Transcript of the Interview with Handel Lee (李景汉)

China Boom Project, Asia Society 2009

Handel Lee (李景汉)

Partner of King & Wood law firm

Industry: Business

Handel Lee, based in , is a Partner at King & Wood, the largest law firm in mainland . He is also the entrepreneur and art collector behind projects such as “Three on ” in , a lifestyle complex that includes fine dining restaurants such as Jean-Georges, a contemporary art center, and luxury retail shopping, and “The Courtyard” in Beijing, a restaurant and China’s first independent contemporary art gallery. Lee is a distinguished lawyer, and is often cited in various legal, trade, and news media, including the International Financial Law Review, Asian Law and Practice, The Wall Street Journal, The South China Morning Post, and The China Business Review. Lee received a BA from the University of Virginia and a JD from Law Center. ------Transcript

Interviewee: Handel Lee (李景汉) Interviewer: John Delury Date: June 2, 3, 2009 Place: Shanghai (China)

John opens and asks for introduction.

HL: 00:50: Well, I um, came to China in 82 and spent half a year at Beijing University. And 82 certainly was a very interesting time to be in China to, to see, to see uh, the newly opened China. The opening was in 79, so in 82 having time to be here for half a year, it kind of saw that… the start of the change. Well importantly, felt, felt the change, especially sitting down, talking to people, there was just incredible exuberance. Uh, very fresh, and very, very optimistic. Uh, a little bit cautious then, but still just incredibly fresh, almost naïve exuberance, that, that was, was coming out. Uh, in 1991, I moved here, uh, to Beijing to open up (incomprehensible) office and I’ve been resident in China, in Beijing ever since 1

1991. Uh, certainly back in 1991, uh, in the, relatively speaking, was still very early in, in China’s uh, development to where it is now… The 1990s were critical years when, when a lot of the fundamental infrastructures or institutionalization of concepts, and of policies, began, and… began, and started to take root. Uh, actually, the… a lot of this started happening obviously in the 1980s, but really done in 1990s, mid-90s they really started taking hold.

02:23: Uh, I recall that, you know I started representing, as a lawyer started representing Chinese banks and companies, starting in 1988-89, and after Tiananmen happened… a lot of people pulled out of China, and in fact even a lot of my friends, ah, were very critical of me continuing to do work, representing Chinese companies. What they didn’t understand was that this was very, very important work… ground-laying work, which, which, in the long term, pushing China forward. And I remember I would try to explain to my friends, and other colleagues, saying, this is work that has to be done. Tiananmen is one incident that happened. We’re talking about some fundamental changes going on, and as a law firm, and as lawyers, we can be a very, very positive part of what’s going on in China, the change, and, and really, building, building this infrastructure of change, conceptually, system-wise, as well as, well, as, well as physically, but really we’re talking about institutional changes, and, and the systems. Uh, and… I remember having to go to great lengths trying to convince people that this was still the right thing to do. Uh, especially after Tiananmen, and especially in the early 1990s when everybody pulled out, um. But we see now today, uh, the, you know, what’s going on in China, but it’s been a 25-year plan to get to where, where China is today, and it involved a great deal of fundamental, basic reconstruction of, of conceptually what, what, China and the, and the political, and policy, uh planners are doing here.

04:17: Uh, people ask me all the time, what is the biggest change in China you’ve seen over the years? And, you know, obviously the natural response is well, there’s so many rich people now, there’s so many incredible buildings, and… everybody’s making money. Actually, the biggest change, the biggest change, is conceptually. The concept, the way of thinking here, has changed. Uh, being here in the early 1980s, 1982, you talk to kids, in the universities, you ask them, what do you want to do when, for a career eventually. They, most of them really didn’t have a concept. They said, well, wherever we get assigned. Uh, you talk to, you talk to kids in elementary school and junior high, you says what do you want do when you grow up. And most of them would, they would draw a blank and say, well, we really never did think about that. I remember having a conversation with a couple of kids and they started crying, because you, when you start pushing them on, well, what is, you know, where, what is your dream, and… they kind of hit a roadblock. In their mind. But that has all, that has changed. That has changed by a 180 degrees. That’s changed now.

05:28: Uh, the freedom of opportunity. 19, early 1980s, even 1990s, you know, there was no opportunity. Opportunities for… development, individually, for business, was, was very restricted. Very, very restricted. There was… you couldn’t just go out and try to find a job or start a business, and that was an alien concept. Today. The freedom of opportunity, if you have a good idea, you got a little bit of money, and a lot of hutzpah, heart, determination, you can make it happen. That’s what’s crazy about China today, is that that 2 perhaps, you know, the doors are wide open in terms of… opportunity. Now especially economic and business-wise. Now obviously in the political area it’s a little bit different, but, this is, this is where it all begins. This is where it all begins. In effect, it goes, it’s probably, even deeper. Listen, Western concepts of democracy is based on economic freedom and economic status actually. That’s, that’s where it came, and that is its infrastructure, uh, so that it is really what it is, this type of change, uh, and conceptual change, uh, is happening in China. To protect my economic gains, my economic livelihood, that’s why I need political, political protections, that’s, that’s where it comes from. So, so, uh, I think what’s going on here in China is, is, is incredible and to be a witness, to be here over the past 18 years, living here, uh, and working here and hopefully contributing to this change, has been, has been ah… a wonderful experience.

John: 07:08: Tell us more, or the future historians more, about, you got started in the world of, in the legal world, uh, and then you’ve done a lot of things in investment, in the art boom, in the restaurant boom, in the real estate boom, tell us more about that in the 90s and then into the 2000s, what you’ve seen, and again what you see driving all of it in your experience.

HL: 07:31: Well, the, there’s an art boom, and there’s a real estate boom, a restaurant boom now, but when I started doing the art, uh, I started collecting when I came here in 91. I opened up an art gallery in 1995; I lost money for the first 8-9 years I did the art gallery, so there was no boom back then. But the thought was that, there was this great new expression of, of, contemporary society. Manifested in this artwork, this avant-garde artwork, experimental. But it was not allowed to, it was not allowed to be shown in China. It wasn’t seen, and… you know, much more, nobody in China was really that interested. Except for a very small circle of artists and academics. But, but it was such a strong, fresh expression, very powerful, that… I felt that it needed to be, be given a… very dignified stage, a public stage upon which the people in China could see it and get close to it. And then, and then maybe either accept it, talk about it, debate it, or reject it, but this had to be put into the public arena. Visually, conceptually, it had to be done, and back in 199-, the early 90s, well 1980s and early 90s, it wasn’t allowed to be shown. It was starting to be collected abroad, and you could see, you know, in Hong Kong, in New York, in London, Switzerland, some of the more exciting and more interesting work, but that, but that was, you had collectors who thought it was, felt the same way I did, from Europe and America, but really a lot of that was commercial-oriented. Uh, importantly, it was to see the artwork, give it the, give it its, a presence and a dignity so it could be seen and then affect the contemporary culture of China.

09:31: A lot of it has to do with, there’s very little, especially back then, that was… very few art forms. Uh, that really could uh, enunciate what was going on, the changes. Ah? And, and, it was very difficult stuff that was going on in China, social changes, political changes, everything, and it’s still going on. Uh, and certainly this type of art, what was a, the forum, was the expression of it. Some of it had social content, some of it had political content, so the authorities had issues with it. Ah. And then that’s why there were no, you know, 3 contemporary art, avant-garde art galleries, and when I opened up in 1995, I think I was one of the first private ones in China, if not the first to do so. So it was less of a business, more of something I thought was very important. Uh, contemporary art, whether it was contemporary art in the Tang dynasty, Song dynasty, or Ming dynasty, I mean, the art, whether it’s poetry… whether it’s the paintings, whether it’s calligraphy, uh, whether it was the philosophers, I mean, it was this that pushed China forward. It pushed a whole civilization of China forward. And… oftentimes they weren’t accepted at that time. But it was very important to have that, in the academic and the public space for viewing, as well as discussion. And that way it affects, affects people, it affects… the public as a whole. That’s why, that’s why I got involved with the contemporary art scene.

11:21: Uh, that’s also why I got involved with the restaurant scene. Because my idea was, well, especially back in 1995, nobody really is going to make a trip to, to see this kind of avant-garde artwork in and of itself. Uh, except, again except for very, very small number of people. But what I want to do was have the public see it, and so, to build a very interesting, great, uh, gathering place, a restaurant space would be sort of a way to get people in, and then, once they’re in, in the environment, relaxing, having a very good time with friends or family, restaurant, which is a wonderful space, then they can look at the artwork. In that frame of mind they can get in a more, perhaps, open and honest way, and they can get closer to the artwork. Usually you’re at a restaurant, not alone, but you’re with friends, again, or with family, and then, then you talk about the artwork, and then you necessarily start thinking about it, and conversing about it, and debating it. I mean you can, that was the whole idea of combining public, public gathering places uh, and very convivial happy places like a restaurant, with the artwork as a platform to show the artwork.

12:42: And that’s the concept between, of the Courtyard restaurant and a gallery back, back in 1995, we moved, and then in 1996 when, when we were fully open. And then ah, with “Three on the Bund,” same concept, it was the gallery, that’s why the gallery is in the middle of the building, and this space that, that penetrates the whole building because the art program is the heart and soul of that project. And it’s really just an extension of the Courtyard. And this project in the Legation quarter, that’s why at the Legation quarter the art program (hammer? Not clear) is even more dynamic than Three on the Bund, because we have a great, not only a great visual art space, we have a great performance space, the first repertory series, repertory theater, uh, for China, with a very, very strong program. Uh but also an art space, that, in and of itself allows people to come in and linger, and stay in this… art environment. And so it affects them, and then it affects our whole project.

13:43: All my projects have this very strong element. In fact, it’s not even strong in them, it’s a fundamental core of these projects. Or else these projects would be uninteresting. Because the projects as a whole serve as a platform to deliver a higher, hopefully a higher content, if you will, for the people who come. If not, it’d just be a bunch of high-end restaurants. Which would, which is, to me, fundamentally uninteresting without the art program being part and parcel of the project as a whole.

John:

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There’s a lot of discussion among those who are trying to understand China’s economic rise, boom. Um, about the balance of sort of the domestic forces and the global forces. Cuz of course it’s been the synergy with another wave of globalization. And as part of the global forces, a key one at that, is overseas Chinese and Taiwan, Southeast Asia, and this synergy across Asia and Northeast Asia, Japan and Korea. What have you seen from that vantage point? In terms of how would you assess the balance, of to what extent this boom is just surge from within, and to what extent it’s been, in what ways it’s been critically shaped, fed, with capital, with know-how, with other aspects, by the world, by the global…

HL: 15:06: Well, I… think, ah, China’s economic development and the boom that’s going on right now, is of course very, very much influenced by what’s come in from the West um, because of, because of China starting in, again, in… early 1980s, starting from ground zero. There was not a lot of foreign significant economic and institutional uh… how we say, influence in the way the economy evolved. Um, and… starting in the early 80s, and then in the 90s and then now, it is, what has really been driving a lot of the business advances, technological advances, industrial advances, is obviously, all the Western concepts of how, business, you know business management, uh, technology, uh… And that certainly, that learning is a… fundamentally critical aspect of how China is moving forward so quickly. Now in terms of, and the conduit of a lot of this, these ideas, these systems, these uh, management skills, the, and etc., and technology, has been coming in through overseas Chinese, you know, whether they’re from Taiwan, Hong Kong, or America, but really, it’s… it’s all over, right. You know, the Chinese banking system, financial systems, I mean, it’s really no one has bigger influence than Morgan Stanley, Goldman Sachs, Merrill Lynch, on China, and it’s certainly that… that’s not necessarily ah overseas Chinese or anything like that.

16:53: What’s important is that uh, a lot of the, what you see in terms of the growth in GDP, yes, a lot of that is driven by foreign investment, or foreign trade, but I think the, the vast majority of this growth now, and the consumption, is driven by local, local demand. And that, and that’s ah, that’s… very, very uh, different than, than Korea or even Japan in its early days. There’s this… amazing amount of wealth in China that’s being created and… this wealth is driving consumption, and this consumption is reaping investment back into the system. And uh, so that, that is the main driver of growth in China. Uh, what’s pushing it on the edge again, is the, the new technology, that new management ideas, the financial, the new financial products, etc. which makes the whole economy more efficient, and companies more efficient, but I think the real consumers, and consumption that drives this growth is domestic generated.

John: Um (not clear) very interesting thoughts. We want to ask you, I guess, a question about, you could, you could say it’s the question, the winners and losers, you know, any major socio-economic change like China’s experienced creates winners and losers. So that would be one way of asking the question, who’ve you’ve seen as the main winners and losers of the boom. And in your thoughts you could include in that, you know, those who criticize, especially the environmental cost of the boom, that the natural world has lost out, um, how,

5 how have you, how do you wrestle with that question, how do you see the cost-benefit analysis for the last 30 years or where it’s going?

HL: 18:44: Well, I think the winners, the winners, of this boom, really is the middle class. And that is certainly important for China in terms of its political evolution. As well as economic evolution. The middle class, there is a middle class right now that is just starting, and it’s growing, and, and hopefully over the next 10-20 years it will become the most significant economic, and social, class in China. But to build that middle class takes a lot of time, because you need a lot of jobs, middle management jobs being created, and white-collar jobs, and this becomes the middle class. But you see it growing, and… it is, these are very educated people, well-educated people, these people with more open concepts, but it, and as, and they have economic interest to… not only progress but to protect. Now that drives a lot of, not only diligent hard work at the office, but also eventually it translates into, you know, economic democracy, and how I vote with my feet in terms of how I make choices or get choices, in regard to the economy. Ah? Companies, corporate, you know, shareholder rights, etc., also in the way I can changes if I don’t like this company, I just move on. Now that is the type of economic freedom, or democracy, that, that is growing and it really manifests itself in a powerful way in the middle class, uh. Especially white collar. That becomes very powerful, and that translates into political, real significant political change. Uh, the other, beneficiaries, obviously the wealthy, those who were very, very entrepreneurial, very, very smart, and took a lot of risks in the early days, and, and you have a lot of high-tech companies entrepreneurs, real estate entrepreneurs, who are incredibly wealth, and industrialists who are incredibly wealthy, and the system has allowed them to flourish.

20:55: Uh, I think the, the loser is overall everybody in China just because of this whole pollution issue. The cost of all of this growth has been devastating on, on the, on the environment. And, and it’s a terrible, it’s a terrible ah, cost, of this jumpstarting and leapfrogging of the Chinese economy, and in, into where it is now. Uh, and, and you know, clean energy, environmental consciousness was just not, just not given any priority. But it was a cruel trade-off, it was absolutely a cruel trade-off for China to do. Just like one-child policy. It’s not that the Chinese want to pollute, nor do Chinese only want one child. Of course they want a clean environment and a big family. But it’s, it’s a trade-off, and thank God in America we don’t have to make those cruel, cruel choices, nor does the government have to make those cruel choices. Now hopefully uh… there, you know, there’s a, there’s an emphasis now, just, just starting, very strong however, top-down, and hopefully it’ll come up from the bottom also, on environmental, environmental integrity. It, hopefully it’s not too late… But that is a terrible situation here in China, and I think everybody living in China is a loser.

22:21: Uh, obviously you talk a lot about, another loser is, are the poor in China, the countryside, the migrant workers. Uh, yes, I mean it’s, there’s still a lot of people living in, you know, below or near the poverty line. But, I think, relatively speaking, you can look at a lot of statistics, the way that their living standards are growing is, in fact, very, very significant. I mean, incredibly significant, uh. You’re spreading the growth among 700 6 million people. And it is getting better. Now there’s a lot of work to be done, and I think the government is, especially with Hu Jintao and Wen Jiabao, they’re, they are looking at this, I think Jiang Zemin and Zhu Rongji, was, were really looking at the top end, pushing up the top end of growth. And that was absolutely necessary, I think now with Hu Jintao and Wen Jiabao they are looking at it, a more evened out approach, combining with certain social policies, environmental policies, and I, you know, again, it’s… a balancing act, but I think that there is more emphasis being placed on raising the living standards, and giving the second-tier, third-tier countryside more, more policy to allow it to… expand and grow more. Again, it’s a terrible issue of 700 million people in the countryside, uh, that’s… two and half times the population of all the United States. That’s a huge issue to grapple with, but again you can look at statistics, and I bet your center has a lot of statistics to look at, the relative growth of the wealth of the countryside, and the migrant workers, and it is rising. Uh significantly, and probably compared to other nations, rising faster.

John: Last question. You’ve told us a lot about, about the past, and how you explain what you’ve seen. What do you see looking into the future? Do you think, you know, we’re 30 years into the reform and opening period, and some would say 30 years into an economic boom. Certainly there’s a chunk of time there with some ups and downs, um, do you think we’re on the cusp of a new turn, of a new period of Chinese period, or are just in the middle of something that’s going to go another 30 years or 50 years?

HL: 24:36: I think we are approaching that cusp of a, a change. I think we’ve, you know, these types of changes, are… again, political, economic, these systems, these concepts have been institutionalized in the system that is China, and in various areas. So, that was the very, very important work that had to be done in the first 20 years. In the first 20 years. I remember, before it was always the questions, “Was China going to go back?” I mean that was the question everybody asked, “Is China going to go back? Are these reforms sticking?” Well, that’s no longer a question, and in fact, that’s what all that work was being done in the first 20 years. I think these past 10 years have been, you see a lot of fruition of, on the surface, but what you don’t see again, deeper foundation of the political, economic changes that allowed this to happen. I think we are on the cusp of… perhaps, another ah… leap forward, because once this consolidates… this secondary eh… I guess infrastructure, institutionalization happens, I think you’ll see another leap forward. I think it has a lot to do with property ownership, I think it absolutely has, protection of real property rights, and how that becomes, how that becomes a more, more ingrained, and protected in the system. I think that that’s fundamental. I think if you talk with the early people, as, who were involved in mapping out China’s opening, and… it’s uh, it’s you know, it’s reform, they talked in the 50-year plan. And in fact it was a very rigorous, methodical, 50-year plan. So yeah, maybe we’re 30 years into it, of a 50-year plan, but uh, I think things are, things are, moving along (laugher), moving in accordance with the plan. Uh, we’ll see what happens over the next 10 years, I think it’s… amazingly exciting time to see the next 10 years, what happens. Uh, I, and I do believe that we will see a new type of, new type of, ah… of development in China. A lot of it, like you’re saying… very indigenous, very Chinese, uh, obviously incorporating a lot of Western ideas, again both in business, economy, and 7 politics, I think next 10 years is going to be a most critical time, where China is kind of turning, turning again on its axis. And moving forward.

John thanks HL, on-screen release.

HandelLeeMasterA.mov (28:56)

Highlights and Connections

04:17: Biggest change in conceptual approach to personal advancement; previously little notion of career development/fulfillment 07:31: Development of art scene in China 11:21: Present contemporary art through restaurant platform 13:43: “Higher content” motivation underlying personal entrepreneurial activity 20:55: Pollution makes everyone in China a “loser” of the boom; trade-off nature of pollution and development- compare with one-child policy; suggests that other countries (i.e. the US) do not confront same grim choices 24:36: No longer a question of rolling back reform (achieved in first 20 years), but of how institutional changes will bear fruit (process has begun in latest decade)

Other Comments Sound is very poor, with severe background noise (probably due to filming outside).

Bio First visit in 1982, half-year at Beijing University Returned to practice law Entered real estate development, became restaurateur/entrepreneur (see articles below) Member of Committee of 100, as of 2007 (http://www.committee100.org/media/press_release/EnglishFINAL_newMember_0507_. pdf)

Additional Information http://www.cctv.com/program/UpCloseold/20060210/101906.shtml http://www.cityweekend.com.cn/beijing/articles/mag-bj/beijingology/beijingology- handel-lee-olympicology-alphabet-soup/?most_viewed=1 http://www.gluckman.com/HandelLee.html

Featured in Time: http://www.time.com/time/asia/covers/501040927/story.html

*The full-length video of this interview is available in the online repository of Rutgers University Libraries: http://rucore.libraries.rutgers.edu

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