Blogging- and social media generally- are amazing pathways for exploration and discovery, but sometimes it’s necessary to turn off the faucet of information in order to let the mind quench its thirst. Someone I very much admire once wrote that “technology has made our perspective more global and tolerant, our access to information easier, our self-definitions less confining. But, the more complex and sophisticated our systems of lateral access, the more we sacrifice in the way of depth.” Based on my own experience, I think he makes a very good point- one which is difficult to swallow in an age that has largely forfeited contemplation and privacy for urgency and 24/7 engagement. Where’s the balance? I hope that my time away from blogging (and Twitter and Facebook and LinkedIn and…) will give me greater perspective on that question as well. And, who knows, maybe I’ll blog about it next year…

On that note, I want to extend a big *THANK YOU* to all who have dropped by over the past year; your thoughtful comments and emails have always fueled this blog, as many of my posts originated from your questions and suggestions. Blogging has forged friendships, conversations over coffee, and even the occasional argument… Blogging has opened the doors to a new US-China community bridge, a community that I believe will lead the future of US-China relations. Simply put, I am very thankful to have had the opportunity to engage with you and I look forward to more dialogue in the future! And, of course, many thanks to all who participated in the interviews and collaborative posts… I think it’s most appropriate to wrap this up with some wisdom from those who are on-the-ground and in-the-know…

On Business and Investment…
Chinese Brands In America: A Conversation with Scott Markman, President of The Monogram Group
“The scale of this opportunity and the amount of companies in China that have the means to consider this would dwarf anything that we have seen from Japan and Korea combined. Many Chinese companies are actively considering the prospect [to build their own brands in the US] but because of cultural issues, very few have taken the leap to put into place the infrastructure and investment. They are looking for other models to follow. Companies like Lenovo and Haier were among the earliest to do this, and other Chinese companies are now sitting back and waiting to see how successful Lenovo and Haier are before they take the leap into the US market. Today is more about potential than reality.”

Head West, China: An Interview with Private Equity Consultant, Song Jin
“There is one major challenge for every Chinese company and it is that they don’t have enough talent to manage cross-border transactions, not to mention managing a US company. In terms of China’s private sector, I would say that they have a slight advantage over the SOEs. One reason is because these privatized enterprises are market driven, and another is because their decision-making process is much faster than the SOEs. However, a state owned enterprise has a huge advantage: they are backed by the government and government-supported banks, which means that their resources are much larger than in the private sector. But, whether state-owned or private, the biggest challenge all of these companies face is lack of management talent.”

China-US Insights on the Future of the Auto Industry: An Interview with Automotive Experts An Qingheng and Bill Russo (Part 1)
Chairman An: “What will power future automobiles is still a difficult question. Will it rely on clean diesel, hybrid technologies or something totally different? Different specialists have different viewpoints. In fact, with traditional energy resources decreasing day by day, all parties have reached the same understanding: that new energy should be developed to power future automobiles. Concerning which technology should take the priority in different points of time, every solution has a reasonable rationale. History will tell us who is right.”
Bill Russo: “The Chinese automotive market is still very young, and in many cases the producers of vehicles that are sold in China are also fairly early in their development stage. What has happened over time is that, as the market has grown, more and more technology providers have taken note and looked at China as a place where they can localize their product. So, for technologies such as clean diesel, hybrid and electric vehicles – you will find that China does not lead the technological development. In fact, Chinese companies are not leaders in the development of any major new automotive technology.”

China-US Insights on the Future of the Auto Industry: An Interview with Automotive Experts An Qingheng and Bill Russo (Part 2)
Chairman An: “The American market is massive and free. It’s reasonable that Chinese OEMs would like to enter this market as soon as possible. It’s rather a question of whether this can be achieved after 4, 5 or 10 years. Rather than forecast when can we make the entry, I think that it’s more appropriate to talk about how to make this happen. Chinese always say that: “The practices of precedent are the lessons of descendent.”
Bill Russo: “While Chinese firms have learned very quickly how to assemble cars and source parts, they are very inexperienced in the vehicle development and synthesis process. An automobile is a complex engineered system that requires advanced technology and know-how in testing and validation in order to achieve a world-class standard of performance, fuel economy, safety, and quality. You need to achieve a certain level of world-class benchmark targets in all of those areas. Quite frankly, a company that’s only built cars for maybe a little more than a decade probably lacks the skills to optimize the finished product.”

Interview with Sam Goodman, China Entrepreneur and Author of “Where East Eats West: The Street Smarts Guide to Business in China
“I jumped in head first. At the time, I was 25 years old; I was overflowing with confidence and brimming with ignorance. My advice is, do your homework and find a mentor. There’s many people who have already done it- find out directly from them what they did right and what they did wrong. Learn from people who have done it before. I’m not really the corporate type and I can’t say that I’ve seen many corporate types take the plunge outside of the corporate world. The skills that you need as an entrepreneur are quite a bit more varied than what you will find in a corporate setting. It’s not the nature of corporate design to give you all the tools you will need as an entrepreneur.”

Q&A with Serial Entrepreneur, Richard Robinson
“I was working my way around Europe for a few years in the early 90’s and I became enamored with the idea of overland travel and read most of Paul Theroux’s train travel books (Paul happens to also be from my hometown of Medford, MA). I got excited at the prospect of an overland trip from Europe to Asia via train so in late 1993 I hitchhiked from Switzerland to Prague and then went by train from there through the Ukraine to Moscow through Siberia and Mongolia to Beijing. I had a ‘China epiphany’ upon my arrival and I’ve been hooked by the Middle Kingdom ever since.”

Go West, China! (Includes an Interview with International Lawyer, Dan Harris)
“The biggest mistake I see is that the Chinese company thinks that because its Chinese employee lived in the United States for ten years, that person knows everything he or she needs to know about doing business in the US. That person is an international lawyer, a labor lawyer, a real estate lawyer, a litigator, a corporate lawyer, an accountant, a chief financial officer, a human relations specialist, a marketer, a publicist… I am working with a Chinese company who has an extremely bright, capable person at the helm, but this person gets grief whenever he tries to bring in outside experts for assistance. [The attitude is] “why do we have you if you need help?” So, what are the drawbacks? They are too numerous to mention, but all you need do is assume that the legal work, the accounting work, the tax work, the marketing work, the human relations work, and the PR work are all being done by someone who doesn’t really know what he or she is doing.”

Interview with David Mair, COO of China Connection Global Healthcare and China Healthcare Fitness and Culture Experience
“It’s really a combination of diet, exercise and traditional Chinese medicine that Aimin Hospital draws on. The calorie-controlled meals they serve are strong in terms of volume, but without the heavy oils and sauces that you often get in China. At the same time, the participants each have their own personal trainer; each participant receives two rigorous training sessions per day and traditional Chinese medicine, including acupuncture and herbal treatments. This approach is designed to create and maintain a higher than normal metabolic rate while staying within a healthy range.”

Interview with Bill Russo, Automotive Industry Expert (Part 1)
“The forecasts on China have always been wrong. If the forecasts say “the middle of the next decade,” I’d move that up to within the next 3 years. One of the barometers that economists typically follow is GDP growth per capita – also known as purchasing power parity. The number that signals when a market has reached a level where domestic consumption can sustain an industry on an ongoing basis is US $6,000. If I go back a few years, China’s GDP per capita in 2001 was US $1,000. In 2008, it was US $5,943. This increase signals that China has arrived as a sustainable domestic consumer market. You have enough citizens and enough wealth that people can afford big ticket items like cars which can sustain growth for a long period of time.”

Interview with Bill Russo, Automotive Industry Expert (Part 2)
“The value proposition for new market entrants usually starts with affordability and evolves over time after the brand is accepted by consumers. The fact of the matter is, much of the content in our cars increasingly comes from China. Because a greater percentage of the total cost of a car is in the manufactured components, there has already been a significant movement of the production of supplied parts to China. A lot of the components used in cars today either are or can quickly be manufactured in China. This is purely driven by the efficiencies gained from sourcing in China. So, people are all waiting for the Chinese car to arrive. What they don’t realize is that a great deal of the Chinese car they’re waiting for is already inside the one they are currently driving.”

Interview with Alistair Nicholas, Founder, President and CEO of AC Capital Strategic Public Relations
“The question – will we see a rise in China’s risk profile because of the economic crisis?  Absolutely. If a company has a factory in a small town that is likely to see social unrest, it has a potential exposure. If a company is about to close down a factory somewhere, which will entail redundancies, it has a bigger exposure. A few years ago I worked with an American company that was shutting down a factory and was surprised when local townspeople surrounded the factory and held its foreign management hostage and the local government was doing very little to help. The problem was partly caused by the fact that they had neglected to communicate effectively with their workers or the local government prior to the announcement to close. It was resolved in the end – but some thinking about communications beforehand would have helped a lot. Foreign companies that may need to rationalize in the market because of the current recession need to give proper thought to how they communicate with government officials, the media and internally. Failure to do so could see them punished in China for a long time to come.”

Interview with Sam Lee, Entrepreneur and Recruiter
“I am a Singaporean Chinese.  I know the language and celebrate many Chinese festivals.  Yet, I am not a ‘Chinese’.  It’s very different doing businesses in these two countries.  To list some: -Singapore thrives on transparency in doing businesses; China thrives on Guan Xi (relationships).
- We follow rules and regulations.  China has all the rules & regulations but little enforcement.
- In Singapore, business is like 100 people with professional fishing gear fishing simultaneously in a small pond.  In China it is like 100 people with enthusiasm and devil-may-care attitudes fishing in a big lake.
I am still learning about China.  The good news is, my dear partner is using this statement less frequently on me now: “Sam…you don’t understand how the Chinese think…..””

Interview with Edward Zhong, Project Chief of Changshu Economic Development Group
“We have encountered some cultural gaps with expats, but those were not significant problems- mostly they were communication problems.  Gradually, in our experience, [effective communication skills] have increased with expats, we now understand their way of thinking and doing things, and we don’t see any problems anymore in working with them.”

On Policy and Politics…
Interview with Greg Anderson, Finance/China Specialist and Ph.D. Candidate at UCLA
“Aside from the obvious, which would be typical business analysis with competent management at the top of the list, clearly there is a role for government in China. Unlike in the West, there’s not a whole lot of distinction between state-owned and privately-owned companies, in terms of government influence. Now that GM is an SOE, it’s understandable that the White House taskforce is going to have influence on how that company is run. People may question the viability and rationality behind this, but no one questions that this is the way it’s going to work. In China, being a private company doesn’t mean that you can completely ignore the government or that the government is not going to have any influence. I’m finding that the leaders of both SOEs and private companies in China must have the skills to manage political relationships. I’m working on a couple of stories along those lines that [highlight] examples of how leaders of auto companies in China didn’t value their relationship with the government and ended up paying the price.”

Interview with International Lawyer and Foreign Corrupt Practices Act Specialist, Richard L. Cassin
“I’m always somewhat skeptical with official statistics coming from China. The bureaucrats have a tendency to report figures that support the government/communist party. And, because there’s been an anti-corruption drive on for a few years now, lower-level officials may be producing statistics to show positive results. That said, however, corruption is still a huge challenge in China. Outright bribery is still common across all industries. But it’s not clear how much impact it’s having on development. Western investors have compliance programs and usually believe (sometimes incorrectly) that they can deal with the risks.”

Interview with Malcolm Moore, Shanghai Correspondent For Telegraph
“You have to ask why people talk to journalists. In some cases, normal people speak to journalists because they have a grievance and they want to get it off their chest and they’re hoping that a little bit of coverage will ease their way in the future. Companies and government officials speak to journalists because they have something to sell. We are a medium for people to transmit their ideas across. In China, nobody has anything to gain from speaking with the foreign media. If you are a peasant and you’re pissed off, speaking with the foreign media could get you severely beaten or imprisoned. If you are a government official, speaking with the foreign media could cost you your job and if you are a company, speaking with the foreign media could severely hamper your prospects in the business world. So, I can understand why people are reluctant to speak to me.”

Interview with Ted Naganawa, US-China Strategist
“Many people are concerned with China’s rapid ascent, but not really as an economic threat.  The term, economic threat, was probably coined to describe Japan in the 1970-80s, which practically posed no security threat to the United States.  Today many people are concerned because China is potentially an overall threat to the United States.  A good example would be the ongoing currency controversy.  In 1985, the United States pressured Japan to let the yen appreciate considerably thereafter, the result of which perversely affected Japan’s export sector and created the bedrock for the subsequent burst of asset bubbles and decades of stagnation in the Japanese economy.
The United States could afford to pressure Japan that way, because Japan was only an economic threat.  If the United States employs the same measure against China, and, as the result, China’s economy stagnates for decades, sending hundreds of millions of Chinese people back into poverty, I doubt it will be contained in the realm of economic policy.”

On Culture and Education…
A Life Transformed by China: A Conversation with Saul Gitlin (Part 1)
“I can’t even begin to describe to you how different it was in China overall in 1982 and how we were treated as foreigners, as compared with today…Imagine standing at the end of Nanjing Lu on the Bund in Shanghai and looking at Pudong. As far as the eye could see, there was farmland- there was nothing on the other side of the river. Today, Shanghai residents themselves don’t pay any attention to foreigners, and anyone in Shanghai who does is immediately recognized as a domestic tourist.”
A Life Transformed by China: A Conversation with Saul Gitlin (Part 2)
“Maybe most people define their career in terms of, “I’m a banker,” or “I’m an insurance agent,” or “I’m a telecom guy.” I define my career another way. My career is defined by China, by Chinese, by Asia.”

A Conversation with Andrew Hupert, Professor on International Negotiation and Founder of US-China Forum
“Part of my inspiration came from Chinese bulletin boards and chat groups where Chinese students are talking to one another about these topics, but there’s no Western participation at all. They tend to just go around in circles and aren’t really improving. Then, the American students entering China tend to come in with their own preconceived notions about culture. They think that they are being very open-minded but [in reality], they are just patiently waiting for the Chinese students to act exactly the way that they do. These two groups really do want to engage in a cross-cultural dialogue, but there is a structural impediment. With US-China Forum, I’m trying to create a structured environment where they can at least get a look at how the other side sees the world.”

Interview with Jenny Bai, Founder and CEO of The Red Connect
“In terms of crossing over and exporting China’s “coolness factor,” I think someone in the middle is needed. China could be “cool” in the U.S. tomorrow, but that depends on what happens with branding. In China, I feel like the idea of branding is synonymous with the idea of face, both of which represent a reaction to an emotional trigger. China is obsessed with luxury brands because it equals status, but what China doesn’t have yet is the history behind its branding, like the U.S. does. Take kaixin001.com, for example: a fiercely popular online community for young people and a great project overall. How do you introduce it to the U.S. and translate it into an American-friendly product? You need someone who understands how to cross such a product or concept over, without losing the Chinese element, which oftentimes means keeping the Chinese people who are associated with it.”

Interview with Xujun Eberlein, Author of “Apologies Forthcoming”
“History is the joined consequence of individual actions. If we could dissect history like an organism, we would see a huge diversity in individual behavior and motives. Yet when we look at the history of different cultures, there is a tendency to focus on commonality rather than diversity within people. Such a tendency is most pronounced when there is any discussion of “good” and “evil.” Those actions that seem to us to be wrong, or abhorrent, are thus attributed to people with evil hearts. People do things for a very wide variety of reasons growing out of strongly distinct cultural upbringings. Individual personal accounts are one of the best means to counter stereotypical thinking.”

Interview with Jason Walker, Tea Maven
“After living in a foreign culture for an extended period, it becomes harder to distinguish between the cultures. You intuitively adapt to the situation and people, not always consciously aware of the changes you’ve made. I adapt my behavior to be with my Chinese in-laws and my Tennessee family.
One of the biggest lessons I learned was the notion of being “in relationship” with the people around us, and what that means within the two cultures. Both greeting a stranger on the street and responding to a colleague’s subtle change in mood are means of acknowledging inter-connectedness to the people around us. Awareness of differing sets of values for relational transaction better enables a person to connect to others, build trust, and collaborate more effectively.”

Interview with Toffler Niemuth, Owner of Shop My Shanghai
“Overall, I’d say there are fewer misconceptions about China now than there were a few years ago.  Many people don’t expect the level of development, and all the sky scrapers they see when they arrive.  That’s quite a big shock.  They also don’t expect the cities to be as clean as they are.  More specifically related to shopping, some people think *everything* is cheap here, but it’s not.  Not only is Shanghai in general getting more expensive, but there’s a huge duty on luxury goods, and on some non-luxury foreign brands as well.  China is not the place to buy real LV bags or Omega watches. Even Nike clothing can seem overpriced here depending on the strength of your home currency.
On a brief trip to China, you only get a taste of the country, nowhere enough to unravel its mysteries.  China is such a complex society, with a rich multilayered history that a short trip to China isn’t going to make clear.”

Interview with Yi Lu, Linguistic Consultant at Handsome Translations
“If you can afford the time, I would say a good command of your business counterpart’s native language would always put you in an advantage over your rivals because that knowledge naturally draws you and your Chinese partner closer. It is a universal human reaction in interpersonal relationships. Even if good proficiency is not possible, on the other hand, some survival Chinese would save you a lot of trouble in private life when you are in the country. Cantonese as a dialect is gradually losing the kind of prominence it enjoyed say 20+ years ago. In addition, the catching up of the mainland economy, closer ties and more frequent travel between the SAR and the mainland have given rise to a popularity of Mandarin study among Hong Kong natives. I should say the Mandarin proficiency of Hong Kong intellectuals has picked up significantly in comparison to Guangdong mainlanders, who read and write Mandarin fluently but still habitually shun it in speech in favor of Cantonese.”

Collaborative Post: What Makes China Uniquely Cool?
Robert Aiudi: “I would hope that China’s coolness and uniqueness stays in China. It makes for fun, fascinating and wondrous travel. That said, China’s coolness is already available around the world in several places. In NYC, I love to go to Chinatown and see old and new China, buy food, see new fangled products, see the newest cell phones, hair styles and hear some funky music alongside family associations, incensed temples, and Chinese lion dances.
All that said, I have a feeling that as Chinese marketers, PR professionals, among others get more savvy about penetrating Western markets, we will begin to see more mainstream Chinese “cool’ things. I think it’s going to follow a similar path to Japanese goods. I remember when “Made in Japan” meant junk, low quality products. Now Sony, Fujitsu, etc etc are world class brands.”
John Yang: “Lifestyle goes with value system, China will start to export its value as it grows stronger and more and more foreigner learning Chinese, and then export lifestyle brands. People have tattoo of Chinese characters. Its characters and styles have also been used in design. HP Mini 1000 Vivienne Tam edition series is one of the latest one.
Chinese food, silk, tea, art-works all have great potential. They need a company to commercialize it abroad.”

On Social Responsibility and Our Global Future…
China’s Energy, China’s Power: An Interview with China Energy Specialists, Elizabeth Balkan and Chris Brown
Elizabeth: “I would characterize the US-China position on climate change not as being at odds, but as perhaps differing in terms of their perception of responsibility. While I think China and the US are equally committed to being responsible and active players in combating climate change, there’s a difference between the United States position on how China should address climate change, and China’s position on what it should do. It’s been repeated many times, but the controversy surrounding historical vs. current emissions and gross vs. per capita emissions remains. Depending on how you read the numbers, China can either look really good or really bad.”
Chris: “Jim Rogers from Duke Energy recently talked about how much they’ve done with carbon capture and sequestration, which holds huge potential for China. I think it gets more difficult with some of the renewables. Having said that, First Solar in Inner Mongolia is involved in this massive utility-level solar project and has brought in its own engineers while incorporating knowledge from the Chinese side.
I’ve been very impressed with how smooth the technological exchange process has been on this First Solar project- so far. But, they’re at the very beginning stages so of course, policy vs. implementation problems could still occur.”

Interview with Joel B. Eisen, Professor of Law and Fulbright Lecturer in China
“Looking back at the start of my trip, I had many preconceptions about China that were too simplistic or otherwise just downright wrong. For example, I had tended to think of China as an unrepentant polluter, but that does not square with the earnest efforts I observed to try to reconcile growth and environmental concerns.
I found myself thinking a lot about the Western-centric lens through which I’d previously viewed China. There’s a lot that’s been written about China by Westerners and I think much of it suffers from the same uninformed approach I’d had before spending time there. China is a place where you need to spend a lot of time before really understanding it, and the biggest surprise to me is just how little I know after five months there.”

Interview with Mihela Hladin, Founder of Greennovate
“First of all, basic awareness moved a step ahead with all of the “green” talk around the Olympics. But, in general, Chinese people think that a lot of these challenges are so huge and that individual participation is not worth it. When we are talking about the carbon footprint or green technologies- these are all very big terms. Without providing basic information, it’s very hard for them to see how they can be a part of the solution. We took the principle that, if you communicate about the environment in a simple and positive way, you get a lot of people on board. Also, as everyone knows, government has great power in China. For example, last year when they banned the plastic bags, it happened immediately. They announced this plan in April and in June they banned them. Nobody thought this would happen; it’s not even happening in the Western countries yet.”

The Fifth Annual Clinton Global Initiative Meeting, Calvin Chin and Qifang’s New Commitment: A Collaborative Interview
“There will be a natural gravitation towards looking for sustainable business models. [In China], I anticipate a lot of social innovation because of this added pressure- we can’t go for the typical non-profit models. The analogy that comes to mind is the way that video games in China faced a constraint, which was the inability to sell physical copies or cartridges because console games were illegal, or CDs/DVDs because people would just pirate them. So, there was a lot of creativity. It’s hard to do a non-profit in China, but socially-minded entrepreneurs and philanthropists will look for models elsewhere, as we did. We looked at Kiva and Grameen for inspiration, but to make it work in China requires fitting into [the country’s] constraints.”

Interview with Casey Wilson, Co-Founder of Wokai
“In a lot ways, there are two different Chinas. There’s a China of the cities that is growing at a very quick rate and then there is a China of the countryside. When you look at the current situation, the average income of individuals in the cities is at about US$6 a day, but in the countryside it’s less than US$2 a day. The urban development rate is at 9.6% a year while in the countryside it’s growing at about 6% a year. If we zoom that out in twenty years, we could have a situation where people in urban areas are averaging a salary of US$12,000 a year whereas in rural areas, they are earning less than one-sixth that amount and essentially existing in poverty. They get stuck in that cycle where they don’t have the funds to send their children to high school or college and their children [repeat the pattern]. When you look at the world, China still has the second largest population of people living under the poverty line and if that issue will not be addressed through the natural process of economic development, there really needs to be new models put in place to support the other side.”

Until next time… And thanks again for reading!

Saul Gitlin (冀碩臨)- Executive Vice-President of top rated Asia-focused multicultural advertising agency Kang & Lee, founder of a popular LinkedIn group for Chinese-speaking professionals, mentor to budding Sinophiles, gifted storyteller and a scholar in his own right- is approaching thirty years of connection to China. I sat down with Mr. Gitlin, who is currently working on a memoir about his early years in China, to learn more about a life transformed beginning with a Mandarin class. Part II of this two-part interview details his career in domestic Asia-focused multicultural marketing, his LinkedIn group Chinese-Speaking and China-Experienced Business Executives, the similarities between learning Chinese and American Sign Language, and what it means to shape one’s profession around a particular theme- China. Part I highlights Saul Gitlin’s initial ties to the Middle Kingdom. To learn more about Mr. Gitlin’s journey and a life transformed by China, read on…

Career Roots…
“[Following seven years in China] I was accepted at Columbia for my MBA, but deferred for a year to spend more time with a woman I had met in Israel, who later became my wife. I said to her, “I’ll come back to Israel and hang out with you while you finish your degree as long as you come back to the US with me so that I can do my MBA,” and that’s exactly what happened. I went to Columbia and did my MBA full-time while my wife worked on her doctorate in psychology here, and then I spent a couple of years doing freelance consulting work. At that time, I knew that I had to put down some career roots and that we needed to be in New York. The year before I came to Kang & Lee, I said to myself, “I’ve spent my whole career in marketing to Asians and I’ve just done an MBA focused on marketing and I love this career path but how can I do it without moving back to China?” At that point, I was married, my wife was doing her degree, and I had a son. That led me directly into discovering this world of domestic multicultural marketing and once I identified that as a career possibility, I made a beeline for both the agencies and the clients that were focused on marketing to Asian-Americans. At a certain point, I made contact with Eliot Kang, the man who founded Kang & Lee. He didn’t respond to me immediately, but quite a few months after I initially reached out to him, I received a phone message from him which led to several conversations and eventually an offer to join him as a member of the executive management at Kang & Lee to run strategic planning and corporate communications for the agency. That was in 1997. I then went on to build my career as a multicultural marketing strategist. Kang & Lee is the number one ranked Asian multicultural marketing, consulting and communications agency in the United States, ranked #1 by “Advertising Age” among all Asian multicultural agencies.”

Chinese-Speaking and China-Experienced Business Executives…
“About a year ago, I decided to get active on LinkedIn. My first thought was that using the site might ultimately bring other opportunities. But, I rapidly discovered that LinkedIn was a very useful tool for other things, like learning more about a potential business client and preparing better for meetings. So, increasingly I started to use LinkedIn during my daytime work. In the spirit of getting active, I looked into joining some of their networking groups. I noticed that there were a lot of “China” groups- there’s “Overseas Chinese Group,” “Chinese Investment Group,” lots of China finance groups… There were many China specialty groups. But, I was searching for something else based on the way I define my career and the way I work with clients across many disciplines. I was searching for a group that I couldn’t find. So, I wanted to build a group of people who really value an important definition of who they are professionally as being “China people” versus people of a specific industry or function. There is not a small number of people like me in the world. The common thread for the group had to be superior Chinese language skills and China work experience. I thought that such a community would allow a very vibrant discussion about China while providing fertile territory for career opportunities. [I imagined] that we could have open discussions on politics, Chinese poetry, current events, Chinese economy, finance, marketing, whatever. But, the group would be a way to embrace everybody who sees themselves as a “China person” regardless of what their functional expertise is. I could not find a group that already did that, so I established one.
I established this group called “Chinese-Speaking and China-Experienced Business Executives” in July 2008. I gave it a Chinese name (中国通) because I felt like the use of the Chinese language was something that I wanted to promote in the group. I assumed that I would attract non-Asian people, but I also hoped and expected that I would attract a lot of ethnic Chinese professionals both from China and from all over the world. The name 中国通 is typically a designation applied to non-Chinese who have exhibited some mastery of Chinese language and culture, although in my group 中国通 are also Chinese business executives; at least half of my members are Chinese nationals themselves.
Once we had critical mass, I could start to see the group taking off on its own; I was getting 15-20 people interested in membership per day. I take the management of the group very seriously. It is designed for people who have the skills expressed in the title. Today the group now has almost 3,400 members; it is the largest group on LinkedIn using the keyword “Chinese” in the title. In my group, all the members are qualified to be there and come from all over the world. They’ve all been screened by me. There are two exceptions I make for accepting new members. The first is that I will allow students to join the group if they already have China experience or if they write to me to say that they are pursuing a career in China. As part of my own offline career, I take the mentoring of students very seriously and I want to encourage people starting out to get bitten by the China bug. The second exception is recruiters. I will admit any corporate recruiter sitting inside a major company because they are interested in getting China-capable talent. It’s all about opportunities for the core group members.”

Mandarin and American Sign Language…
“I’m currently studying American Sign Language (ASL). There are a lot of similarities between ASL and Chinese. ASL is not English done with hand signs; it has its own grammar with its own rules and a lot of the question formation structures and overall syntax are very similar to ways of saying things in Chinese. As I’m trying to learn ASL, I find that my brain is naturally going into Chinese mode as I form sentences in sign language. Whether its the use of particles at the end of phrases that express questions or the way you use prepositions, there are a lot of things that feel very familiar to Chinese. The second thing is that learning signs for ASL is like learning Chinese characters. Some of them are very iconic and look like what they mean- which is the case with some Chinese characters- but most are more stylized and originally had pictographic roots but evolved into something more abstract which must be learned by rote memorization. Seeing a sign, practicing it and committing it to memory- this is the exact process of learning Chinese characters. You can naturally apply that process to learning signs, except that you are doing it with your hands instead of taking pen to paper. So, in terms of the grammatical aspects as well as the process for acquiring abstract signs, I feel very predisposed for learning ASL. That was an insight that I came into on my own, but when I started asking educators in the ASL community about my observation, several have said that this is known and has been discussed among academic circles. People who know Chinese have an easier time acquiring American sign language.”

China as a Career…
“It’s been twenty-nine years since I first started studying Chinese; [I just turned 47]. People often say to me, “how did you have that vision?” One side of me wants to say, “I’m just a smart guy.” But really, I came into it because of my love for language and it just so happened that I focused on Mandarin, the hot country, the big business opportunity. My language skills and my knowledge of China have opened almost every door that I’ve knocked on. If you look at my resume, you’ll see that I was involved in all kind of things. Some people think that I’ve really jumped all over the place- from the hospitality industry to plastics production to telecommunications to advertising. They ask, “where’s the thread here?” Maybe most people define their career in terms of, “I’m a banker,” or “I’m an insurance agent,” or “I’m a telecom guy.” I define my career another way. My career is defined by China, by Chinese, by Asia. For me, the industries are quite incidental. One of the things that I really enjoy about the marketing communications industry and more specifically, the role that I’m in now, is that I get to develop strong competencies in a variety of industries. I’m sitting on strategic issues for my insurance clients, my telecom clients, my automotive clients… When you work with some of these [diverse types of] clients over a period of years, you really learn a lot.
I am part of a generation of people- and I think it’s growing- who are not defining their careers based on a specific industry but rather on a strong and very important competency that can cross industries and disciplines.”

This concludes Part II of a two-part interview with Saul Gitlin (冀碩臨). If you’ve missed Part I, click here. Mr. Gitlin is Executive Vice-President of Kang & Lee Advertising and Founder of the LinkedIn group, “Chinese-Speaking and China-Experienced Business Executives.” To learn more about his professional background, please visit his LinkedIn profile.

In an age of “experts” we often find that few individuals have the proven experience to live up to the title once you scratch the surface- especially when it comes to China. Saul Gitlin (冀碩臨)- Executive Vice-President of top rated Asia-focused multicultural advertising agency Kang & Lee, founder of a popular LinkedIn group for Chinese-speaking professionals, mentor to budding Sinophiles, gifted storyteller and a scholar in his own right- is approaching thirty years of connection to China. And, while he may not call himself a “China expert,” his history and intensity proves otherwise. I sat down with Mr. Gitlin, who is currently working on a memoir about his early years in China, to learn more about a life transformed beginning with a Mandarin class. Part I of this two-part interview highlights a few stories from Mr. Gitlin’s initial ties to the Middle Kingdom; Part II will detail his career in domestic Asia-focused multicultural marketing, his LinkedIn group Chinese-Speaking and China-Experienced Business Executives, and what it means to shape one’s profession around a particular theme- China.

The Chinese Challenge…
”Pretty early on in elementary school, I discovered that I had an unusual aptitude for learning languages. I had the fortune in New York City public schools to be given the opportunity to study foreign language beginning in the fourth grade and was placed into a French class. This was in the early 70’s, before Spanish became the language of choice. I continued to excel in foreign languages throughout high school, studying French and Italian, and then decided that I would major in foreign languages in college. My initial thought was that I’d be a French major. However, by the time I hit my junior year of high school, I decided that I was going to take another language when I got to college- one that was completely different from French and that would really exercise my perception that I had an ability to learn languages. So, I decided upon Chinese. This was in 1978 and there was a lot going on in the world at the time- the end of The Cultural Revolution, the nascent opening up of China, Deng Xiaoping coming back, and the establishment of diplomatic relations that was finally concluded by the Carter Administration… I knew about none of that; none of that had any impact or relevance to the decision I made- it was purely about my perception that Chinese was the most difficult language in the world. Part of it was also an ego thing- I knew of no one else who was studying Chinese and my sister was studying Russian while my brother was in college studying Latin and Greek. I needed to be different from them and I wanted to tackle what I thought was the most difficult language in the world.
In the end, I decided to go to a school that had a great French program and a very strong Chinese program- Cornell. When I walked into my first day of [Chinese] class, which had about 20-25 students, I noticed that only 3 were non-Chinese. Most students were in the class to satisfy foreign language requirements; they were Chinese Americans and many of them spoke Chinese but didn’t read or write. It was all about, “if I have to take a language requirement, I’ll study my family’s language.”
Outside of the classroom, I was really ridiculed and made fun of. Everybody wondered, “what are you studying that for?” However, I discovered that my perception of Chinese being a very difficult language was really off target. Grammatically, it is one of the simplest languages in the world; there are no verb conjugations, a syntax that often mirrors English, and a non-redundant grammar that, when compared with French or Spanish, is so much easier. Of course, the flipside of that is that pronunciation is difficult and the writing system is challenging. Within a month of studying Chinese, I called my parents and said, “I’m going to major in Chinese.” I became very passionate about it, but had no idea what I was going to do with it. I became an Asian Studies major…and I focused everything on China- I took Chinese history, Chinese government, Chinese linguistics. The only thing I didn’t take was Chinese literature, but I focused on that in graduate school. I ended up winning a Presidential Scholarship (Harry S. Truman Congressional Scholar), which funded my last two years of college and my first two years of graduate school.”

Fudan and Qiqihar…
”During my undergraduate studies lots of students were going to France and Spain, so I decided that I was going to go to China. No one from Cornell had done that since 1949. I went to China in 1982 as a cross-registered student at SUNY Albany (Cornell did not have a foreign exchange program with China during that time) and joined over a hundred students at Fudan University from all over the world. [During college] at Cornell, I had lecture three days a week for an hour and an hour and a half of drill every day; in addition to that, during my freshman and sophomore years at college, I spent on average three and a half hours every night in the language laboratory at Cornell. So, when I arrived at Fudan, [I had to take a Chinese language exam for placement]. I passed the exam with flying colors and decided to study 近代历史- modern history.
I can’t even begin to describe to you how different it was in China overall in 1982 and how we were treated as foreigners, as compared with today…Imagine standing at the end of Nanjing Lu on the Bund in Shanghai and looking at Pudong. As far as the eye could see, there was farmland- there was nothing on the other side of the river. Today, Shanghai residents themselves don’t pay any attention to foreigners, and anyone in Shanghai who does is immediately recognized as a domestic tourist. It was the post-Cultural Revolution and xenophobia was still in place; foreigners were monitored very carefully. When you were in China those days as a foreigner, you really felt that you were cut off from the rest of the world. If you wanted to buy foreign goods, you had to buy it at The Friendship Store and you had to buy it with a special Chinese currency that you received when you exchanged foreign currency- you couldn’t spend RMB in a Friendship Store.
I spent a year at Fudan and took every opportunity I could to visit the countryside. On the weekend and on school holidays, I would hop on the train. I basically went everywhere in the country except T1bet. Back then, anytime you wanted to take a trip in China via airplane, train or bus, the person selling the ticket would demand to see your “foreigner’s travel permit,” which said that you were permitted to travel to a specific destination during specified days… During one trip, I had permission to go to Harbin and went to see the ice-sculptures, but when I got there, all the locals were saying that the ice sculptures in Qiqihar were worth seeing. So, I bought a ticket to Qiqihar and took the train there with two fellow students. The minute we arrived in the Qiqihar station, a plain clothed policeman asked to see my travel permit. I said “I don’t have a travel permit,” and they took us to the public security station and left us there for about an hour, during which time we [assumed] that they were verifying our identification with Fudan. When the security officers returned, they told us that, up until a week or two previous, Qiqihar had been a closed city to foreigners; we later surmised that it was because it was in close proximity to an air force base. So, we were dealing with a local public security apparatus that was inexperienced and perhaps even paranoid about foreigners in their city. They asked us to write a self-criticism in Chinese explaining why we had done what we did and then they gave us permission to leave, provided we would return to Harbin the next day…
We made our way to a hotel, got to see the ice-sculpture exhibit, and pushed our way into a sugar factory- something that I should never have done, in retrospect. From the moment we exited the police station to when we stepped off the train in Harbin the next night, there was a guy following us very conspicuously the whole time- someone who had been assigned to watch us. We observed him when we’d left the police station, he followed us all through the city, got on buses with us, showed up at restaurants we went to, and only left us when we stepped off the train in Harbin.”

The First Documented Case…
”I decided to go to Yale for a Ph.D. in Chinese Literature and from the moment I arrived there, I felt like I had to get back to China. I discussed this with my professors two months after starting at Yale and my fellow students were horrified because I was there with full-funding from a variety of scholarship sources. I received a transfer to a Master’s in East Asian Studies, [which allowed me to leave Yale] after a full year with a Master’s degree. I graduated in 1985 and came out knowing that I was going to go back to China. A friend of mine had been leading tours and offered to put me in touch with the company he was working for. [Two weeks after I contacted the company] they called me and said, “we’ve been asked by a French travel agency in Montreal to put a French-speaking guide on a tour of doctors of acupuncture going from Quebec to Beijing to do an international conference but they want to do a pre-tour of China. Can you do it in French?” I said yes, and then spent the next eight months as a tour guide taking groups to Asia and back…
As if fate handed me something, the travel agency called me up one day and said, “we have a tour leaving next week, Trans-Siberia for twenty-eight days, and our guide has just cancelled on us; you’ve already been on the Trans-Siberian. Will you take it?” I said “sure” and I embarked in May of 1985 on the Trans-Siberian tour. That tour really sticks out in my mind because something momentous happened. Three days into the tour, a thirty-five year old man from Los Angeles on the tour came to me one morning in the Nanjing Hotel and said that he was going to stay back because he wasn’t feeling well. The next morning he said, “I have leukemia. Before I left the states, I had some chemotherapy and because my immune system is down, I think I’m starting to get sick. I don’t want to alarm you, but I need some time to rest.” A day later we flew to Xi’an. By the time we got to Xi’an, he was having visible problems breathing. I spent half the time in Xi’an shuttling this guy to a few doctors, including one who said, “he probably should have some oxygen in his room.” At that point, I suggested that he shouldn’t go to Russia and that we should work on getting him home. This was mid-80s China and there weren’t foreign hospitals. We got to Beijing and by that time, he could hardly walk. We were in the Great Wall Hotel in Beijing and I started to work on getting him on a flight back to Los Angeles with Pan Am. Pan Am insisted that he come to their office and once their station manager looked at him, he said that they couldn’t sell him a ticket without authorization from his doctor that he could fly… At this point, I had been urging this guy to let me hospitalize him in Beijing, but he absolutely refused to do that… [Following this issue with Pan Am], I’d gone up to his room and he said, “listen, I really need a tank of oxygen.” I said, “I’ll take you to the hospital” and I called an ambulance, which arrived about an hour and a half late. I was his interpreter to the Chinese doctors and explained that he had leukemia and was having difficulty breathing. I was scheduled to leave the next morning to the Soviet Union on the Trans-Siberian railroad with my tour group, but on that night, around 1:30am, he died. The Chinese doctors could not understand why such a young man who was under their care would just die. They called his doctor on the phone in Los Angeles and his doctor said, “oh, I diagnosed him a year or two ago with full-blown AIDS.” This was the first acknowledged AIDS death in China, and within three weeks it started to make headlines all over the world…”

Hebrew and Mandarin…
”After about three years in China I was getting a little burned out. I was in my mid-twenties, single and China was still a quasi-hardship place to live. So, I decided to take a break and spend a year traveling around the world. I bought a ticket back to the United States, spent a summer traveling around Europe by train and then went to Israel with the intention of spending a few weeks there. When I got there, however, my language bug kicked in. I decided to put down some temporary roots there and I enrolled in an intensive Hebrew language course designed for immigrants. I’d been to Israel once before and was profoundly embarrassed that I could speak Mandarin but not Hebrew, which was a language connected to my own ethnic roots…
Israel is a very small country and by my assessment there were probably no more than two or three people there at the time who spoke fluent Mandarin. Israel was already taking the first baby steps towards trying to normalize relations with China and I became known within a community of people who cared about China and Israel, one of which was an Israeli diplomat who worked in the foreign affairs ministry and had studied some Chinese. At just about the time that I was going to leave Israel, she called me up and said, “I just want to let you know that in the newspapers in Tel Aviv they’re advertising that a major international Israeli company is searching for people who speak fluent Asian languages.” So, I applied to this company, which turned out to be the company of the richest man in Israel at the time, Shaoul Eisenberg. I was made a job offer and in the summer of 1989, I started working for the Eisenberg Group of Companies at his headquarters in Tel Aviv. He was looking to create a national network of his own company’s offices in China, as well as a few other places in Asia… About six weeks into working for him, he came to me and said “one of my resident managers of Beijing needs to take a home leave. I’d like to send you over there to fill in for him until he gets back.” So, I was shipped off to China and, even though that manager eventually came back, they kept me there. Between 1982 when I went to study at Fudan until 1992, I spent a total of seven years in China as a student, then in the hospitality industry and then with this international trading company. That was my residence experience before coming back to the United States to pursue an MBA.”

This concludes Part I of this two-part interview with Saul Gitlin (冀碩臨). Mr. Gitlin is Executive Vice-President of Kang & Lee Advertising and Founder of the LinkedIn group, “Chinese-Speaking and China-Experienced Business Executives.” To learn more about his professional background, please visit his LinkedIn profile. Part II of this interview with Saul Gitlin will focus on his career in Asia-focused multicultural marketing, his LinkedIn group, and what it means to shape one’s profession around a particular theme- China. Stay tuned…

 Perhaps the largest impediment to successful cross-cultural business negotiation between the US and China stems from a lack of communication, whether in the form of candid two-way dialogue or in the ability to access information across borders, languages and time zones. While seasoned international business professionals gain acumen through their hands-on experience (and their mistakes), MBA students and budding entrepreneurs who are new to the increasingly competitive cross-cultural playing field struggle to find practical knowledge with real world applicability. Andrew Hupert, a professor of international negotiation for New York University at Shanghai’s East China Normal recognized this gap in business literature and the university classroom. Instead of merely venting, he took action with the launch of US-China Forum which is, as he describes it, a “no-risk laboratory in which to learn about negotiations with REAL international counter-parties.” I linked up with Mr. Hupert- who is also the author of two must-read China business blogs, China Solved and Chinese Negotiation- about the need and the audience that inspired US-China Forum as well as the planned evolution of this innovative learning platform beyond Beta. To learn more about Andrew Hupert, US-China business negotiation and the US-China Forum, read on…

What initially inspired you to launch US-China Forum and what relationship does it have to China Solved?
The US-China Forum has a relationship to China Solved and Chinese Negotiation; it’s all part of the same package of building a business branch between the US and China. China Solved is directed toward the international community doing business in China and Chinese Negotiation is targeted more toward Americans that are seeking entry into China or negotiating deals in China. I’m an educator- I teach international negotiation for New York University at Shanghai’s East China Normal. I’ve found that it’s very difficult to teach college-aged students and MBAs cross-culture business and trade because they lack business experience. So ultimately, the goal for US-China Forum is to create an online platform for negotiation simulation where small teams from different countries can take on the roll of a business unit- for instance, a multinational or an American entrepreneurial company trying to enter China.
Part of my inspiration came from Chinese bulletin boards and chat groups where Chinese students are talking to one another about these topics, but there’s no Western participation at all. They tend to just go around in circles and aren’t really improving. Then, the American students entering China tend to come in with their own preconceived notions about culture. They think that they are being very open-minded but [in reality], they are just patiently waiting for the Chinese students to act exactly the way that they do. These two groups really do want to engage in a cross-cultural dialogue, but there is a structural impediment. With US-China Forum, I’m trying to create a structured environment where they can at least get a look at how the other side sees the world. One of the primary missions of US-China Forum is to help people understand just how big the world is, just how broad the playing field is, and to give them a sense about “the other guy” so that they can ask the right questions.

Who is your target audience?
My target audience is US and China students interested in cross-cultural trade. I’m reaching out to university business professors to incorporate US-China Forum into their lesson plans. Right now, I am focusing on the structured discussion forum where I bring up topics and encourage users to interact with each other through comments and I’ll be introducing more functionality as far as letting the participants speak directly to each other as I get critical mass. I have a group of consultants, professors and experienced business professionals who can take on the role of moderating negotiation simulations on US-China Forum through interactive case studies, where all sides of the trade are represented by participants.
It is challenging getting Chinese students involved on any level; they are very curious and interested, but they are also a little bit shy. So, one of the challenges I’ve had in the classroom is that, while the Chinese students are too quiet, the American students are too chatty; the American voices sometimes have the habit of drowning out the Chinese voices.
I’m finding less interest from the US community at this point- probably because there’s not critical mass yet- but the Chinese side is jumping at this. The American side seems to be skewing a little bit older- they are already working with China or in many cases, looking for a job [in China]. That’s an interesting demographic to me and it might be something that I encourage for Americans who are preparing to enter the Chinese job market. But, I want to maintain a focus on university-aged participants- especially MBAs, Juniors and Seniors enrolled in college business programs- and the role play component of US-China Forum is primarily designed for that age group.

Are the role play questions focused on foreign businesses coming in to China?
I see a lot of business entry questions and a lot of the questions that I used in my classroom in Shanghai concerned US-China joint ventures that are changing- either encountering problems or growing. I talk a lot about US managers dealing with Chinese managers, either in terms of new direct investment or an existing relationship. In the future, one of the scenarios that I will need to start building for is [one concerning] Chinese managers entering the US market. A year ago, we didn’t think about that. It would not have been a scenario that I’d have looked at. Now, it’s become a very hot topic but I need to see a few more actual cases.

What technologies will be implemented to support US-China Forum?
Ultimately, I’d like to enable it with video, chat, mobile and instant messaging. A lot of it is dependent on bandwidth. I want to make it as flexible as possible, but I don’t want to knock out people that aren’t sitting on fast connections. In China, this is a big issue. We don’t have access to YouTube here and sometimes university connections aren’t that fast. We’re also dealing with a time difference, which is a realistic business issue and something I’m also tackling. How do you handle a twelve hour time difference between New York and Shanghai or Chicago and Beijing? But, that’s something that real-life negotiators and business people have to deal with all the time.
As far as technology goes, I’d like to add as many bells and whistles as possible to US-China Forum and make it realistic. One of the outcomes of US-China Forum that will be interesting to the business communities is seeing how people connect. What are the most organic ways that US and China business people connect? I’m very curious about how this younger demographic is going to handle it. If someone’s waking up early or staying up late to make a phone call- just like we’re doing now- I think that is one of the challenges of doing cross-cultural trade. I want to see if the younger, more tech-savvy demographic finds a different way to handle that challenge.
There are also other differences in the way that people use technology when comparing the US and China. In China, mobile technology is much more common. In the US, there is still a tendency to rely on emails, phone calls and groups like LinkedIn whereas in China, it’s more about online chat and mobile technology. They are not as email-centric as the American side.
I’ve been working with Carsten Ullrich, a Ph.D. from Germany who is focused on the IT-side of education at Jiao Tong University. He and his wife and colleague, Kerstin Borau, who is also at Jiao Tong, are collaborating with me on how to bring some of their classes and resources to bear.

How are you handling the language barrier on US-China Forum?
Interesting question. Aside from technology, the other issue that I’m currently grappling with is the language difference. Some people have suggested that I add a Chinese version of the site and while that’s something I’m looking into, I’m afraid that there’s a danger of segregating participants into two different communities- those who speak English and those who speak Chinese- which will [stifle interaction]. At the moment, I’m using English as an international medium and down the road, I’d like to offer translation assistance. If there are Chinese students who are concerned about their English level, at this point they can run their discussion through me or one of the interns to help them.
I also need to think about incorporating other cultures and languages as well, as I’ve been getting a lot of interest from other countries. I’d originally envisioned this as a two-way dialogue focused on the US-China market, but one of the things that I’ll have to consider is the [incorporation of other groups globally]. How am I going to deal with Europe, India and ultimately Japan, who are now being neglected? But, my primary focus is the US-China trade relationship, so I’m going to leave that structure as is for the short-term. Ultimately, I’m going to have to question how I will incorporate other cultures into the scenario. This is a very realistic issue- Westerners in China deal with it all the time. It’s not so much about a New York investor coming to Beijing to apply for a license; it’s now an American group dealing with a Taiwanese group and a Korean group as they enter China while simultaneously answering inquiries from India.
So, the same questions that I’m forced to confront in setting up US-China Forum are what other multinational businesses are also running into on a day-to-day basis.

So, is US-China Forum your primary focus now?
My primary focus is teaching US-China negotiation and I see US-China Forum as an extension of that; I’m focused on bringing my classes online. I’m now looking for professors in the US who would like to incorporate US-China Forum in their curriculum either short-term or long-term and I will be able to accommodate them on the Chinese side. One of the things that I will be doing is matchmaking between Chinese and American business classes- facilitating interaction and discussion there.
I’d like to get more participation on the grassroots level. It’s fairly easy to get people to take a look at the site, but what I really need now is for people to register and participate. That being said, progress is definitely being made. People have been making very constructive comments and through that feedback it’s become clear that there’s a need for this [platform]. The current cross-culture business infrastructure is set up for older people who are already actively participating and I’ve found that there is less out there for university students and recent grads. There’s a gap in the literature on US-China business right now: How do you approach younger people with limited business experience? Coming into US-China trade with no business experience at all can actually be a benefit because there’s a blank slate- they don’t have any predispositions. But, it can also be very intimidating for the students- they don’t really have a good sense about WOFEs or joint ventures. So, one of the things that I’ve tried to do is bring in a primer-level background for smart people who don’t have business experience but who want to participate in a cross-cultural discussion.

Andrew Hupert is a New York University Adjunct Professor of International Negotiation at Shanghai’s East China Normal University, Founder of US-China Forum, and blog author of China Solved and Chinese Negotiation. To learn more about Mr. Hupert’s professional background, visit his LinkedIn profile. If you’re a business student, professional or educator interested in US-China cross cultural negotiation, be sure to register and participate on US-China Forum! Hope to see you there…

Let’s get straight to the point. Are Chinese companies ready to retain foreign firms like The Monogram Group to establish their presence in the US as recognized brands?
After 30 years of growth, some Chinese companies have reached the point where they are able and willing to consider the leap beyond private label status to build their own brands and service and distribution networks. There are literally hundreds of [Chinese] companies today that have the revenue size and product quality to consider the leap beyond OEM status. They have paid attention to paradigms from Japan and Korea and how some of the dominant companies from those countries went through a similar process 30, 40 and 50 years ago. However, the scale of this opportunity and the amount of companies in China that have the means to consider this would dwarf anything that we have seen from Japan and Korea combined. Many Chinese companies are actively considering the prospect [to build their own brands in the US] but because of cultural issues, very few have taken the leap to put into place the infrastructure and investment. They are looking for other models to follow. Companies like Lenovo and Haier were among the earliest to do this, and other Chinese companies are now sitting back and waiting to see how successful Lenovo and Haier are before they take the leap into the US market. Today is more about potential than reality. Again, you could probably count on two hands the Chinese companies that are actively pursuing this strategy. It is our opinion that, two or three years from now, this will be a much [higher priority]. The Monogram Group has seen this trend for some time and we’ve been building our relationships, our credibility, and our infrastructure in the process. Our objective is to become the dominant consultancy in this specialized expertise within two to three years.

What are some of the challenges that you are currently facing in this new frontier?
There are several. This is not an easy task. Some of the challenges are related to cultural differences between China and the US. There are also issues regarding corporate structure and the role of marketing and brands in the average Chinese company, versus [standard practice] in an American company. There are four or five things that I’d like to point out that [The Monogram Group] has experienced firsthand many, many times. The first is that many Chinese companies have a blind spot about paying for professional services. They very often don’t trust service providers because they put their stock and faith in tangible things- inventory, raw materials, people, factories. But, when it comes to getting advice from a law firm, a branding consultancy, an accounting firm or a management consulting firm, there’s almost a knee-jerk mistrust [which leads to questions like] “What are you telling me?” “Why am I paying this much?” “How do I know you put in all those hours?” “What am I getting in return?” And, “what’s the value?” Very often, they will bypass this type of expertise and counsel, whereas equivalent American companies would never consider bypassing a law firm for major issues like contracts and IP,  or a branding consultancy like ourselves. So, that is a profound difference between Chinese and American companies.
Second, it is a cultural issue with China that only the top person makes important decisions. So, if you have a hierarchy of people in an organization with employees numbered one through eight, for example, two through eight cannot and will not make a decision. It’s only the top individual that is allowed to do that in a Chinese company. Getting access to the top person in order to pull the trigger on decisions can take a while. Again, woven into that you have an inherent lack of trust and bias. [Employees not in the top position] within these companies avoid risk because they are not likely to be rewarded for making the right decision. But, if something does go wrong, they can lose their jobs. So, they tend to be very risk-averse and will overtly and consciously avoid making a decision such as hiring us or proving a budget or coming up with an action plan.
Third, Chinese manufacturing companies tend to be very manufacturing-oriented. They think about making products, negotiating price for products, distributing products, and competition in their category. Very often the mindset is, “I have a good product to sell. Can you go distribute it and get it sold for me?” as opposed to “Who may buy this?” and “What do they want or demand? What could they want but they can’t get a hold of?” This doesn’t really occur to them, so the whole idea of a brand- which is about a relationship and a promise and a value proposition- is not how they think. We’re really teaching them a whole new way of thinking. Eventually, we’re persuading them that, if they want to [establish their own brand], they’ll have to reorient how they think and how they fund certain activities like market research. They typically discount market research, which is at the heart of any American company showing up and being credible, especially on the consumer product side.
Fourth, their orientation towards timeframes and sense of urgency are very different from their American counterparts. If you have an American VP of Marketing whose job it is to hire an agency and launch a new activity, the longer they don’t pull the trigger, the more they’ll get criticized. Eventually, their job will be at risk. With their Chinese counterparts- actually, there probably won’t be a Chinese VP of Marketing focused on these issues- but timeframes and sense of urgency are just different in China. Things take a lot longer. Things are furloughed and considered infinitely longer than they are here.
Finally, because of the gap in hierarchy within a qualified Chinese company where marketing is not on the organizational chart, very often who the point person is on such projects can change more than once during the courtship process, the relationship-building process, and even after the project has been approved. So, who you work with may depend on who the boss decides has that responsibility from week to week. Continuity and the building of knowledge and skills can be fractured at times.
These are some pretty fundamental differences that can often get in the way of not only securing relationships, but also [may impede the process] of doing the work and doing it according to our best practices, which ensures the greatest chance of success.

Scott Markman has 28 years of experience in corporate design and brand development, including the last 19 as President of The Monogram Group. Since 2005, the agency has won nearly 15 awards for creative and strategic excellence. To learn more about Scott Markman, check out his profile on LinkedIn. To learn more about The Monogram Group, visit Monogram China and Monogram USA.

Let’s start with your background. You were educated in both the US and China, receiving your MBA from Washington University in St. Louis and Ph.D. from Nanyang Technological University. So, what led you to make the decision to forge a career in the US rather than returning home to China, where your educational and professional achievements are a hot commodity these days?
Yes, I was born in China and went to undergrad at Xi’an Jiaotong University before coming to the US for my MBA. Following that, I worked for Deloitte Consulting and for a couple of years now I’ve worked for a US private equity advisory firm focused on investment strategy, due diligence, and managing portfolio companies. During my time with this firm, I’ve discovered that there is a unique opportunity for Chinese companies to take advantage of the US economic crisis. A lot of US companies have good brands, good products, good engineering and pretty good design; however, they are also in some form of financial distress. On the other hand, China is like the world’s factory now. The margin each Chinese company gets from products sold overseas is actually pretty low- 3 to 5 percent- and that is because Chinese companies don’t have [strong] brands and designs. The only competitive advantage for these companies is cheap labor, and you cannot compete forever with this model. Now, there’s a great, once in a lifetime opportunity for these Chinese companies to move up by coming to the US and acquiring US companies. Through acquisition, they can easily gain access to the US market by acquiring established US brands and utilizing US marketing, R&D, and sales and distribution networks to quickly move up the supply chain.
In terms of why I haven’t returned to China…I have thought about this question a lot. Some of my friends have gone back and been very successful in China, so of course I ask this question to myself nearly every day. But, what I’ve tried to do is [examine] my strengths and weaknesses in terms of what I can offer to my future clients. If I go back to China there are only two types of opportunities I can have: I can either work for a foreign company currently operating in China or, I can go to work for a Chinese company that is trying to compete with those foreign companies already in China. The advantage that I bring to the table here is that, because of my education and working experience in the US, I have a more Westernized way of doing business, which is something that a lot of Chinese companies and foreign companies operating in China need. However, doing business in China needs connections, and because I left China more than ten years ago- even though I go back regularly to visit my family there- it is different than if I had stayed permanently. If I returned, I’d have to recreate those connections.
If I remain here in the US, there aren’t many people who have my skills that can help Chinese companies expand to the US. So, in choosing to stay here in America, I probably have less competition compared to if I returned to China.

The typical conversation about US-China business relations tends to focus on US foreign direct investment opportunities in China. But, as you pointed out, the landscape seems to be changing and Chinese companies are indeed heading west. In fact, China’s outbound investment exceeded FDI for the first time this year, shifting China’s role in the global economy. What factors do you think propelled this shift?
There are a few factors. One very key point is the trade imbalance. Over the last ten or twenty years, China has been running a surplus; they export more product than they import, so they have a huge amount of reserve money. China is now constantly seeking investment opportunities other than just buying US treasury bonds. In other words, the Chinese government now has money and they need to invest it somewhere that will generate a higher return than US treasury bonds can.
A second point to consider is China’s strategy for outbound investment. What do they need? Natural resources. China’s appetite for commodities is caused by its huge growth, and China itself does not have enough natural resources to feed its demand. So, Chinese companies are going around the world- Africa, Middle East, South America, and even Russia- to try to secure desperately needed iron ore, oil and other natural resources. Most of China’s foreign direct investment falls into this category. For political reasons and national security issues, there isn’t actually a lot of these types of transactions for US natural resources. China has attempted it in the past but was blocked by US Congress. So, now they’re being very cautious. At this point, China has partnered with almost every country except for the US in terms of natural resources.

Let’s talk about investment opportunities that China should be focusing on now.
[To address this generally], China should focus on competing with multinationals involved in low-end industries, ones that have already established manufacturing facilities in China. For example, electronic products like laptops, cell phones, digital cameras and TVs. China is the world’s number one producer of these items already. However, there are not many Chinese brands associated with these items. Consider Apple. In the last three months, Apple sold 10 million copies of their iPhone. But, those iPhones are all made in China; they’re not made in the US! It’s a Chinese export, but not a Chinese product. So, China knows how to make these products, but they don’t know how to brand them and China doesn’t necessarily have very good engineering and R&D. Some of China’s engineering and R&D is pretty sophisticated, but it isn’t the most advanced or most modern [in the world]. These types of Chinese companies that already manufacture [American] products are the ones that are in a very good position to come and make some acquisitions; they can buy within the industry that they’re already involved in. And, since these US companies already have very good brands, distribution channels, R&D and engineering- in addition to their massive manufacturing facilities in China- it would be a perfect match.

What are some of the challenges that Chinese companies face when doing business in the US? In this regard, do privatized enterprises have any advantages over state-owned enterprises (SOEs)?
That’s a very good question. There is one major challenge for every Chinese company and it is that they don’t have enough talent to manage cross-border transactions, not to mention managing a US company. In terms of China’s private sector, I would say that they have a slight advantage over the SOEs. One reason is because these privatized enterprises are market driven, and another is because their decision-making process is much faster than the SOEs. However, a state owned enterprise has a huge advantage: they are backed by the government and government-supported banks, which means that their resources are much larger than in the private sector. But, whether state-owned or private, the biggest challenge all of these companies face is lack of management talent. In the past thirty years, there has been huge growth in China. Now, a lot of middle-class individuals have cars, their own phones…If you look at China on this level, it would seem that a lot of Chinese are reaching a standard of living that is close to what you would find in a developed country.
However, management skills within Chinese companies have not become equal to management levels found in developed countries. Harvard Business Review had a good article [which explained three categories of management]. The first is the way Western managers handled uneducated, blue-collar workers in the 1930s- assembly line or construction workers. The most constructive way to manage them was by employing a foreman who wore big boots. If he saw someone who was lazy, he kicked them in the back and they went back to work. In this type of management style, if you want to make your employees work harder, you pay them more money, give them overtime and offer them raises. That’s how you motivate this type of worker. Then, when cost of living increased in the 1970s and ‘80s, a lot of people found themselves working in nice offices with [new technologies]- the work environment became much better and you could no longer kick an employee anymore, as it was illegal and they could sue you. So, how to manage and motivate people during this time? If the boss was not in the office, employees would make phone calls to their friends, read magazines and so forth. But, if they see that the boss is in the office or viewable, they will quickly go back to work. So, the best way to increase productivity in this type of environment is to constantly show the employees that the boss is nearby- the presence of the boss. Then, consider the IT dotcom stage, where companies like Microsoft and Google had a problem managing their employees because all of their employees are already millionaires. These types of employees don’t have to work- they don’t need the money anymore- and the only reason they are still working is [to attain] personal achievement. So, the best way to motivate these types of people is to take care of their needs outside of the work. You don’t have to be there and you don’t have to kick them, you just need to provide a nice environment for them to work, including giving them more vacations. Productivity becomes entirely self-motivated. We see this in the US a lot- on Wall Street- with people making at least six figure salaries. As a boss, you don’t have to be around the office to motivate employees. Instead, the boss sets a target and gives them a deadline. I would say that most of corporate America is managed this way now. But, the majority of the management styles in China’s private sector are still in the first and second phases.

In a recent article you stated that Chinese employers involved in cross-border deals can be expected to favor US-based pros who are fluent in both Chinese and English and who have some connection with China. Where are these employers recruiting and what advice would you give to mid-level and senior-level professionals who fit this profile?
Correct, these employers tend to favor Chinese who were born in China but who have studied and worked in the US for several years, and who speak both Chinese and English. One reason they favor this type of person is that most Chinese entrepreneurs, CEOs, and managers don’t speak English. So, they need someone who can speak Chinese, someone who has no problem communicating with them. At the same time, they need these mid- and senior-level professionals to act as a proxy for them in talking to American counterparties. As I said before, in China business is about relationships. So normally, they look for someone they “know” by asking their friends and getting recommendations. They tend not to use professional recruiting services, unlike US companies. If a US company goes to China and they need to fill ten positions, that US company will normally hire a professional headhunter or search agent. But, Chinese companies don’t like to use this type of service to help them search talent.
In China, people like to do business with friends. They like to get dinner together first, get to know each other and feel comfortable with having a conversation. Then, after [trust is established], they can start doing business. For Chinese, establishing a friendship comes before business relations. In the US, if there’s business to do and money to make, we hire a lawyer to draw up a contract and everyone follows the rules. It’s pure business- very professional. In China, friendship comes first.

Let’s address a rather contentious issue- the US’s massive trade deficit and declining value of the dollar. How will this impact trade with China and more specifically, Chinese investment into the US?
Ironically, it has actually had a positive impact in terms of Chinese FDI- coming to the US to make some acquisitions. China still thinks that the US dollar is overvalued and because of the US government’s current deficit, they are not 100 percent sure how this is going to be repaid. So, one of the things that China is trying to do is diversify their huge reserves by looking for new investments, other than US treasury bonds. One new investment type is to acquire some US companies.

So, what advice could you offer to heads of Chinese companies who want to expand to the US?
This is a very new idea for them, and many Chinese companies aren’t even aware that this is an option. When I talk to CEOs and managers in China, they often say “oh, I didn’t realize we can do this! But, this is interesting- can we talk more? Can you provide more information on how to do this?” My advice to them is that, this is an option and it’s not even that difficult. I understand their concerns- it’s a new, unknown territory operating in a different language with different business practices. But, whoever takes the leap first…there’s a huge opportunity. Think about all the foreign companies that went to China after China opened its doors. The foreign companies that established themselves there first gained [incredible] presence. It’s what we call “first-mover advantage.” If a Chinese company can successfully make one acquisition and integrate it with its current operation in China, it will be a huge competitive advantage. Chinese companies need to think about doing this. Every risk is associated with a huge reward.

Because of the current economic crisis, many educated and business-savvy Westerners who have been unable to advance their careers at home are now looking to China for opportunities. What’s your take on this?
It’s definitely a good international experience for these professionals to have. Most of them will probably be able to find work in the big cities- Beijing, Shenzhen, Shanghai, and Hong Kong. China is still a manufacturing base- 80 percent of GDP comes from manufacturing and only 20 percent comes from the service sector. So, there’s a huge need for Westerners in China’s service sector- [foreigners] who can bring their expertise and experience in the areas of finance, marketing, IT, and customer relations. The pay will be slightly lower than what they earn in Europe or America- probably- but I think it depends. In China, what I’ve noticed in the past few years is that the pay comes out to be pretty close now.

Last question: what’s next for you?
I’m constantly looking for Chinese companies who want to take advantage of this once in a lifetime opportunity to enter the US market and help them find good investment targets, manage the cross-border acquisition transactions, and hopefully to help these companies establish their presence in the US successfully. These are my goals.

Song Jin is a China-born and US-trained veteran in private equity and management consulting who currently works at a boutique private equity firm in New York City. He speaks frequently at conferences and with Chinese media outlets on topics relating to Chinese investment strategies, joint venture structures, intellectual property protection, and building government relationships. To learn more about Song Jin, please visit his LinkedIn profile. Thoughts or questions? Leave your feedback in the comments section.

The US-China relationship has entered into a new energy era, one where hope clashes with history and future collaboration is threatened by unnecessary competition. While the two nations are taking considerable steps toward the development and implementation of renewable energy technologies, their entangled dependence on coal remains; the US and China now account for nearly half of the world’s carbon emissions. Is a US-China coal “cartel” inevitable? Will bilateral cooperation lead to future opportunities in low-carbon innovations? Or, will self-serving interests steer the US and China down divergent paths? I had the chance to talk with Elizabeth Balkan and Chris Brown, China energy and climate change specialists who posses exceptional knowledge on the future of clean energy, green infrastructure, and the policies that shape this US-China equation. Together, their unique insights are unparalleled. To learn more, read on:

In addition to your energy sector expertise, you both possess a deep knowledge of China as well as fluency in Mandarin. What brought you to China in the first place and how did your experiences abroad shape your professional lives today?
Elizabeth: I studied Mandarin throughout college and wanted to deepen my cultural understanding. For that reason, ever since college I’ve been working in a capacity that involves China. For the first part of my career, I focused on social and environmental compliance in the field, and through that work I became aware firsthand of the environmental situation in China. I was quite alarmed to the point of wanting to address it in my career and combine the US’s strength in innovation with China’s strength in manufacturing capacity.
I had been spending a lot of time in factories and manufacturing facilities, and was mired by the absence of incentives for compliance and scale of China production capacity which, aside from serving Western consumption, wasn’t really doing anything to get China towards a sustainable course of development. That experience prompted me to go back to school to get my Master’s degree, where I focused on environmental economics and sustainable development with an eye towards China and towards finding a way to make environmental technology commercially viable with the use of China’s manufacturing capacity. For me, while I recognize that the on-the-ground issues related to the environment and the situation are extremely important, I find it critical to first work on bigger, more sweeping solutions in order to help people understand what China is capable of doing – installing the hardware before the software, you could say. In the last year, my work has become increasingly shaped by indications from the Central Government as to what they are willing to do in terms of funding, policymaking and national commitments.
Chris: I also studied Chinese in undergrad, as well as studying abroad in Beijing. I then lived in Jilin City for a year and it was there that the Uighur students got me interested in Xinjiang. For the Spring of ‘89, near the end of the semester, most of the Han students were protesting so I ended up bonding with the Uighur ones because they were the ones who showed up for class. Following Jilin I moved to Taiwan, where I worked in Taiwan radio for a few years, mostly in Chinese and on the air. I then came back to the US, where I got my Master’s in Chinese Studies at the University of Washington and had the chance to study Xinjiang policy. I’d wanted to study Uighur, but the closest language they offered was Kyrgyz.  That led me to work in naval intelligence for three years, [followed by a position as a Defense Analyst] with the Defense Intelligence Agency (DIA) in D.C. Since I’d been studying Kyrgyz all along, they had me groomed as the Xinjiang expert. That was actually my start into energy- I’d been looking at energy issues for the government and particularly for the Department of Defense from a “threat security” perspective. Basically, it boiled down to “what’s China up to in Central Asia and what are they doing to secure resources?” I was also involved in stability studies with a focus on two questions: 1) what is China doing to internationally secure resources in Africa, Venezuela and Central Asia, and 2) how does that tie into long-term stability in terms of keeping the economy going? But, I wasn’t really interested in looking at energy issues from a security perspective, so I left the government in 2005 to pursue opportunities with China energy projects and look at it in terms of how the US and China cooperate, as opposed to working from the standpoint of seeing China as a threat. I no longer viewed it from a government perspective; it was more about what I could do to facilitate cooperation and bring the two sides together. For me, I’ve been looking more at clean energy over environmental issues, but obviously there’s an overlap.

China is reportedly spending $230 billion in stimulus money on “green infrastructure.” What is this investment targeting, specifically? Could you tell me about some of the projects currently underway?
Chris: 40 percent of China’s stimulus package is going to the green economy. There’s a big push to get a domestic solar market. They started off in March with the Solar Roofs Program and then in late July they announced the Golden Sun project, which is more utility-level. The difference between the two programs is that the “Golden Sun” targets larger utility-scale projects, probably mounted on the ground instead of buildings, and more than 300 kw, and complements the Solar Roofs Program, which as the name implies, is meant for roof top projects not less than 50 kw. The Golden Sun policy explicitly excludes projects which fall under the Solar Roofs Program from benefiting under the Golden Sun program.
China’s government will subsidize 50 percent of projects that focus on- for instance- grid connections. It’s very impressive and aggressive.
Elizabeth: There’s been some very good analysis done about how the stimulus money is being used and classified. My sense is that there’s a lot being done and generally speaking, green and non-green funding are creating positive feedback to help leapfrog China’s infrastructure, which is a reflection of the central policy on the circular economy. For instance, you have projects like railways- which could be considered “green” or “not green,” depending on your perspective. It’s not really a renewable energy and doesn’t address transportation-related emissions issues, but at the same time it’s better than building roadways. These kinds of things point to a difficulty in arriving at a [RMB amount] allocated to green projects. The way that some analysts have sliced and diced the numbers gives a false impression. From my perspective, there seems to be promotion in some circles that China is racing ahead of the US, which is spawning a competitive drive in Washington. This is not the message that should be conveyed because the numbers may be bigger than what may be specifically allocated towards “green.” Even if China does exceed these numbers, [these initiatives] shouldn’t be turned into a trade war.

In some ways, the US and China seem to remain divided on the issue of climate change, although both countries are taking significant steps to combat their own environmental problems. China has recently become the top polluter of greenhouse gases, surpassing the United States; the two nations now account for more than 40 percent of the world’s carbon emissions. What are some of the steps that China is taking, and where do you see opportunities for US-China cooperation on the issue? What are some of the challenges?
Chris: Jim Rogers from Duke Energy recently talked about how much they’ve done with carbon capture and sequestration, which holds huge potential for China. I think it gets more difficult with some of the renewables. Having said that, First Solar in Inner Mongolia is involved in this massive utility-level solar project and has brought in its own engineers while incorporating knowledge from the Chinese side.
I’ve been very impressed with how smooth the technological exchange process has been on this First Solar project- so far. But, they’re at the very beginning stages so of course, policy vs. implementation problems could still occur.
Elizabeth: I would characterize the US-China position on climate change not as being at odds, but as perhaps differing in terms of their perception of responsibility. While I think China and the US are equally committed to being responsible and active players in combating climate change, there’s a difference between the United States position on how China should address climate change, and China’s position on what it should do. It’s been repeated many times, but the controversy surrounding historical vs. current emissions and gross vs. per capita emissions remains. Depending on how you read the numbers, China can either look really good or really bad. Also, there’s the debate about whether China is a developed or a developing country. So, I think the challenges and the opportunities stem from that difference in stance. The US seems to believe that China should be doing as much as the US. China has indicated that- at least in this round of negotiations- no cap on emissions will be committed to. Responsibility for some of the funding is another issue that has seen some disagreement. China’s feeling is that the US, as a historically bigger emitter, should fund a lot of the abatement initiatives in China.
Chris: Have you seen differences in policy from administration to administration on the US side?
Elizabeth: Have I seen [those differences]? Yes. I think there’s been a huge change from the administration, but then again you come down to issues like funding and technology transfer and even the current administration doesn’t really seem as yet fully equipped to address those things. US-China alignment, to be activated in a way that’s going to meaningfully bring climate change solutions is going to require a lot of money, cooperation and technology transfer.
Chris: Orville Schell had conveyed that at a [recent Carnegie Panel]. He’d said that, at this level, let’s put aside questions regarding whose responsibility it is historically…. Really, where this is going to hit a wall is in Congress- trying to sell things like technology transfer and financing.
Elizabeth: Right. I think a lot of people in Washington have a hard time understanding why China needs funding when they’re the ones who bailed the US out of the economic crisis. It’s a more complex issue than that, but I can understand why people have a hard time understanding why China’s looking for handouts.

A recent Pacific Northwest National Laboratory study summarized by The New York Times predicts that “China’s vast underground repositories could store more than a century’s worth of carbon emissions from coal-fired power plants and industrial facilities, permitting use of cheap, industrial coal.” Given what we know about China’s coal dependency and the negative effects coal has on the environment, what could this discovery mean in terms of policy dialogue?
Chris: I’m glad you bring up coal. Coal is just an inescapable fact of life in China’s energy future. I think that the green movement in general tends to be too purist, especially when it comes to China. Coal is just not going to go away. Do we focus on cooperation like the Duke Energy deal or do we cooperate on clean ways of burning it or do we make it a pariah?
Elizabeth: There seems to be a dangerous trajectory toward US-China cooperation becoming a coal cartel, which is to say that although the US and China have very different positions and circumstances, one thing that brings them together- while setting them apart from the EU- is their large-scale dependence on coal. The EU has drastically reduced its coal dependence. I worry that this common position will somehow trump the importance of a multilateral agreement aimed at diversifying fuel sources away from coal. The US and China as two main powers do have the ability to derail that process by conveying “we need coal and that’s not going to go away, so the rest of the world better get used to it.”
If all of China’s dirty coal-fired plants were shut down and cleaner coal-fired power plants were brought online, I do think the negative effects of coal would be mitigated. I will say that many inefficient power plants have been shut down, but being familiar with this on-the-ground situation in China, it’s still not enough. China’s energy demand and the anticipated rate of energy growth over the next twenty to thirty years leads me to suspect that it will be impossible to shut down enough of those small power plants and bring online cleaner ones which will make enough impact. There’s a reluctance to shut them down, given the growing energy demand in the cities.
Chris: I guess I’m coming from a late 80s, early 90s perspective. I agree that there needs to be pressure on the coal issue. That excuse of “well, it’s not going to go away” is sloppy and lazy. However, I am looking at China’s cleaning up its coal industry as a glass half full rather than half empty. They are doing a better job than I would have expected, shutting down smaller inefficient plants and replacing them with larger, cleaner and more efficient ones. It is not a one-to-one replacement and there is a net gain in coal capacity but the result is that China’s coal plants have increased their thermal efficiency by 5.6% over the past three years.
Elizabeth: I’d like to add something on the findings of an MIT study, which was really interesting. They went to 85 power plants with a total of 299 generating units, almost 80% of which were outfitted with “clean coal” SO2 scrubbers, and they found that, in many of these facilities, a lot of the environmental technologies that had been added were not being used because they are expensive to use, and sub-grade coal was being used in a lot of these advanced facilities. You can have the most advanced equipment, but if you don’t have the proper operations and if you don’t have proper enforcement and monitoring to ensure that, then you won’t have clean power plants. It’s more than just shutting down the dirty coal plants and building clean ones. In the US, we have these automatic reports sent to the EPA but in China, there’s nothing like that.

What are some of the opportunities in clean energy and green building for entrepreneurs standing on the US-China bridge?
Chris: Solar is fresh in my mind; there’s so much opportunity for China to develop that market. I’m amazed at the access they’re giving for solar and I’ll use that as just one example. Investing in First Solar and being involved with First Solar and Suntech, being involved with solar expansion and utility-level projects in China. At the same time, China’s solar companies are being very aggressive about going overseas- [expanding] into Pakistan and setting up PV cell plants here in the US.
Elizabeth: I think a lot of the opportunities will depend on emerging legislation from Washington as well as outcomes from Copenhagen. Chris and I attended a conference on China-US clean energy economy. They made it sound like, in two weeks time, there would be a robust carbon trading market within China, which is something that holds a lot of opportunities for entrepreneurs, both in financial and non-financial areas. But, the prospect for the development of those markets and the speed at which those markets will develop is still uncertain. Apart from policy and legislation, there needs to be some key transformation in China’s market behaviors to really make China’s climate-related business opportunities blossom. I think, within a year’s time, we’ll know with greater certainty what types of opportunities will come online. You can see just by China’s market transformation over the past twenty years that it will happen, and it will happen quickly.
Chris: I’d watch state and provincial level activities. Qinghai has been very aggressive in putting money into [clean energy]. Jiangsu likes to think of itself as the “California of China”. Not only has the provincial government been aggressive in promoting solar within Jiangsu but they have been very active creating relationships with US state governments, California in particular. There have been several Jiangsu-California conference and workshops over the last year including a Jiangsu-California Clean Tech Exchange workshop in May. I also find it interesting how the Jiangsu government has been working with the American Council on Renewable Energy (ACORE) as their liaison between them and the US DOE and California state government. The military is also funding new energy projects.
Elizabeth: The bottom line in China is often different than the US. Return on investment and cost benefit analysis dictates how money gets spent in the US, whether private or public sector. In China, the calculation is often different. One instance that I’ve seen: a Chinese municipality wanted to adopt an emerging technology for treatment of waste. Within the financial world, that was considered unproven, unviable and not a sound investment. But, the municipality said “we’re not looking at this from purely economic terms. We’re looking at it from a social perspective.” That’s something that is unique in China and will lead to significant opportunities.

What’s next for you?
Elizabeth: I’d like to continue on the same trajectory, consulting independently on issues related to China’s environmental actions and opportunities for alignment between the US and China to develop and deploy cleaner energy.
Chris: Much the same- continuing with renewables, specifically. I’ve really enjoyed working with companies trying to bridge the two sides and forge cooperation.

Elizabeth Balkan is an independent consultant currently based in New York City who specializes in energy efficiency and climate issues. To learn more about Elizabeth, be sure to check out her website, New Energy and Environment Digest (新能源与环保参考) at www.needigest.com and her Linkedin profile. You can also follow her on Twitter @needigest. Chris Brown is a China energy consultant also based in New York City and currently serves as a liaison, translator and research manager for Chinese and Japanese companies who are expanding into the North American solar energy market. Visit his Linkedin profile and blog, solarsite, to learn more. You can also follow Chris on Twitter @chrisrbrown.

When I was a child my mother used to say to me, “eat your dinner; there are people starving in China!” Boy, how things have changed..or have they? As this century’s development miracle, slated to become the most economically powerful nation within the next twenty to thirty years, China is no longer considered a country impoverished. But, consider this: China today has the second largest population in the world living under the poverty line. And, while the average individual income in China’s cities is about US$6 a day, in the countryside it’s only US$2. Meet 25-year-old Casey Wilson, Co-founder of Wokai, a unique microfinance institution which aims to ensure that China’s rural populace is not left behind. I had the opportunity to chat with Ms. Wilson at length about her work with Wokai, NGO transparency, and the future of microfinance in China. While Wokai stands to redefine grassroots microfinance organizations and effectively raise the quality of life for tens of thousands of families in China’s countryside, Casey Wilson- for both her brilliance and her actions- is definitely one to watch. To learn more, read on:

First, tell me about your connection to China and microfinance. What brought you to China initially?
I came to China to pursue a career in development; there were basically two reasons why I chose China. First of all, China has the second largest population in the world living under the poverty line. In terms of economic development and poverty alleviation, there’s a huge amount that needs to be done. On the other side, in terms of learning about what fosters and hinders economic development, I felt like by living and working in development in China, I could see a significant amount of change in a very short period of time. That was the impetus for moving to China three years ago. How I got specifically involved in microfinance was twofold. One part was meeting my partner, Courtney [McColgan]. She was on a Fulbright at the time studying loan sharks in the informal lending sector in Zhejiang Province and had been involved in microfinance in China for about 3 years. We were classmates at Qinghua University in a program called IUP for people who are either doing business in China or doing Master’s and PhD work where their research is conducted in Chinese.
Seeing the way that growth is happening in China, where the cities are growing at such a rapid rate while the countryside has remained more stagnant and you have this expanding rural-urban divide, I thought that microfinance would be one of the only solutions to developing the rural economy. Courtney and I became roommates after we were classmates; it was then that we decided to combine our skills and interests to launch Wokai. The impetus was that we saw that microfinance in China is basically twenty years behind countries like India, Bangladesh and those in Latin America. Microfinance institutions that already existed in China really didn’t have the capital to expand to new clients and increase their impact. By introducing a person-to-person model and connecting people from around the world that have a connection to China…we thought that would be a very powerful, scalable model that could have a big impact.

In my interview with Calvin Chin, founder of the social enterprise Qifang, we discussed the hurdles involved in launching an NGO in China. Calvin had said that, despite nonprofits popping up all over China, it’s still extremely difficult to get a formal NGO recognized. What was the process like for you?
We ran across similar issues like the ones that Calvin faced with Qifang. We weren’t able to register as a nonprofit in China, so alternatively we registered as an NGO in the US with a foreign representative office in China. When we first began, we wanted to introduce a lending model where you could lend capital that would then go to our microfinance institution partners on the ground and once that loan was repaid, you’d be able to take your capital back out of the system. However, due to financial sector regulations in China we were unable to do that. So, we encountered two problems: the regulatory issues that exist in the finance sector and the regulatory issues that directly impact NGOs such as not being able to register for non-profit status in China and not being able to fundraise domestically in China. Microfinance institutions are in a strange gray area where they’re registered as NGOs but they’re engaged in activity that is also regulated by the financial sector.

How does Wokai differ from Kiva or Qifang?
With Kiva, you go online and provide a loan that, once the borrower has repaid, you can take out of the system. With Wokai, you provide a donation that will be used year after year to provide a series of new loans to borrowers of your choice. The second difference is the type of institutions that we’re working with. In microfinance, there’s a pyramid of institutions with four tiers. The first tier of institutions are large with 100,000 clients or more, external ratings and audits, and they have the ability to access capital markets and/or debt and equity investments from larger funds or investors. The fourth tier microfinance institutions have 5,000 clients or less and are really grassroots organizations that need support both in terms of capacity-building and strengthening their internal financial structures and operations as well as capital to scale up. The types of institutions that Kiva works with are those first and second tier institutions that they’re able to cooperate with remotely. We’re working with fourth tier institutions- more of those grassroots institutions that exist in China- which not only need capital but also require offline support in terms of due diligence and helping them in the process of building up their internal strength in accounting and finance. Our model is based on contributions, rather than loans, from our users online and the type of institutions that we’re working with are younger and, along with capital, need on-the-ground support to scale up.
Qifang is doing student loans. They’re supporting individuals in college and through college associations to provide those loans.

(Wu Hailing, a Wokai success story)

How is Wokai able to avoid corruption and ensure that these loans are being put to best use? What’s your monitoring and evaluation process?
We’ve created a very rigorous monitoring and evaluation process, specifically because it takes on-site supervision to get a sense of the strength of a particular institution and recognize any potential holes. So, before we identify an institution as a potential partner, we’ll work with other groups based in Beijing to get a sense of who are the strongest existing institutions in China’s landscape. Once we’ve identified a potential partner, we’ll reach out to them to have them apply for partnership and they’ll give us three years of financial statements along with general background about their organization, their structure, and the management team. What we’re looking for is basically three things. First of all, are they having a strong social impact and helping the poor to reach economic independence? Second of all, that they have management teams with an ability to scale and strengthen their institutions. Thirdly, we look for a transparent management team. If we’re able to conduct that first round of evaluations and it looks like they’re still a good fit, we will then go offline to do a three to five day onsite due diligence trip. When we do that, we meet with everyone from their board of directors to their management staff to their cashiers, accounts and loan officers and finally do an audit of their clients. We really try to find out if there are any potential holes. Do all of the interviews match up in terms of what people are saying about their policies, about any potential fraud that might come up? In doing an audit, we will then take a list of 3,000 clients of that institution, choose five to ten borrowers, get their credit file, and then go offline to interview them. What we’ve really found is that the client audit is really the most telling part of the process.
[Once that is completed], we’ll go back to our offices and put together a 10-15 page rating report. We have an international committee of microfinance experts who then decide a) do we partner with the institution and b) if we are going to partner with the institution, what are the goals and benchmarks that they have to reach as an organization in order to either begin receiving funding from Wokai or get an increase in funding? For example, one of our partners had to be trained in international best practice accounting standards.
That’s our initial evaluation procedure. On our website, we track everything from borrower loan distribution to repayments. We get monthly financial statements from the institutions and then every three to four months, we go offline and do an on-site evaluation.

As a rapidly developing nation and global leader, China no longer appears to be on the list as a “country impoverished.” So, why China? How would you justify the need to a foreign donor?
It’s an interesting puzzle. In the next twenty to thirty years, China’s GDP is going to surpass that of the United States and you could ask- isn’t all of China going to be lifted out of poverty during that process? But, in a lot ways, there are two different Chinas. There’s a China of the cities that is growing at a very quick rate and then there is a China of the countryside. When you look at the current situation, the average income of individuals in the cities is at about US$6 a day, but in the countryside it’s less than US$2 a day. The urban development rate is at 9.6% a year while in the countryside it’s growing at about 6% a year. If we zoom that out in twenty years, we could have a situation where people in urban areas are averaging a salary of US$12,000 a year whereas in rural areas, they are earning less than one-sixth that amount and essentially existing in poverty. They get stuck in that cycle where they don’t have the funds to send their children to high school or college and their children [repeat the pattern]. When you look at the world, China still has the second largest population of people living under the poverty line and if that issue will not be addressed through the natural process of economic development, there really needs to be new models put in place to support the other side. I guess you could ask, “why doesn’t China’s government push for that type of development in the form of aid or policies?” My answer to that would be that the government has tried to institute a lot of poverty alleviation initiatives and subsidies in the past, but they really haven’t been able to reach the entire population living under the poverty line. A poor person living in China or anywhere else in the world should have equal access and support in terms of getting an opportunity to lift themselves from poverty.

(letter from Toronto)

Tell me your favorite Wokai success story.
I have a few. The first one would be about my favorite borrower, Wu Hailing. When she was eighteen, she got married to her husband in Yilong County, Sichuan Province. They went to live with her husband’s family and basically, in that process, were put into debt from the costs associated with living with them. They were forced to move to Guangzhou as migrant workers as a means to repay that debt. After four years, they’d saved up enough to repay their debts and then moved back to Yilong County. Hailing was able to save up a little bit more to start a duck-raising business. She bought a number of ducks and after about three months into the business, the ducks all contracted a parasite and they died; Hailing was left without anything. In her words, she said that she had to work her fingers to the bone just to keep her head above water. She found out about our field partner in Yilong that provided loans for people to start small businesses and training support so that they could be successful in those businesses. She went to our partner and was able to take out a loan to restart a duck raising business and this time, she received training which taught her how to prevent disease and how to effectively build up her duck raising business. After a year she was able to pay back her loan and this year she took out a new loan for US$600 to expand that business. If our field partner hadn’t been there, she may have been left without any options and would’ve probably had to move back to Guangzhou as a migrant worker. Now, she’s earning extra income that can be saved and used to eventually send her children to school.
I love working with our supporters. We have chapters in San Francisco, Seattle, New York City and now we’re starting in Beijing and Hong Kong. There are over 150 volunteers who have full time-jobs but on nights and weekends they give speeches to build awareness about Wokai and microfinance in China. I’m always inspired by their altruism and selflessness in supporting this cause for microfinance in China. Just last week, I got to the office and there was this huge envelope and it was from this girl from Toronto who had been working over the summer in Hong Kong and did a short trip to her family’s village in Guangzhou. She was just so shocked by the fact that the China that she’d experienced through living in Hong Kong and visiting Beijing and Shanghai was so different from the experience that her family was having in Guangzhou. She put together this amazing story about why she thinks we should start a Toronto chapter. I am really inspired by the passion of our supporters and the stories of our borrowers on the ground.

What’s next for you?
Right now, we have the foundation in place. We have great field supporters in Inner Mongolia and Sichuan Province; we have a really great supporter network in key cities that will hopefully expand to LA, Toronto and Shanghai over the next three to six months. What we really need to do is start getting contributors online. Our goal over the next year is to expand from the 525 contributors that we have today to around 10,000 contributors. Over the next two and half to three years, we’d like to increase that to at least 50,000 contributors a year and US$5 million a year in loan capital that we’d bring into the microfinance sector in China. For us, that’s a pretty big landmark. Once we reach that point, we’ll be sustainable just from the optional donations that come in online. So, from an operational standpoint, that’s what’s next in the near term. On a larger level, it’s really about scaling up, increasing our impact and building a global community that’s supporting microfinance in China.
We’ve thought about areas where we can use this model to expand and branch out, such as creating an online marketplace for the goods that are produced by our microentrepreneurs, or expanding into green microfinance or microinsurance. Before we reach that point, we really need to scale up and build our local community

If you’d like to learn more about Wokai or make a contribution, check out their website at www.wokai.org You can also follow Wokai on Twitter @wokai.

Social enterprise has rapidly become the business model of the future, whether bundled into traditional corporate structures or formed by entrepreneurial not-for-profit organizations. At this year’s Clinton Global Initiative Annual Meeting, it certainly appeared that nearly every nation in the world was working to harness social enterprise as a way to do good, fuel innovation, guarantee sustainability and generate new jobs. Well, almost every nation in the world… Thank goodness for Calvin Chin, Founder of the China-based microfinance venture Qifang and one of the very few who carried China’s torch at the 2009 Clinton Global Initiative Annual Meeting. This collaborative interview with Calvin, conducted together with Elliott Ng of CNReviews, explores Qifang’s new CGI commitment and the emergence of social enterprise in China while addressing the question that Elliott, Calvin and I were all asking: “where was China anyway?”

Aimee: Tell me about Qifang’s commitment with CGI.
Calvin: The commitment is essentially something pretty new for us. In the past, everything we had been doing focused mostly on China, so the sponsors for the loans have been in China as well. The CGI commitment is a cooperation [with a not-for-profit organization] based here in the US called the 1990 Institute. It’s made up of some pretty successful Chinese-Americans who [organized] in 1990 and had a heart for working and giving back to China. About ten years ago they created a particular project called the Spring Bud program for three counties in Shaanxi Province, where they chose 1,000 schoolgirls and sponsored their education through primary and secondary. Now, most education is free- for compulsory education- but of course there are other expenses. So, we sponsored these 1,000 schoolgirls and the first class is graduating this Spring. We are working with the 1990 Institute to ensure that these girls have a chance to have higher education. For us, it’s quite new in that we are working with an international non-profit- in this case, the US- and we’re going to give tax deductions to people who are lending into the platform, into the loan. Basically, sponsors will make a gift to 1990 Institute and we won’t be able to take those funds out, but those gifts will fund loans. Spring Bud actually introduced this interesting hybrid in that, not only will these schoolgirls get these loans but that after two years, there will be loan forgiveness. We’re trying to cultivate community leaders in these disadvantaged areas. We’re very excited about it! It’s kind of a new, deeper engagement than we’ve done in the past.
We’re talking to another partner that could help us set up tax deductions to people outside of the US as well-like Korea, Taiwan, Hong Kong, Singapore-countries that seem to overlap nicely with the Chinese diaspora and will have a heart to give back.

Aimee: Over the past few years, non-profits have started to pop up all over China. You’re running Qifang- a for-profit business- as a social enterprise. So, have you considered filing for a non-profit as well?
Calvin: While non-profits have started popping up in China, it’s still extremely difficult and a long process to get a formal non-profit recognized. A lot of interesting things in China’s civil sector are happening, specifically unregistered NGOs or NGOs that are registering as for-profit companies instead. I think it’s an interesting phenomenon and will point to some innovation. Organizations like us that have been targeting social impact from the beginning face this push and pull. We want to be a social venture, and we want to be a for-profit company because we want to grow quickly and use business discipline. We believe that we have a sustainable business model that obviates the need to raise donations each year for our operations… All the standard reasons as to why social ventures make sense. But, then you also have this push factor. It’s extremely difficult to set up a non-profit venture in China. Unlike the US, where you can set up a company, register as a non-profit and then prove your non-profit status to the IRS, in China we’ve heard that it’s taken five or six years- even for billionaires- to set up their own foundations. There will be a lot of people that will set up non-profits in nature, but will register them as formal companies with capital registration requirements and tax liabilities. There will be a natural gravitation towards looking for sustainable business models. [In China], I anticipate a lot of social innovation because of this added pressure- we can’t go for the typical non-profit models. The analogy that comes to mind is the way that video games in China faced a constraint, which was the inability to sell physical copies or cartridges because console games were illegal, or CDs/DVDs because people would just pirate them. So, there was a lot of creativity. It’s hard to do a non-profit in China, but socially-minded entrepreneurs and philanthropists will look for models elsewhere, as we did. We looked at Kiva and Grameen for inspiration, but to make it work in China requires fitting into [the country’s] constraints.

Aimee: We’re curious to hear about your experience at Clinton Global Initiative.
Calvin: It’s been a really good meeting for us. We’ve met some phenomenal people, including some that we’re going to explore collaboration with in different regions and how they approach different problems. I would say that China is underrepresented here. Aside from there not being many Chinese people [at CGI], there are not many organizations that are active in China here. Someone joked that you’d be hard-pressed to remember that Chinese makes up to one-fifth of the population of the world if you only looked at this meeting.

(Elliott Ng, CNReviews)

Elliott: Who else have you met from China at this meeting?
Calvin: Raefer Wallis from Giga is here; he’s doing some very cool stuff. The Rural Development Institute is here- they’re from China. Diane Geng from the Rural China Education Foundation- these guys are great. Schoenfeld Foundation is based in Hong Kong- they’re here as well. That’s about it. You can see that it’s relatively small.

Aimee: Do you think lack of China attendance is because of CGI Asia, held in Hong Kong in December?
Calvin: Having had CGI Asia you would think that more people would be participating because then they would have a network in Asia that they could point to and say, “remember all of the value that you got out of attending in Hong Kong?” But, that’s not the case. Generally speaking, a lot of Chinese entrepreneurs, businesses and NGOs are really focused on China and while this is a great platform, they really would not think of attending. It’s expensive, for one. Second, there’s the language barrier- everything is communicated in English here and there’s really no Chinese language. Then, as we were talking about earlier regarding the civil sector being a lot of informal, small NGOs registered as companies, you don’t really have the audience of well-established non-profits who have the means, awareness or visibility to the CGI group either. It’s all of those factors.
CGI has this great contact who acts as a mentor to NGOs, and she was talking about how those of us here who are active in China can encourage others to get active in China. Last year, Schoenfeld Foundation sent a bunch of Chinese university students to last year’s CGI U meeting- the CGI for college students. We had a great chat with them and will try to help them find more young people who are interested in these models of social entrepreneurship.

Elliott: Obviously because there are so few people from China here, you’ve probably had a lot of interesting conversations with folks who are interested in learning more about China. What do you think you’re sharing that’s most interesting in terms of helping people understand the social enterprise environment in China?
Calvin: That’s a great question. It’s easy for people not engaged in China to think only of the Olympics, the economic miracle, this idea of the G2 and China being a developed country, a world leader. So, when you talk about needs in China, it’s not always obvious. Along those lines, you hear [questions like] “how does China grow in a sustainable fashion” or “how does China manage the demand for 300 million cars?” These types of issues are about wealth. [The conversations are] much less about the rural poverty issues that are more commonly spoken about regarding South Asia, East Africa and Latin America.

Elliott: So, you’re helping them have a more balanced view of these issues?
Calvin: I think so. I wouldn’t overstate how much people don’t understand, but it’s much less talked about. We’re reminding them about the 800- to 900- million people who live in rural China. The second important thing that we’re trying to share is about social ventures, particularly that there is a lot of creativity, there is a lot of innovation, and there is a lot of dynamism in China. It’s not about the typical questions [regarding] government control or “isn’t education free?”- these types of things that point to the typical idea of a “socialist” or “communist” China. That’s the other thing that we can try to help people understand.

My many thanks to Calvin Chin and Elliott Ng for this interview and of course, to Clinton Global Initiative for inviting me to be a part of this year’s meeting. Be sure to check out CNReview’s interviews with Calvin Chin here and here. If you’d like to make a commitment to Clinton Global Initiative, learn more about the organization, or spread the word in China, visit the CGI website at http://www.clintonglobalinitiative.org/

Environmental degradation is a global emergency that urgently calls for closer cooperation between East and West, inevitably transforming the way we all think about economic development and sustainable industry. As more companies shift their attention towards “green” solutions, the blended value business model of social enterprise has emerged as an approach which, as Greennovate Founder Mihela Hladin states, combines “business and social potential to do something meaningful.” This Link Up, Learn More interview with Ms. Hladin focuses on the environmental sustainability concept in China’s manufacturing industry while exploring Greennovate’s aim to prepare China’s youth for a brighter, greener future. To learn more about Greennovate, social enterprise, and why China’s environmental crisis is not just China’s problem, read on…

You’re originally from Slovenia, one of the smallest countries in the world, but you are now living and working in China, the most populous nation on the globe. What was that transition like for you and what got you interested in China?
It’s definitely not the usual expat story. With me, I wasn’t very interested in Asia in the first place; I was more interested in the Americas and Africa than this part of the world. My family was involved in the environmental engineering business in Slovenia. I left my home for a while and worked in IT in the States. When I returned, [my family] asked me to come and work in their company. I didn’t really want to stay in Slovenia. The opportunity opened for me to go to China- we had just opened an office there- and so I said, “ok, I’ll take over the business development.” When I got to China I was overwhelmed by the size, numbers, challenges. We were in the business end of pipe solutions like wastewater treatment and air treatment – really hardcore environmental consulting mainly for the metallurgical industry. It’s the worst kind of industry, not just in China but everywhere you go. I was traveling over to China for a year working like crazy, trying to get our Chinese partners and Slovenian engineering partners together. It was difficult to get the Slovenian side to recognize that things in China aren’t done in the same way that they are done in Europe and for the Chinese to understand that, even though we come from a small country, we do know something. So, after a year and a half, when we began signing the first deals, I was almost ready to pack my bags because my contract was going to end. And then, our Slovenian company went through a sudden hostile takeover and as everything happened so quickly, I thought I was through the worst in China and that it was the time to continue with something that I really believed in. For the first year and a half in China, I kept bumping into the same challenge which was that people are not educated and aware that you can’t just buy trees. The river will not get clean in a week. I was sure that if the industrial owners I’d been working with had a bigger picture of their environmental impact, they would not continue doing things in the same manner. So, I decided to stay and focus on environmental awareness…to do something that will have an impact on China and not only improve my life as an expat but also have a bigger outreach.

Tell me a little bit about how Greennovate works and the team you currently have on board.
As consultants, we focus on the sustainability concept in manufacturing and service medium sized industries, including training, basic analysis and assessments, and immediate and long term applications for environmental improvements. With EXPO2010 on the way, more businesses are recognizing green opportunities and consumer potential. And, with Wal-Mart’s new environmental initiatives for their suppliers in China, the interest is certainly much stronger then ever. The challenge this year- especially with the economic turndown- is to keep the environment on the priority list for businesses and to make them understand that being green goes beyond one or two actions.
Westerners also need to recognize their environmental role here in China. Most of their goods are produced in China; the pollution is here also because of the [foreign businesses], not just Chinese. If we would all have started these initiatives 10 years ago and tried to raise the educational level on the environment, things might be different now. But, then again, you cannot cry over something that has passed.
When we started Greennovate, we developed our own curriculum on the environment for high school kids. We thought that students outside of the big cities would probably stay there and eventually work in the industries that we consult for. With the high school competition as it is in China, very few kids end up going to university. And, if you build good capacity on the local level, that will produce a long term result. That’s how we started with GECKO (Greennovate Environmental Challenge for Kids Outreach)- we funded the first program ourselves and chose Guizhou Province. We spent four weeks there teaching at their schools and when we got back to Shanghai, we began developing several initiatives to support the program. We were able to move the program to another level when we got FedEx China on board to sponsor one province while training their own employees on the environment. Today, this is their internal CSR initiative plus community outreach. Now, we also train other Chinese people who are interested in raising awareness and we are more involved with developing new resources and social media channels to keep spreading the program.

From concept to launch, what was the process of building and licensing Greennovate like for you?
We had an interesting beginning because we had to confront the fact that we either needed to move very quickly or pack our bags- as a team. Three other members were working with me before in the other company. I started doing my own research on how I could register the consulting part and the “do good” part simultaneously. We began as a hybrid- as “Greennovate” and “Greennovate Foundation” because I wanted to have a clear accounting of what was going to education in China; this needed to remain separate in order to maintain credibility for the entire project. I was new, we were small and no one had heard of us before, so there was a lot of doubt about what we were doing and how we were doing it. Two years ago, no one was talking about social enterprise. Now, everyone is talking about social enterprise. In China, I learned that if you want to do something here, you just need to stand up and do it and figure the rest out later.

When we talk about pollution in China, the city that is most often mentioned is Beijing, particularly after the attention given to air quality leading up to the Olympics. However, Greennovate’s work focuses on 2nd and 3rd tier cities. What led you to make that decision?
Before, I had more experience in the smaller cities around China as a consultant, and when we started off we had some connections already. The second thing was that we were pretty modest- we were small and didn’t know if this idea was going to go somewhere or if we were just crazy with enthusiasm. Environmental consulting goes hand in hand with environmental awareness but is it going to work for us? We did our research and some programs were already running in Beijing, Shanghai, Chengdu, and Yunnan. But, in the interior of China and West China nothing was going on. We wanted to give these communities access to environmental education.

How have connections-guanxi-played a role in your business?
As with every other business in China, it’s good to have connections and very difficult to succeed without them. In terms of our guanxi, we’ve had a very good experience. I cannot complain. When we were doing environmental awareness programs, we were bringing free education into the communities and therefore never had any issues.

What are some of the positive steps that China has taken in recent years towards a more environmentally sustainable future? Do you feel that its citizens are becoming more aware about their carbon footprint, green technologies and the everyday things they can do to protect the environment?
First of all, basic awareness moved a step ahead with all of the “green” talk around the Olympics. But, in general, Chinese people think that a lot of these challenges are so huge and that individual participation is not worth it. When we are talking about the carbon footprint or green technologies- these are all very big terms. Without providing basic information, it’s very hard for them to see how they can be a part of the solution. We took the principle that, if you communicate about the environment in a simple and positive way, you get a lot of people on board. Also, as everyone knows, government has great power in China. For example, last year when they banned the plastic bags, it happened immediately. They announced this plan in April and in June they banned them. Nobody thought this would happen; it’s not even happening in the Western countries yet.
In terms of sharing information on environmental news…when I moved here, except for some really big catastrophes, you never found anything tangible about the environment in the media. Now, it’s everyday news. People are seeing that the environmental consequences are connected to their health and their own well being, and now they are concerned – but they need tools and knowledge to act.

Speaking of this, we’ve witnessed several uprisings in China over the past few months that were fueled by the frustration over illness and degradation caused by pollutants and the overall lack of environmental standards. How do you think these protests have affected overall policy?
I was raised in Yugoslavia and in very modest circumstances, but I was still never hungry. When Slovenia finally became a part of the European Union, living standards started getting better. When I think about that shift and compare it to what is going on over here, I don’t think there is any better model in the world that we can look to and say, “okay, China should go this way,” or “China should do this.” It’s hard to judge whether things are right here or not, especially for people who do not live here. I think we should all have respect for how fast things are growing in China. I believe the country is dealing with these changes in a progressive way and is making very fast steps towards integrating sustainability into the current systems.

Given China’s reluctance with nonprofits, do you think that social enterprise may find its way there as an alternative option?
This NGO challenge has been around for years, but I think people still find a way to do the things they aim to do in China. It’s just harder because of the lack of funding and lack of transparency. There are no tax statutes as you have in the States with NGOs. I think Chinese people have an easier time registering than foreigners do, but they still have to go through a very long procedure. From my own experience, if you are doing good things here, no one is going to tell you not to.

You will be launching Joinmagic.org in two weeks. Can you tell me a little bit about the aim of this venture and how it relates to the Greennovate concept?
Greennovate has been running programs for high schools in China for a year and a half now. We’ve started getting invitations to speak at universities on the environment as well and we’ve realized that this is a big field that needs to be covered. In December, we begin thinking about a larger initiative that would interest university students while providing them with the knowledge and tools to live more sustainably. Also, how can their careers grow to make China greener? We came up with the “Made GREEN in China” initiative to shake traditional mindsets and [make the subject of the] environment fun and exciting for the upcoming decision makers. So MaGiC stands for Made GREEN in China.
This is an open initiative and we are welcoming companies that would like to work with young people to join us. In our first year we will be running some design competitions where we will be going to the universities, teaching on the environment, and then inviting these students to try to see how waste could be a resource and how important the design role is in the manufacturing process, which is very opposite from what the perception is today….David de Rothschild is now building a boat from plastic bottles in San Francisco and is going to sail from San Francisco to Sydney to raise awareness on plastic garbage. He’s an inspiration of this year’s design competition- that nothing is impossible. We started to gain our voice on Chinese social media platforms where young people can come and learn about the environment. Next year we will have one month in Shanghai called “Magic Experience,” where all of the university contestants that have been selected will have an opportunity to work with design companies, sustainability consultants, and environmental organizations to broaden their knowledge and network with the goal of seeing how they can incorporate these concepts into their own careers.

What’s next for you?
Well, it’s very early to start thinking about what’s next for me! I’m certainly not done here in China. I’d like to expand Greennovate initiatives to another country and return to China on a regular basis. Indeed, China might be the toughest challenge for Greennovate but for sure it’s not the last one.

Be sure to check out Greennovate at www.greennovate.net You can also follow Mihela on Twitter @greennovate. This interview kicks off a series of blog posts focused on social enterprise and corporate social responsibility in China as well as related East-West opportunities in this area, including coverage of  the 2009 World Savers Congress and Clinton Global Initiative Annual Meeting.