea, I have some contacts in Mumbia India – both a factory I have been buying from, as well as IT outsourcing firm…..they invite me with open arms there….and actually want me to visit in the end of December….but going to have to put that on hold.

      But many people, Filipinos and Chinese, tell me that India IS CRAZY packed….and if these 2 densely populated countrymen are telling me that….then its gotta be really insane…

      Have to visit first before relocating…..stay tuned!

    2. Besides the “street issues”, there are lots of western interests conducting business in the downtown area, away from the IT center. I’m sure the business environment is similar to that of China, except there is no GFW. However, corruption seems to plague all business, police and government operations.

      1. Author

        Yea, corruption seems to run rampant in developing economies

        I’m sure it was like this when USA was developing…

        still hard for me to give up the China card.

  5. I say you stay long enough in your top 2-3 options/cities then decide. You’d only really know what suits your lifestyle, workstyle if you experience yourself what each place has to offer. And best to consult the right people too! At the end of the day though, its whats best for you, its what leads you closer to your goals, its what allows you to get to your priorities faster.

    I say BEACH – you’d probably end up doing your other passion which is traveling, or at least the opportunity to do a travel business too!

    1. Author

      well, as you know I’ll be in Manila next friday till Jan 18 (still have to announce it on this blog! jeeez, its owning my life this blog! haha)

      so the story continues…at least I’ll have Christmas in Philippines which they say is nice, right

      1. Riiiight! Will find a way to make the holidays fun enough for you. But be prepared to do 3 things: eat, eat and surprise, surprise – eat! Best to go on a diet NOW.

        Ask your friends who wont be doing much this December to spend it here too – lets use that opportunity to do a trial.

        1. What are we eating? Oh, I will in China and HK during xmas…spending it with this really hip chick from China. Will give you more details when we’re at Agave knocking down bottomless margaritas…

          1. Author

            I think Philippines is a more “christmas-y” place being that they celebrate it there and its Christian land (except the muslim area)

            sure, we’ll discuss over margheritas next friday

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