Insight Magazine March April 2018

INSIGHTThe Journal of the American Chamber of Commerce in Shanghai - Insight March/April 2018 www.amcham-shanghai.org China’s fast food market has dramatically changed since the 1990s. How have foreign brands like KFC and McDonald’s fared? Plus, navigating China’s food import laws with David J. Ettinger of Keller and Heckman. POLICY P.18 POLICY P.24 MEMBER NEWS P.26 Paul Clifford on China’s Trump’s tax reform and Report on AmCham’s economic complexities what it means for business WeForShe conference FEATURES INSIGHTThe Journal of the American Chamber of Commerce in Shanghai - March/April 2018 AMCHAM SHANGHAI President FEATURES KENNETH JARRETT VP of Administration & Finance HELEN REN 06 Fast Food, Big Changes KFC and McDonald’s: Adapting to a new paradigm VP of Operations SHILPI BISWAS 09 Navigating China’s Food Import Laws Interview with David J. Ettinger of Keller and Heckman Directors Unconventional and Viable Committees 12 JESSICA WU How commercial-use drones will disrupt and benefit industries in the near future Communications & Publications 15 Selling to Chinese Consumers IAN DRISCOLL Interview with consumer marketing expert Tom Doctoroff Government Relations & CSR VEOMAYOURY "TITI" BACCAM Trade & Investment Center LEON TUNG POLICY PERSPECTIVES INSIGHT 18 The China Paradox The China Paradox author Paul G. Clifford discusses the contradictions in China’s economy Senior Associate Editor RUOPING CHEN 21 China’s Debt Burden and Prospects for Economic Reform A conversation with Peking University’s Michael Pettis Associate Editor DOUG STRUB 23 Chinese ODI Restrictions Content Manager Information table on China’s regulations around outbound investment DEBORAH TANG 24 Understanding U.S. Tax Reform Design With analysis from David M. Allgaier, a tax partner with Deloitte China GABRIELE CORDIOLI Printing SNAP PRINTING, INC. MEMBER NEWS INSIGHT 26 WeForShe: Beyond the Numbers SPONSORSHIP Report on the Women’s Executive Network’s 3rd Annual Conference (86-21) 6279-7119 Story ideas, questions or 29 Board of Governors Briefing comments on Insight: Please contact Notes from the January board meeting Ruoping Chen (86-21) 6279-7119 ext. 4583 Event Report [email protected] 30 Recap of selected events from the past two months Insight is a free monthly publication for the members of The American Chamber of 32 Month in Pictures Commerce in Shanghai. Editorial content and sponsors' announcements are independent Selected photos from the past two months’ AmCham events and do not necessarily reflect the views of the governors, officers, members or staff 34 Esoterica of the Chamber. No part of this publication may be reproduced without written consent Facing a Double-Edged Sword of the copyright holder. Special thanks to the 2017-2018 AmCham Shanghai President’s Circle Sponsors Shanghai Centre, Suite 568 2018 1376 Nanjing West Road Shanghai, 200040 China tel: (86-21) 6279-7119 fax: (86-21) 6279-7643 www.amcham-shanghai.org March/April March/April 3 Could you tell us something about your- How do we continue to grow and provide INTERVIEW self, where you’re from and a little about better service to our members in the cur- your professional life? rent changing environment? Having been WITH I’m originally from Shanghai. I grew up in deeply involved in the Chamber in the past a Shanghai that was very different from the 12 years, I felt that I would be able to con- ERIC ZHENG Shanghai today. Back then, Pudong was tribute more to the growth of the Chamber Chair of AmCham Shanghai still considered a rural area with no high- by serving as the chairman’s role. rise buildings. There were no bridges or tunnels connecting Puxi and Pudong. That What are the biggest challenges and op- was a different era. portunities the Chamber faces? And what I moved to the U.S. in the 1980s to pur- will 亦you prioritize as Chairman? sue graduate studies. My professional China continues to grow, albeit at a career spans both the private and public new normal pace. Globalization, urban- sectors. For a number of years, I worked for ization, consumption and digitization will PricewaterhouseCoopers (PwC) as a man- continue to drive the growth for many agement consultant based in the Washing- years to come. The Chamber should help ton, DC area, with a focus on market entry its members better leverage those op- and operating strategies for China. After portunities by sharing relevant informa- PwC, I moved to Guangzhou to work at the tion and best practices and by dealing U.S. Consulate as Principal Commercial Of- with regulatory issues. A major challenge ficer. I was responsible for promoting U.S. that AmCham Shanghai is faced with is products and services and for assisting how to stay relevant in a changing envi- American companies with their operations ronment by providing value-added ser- in South China. I subsequently joined AIG vices to its members. Our membership in Hong Kong to plan for China expansion comprises companies of different sizes and moved to Shanghai in 2005. I now run and from different industries. To achieve AIG China, the largest wholly-owned inter- sustainable growth, the Chamber should national property-casualty insurance com- aim to add value to its members of all pany in China. kinds. What has been your history with Am- What new Chamber initiatives are you Cham? When did you join and what ex- most excited about? periences with the Chamber did you find It is exciting to see the progress the most important for your business? Chamber is making in growing its presence My association with AmCham goes back in Suzhou and Nanjing. There are many to my time in Guangzhou when I served as American companies in Jiangsu. I believe an honorar言y board member of AmCham we should continue to grow our member- South China representing the U.S. Consul- ship by expanding beyond Shanghai to its ate. I joined AmCham Shanghai soon after neighboring provinces such as Jiangsu. I moved to Shanghai. Over the years, I’ve The Chamber is also taking additional been an active Chamber member. I ini- steps to strengthen ties with the Chinese tially was involved in the Financial Services business community. This can be valuable Committee serving as vice chair and later chair. Since 2011, I’ve served several terms as a board member as well as treasurer, vice chair and now chair. I always believe that the Chamber provides its members with a great platform for information-sharing, policy advocacy and networking. What interests you about the Chairman’s role? AmCham is a membership organiza- tion that needs volunteers to play various leadership roles including the chairman. AmCham Shanghai is already the largest American chamber of commerce in www.amcham-shanghai.org Asia Pacific with about 3,000 members. 4 FEATURES to our members. Many of our members are involved in supporting Chinese companies as they invest overseas and an even larger number of our members look to Chinese companies as customers and business partners. In addition, the Chamber is paying more attention to alternative ways to deliver valuable content to members. There is a new podcast series, more use of videos and we are exploring ways to stream pro- grams that take place in Shanghai to our branches in Suzhou and Nanjing. These are all signs of the Chamber gradually joining the digital age. Eric Zheng, AmCham Shanghai Chair, meets with officials at the Nanjing Center Government Dialogue and Dinner What is the most important U.S.-China bilateral issue today that concerns Cham- invest in the U.S. We should certainly help the key challenges, and how we believe ber members and their companies? those members and affiliates invest in the the U.S. government can assist. The U.S.-China bilateral relationship is U.S. if they so choose. one of the most important and perhaps the What are the biggest commercial chal- most complex bilateral relationship. As Chi- The U.S.-China relationship faces some lenges that the U.S. and other Western na becomes more influential on the world challenges. How would you describe companies will face in China over the stage and the U.S. turns more inward-look- the overall relationship and what role next decade? ing under the current administration, it is can AmCham play in solving some of the Since China opened up to foreign in- more important than ever to manage bilat- problems that exist? vestment, many U.S. and other Western eral relations so that our Chamber mem- I think the U.S.-China bilateral relation- companies have seen significant growth bers can continue to benefit from China’s ship has never been more strategically in China. Over the next decade and be- growth and prosperity. The last thing our important than now. The U.S. and China yond, foreign investors will face more and members would want to see is a trade war are now the largest and the second larg- more competition from domestic players, between the two countries. That would not est economies in the world. Both countries both state-owned enterprises and private be in the best interest of either side. recognize the importance of their bilateral companies. Government initiatives such as The Trump administration wants to relations. Both countries also have an ob- China 2025 will undoubtedly help create support American business. Thus, it is im- ligation to properly manage their relations powerful domestic champions that rival portant for the Chamber to make sure the so as to contribute to peace and prosperity foreign companies. In addition to those administration understands our priorities. in the world. problems of industrial policy and growing Our members need U.S.

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