Monday, March 31, 2008

The Olympic Torch is not for China Bashing

By: L. Ling-chi Wang & George Koo

Monday, March 31, 2008

The torch heralding the 2008 Summer Olympics will arrive April 9 in San Francisco. This is its sole stopover in North America, as it makes its way from Greece to the site of the Summer Games in Beijing, China.

The Olympic torch is a universally recognized symbol of goodwill among the peoples of the world. The goal of the global torch relay is to unite the people of the world. San Francisco has been accorded the singular honor to represent North America in welcoming this international symbol of athletic competition and excellence.

For any politician or organization to disrupt this ceremony as a way of registering a protest against China - however valid their views - is to dishonor the spirit of Olympics.

Even if the protesters succeed in using the Olympics to score political points, they will be setting a precedent and run the risk of turning this honored event into a special-issues sideshow - where promoters of every pet issue will seize the opportunity for exposure of their cause. Interest in the goals and spirit of the Olympics will fade, and the international community will be the poorer for it.

Almost any city of the world would leap at the chance to join in the celebration and participate in the Olympic torch relay. The world community would look upon San Francisco with disdain, if the torch relay celebration is hijacked by other interests.

The contrast between how the torch is received in San Francisco with how the torch is celebrated in Europe, Africa, Latin America, Australia and Asia will embarrass not just the disrupters but sully the image of San Francisco - and America.

The Olympics belong to everybody - not just China, and not just the handful of protesters. Using the Olympic torch relay as a venue to voice their protests runs the risk of damaging their causes. They may think they will get their voices heard, but the vast majority of the global audience will see only the antics of the protesters, raising doubts and questions about the legitimacy of the protest.

The protest sponsors stand to lose sympathy more than gain support.

For the Bay Area Chinese American community, the Beijing Olympics is an occasion of pride and joy: This ancient tradition of athletic competition will be held in China for the first time. We invite and welcome all residents of goodwill and fans of the Olympics to join hands in welcoming the Olympic torch as it makes its way to Beijing through San Francisco.

Let the people of San Francisco use this occasion to join hands with the world community and renew our friendship and partnership with the people of China.

L. Ling-chi Wang is a professor emeritus of ethnic studies at UC Berkeley. George Koo is an international business consultant and board member of New America Media.
This article appeared on page B - 5 of the San Francisco Chronicle

Wednesday, March 26, 2008

Significance of Ma Yingjeou's Win in Taiwan Election

Ma Yingjeou scored an overwhelming win in the just concluded election for president of Taiwan, garnering 58% of the votes cast, and handily defeated his opponent by more than 2 million votes. His win has been a subject of all sorts of interpretations by outside pundits.

Seemingly overlooked in the post-mortem analysis is his win on Kinmen Island, where he won 95% of the votes. Kinmen is the smallest of Taiwan's voting districts and easy to overlook. But surely, a plurality of 95% is noteworthy and deserves a closer examination.

Kinmen (also known as Quemoy or Jinmen) is just one mile off the coast of Xiamen. Direct ferry service to Xiamen began in 2001 and the traffic between the offshore island and its bigger neighbor has flourished, having expanded to eight daily sailing in each direction.

Xiamen is where residents of Kinmen go to buy necessities, fresh fruits and vegetables and luxury goods. Kinmen is a popular destination for tourists from the mainland. The economic linkage is obvious and palpable to people on both sides of ferry crossing.

Ma’s avalanche victory on Kinmen is a leading indicator of where his cross strait policy needs to go when he is sworn into office on May 20.

The people of Kinmen can see first-hand the benefits of closer ties to the mainland and bet on Ma to improve on this approach. The rest of the people of Taiwan will also see the economic benefit if Ma delivers on his campaign promise for closer economic ties with China.

Closer economic ties will build on the natural affinity of people of both sides and lead to closer ties with the mainland, something Ma’s opponent did not relish. Hopefully Ma will ride the rising tide of sentiments and make the necessary bold moves to reverse the past eight years of stagnation and cross strait hostility.

He has made a positive move by revisiting the prospects of welcoming pandas to Taiwan earlier offered by Beijing but rejected by his predecessor, Chen Shui Bian.

If he let irrelevant issues such as pursuit of pseudo independence, maintaining checkbook diplomacy with banana republics, buying arms from the U.S., denying Taiwan’s Chinese roots, rewriting history books, and, of course, graft and corruption interfere with implementing the people’s demand, he will rue his day and the lost opportunity.

His first 100 days will be watched intently.

Tuesday, March 25, 2008

Dalai Lama, Tibet and China

I just came back from Asia where eyewitnesses gave a different view of the matter than that of the West. First of all, the violence was initiated by the thugs in Lhasa. Secondly, the violence got out of hand because the riot police did not respond right away but melted away for the first 24 to 48 hours. Thirdly, since Dalai Lama is publicly opposed to violence, this suggests that he is not in control of his younger followers. From Beijing's point of view, having a dialogue with Dalai Lama may not contribute to a peaceful resolution because of their perception that he lacks sway over his followers.

This summary was what I gathered from the reports written in Chinese and found in Hong Kong such as the weekly, Yazhou Zhoukan, and in part confirmed by the International Herald Tribune.

I personally believe a dialogue between Dalai Lama and Beijing would be useful but feared such a dialogue will fall far short of expectations of the West. America's view of the world, particularly of Asia, fits the derisive Chinese proverb of the frog in the bottom of well, i.e., very limited vision of the real world.

What the thugs did in Lhasa would not have been tolerated had the actions taken place in Los Angelese, Detroit or New York. But because it took place in Tibet, the American sense of right and wrong has once again been turned on its head.

Sunday, March 2, 2008

Career Challenges and Opportunities in the Coming China Century

Keynote speech at International Career Fair, San Francisco, February 29, 2008

China has been the fastest growing economy in the 5000 year memory of human history. By quadrupling every 14 years, that’s almost 20 fold since reform began in 1978, China has left most of professional economists breathless in trying to keep up, much less explain why China has been so successful.

China is now a global economic force and has impact on the economic development in all corners of the world. It is a great trading nation, just next to the U.S. in scale and is most likely the third largest economy in the world already, having surpassed Germany sometime last year. In terms of purchasing parity, China has been the second largest economy for a number of years. Purchasing parity, another economic term, is why it is possible to take a salary cut and still thrive in China. A dollar or euro just goes much further there.

China is also fast becoming a major source of foreign direct investment in other parts of the world. Their exercise of multi-lateral and multi-faceted diplomacy, commonly called soft power, has been particularly notable in the 3rd world such as Latin America, Africa and elsewhere in Asia.

Of course, there are always nay Sayers that predict the imminent demise of China or the pop of the bubble, etc. One of these so-called pundits even wrote a book about the coming collapse of China. Since that book was published, China has doubled its GDP and now sits on top of nearly $1.5 trillion of hard currency reserve. If you wish, you can devote your energy criticizing China for human rights problems, official corruption and flimsy banking system, and to varying degrees you’d be right. But it would be hard to make a living at it.

But if you are interested in developing your career where the action is--and will be for a long time to come--China is the arena you should be looking into.

It has been thirty years when I first joined Chase Manhattan Bank and later Bear Stearns to advise American companies on doing business in China. In the early days, we used to try to make business appointments first thing in the morning from our hotel rooms and we’d get a busy signal even before we finish dialing--a most disconcerting experience. Today, China has roughly 500 million cellular phones and equal or more land lines. In some cities, completely wired in glass fibers, one can even order and get a phone installed the same day—not possible in countries with copper wire legacy systems such as America.

In those early days, there were just a handful of us doing this kind of work and one can hardly describe it as a career. Today, with China’s prominent place in the age of globalization, cross border business consulting, which was what I was doing, is a popular career choice and in demand, but it is not the only game in town. Let me simply enumerate some of the careers that have opened up with the emergence of China.

First of all, China has become a magnet for all sorts of professions seeking new and developing opportunities.

Jim Rogers, famous for starting the first mega private equity fund with George Soros, has written several books about China and is putting his money where his mouth is. He is cashing out of America and investing in China. He is also taking his family to live in China—well, not quite, but is moving to Singapore to get closer to where action is.

Dick Kramlich, senior partner of New Enterprise Associates, a major venture capital firm in the Bay Area, has some success investing in China and is so impressed with the potential that he too is moving to China. He will actually live in Shanghai to get even closer to where it is all happening.

One of Kramlich’s investment was Semiconductor Manufacturing International Corporation in Shanghai. SMIC was the first semiconductor foundry to be established inside China, wholly foreign owned with capital from the West and a management team headed by a Taiwanese executive. During the early period of this company, one out of three employees were returnees from the West, many from Silicon Valley. These returnees gladly took a 75% pay cut to get on the ground floor with stock options and subsidized housing and enjoyed the generally much lower cost of living.

Returnees with middle management experience have been able to land senior positions in China. Scientists and professors with their own lab in the U.S. have gone back to become head of research institutes and department heads. China has shown a hunger for talented individuals with valuable experience gained from the West.

But as I mentioned in the examples of Jim Rogers and Dick Kramlich, you don’t have to be ethnic Chinese or even Chinese speaking to find opportunities in China. Let me tell you the story of a French chef in Shanghai.

He was originally the master chef in San Francisco. The owner, a Chinese American, sent him along with the maitre ‘D and a manager to open a new fusion restaurant in the Xintiandi district of Shanghai. Any of you that have been to Shanghai would know that Xintiandi is the high profile, upscale place to be seen.

I had dinner there shortly after the restaurant opened and I asked the three of them how they liked living and working in Shanghai, none of whom speak any Chinese. Their enthusiastically responded that Shanghai is their future, San Francisco is passé. They expect to build their fame and fortune in China’s and for that matter, world’s most cosmopolitan city.

A few weeks later I had a networking breakfast meeting with an investment banker who had just relocated to Shanghai to begin a new career doing deals in China. He was also a non-Chinese speaking white American but he too was really excited about the prospect of working in China.

I told him that he reminded me of this restaurant in Xintiandi and the three founders there. He said, “Yes, yes, I know all about that place, I’ve eaten there many times.” I said, “Well, you know what I mean about your common background and putting a stake on the ground in Shanghai.”

He said, “You know, George, that restaurant is going to fail!” I was surprised since the restaurant had just newly opened. “What do you mean?” I said. The investment banker, with greatest authority declared, “Can’t you see, the fengshui of that place is terrible.” Sure enough, the next time I saw him, he confirmed that the restaurant had indeed gone belly up.

So, as you can see, sometimes a laowai knows more about Chinese customs than even an ethnic Chinese.

Of course, as China is increasingly integrated into the globalization trend, career opportunities are not all in China. Chinese businesses and companies are going to come to the U.S. and Europe and elsewhere to establish their presence for a host of usual reasons. Initially, local Bay Area travel service that caters to Chinese visitors was the first to profit. They know where Chinese visitors like to stay and eat and where to go to buy real Prada and Coach handbags. Investment bankers, lawyers, accountants, tax advisors, consultants, site selection experts, real estate agents are next to line up and offer their services.

Those that are agile and can see the opportunities will be successful. Let me mention one example. Up to now, though the situation in China is constantly changing, privately held companies have difficulty getting financing at home. A popular route has been a so-called PIPE linked to RTO transaction to get a back door listing on NASDAQ. PIPE means private investment into a public equity achieved by reverse takeover (the RTO part) of a shell company. By this transaction, the company ensures raising some capital as part of the exercise. Companies learned through disappointment that simply backing into a shell company without PIPE does not guarantee raising capital because of a lack of investor interest in pink sheet listings.

Once listed the company then worked hard to drum up investor interest, raise secondary rounds and eventually graduate on to the main NASDAQ board. There are private equity and hedge funds that find investing in promising Chinese companies via this route very lucrative.

There are law firms and boutique investment banks that specialize in this kind of financing. What I find particularly interesting is the public relations firm that helps the RTO entity gain traction with the investors. I found one firm that concentrates of serving Chinese companies. The PR firm formed an office in Hong Kong and regularly conducted seminars inside China on the IPO process on the U.S. stock market. The firm accompanies their Chinese client on their road shows and participation in investment conferences and they coach their clients on how to present themselves to investors in the best light.

So, what will it take to participate and establish a career based in China related businesses? There are the usual requirements that would qualify you and there is one specific “watch out” that you have to be sensitive to.

First, the basic attributes to succeed in any cross culture, bi-lingual career is the ability to form empathy with anyone that looks different, talks and thinks differently. If you see yourself as a hard nosed, successful entrepreneur or a fast track, go-getter executive and know everything about international business and you act on your self image, then you are likely to fail. Whatever your self image, you need to show respect and you need to know how to listen. You need to understand where your counterpart is coming from. To do this you need to spend time understanding Chinese culture and how they think, and you need to keep up with recent developments in China so that you know their priorities.

You need to be able to communicate. Knowing how to speak Chinese helps but for those of you in the audience that already know how to speak Chinese, may I remind you that speaking the language is not the same as communicating—the difference is between talking to each other or talking at or past each other.

Now some bad news. Any of you that decide on a career involving China, especially in Silicon Valley, needs to know that you run some risk of going to jail. No, not the Chinese jail, but the American jail. You should be aware that deep seated racial bias still exists with the U.S. government and the FBI. I am not joking. Please do not take this lightly.

Some of you may remember the spy case involving Dr. Wen Ho Lee of Los Alamos Lab. He did not even do any work with China. He was merely ethnic Chinese. At the time the right wing Republican Party was accusing the Clinton Administration of being soft on China and allowing precious missile technology to be stolen and sent to China. The Energy Secretary, Bill Richardson, promptly offered Dr. Lee as the scapegoat and Attorney General Janet Reno looked the other way. The outcome was a farce in which the presiding judge actually apologized to Dr. Lee for government misconduct.

This is no isolated case. There were Chinese American victims of racial profiling before Lee and continues to this day. Some of you may recall the famous double agent (or was it triple agent?) case involving Katrina Leung and her FBI handler, J.J. Smith. Until they were caught in bed together, the FBI LA office had no clue as to how information seemed to be leaking from their office. Their natural reaction was to suspect two of their top ranked agents who happened to be ethnic Chinese and women to boot, Anita Chiang and Denise Woo. They had distinguished careers up to then but suddenly they became the in-house Mata Hari’s. Their careers were abruptly terminated by FBI’s long standing practice of racial profiling and never got compensation by the government for wrongful termination. Later when JJ Smith was apprehended, he got three months probation.

More recently, there was a Bill Chen who was accused to selling shaker tables to a Chinese missile operation which he vigorously denied. Originally his Silicon Valley employer defended him but then the U.S. government told the company that if they expect to do any more business with the government, they need to fire Chen. A few months ago, the government dropped all charges but a disillusioned Chen said that his career is ruined and he is taking his family back to China.

I spoke to a biotech scientist who came to the government’s attention because he was holding a nice job and felt secured enough to buy a house. He needed help with the down payment so his parents and brother wired him $20,000 from China. The Homeland Security folks apparently concluded that something fishy was going on and turned his life upside down. At the time, China was well on its way to holding a trillion dollars of foreign reserve but our government agents can’t seem to believe private individuals from China has $20,000 to send and therefore something nefarious was going on.

I could go on and on. Go to my website,, and pick the heading “Racial Profiling in America” and read more.

Those of you working in technology sector or in Silicon Valley have to be extra careful. The FBI special agent in charge of Silicon Valley has in public interviews proclaimed that the valley is crawling with spies sent from China. That means you and you and you (in the audience) are all potential spies. The agent’s name is Pryzbyla but no one has accused him of being an undercover spy for some Eastern European country.

If you go to China frequently, if you speak Chinese or if you work for a high tech company (and you don’t have to be all of the above, any one of those can put you under surveillance), you need to know about dual use and export license. Dual use applies to technology products and know-how that have civilian use but can also be used in military applications. Such items require export license which is obtained by applying to the Department of Commerce. Of course, export license is required for a lot of products made in Silicon Valley. Typical of bureaucracy, the range of products subject to license seems to only expand, but that’s another story. Go to my blog and you can see why I think the idea of dual use has hampered the competitiveness of American export.

My takeaway to you today is that you need to know the regulations governing export from the U.S., not just products but information as well. Sending your own technical publications to China could get you in hot water as it did in the case of Chi Mak, another miscarriage of justice. On the other hand, just looking at the increased interest in learning Chinese in K-12, you can see that everybody sees the importance of China in the coming century.

This is the best of times to pursue a cross border, cross cultural career and I wish all of you every success.