May 2015
Premier Li Keqiang ALSO INSIDE • Centennial Ball Snapshots • WeChat and Business
A Balancing Act China’s plan to balance growth and build a more predictable business environment this year could benefit some multinationals but pose a burden to others
Shanghai Workers Series Meet three inspiring expats who are just mad about living and working in Shanghai: Heather Kaye, Jamie Barys and Xavier Bernasconi
2015-5 cover.indd 1 15-4-23 上午9:01
MAY 2015
INSIGThe Journal of the American Chamber of CommerceH in ShanghaiT amcham shanghai 12 By Kathryn Grant President Centennial Ball Highlights Kenneth Jarrett 12 AmCham Shanghai kicked off our 100th anniversary year
VP OF PROGRAMS & Services with the Centennial Ball at the fabulous Peninsula Hotel Scott Williams
VP of Administration & Finance Helen Ren 16 Directors Shanghai Workers Series Business development & Marketing 16 We continue our annual series with three dynamic expats Patsy Li who work in Shanghai. Meet Jamie Barys, Xavier Bernasconi Committees and Heather Kaye Stefanie Myers
Events Jessica Wu 26 government relations & csr A Balancing Act Veomayoury "Titi" Baccam 26 By St. John Moore, Gordon Guo and Rachel Morarjee Membership & CVP Our cover story focuses on highlights from China’s Linda X. Wang legislative session in Beijing and ramifications for foreign INSIGHT companies EDITOR-IN-CHIEF
Bryan Virasami 33
Content Manager Look Before You Leap By Natalie Lowe Kathryn Grant 33 A social media expert explains why WeChat can give your Senior Associate Editor company a boost and why it’s not for everyone Silvia Feng
INTERNs
Lois Delhom Anne Meredith Amanda Zhao Insight standards Design 5 Movers & Shakers 8 China Business Alicia Beebe
Printing MONTH IN PICTURES EXECUTIVE MEDIA ROOM Mickey Zhou Highlights from recent events Favorite social media platform Snap Printing, Inc. 42 50
INSIDE AmCham INSIGHT Spo nsorship (86-21) 6279-7119 ext. 5667 Story ideas, questions or 40 From the Chair comments on Insight: Please contact 41 Board of Governors Meeting Bryan Virasami (86-21) 6279-7119 ext. 5668 45 Government Relations [email protected] Insight is a free monthly publication for the 46 Event Highlights members of The American Chamber of Commerce in Shanghai. Editorial content and sponsors' announcements are independent and do not necessarily reflect the views of the governors, Cover design by MICKEY ZHOU officers, members or staff of the Chamber. No part of this publication may be reproduced without written consent of the copyright holder.
Shanghai Centre, Suite 568 1376 Nanjing West Road Shanghai, 200040 China tel: (86-21) 6279-7119 fax: (86-21) 6279-7643 www.amcham-shanghai.org Editor's note
n this issue, it’s safe to say we have a little bit for in Beijing. She focuses on implications for nearly everyone, especially in our Shanghai foreign companies and talks about initiatives that Workers Series, in which we profile a few Premier Li Keqiang prioritized during his policy peopleI with unusual or interesting professions. speech at the meetings. If you like Kung Fu Panda or other animated We know that everyone, their friends and their movies you might enjoy the story about Xavier ayi use WeChat in China. But what use is it for a Bernasconi, who is part of the movie making CEO or a marketing team? Natalie Lowe goes in- operation at Oriental DreamWorks in Shanghai. depth and talks about ways companies can put this If you enjoy street food or any type of food – and tremendously popular instant messaging app to use who doesn’t – get some inspiration from Jamie for your company. At the same time, she explains Barys, an American who came to China to study that using WeChat won’t translate into automatic Chinese and then started a small business that rewards unless you come up with a sensible strategy provides walking food tours to hungry tourists. and not simply bombard your contacts. The series wraps up with Heather Kaye who Finally, if you missed AmCham Shanghai’s launched an environmentally conscious design Centennial Ball in April, we have highlights on company that produces swimwear and other page 12 and great photos from that special night. Bryan Virasami clothes from plastic bottles. Food, movies and Also visit our Insight website for more photos, editor-in-chief clothes – things we can’t live without. stories, event roundups and a lot more. We get a bit more serious with our cover story. In our June Insight, we will celebrate the Rachel Morarjee of Brunswick Group and her Chamber’s 100th anniversary with a special issue colleagues have written a comprehensive analysis that will take you back in time. We promise you’ll of major outcomes from the legislative meetings find it exciting.
h
Insight_OCT_190x130mm_150409.indd 1 2015/4/9 16:14:54 Movers and Shakers
compiled by Junling cui
Movers and Shakers highlights major personnel changes within the Chinese government at various levels and senior management-level movements within multinational companies in China.
HULT Shaun R. Carver was recently promoted to Executive Director and Dean of Hult International Business School. Carver has worked in the international education industry for over 12 years. He joined Hult in June 2013. Prior to Hult, he founded a school called Pontes and worked there for five years. Pontes ran pre-university and pre-master programs designed to help Chinese students succeed in western universities. From 2002 to 2009, Carver worked in various leadership positions at ELM Education, the Sino-British College Shanghai campus, Tsinghua University and University of International Business and Economics in Beijing. Shaun is an active member of the Rotary Club in Shanghai and a strong supporter of social entrepreneurship programs. Shaun R. Carver
Private Sector CONTROL RISKS Control Risks, a business risk consultancy, Nader Zyaei recently named Mavis Tan Senior East West Associates recently promoted Managing Director in Control Risks’ Nader Zyaei to China Vice President & forensic investigations, compliance and Managing Director. Zyaei joined East West insolvency practice in Hong Kong. Mavis Mavis Tan Associates in January 2013. In his new role, served as a Senior Managing Director of Zyaei is responsible for business Nader Zyaei FTI Consulting’s forensic and litigation consulting practice based development, client relationships, project in Hong Kong from 2010 to 2014. Prior to that, she was a director execution and overall leadership and development of East West’s of Baker Tilly Hong Kong’s business recovery and forensic consulting team in Asia. Prior to East West Associates, Nader accounting practice. spent 12 years working in various leadership positions at the Heatcraft Worldwide Refrigeration division of Lennox International. In October of 2007, he moved to Shanghai to be government the VP/General Manager-Asia of the company. Nader obtained Jiang Rui was named Vice Governor of his Bachelor’s degree in Industrial Engineering from SIUE in Liaoning province on April 13. Jiang became Illinois and his Master’s degree in Engineering Management the Vice Party Secretary of BenXi, a city in from the University of Missouri – Rolla. Liaoning in 2006. He was promoted to mayor of the city in 2007 and the Party Secretary at CFA INSTITUTE Jiang Rui the end of 2009. Jiang is from Liaoning and CFA Institute, the global association of has worked in the area his entire life. investment professionals recently appointed Paul Smith president and CEO. Smith has Feng Xinzhu was appointed Vice Governor more than 30 years of leadership experience of Shanxi province in April. Feng was the Paul Smith in the asset management industry, including mayor and the Party Secretary of over 18 years in Asia. He joined Bank of Tongchuan Municipal Government. He Bermuda in Hong Kong as Asia Head of Securities Services in has worked in Tongchuan since 2001. Prior 1996. Before joining CFA Institute in October 2012, Smith was to that, he worked in Shanxi Agriculture Feng Xinzhu chairman and CEO of Asia Alternative Asset Partners. Power Management Bureau.
If your company has executive personnel changes, please contact Junling Cui at [email protected].
MAY 2015 insight 5
FTZ DIGEST
HSBC and Baoxin Team Up
HSBC, a major U.K.- based bank, became the first non-Chinese bank on March 17 to complete a transaction under new Shanghai Free Trade Zone (FTZ) rules governing offshore borrowing. The new rules came into effect on February 13, when the future to conduct seminars to brief Hong Kong enterprises on People’s Bank of China new Shanghai FTZ policy initiatives. They also plan to work moved to reduce pre- together to promote co-operation on financial intermediary approval requirements, services operating through the FTZ and encourage more cross- increase permitted border RMB business. The HKSAR already has a large footprint transaction types and within the FTZ. According to reports, Hong Kong–invested expand the amount of enterprises make up 46 percent of all foreign-capital invested funding that can be raised enterprises which have set up business in the FTZ since its by companies and banks launch. As of February, 1,265 such Hong Kong enterprises were operating within the FTZ. In the landmark deal, HSBC used its Free already operating within the zone. Trade Account (FTA) within the FTZ to borrow U.S. dollars from an offshore market, which it then lent to the FTZ-based subsidiary of Baoxin Auto Group at the offshore rate. As a result of the trade financing deal, worth about US$10 million, Baoxin’s funding costs Baker & McKenzie and FenXun First Joint Operation were reduced by 2% compared to the usual cost of traditional borrowing from onshore banks. Baker & McKenzie has become the first foreign law firm to According to its company website, automobile sales and successfully take advantage of recent legal reforms within the service group Baoxin is the largest BMW dealer in China and Shanghai FTZ, forming a Joint Opeation with Beijing-based the world. The company was one of the first participants in the Chinese law firm FenXun Partners on April 15. The two firms’ auto import pilot program set up within the FTZ earlier this application was the first to be approved by the Shanghai Justice year in an attempt to lower the price of imported cars within Bureau. Their Joint Operation was announced at a ceremony China. HSBC was one of the first foreign banks to set up shop in held at the Baker & McKenzie FenXun (FTZ) Joint Operations the FTZ, opening a sub-branch in the zone in early 2014. It also Offices, located within the Shanghai FTZ. The historic holds the distinction of being one of the first foreign banks to partnership represents the first time law firms will be allowed to set up an FTA in the Shanghai FTZ. provide joint Chinese and international legal services to clients from a single platform. In the past, foreign and Chinese legal services were required to be provided separately. The Joint Hong Kong Delegation Visits the FTZ Operation arrangement, which also allows secondments of lawyers between firms, will permit the two firms to work Members of a Hong Kong Special Administrative Region collaboratively to serve clients. (HKSAR) delegation, led by HKSAR Chief Executive C.Y. Although the two firms will now be able to work together to Leung, met with leading Chinese government officials including respond to client needs, they will remain independent and Yang Xiong, Mayor of the Shanghai Municipal Government, for structurally separate, and each is required to keep their the Third Plenary Session of the Hong Kong/Shanghai operations within their own business scope. The Shanghai FTZ Economic and Trade Cooperation Conference in Shanghai on is the only place in China where such cooperation between April 10. During the conference, the Hong Kong and Chinese Chinese and foreign law firms is permitted. The partnership was governments signed three co-operation agreements regarding made possible thanks to a new scheme which contains measures commerce, finance, and the exchange of civil servants. They also meant to encourage increased cooperation between law firms reached a consensus for co-operation in a variety of areas, within the FTZ. Baker & McKenzie, which ranks as the largest including the Shanghai FTZ. During their visit, the Hong Kong law firm in the world by revenue, has a long history in China. Its delegation visited the zone, where they participated in a briefing Hong Kong office opened in 1974, and it became the first hosted by the Shanghai FTZ Administration. Representatives international law firm licensed to practice law in Mainland from Shanghai and Hong Kong hope to work together in the China in 1993.
MAY 2015 insight 7 Hunan TV to Co-Produce Films with Lionsgate SunPower and Apple in Sichuan Solar Projects Deal i m agine ch ina
Apple, which has a tradition of using renewable energy to power its data centers, agreed to a collaborative investment project with SunPower to build two solar power generation systems in Sichuan province with a total capacity of 40 megawatts. Upon completion in late 2015 the two stations will be co-owned by Apple and Sichuan Shengtian New Energy Development, SunPower’s project development joint venture. This deal is expected to help China get closer to its 17.8 gigawatts of solar power capacity this year, as well as satisfy Apple’s wish to cut its energy bill.
Tencent Surpasses Amazon in Market Capalization
Hunan TV is a popular channel for entertaiment shows
Hunan TV, one of the largest broadcasters in China, sealed a deal with American film studio Lionsgate to invest US$1.5 billion in at least 50 movies over the next three years. It is the biggest overseas deal in China’s movie-making history. According to Lionsgate CEO Jon Feltheimer, this cooperation with Hunan TV will significantly expand Lionsgate’s movie market share in China, while more Chinese elements are expected to be brought into the international movie market. While the American movie industry growth is limited, it is generally accepted that the Chinese movie industry is developing rapidly. China’s box office sales totaled RMB29.6 billion with 618 films in 2014, up 36 percent year on year. Some of the first films that will be co-financed include Gods of Egypt and Now You See Me 2.
Toyota to Build Plants in Mexico and China
Toyota will spend about US$1.3 billion over the next four years to The Chinese online entertainment and social networking giant build new car plants in Mexico and China. This move ends Tencent reached a market capitalization of US$206 billion in mid Toyota’s three-year suspension of additional production capacity April, higher than Oracle’s US$190 billion, Amazon’s US$178 after demand fell during the global financial crisis. The new billion and IBM’s US$161 billion. Analysts believe the surge of its Chinese plant will be located in Guangzhou, and is expected to market valuation was due mainly to the skyrocketed Hong Kong churn out 100,000 units per year. Executives from Toyota stock market, where this Shenzhen-based listed company is expressed their interests in further expansion in markets with traded. In contrast, the New York-listed Alibaba saw a 19 percent forecasted steady growth in a bid to rival Volkswagen from shrink of all its shares possibly due to its overheated US$25 Germany and General Motors from the U.S. billion IPO and a lackluster third quarter earnings result.
8 insight MAY 2015 deal of the month
BY Lois Delhom
IBM and China Telecom Team Up i m agine ch ina BM and China Telecom recently announced a partnership in which China Telecom will host IBM’s mobile enterprises apps on its servers. IIBM and China Telecom previously inked a deal in 2014 to help small and medium businesses adopt cloud computing technology. However, the most recent agreement is said to be bigger. “The two companies will seek out everything from large, share-owned enterprises in sectors like banking and insurance, to private startups,” said Nancy Thomas, a Beijing-based Managing Partner of global business services at IBM. Under the plan unveiled at an early April press conference in Beijing, China Telecom will offer its clients the opportunity to use IBM’s MobileFirst services, which help customers create applications for companies on a secure server that China Telecom already has in place, according to published reports. The MobileFirst service, an innovation by IBM and Apple for IOS devices, is a product that enables clients to build, deliver and manage apps for enterprises as well as providing mobile solutions. It will be available on China Telecom’s Internet cloud, which will in turn increase mobile adoption in Chinese enterprises. “China Telecom and IBM will jointly promote the mobile IBM and China Telecom will cooperate transformation of Chinese enterprises,” said Gao Tongqing, the Executive Vice President of China Telecom. official website. “We’re looking to China Telecom to be the However, due to cyber security threats, the foundation to give clients confidence,” explained Chinese government has passed new laws and Thomas, while praising the service’s security. China regulations to encourage state-owned and affiliated Telecom, which is reportedly the biggest cloud companies to restrict their business with foreign computing service provider in China, has companies. IBM CEO Virginia Rometty said in nationwide high-speed networks that provide more Beijing that the company will share its technology reliable services for customers. In the new with China Telecom, which currently holds more partnership, IBM will strive to “help businesses than 70 percent of the country’s Internet services implement secure, cost-effective and scalable and content, in order to help China grow its own cloud-based applications,” according to IBM’s information technology industry.
MAY 2015 insight 9 Celebrating 100 Years
Chamber Traces Roots to June 1915
ou probably know by now that businessmen that lasted slightly more than one AmCham Shanghai was founded hour. The U.S. Consul General at the time chaired 100 years ago on June 9, 1915. The the discussion and the participants established a following morning, one of Shanghai’s provisional committee of 10 persons to write a preeminent English language constitution. That work concluded by August, at newspapers, the North-China Daily News, reported which time the provisional committee became a theY story: “The proposal to form an association in 14-person board led by three officers – President the interests of American commerce in China was J.H. McMichael (Frazar & Company), Vice- discussed by businessmen at the Palace Hotel President J.W. Gallagher (U.S. Steel Products Co.), yesterday afternoon and found unanimous and Secretary P.L. Bryant. None of these positions acceptance.” were full-time professional staff, though the first One year later, the Chamber – officially known annual report did include an appeal to members to as the American Chamber of Commerce of China identify a full-time, salaried position to direct the – published its first annual report. That document organization’s work. is a treasure trove of information about the From the report we know that during its Chamber’s first year, providing detailed minutes of inaugural year, AmCham members were meetings and the issues that absorbed the concerned mostly with difficulties related to organization in those early days. shipping goods in and out of Shanghai. This had The decision to establish a chamber resulted everything to do with the outbreak of the First from an evening meeting on June 9 of 45 World War a year earlier. Most freights were carried on British or Japanese vessels back then, and because of American neutrality in the early period of the war, American firms were sometimes blacklisted or subjected to intrusive inspections by British authorities, while Japanese ships often refused shipments from other nationalities. The 1916 report also gives us a complete picture of AmCham’s financial health in the year following its inception. The annual membership fee in those days was $50 gold (the United States was on the gold standard), or about $1,140 in 2015 dollars. At those prices, the organization had accumulated a bank balance of $2,057.25 (about $47,000 today) by March 1916, based on a membership base of 32 firms and 26 individuals. That level of funding, however, was not enough for the Chamber to finance the level of activity its founders had in mind, and the Chamber quickly
10 insight MAY 2015 embarked on a campaign to recruit members residing in the United States. The goal was both to expand commercial relations between the United States and China and expand its revenue base to sustain operations: “In this connection it might be stated that your Chamber has been greatly hampered for funds during the year. The committee has been compelled to abandon a number of projects because of the expense entailed, and as practically all of the business organizations and individuals in China eligible for membership are now enrolled, no great increase in income can be derived from this source. It has therefore been considered as most necessary to enlist every American firm or manufacturer represented in China in the membership of the Chamber, and the members are urged to cooperate in securing as members the house for which they hold agencies in China. To this end a class of non- resident membership with a yearly fee of $20 gold has been created.” In a tradition that persists to this very day, the Chamber in its earliest days held monthly member briefings. Back then they were called “tiffin meetings” and took place on the first Thursday of each month. There was initially an effort to hold these gatherings weekly, but members were too busy to attend with such frequency. Instead, some 50 to 100 American businessmen would gather for a monthly lunch, joined by the U.S. Consul Art Peace Hotel). General, and listen to a guest speaker. The first annual report also clearly defined Another parallel with today is that AmCham AmCham’s by-laws and set out its mission: “The Shanghai paid close attention to government object of the Chamber shall be to watch over and relations from the very start. For example, all U.S. protect the general interests of American consuls in the treaty ports of China were honorary commerce, to collect information on all matters of members of the Chamber. In its first year, the interest to the American mercantile community, young organization became a member of the U.S. and to use every means within its power for Chamber of Commerce in Washington, DC, and removal of evil, the redress of grievance, and the began building ties with other business associations promotion of the common good; to communicate in the United States as well as the Chinese General with the authorities and others thereupon; to Chamber of Commerce of Shanghai. It lobbied receive references, and to arbitrate between Congress for a new facility for the U.S. Consulate disputants – the decisions in such references to be General in Shanghai and put in place a system to recorded for future guidance.” handle trade inquiries from the United States. And, AmCham Shanghai was established to protect when U.S. Minister (i.e., Ambassador) Paul Reinsch and enhance American business interests in China. visited from Beijing, the Chamber hosted an That was our core mission one hundred years ago elaborate dinner at the Palace Hotel (today’s Swatch and the same remains true today.
MAY 2015 insight 1 1 Centennial Ball Draws Huge Crowd, Raises RMB750,000 for Charity
BY Kathryn Grant
mCham Shanghai members and other guests Hotel, guests walked past a series of old Shanghai themed enjoyed a dazzling celebration at the annual charity stations that served as backdrops for fun photographs. gala where the Chamber also kicked off its 100th Backdrops included old pictures of The Bund and classic year anniversary celebration. Guests at the merchant shops. In addition to the fabulous décor, a selection ACentennial Ball enjoyed a fine dinner, music, a live auction and of casino games were available for entertainment throughout the other entertainment at the Peninsula Hotel on Saturday, April evening. 11. The evening began with speeches from AmCham Shanghai Guests were transported back to a time when adventurous President Kenneth Jarrett and Chairman Robert Theleen. Both merchants first landed in the East, as the décor reflected a recounted the impressive growth of the Chamber in the last 100 bygone era of early Shanghai. Upon entering the Peninusla years, and the wonderful future that lies ahead. Guests enjoyed a
Platinum Sponsors Live Auction Sponsors
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12 insight MAY 2015 Dancers entertain guests
live jazz band- harking back to the “old Shanghai jazz” theme organizations: The Renewal Center and INCLUDED. The that was apparent throughout the evening. Renewal Center helps displaced individuals in Shanghai find One of the highlights of the event was the live auction that sustainable solutions through full-time support, employment, and included a Cadillac from GM China that raised RMB290,000. permanent homes. INCLUDED is dedicated to helping migrant Other major items included first class round-trip tickets from children and families to achieve their full potential by establishing American Airlines to the U.S. Rebecca Branham, Co-Founder community centers that provide a safe and welcoming space in and Managing Director of B & L Engineering Consulting Co., the heart of migrant neighborhoods. Funds from the GM car won the Cadillac. The chamber netted 750,000RMB from the went towards 40 plus Chinese undergraduate student scholarships auction and ticket sales. from Fudan University and Jiaotong University in partnership The funds raised went towards supporting two charitable with the Shanghai Soong Ching Ling Foundation.
Corporate Table Sponsors
MAY 2015 insight 1 3 Guests pose in the Peninsula’s Rose Ballroom
Steven Nelson, left, collects a live auction prize
Rebecca Branham of B&L collects the key to her new Cadillac
Centennial Ball guests 礼东：方正大黑简体 LEEDONGiFTED字体：Univers CondensedBold your marketing partner：AbsaraSansOT*
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14 insight MAY 2015 Glen Walter, CEO of Coca-Cola makes a bid
Guests pose against various early 20th Guests from BritCham Century imagery
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MAY 2015 insight 1 5 Working in Shanghai
Eating Her Way Through Life Jamie Barys of UnTour Shanghai says she isn’t eager to return to the U.S. simply because of xiaolongbao and other tasty dishes in Shanghai
BY SILVIA FENG
o Jamie Barys, the owner of a week that are open to the public, and UnTour Shanghai, an eclectic Insight joined the Hands-on Dumpling small business that runs Delight tour. The four-hour walking walking tours for out-of- food tour leads guests through the townersT interested in Shanghai’s street former French Concession area as they food offerings, there’s nothing more explore regional varieties of dumplings important than a good xiaolongbao. A from around China. The tour began on a resident of Shanghai since 2007, Barys cold winter morning on Hengshan Road enjoys the Shanghai specialty dish so much with two American tourists who were in that she told her parents she would only Shanghai for a weeklong visit. move back to her hometown in Tennessee The first stop was a potsticker when someone opens up a steamed soup (guotie) stall where the guide taught us dumpling shop there. a lesson on how to eat street food. The NAME: Jamie Barys Food is how Barys fell in love with guide has extensive knowledge of not China, a growing passion that started in only the different varieties of dumplings AGE: 30 2005 when she was a study abroad student served on the tour, but also the culture JOB TITLE: Chief Eating in Beijing and later became the inspiration and history of Shanghai. Over the Officer for her first company, a food tour operator. course of the tour, the guide pointed out UnTour takes visitors and expats living in interesting architecture and told stories U.S. HOMETOWN: Shanghai to local, authentic eateries off about the different food stalls where the Chattanooga, the beaten tourist path. guests sampled bites of steamed buns Tennessee UnTour Shanghai organizes six tours (xiaolongbao), fried dumplings (guotie),
16 insight MAY 2015 working in shanghai
boiled dumplings (shuijiao), glutinous rice dumplings (tangyuan) and wonton soup. The most inviting part of the tour was the fried pork bun (shengjianbao) class where guests prepared, cooked and ate their own hand-made buns from scratch. Recipes were provided to all guests so they could show off their newfound dumpling-making skills when they returned to their home countries.
When I worked in PR, I did not feel fulfilled. The best part of my day was lunchtime, when I would go out to find street vendors.”
Ready for business
Barys’ first experience with China was as a study abroad student in Beijing Chef Mike, the instructor of the dumpling-making class, teachers a guest in 2005, a destination she said she how to fold the dumpling wrap selected on a whim as it was one of the more affordable options available at her university. After the semester in Beijing, she was hooked on China and decided to move back after graduation. Barys fulfilled that goal in editorship at Shanghai Talk, where she initially wrote mostly 2007 and after a two-month language immersion program about the city’s food scene. in Hangzhou, she found a job at Hill & Knowlton, a public It wasn’t long before Barys decided to capitalize on her relations firm. experience with Shanghai’s dining scene by launching her “When I worked in PR, I did not feel fulfilled. The best part own company. As a traveler who plans itineraries based on of my day was lunchtime, when I would go out to find street food, Barys saw the need for a food tour company in Shanghai. vendors,” she says. “I loved finding something I had not tried Inspired by the idea of making Chinese food accessible to before, and relished the opportunity to practice my Chinese.” tourists, she partnered with Kyle Long, a fellow graduate of A year later, Barys started freelancing articles about food the Beijing program and good friend, to create a user-friendly for blogs, eventually leaving her work in PR and taking an dining experience.
MAY 2015 insight 1 7 The New York Times article states: “Breakfast in China is best enjoyed on the street, still piping hot from the wok or steamer. The only difficulty is deciphering a Chinese menu. UnTour Shanghai (untourshanghai.com), a street culinary tour company, simplifies the process by doing the ordering for you. The Dumplings Delights tour spans the breadth of China, from cabbage-filled jiaozi eaten in wintry northeastern China to delicate shrimp almond pastries from southern China and, of course, Shanghai’s famous xiaolongbao (soup dumplings) — all in a two-square-block area.”
Up Next
Barys has been the “Chief Eating Officer” of UnTour Typical breakfast food along Shanghai streets Shanghai for more than four years, and the company has grown from the two co-founders to more than 10 part-time guides, all expats who have lived in Shanghai for years, plus “Eating at local, authentic Chinese restaurants can be administrative staff. a very daunting experience, especially for visitors who are “I’ve always found it very rewarding to work for UnTour,” unfamiliar with the city and don’t speak the language,” said said Carla Bellemans, an UnTour guide. “Jamie’s commitment Barys. “Our mission was to take the guesswork out of finding to seamless service, her attention to detail when looking for the best places to eat in Shanghai.” interesting venues and knowledge about cuisine but foremost UnTour Shanghai officially launched in December 2010, flexibility are what sets UnTour apart from the other tours.” and Barys left her position as Managing Editor of Shanghai Riding on the success of UnTour, Barys and Long have Talk magazine in 2012 to pursue UnTour full-time. started a new business venture in the same vein as the food tour company. Glutton Guide Shanghai will be the first New business e-guidebook in a food-focused series that highlights the best restaurants and bars in each destination, she says. The When the company first launched, the two co-founders Shanghai edition will be launched this summer, with eight handled all responsibilities from the day-to-day operations to other cities around the world, including Melbourne, Prague the tours themselves. Within a year, they had already broke and Buenos Aires, already in the editing phase. even. Barys and Long are working with food tour operators More than four years later, UnTour Shanghai is ranked as and professional food writers around the globe to create a one of the top tours in Shanghai on TripAdvisor. The user- comprehensive resource for other foodie travelers who also generated travel review site has been a marketing boon for the want to eat their way around the world. company. “I believe that people who are passionate about what they “Nearly half of our traffic comes from TripAdvisor, Barys do tend to be much better at their jobs,” she says. “I love says. “And word-of-mouth and the number of repeat guests hearing from foreigners who come to China and have really who return for more tours has pleasantly surprised us. It’s good food experiences. That keeps me going at UnTour and such a high compliment for people to tell us that their UnTour inspired me to start the Glutton Guide series.” was one of the highlights of their vacation.” Choosing a favorite street food in Shanghai proved to be a Barys also took advantage of her public relations challenge for Barys, but she eventually settled on xiaolongbao, background to promote the company. UnTour Shanghai was although she refused to name just one shop. She straddled the mentioned in The New York Times’ “36 Hours in Shanghai” fence and finally opted for two choices which hightlight regional feature in 2013, and the company topped the list of Shanghai’s diversity, naming a hole-in-the-wall at the corner of Jianguo and Best City Tours in Travel+Leisure last year and was featured in Gao’on for their Nanjing-style dumplings and Fu Chun Xiao Long The Financial Times in January. (a local chain restaurant) for their Shanghai-style options.
18 insight MAY 2015 working in shanghai
A Digital Life Shanghai is the future of film, says Xavier Bernasconi, Digital Supervisor at Oriental DreamWorks in Shanghai
BY ZHANG KUN
t’s perhaps safe to say that in about ODW is a young studio with new artists, a decade or so, the film business in engineers and other CG talents from around Shanghai will develop a reputation the globe. Many have prestigious titles outside of China. Good, bad or not under their belts including some Academy soI great, Xavier Bernasconi of Oriental Award winners. The Shanghai studio’s first DreamWorks Studio in Shanghai predicts production, Kung Fu Panda 3, will be released it will be robust and ambitious just like next year and is being jointly produced by Hollywood was in the 1930s and 40s. ODW, DWA and China Film Group (CFG). It is this vision that brought the 38-year- The industry is changing. According old Italian maker of animated films to to an article in The New York Times, the Shanghai last June. As a digital supervisor at Chinese Box Office has tripled in size since Oriental DreamWorks Studio (ODW) based 2010, and DWA, like most other Hollywood in Shanghai and a self-described “geek,” studios, is looking to adapt their global Name: Xavier Bernasconi is part of a large operation strategies accordingly. “There is tremendous Bernasconi opportunity in China, and ODW is expanding whose goal is to make movies with Chinese Age: 38 characteristics. aggressively and is actively hiring many more He said his main objective is to “tell people,” Bernasconi says. 260 people are now Job Title: Digital Chinese stories for worldwide audiences,” working for the studio. Supervisor, Oriental adding that “we are creating movies with a ODW was founded in 2012. The idea DreamWorks came up quite a few years ago when Chinese flavor for worldwide distribution.” Hometown: Cuasso al DreamWorks Animation began to create ODW is a recently formed China-U.S joint Piano, Italy venture with 55 percent ownership by “Kung Fu Panda” and was determined Chinese investment and 45 percent by the to make it “as authentically Chinese as U.S. based DreamWorks Animation (DWA). possible.” After Po, the main character, won During an interview in his office earlier a huge following, DWA gained a reputation this year, Bernasconi explained that he has that created an opportunity to form ODW. been working with CG animation feature films for more than two decades. Before Po speaks Chinese joining ODW, he spent four years at Lucasfilm in Singapore. He and his Swedish-born wife, The Chinese edition will hire Chinese who also works at ODW as a production actors to do voice-overs and for the first supervisor, relocated to Shanghai because time in the animation industry, a movie they believe it’s the “future.” is being made in two languages – Chinese But he knows there’s a lot of work to do. and English. Po and friends will speak
MAY 2015 insight 1 9 an office, featuring a new decorative theme in each cubicle. In one corner, there is a Chinese garden, complete with tea sets and chess boards, and a few steps away is a shipwreck site with a dead sailor or pirate’s skeleton leaning against the wall. The creative office decoration resulted from a Chinese New Year competition at ODW. Every worker was given a budget of RMB200 to create a “dream desk.” Employees were told they could spend it on their own or cooperate with colleagues to build an integrated style or theme. The result is an environment that inspires creativity. In one part of the office, four people were working in a tent, each sitting at a corner under a canopy held up by a pillar in the middle. A unicycle and a clown’s hat reveal their theme to be “circus.” Bernasconi explains the process of creating an animation film, comparing it to a production line. First, the director or someone else proposes a story, and then every other department will be at the “service of the story.” The next stop after the story is accepted is character design. First the models are digitally sculpted, followed by the “surfacing” stage where artists paint the colors on and add details, such as hair, fur, bones and anatomical structures. Next, they are passed on to animators, who add motion, emotion and make them active and as Bernasconi says, “blow life into them.” The FX and lighting department work on the special effects – explosions, snow, rainstorms, or destruction, polishing the look of the final images in the process. A movie is not necessarily developed in chronological order. The work on the various different parts is A work space area at DreamWorks in Shanghai like constructing a puzzle, with production managers ensuring
Chinese with matching Chinese lip movements done through re- animation. “Otherwise, the film is going to be exactly the same all over the world,” Bernasconi said in his office overlooking the Huangpu River. ODW studio sits on three floors at Greenland Center, located on the west bank of the Huangpu River in Xujiahui district. The company, which recently expanded to the third floor, has its data center in Pudong, where it stores the massive computers that generate digital images. The place is called a “render farm” because, says Bernasconi, “Creating animation is like growing crops.” But a brief office tour reveals an operation which bears little resemblance to a farm. Posters in the corridors show scenes from some of DWA’s most beautiful creations, but since the company is cautious to avoid any possible leaks concerning ongoing projects, Bernasconi instructs a photographer accompanying the tour to ensure his camera does not stray and capture any of the images. Xavier Bernasconi talks about his job The central office area looks more like an amusement park than
20 insight MAY 2015 working in shanghai i m agine ch ina
Kung Fu Panda exhibit at the Venetian Macao Hotel everything falls into place in the end. Bernasconi is there to guide them. “You need a long time to “My work is to deliver the look of the movie – the first fully- train the artists, to make sure they acquire the sensitivity to be ODW produced feature animated film,” Bernasconi says. He works able to produce images that are able to rival Pixar, Blue Sky and with two other supervisors, and uses his expertise in lighting all the other players,” Bernasconi says about the future of China’s design to understand the vision of the director and evoke the right animation industry. emotional response in the audience. So far, however, he’s pleased with what he’s seen. “I’ve been here for six months. I see an enormous amount of Animation lifeline talent that needs to be fostered and developed, but the talent is there,” says Bernasconi. “I think Chinese art is always amazing, China has unveiled initiatives to support the animation industry from painting to ceramics.” during the past decade and has nurtured hundreds of grassroots Bernasconi says that feature animation is the perfect studios. Thousands of animators and artists have worked on combination of technology and the arts. The job requires him commercial advertisements, video games and TV series, but just to develop new technologies “because directors always want a few have gone through the technically demanding procedure of something new, something more difficult, so we need to find a way making a full-length feature film. to make it. At the same time, it is a creative process, especially with “We look at the latest existing technology, workflows and other my department, (working) with lights and colors…that’s why I possibilities out there; we look at it from everybody’s experience, love this side of the movie making industry,” says Bernasconi and lay everything on the desk, to find out which ones most fit our CG animation is a relatively new field that started in the 1970s needs,” Bernasconi says. and has developed rapidly. “You can find traces of CG technology Many of the Chinese artists working at ODW are from in some of the early Star Trek movies, but you hardly see a film grassroots studios. Chen Xiang, for example, has been an animator without CG nowadays. It has changed the outlook of the movie since 2000, working both for domestic projects and big budget industry,” Bernasconi says. international productions. “Experienced and technically-mature as we are, none of us have gone through the whole process of making a big-budget feature film that involves massive investment Zhang Kun is a Shanghai-based journalist and an occasional con- and hundreds of people,” says Chen. tributor to Insight
MAY 2015 insight 2 1 Designed to Succeed Heather Kaye of FINCH talks about using recycled plastic to make swimsuits and her innovative clothing business
BY LISA M. MULVEY
estled within the lanes of plenty of waste she felt was unnecessary and Jiashan Road among handfuls harmful to the environment. of look-a-like wooden doors “Even the slightest variation in color are some of Shanghai’s most would result in rejection of fabric,” she Ndiverse and successful small businesses. said. Yards and yards of fabric were simply The area is a living, breathing creative discarded without a second glance. network that thrives on the sharing of ideas, Kaye was born and raised in San Diego, professional knowledge, resources and California. She earned a Bachelor’s Degree support. in Psychology and Biology from Harvard Currently, there are 12 businesses within before focusing on fashion/apparel design this particular entrepreneurial ecosystem and receiving an Associate of Arts and including Letters from Lana, graphic Sciences degree from Parsons School of Name: Heather Kaye designer Elke Martini, Mr. Waffle and Design in New York. Kaye worked as a designer in Manhattan for almost seven Age: 41 FINCH. While each fills a unique niche, it isn’t by design. Over time, people left, people years before relocating to Shanghai with Hometown: San came – the unifying theme simply being her husband, George. Their daughters Diego, California small start-up businesses of one to three Charlotte, 7, and Matilda, 5, were both born in Shanghai. Quite certain that they’d Job: Owner of FINCH people who try to create an environment that fosters a cross-pollination of ideas. remain in Shanghai for an extended period, American expat Heather Kaye, owner they purchased an apartment in a quaint of FINCH, is one of the successful lane house off Huaihai Road and enrolled entrepreneurs in this corner of Shanghai the kids in a local Chinese language only who has made a name for herself by using kindergarten that was within walking recycled materials – especially plastic bottles distance. – to produce swimsuits, among other items. Kaye’s neighbors consist of artists, A puzzle unfolds writers, designers and bakers. Her passion for design and textiles fueled her to accept After three years in Shanghai working an offer from a notable Manhattan-based under the direction of others, Kaye felt it was fashion company to relocate to Shanghai time for her to take on the city and start her in 2006. Kaye initially worked closely with own business. factories in China, but became unhappy Many of the barriers that she had grown with what she saw: the process of producing accustomed to elsewhere did not exist in patterns for the upscale market resulted in Shanghai. For example, Kaye explained that
22 insight MAY 2015 working in shanghai
small network of local business connections. These connections have helped introduce Kaye to a growing community of designers, which has allowed FINCH to focus its efforts and funds on design and product development rather than on marketing campaigns. Partnering with eco-conscious global and resort chains, which have a year-round clientele of women, men and kids has also proved successful. Partnering with hotels offers an opportunity to reach new customers on a daily basis and provides an opportunity for FINCH products to be seen by an even wider audience once the customer returns home.
Made in China
As a designer, Kaye loves a good puzzle. How could she develop the design process to create less waste, become eco-aware and bring prices down, all whilst creating connections within the community? After much research, Kaye ultimately chose to Heather Kaye use Repreve – a fabric created from recycled plastic bottles by a U.S.-based company called Unifi. Recycled bottles are cleaned, chopped, melted and making prototypes is less expensive. She said that lower labor costs turned into moulded plastic pellets. The pellets are then transformed also mean accessibility for entrepreneurs designing products in into a fiber, and eventually woven or knitted into fabrics to create Shanghai. clothing. Since factories in Shanghai are highly specialized, FINCH After spending a year developing a business model, Kaye employs several production facilities within China. launched FINCH in June 2010 in cooperation with fellow expat “Rain capes need to be waterproofed through heat transfer Itee Soni. She decided to take a different approach to her business seaming. Ours are produced near Guangzhou,” Kaye explains. by using only organic and recycled materials. Beginning with tailored woman’s apparel, Kaye soon recognized that Western style swimwear was quite limited in Shanghai. Two years later, FINCH’s signature swimwear line was launched. Today, FINCH’s product line focuses on seasonless pieces such as rain capes as well as Western style swimsuits that feature recognizable patterns such as diamonds, clouds & bi-planes and animals, in minor variations. This strategy keeps waste to a minimum and allows FINCH to keep styles fresh and satisfying to customer tastes. Kaye feels that in Shanghai, multi-brand boutiques are considered not only trendy, but also incubators for young designers. Without a retail store, overhead costs can be kept at a minimum. More importantly, placing products in various locations around Miss Earth China contestants in FINCH swimsuits the city allows her to increase product visibility and create a
MAY 2015 insight 2 3
working in shanghai
Women in Finch dresses pose on Jiashan Road
“Our swimwear is made with knitted fabric, which requires flat- In Shanghai, it’s easy to become overwhelmed with work and I so felled seams and overlock machines with elastication produced admire Heather for knowing what her limitations are and for finding in a facility near Shenzhen.” These particular techniques are used her own perfect niche between work and family life,” Poon says. specifically when working with knitted fabrics to decrease the Kaye also supports Poon’s annual Eco-Design Fair that brings potential for fraying and provide a more finished look. international and domestic designers together and helps create As an independent entrepreneur, Kaye not only has control awareness for eco-friendly products and the need for sustainability. over fabric choice, but also which factories produce the pieces, the dyestuff used within the fabric mills, and even how the swimwear Focused growth is packaged and delivered, allowing for 100 percent transparency. Though FINCH holds the title of being the first 100 percent FINCH has only three key team members: Kaye, her partner organic and sustainable women’s swimwear and apparel brand Itee, and an accountant. She feels that it’s important to keep the designed and manufactured in China, creating a quality product company small as this gives everyone the opportunity to stay that serves the community’s needs using an eco-friendly process is involved in critical decisions and to develop the business and the not the only key to her success. products at their own pace. As it nears its 5th anniversary, FINCH’s design aspirations have Connectivity shifted from the local to the global. Kaye regularly attends events and design fairs around the globe and has developed strategic In China, the power of guanxi serves as a key element in both partners in Hong Kong, Singapore, England, Dubai, Ecuador and personal and business relations. Kaye feels relationships and the United States (Los Angeles, Miami and New York) who purvey connections within the community, with customers, and with FINCH products. other entrepreneurs remain essential. More recently, Kaye has focused her outreach on communities Sherry Poon, a mother of three who owns Wobabybasics, has with strong bicycle cultures, such as Amsterdam, where she developed a close relationship with Kaye over the past five years has introduced her line of rain capes. Kaye and FINCH seem to and gets inspiration from her. have found a niche occupied by few others – adding design value “Heather is endlessly inspiring to be around - she emits a and ecological awareness to a relatively ubiquitous though too positive, creative aura that touches everything she is involved with. commonly mundane piece of urban apparel.
MAY 2015 insight 2 5 A BALANCING ACT As China aims to balance growth and build a more predictable business climate this year, some multinationals may face tougher regulations and stark choices
China’s top leaders inside the Great Hall on March 13
St. John Moore is Partner, Gordon Guo is Director and Rachel Morarjee is an Associate at Brunswick, a leading business communications firm that has a global partnership with 23 offices in 14 countries. The firm specializes in communications surrounding the issues critical to business St. John Moore Gordon Guo Rachel Morarjee success.
BY ST. JOHN MOORE, GORDON GUO and RACHEL MORARJEE
ith the dust now settled following the and then everyone gets back to business, but they were wrong. annual gathering of China’s legislature in It’s clear the fight against corruption is here to stay,” one mid-March, it is evident that the executive at a leading multinational told us recently. authorities are continuing policies and For some companies, the ability to move new business directives laid out in previous sessions. projects forward has become more difficult as official decision- But business as usual these days looks radically different than making on critical issues has been stymied by officials’ lower Wit did in the years before Xi Jinping took office in 2012. tolerance for risk. For others, a sharp drop in the number of “When I arrived here two years ago, all my staff told me not grey market requests for payments to expedite business to worry about the crackdown on corruption. They said these operations has made it much easier to do business at a things happen every few years and last for about six months grassroots level. The crackdown on graft is perhaps one of the
26 insight MAY 2015 Xinhua A BALANCING ACT cover story
backhanders at the same time. Having begun streamlining and decentralizing administrative approvals over the last year for Chinese and foreign firms alike, the government is now moving to clarify the regulations for investment approvals, simplifying the process and defining the timeframes. This will help decouple decision-making power from those who control access to resources, as well as pruning individual officials’ power. Such reforms aim to lay out the government’s responsibilities and supervisory powers more clearly, while outlining the areas where business is permitted to operate. They will also clarify the “negative list” of industries subject to heavier regulations, which are likely to include telecoms, the Internet, pharmaceuticals and food. Broadly speaking, the government intends to withdraw from the direct provision of many social services, allowing NGOs to step into the gap. However, foreign NGOs’ operations will likely be subject to far greater control once the new foreign NGO law is passed. Changes to the administrative system, continued equalization of investment policies, and adjustments to the broader operating environment are designed to create a more predictable business environment for all those that operate in China – be they local Chinese firms or foreign investors.
more high-profile examples of China’s effort to reform its Slower growth economy and how it delivers both positives and negatives to companies operating in China. As economic growth stutters, policy makers face an uneasy Premier Li Keqiang’s policy address at the National People’s balancing act: how to deliver sufficient growth to ensure social Congress made it clear that the government is aiming to create stability and push reform, while also easing public distress over a far more systematic and predictable business climate: a “New health, education, food safety and pollution. This delicate Normal.” He also gave an unusually frank assessment of the dynamic can be seen as a national discussion that erupted problems facing China’s economy in his annual policy address imaginechina as he pointed to overcapacity, insufficient innovation and a historically successful growth model which is now faltering. China’s topline growth target was lowered to around 7 percent – its lowest rate in a quarter century. However, authorities are confident they can offset the downturn with policies that encourage entrepreneurship and innovation. Below we highlight some of the key themes laid out in Li’s policy address and subsequent government statements and we look at the pros and cons for foreign companies on the ground in China.
Administrative burden Tech companies that sell computer equipment to Chinese banks could be required to share their source codes with In the last two years, the government has slashed 700 authorities business approval processes, removing channels for
MAY 2015 insight 2 7 imaginechina
Li Hejun, Chairman and CEO of Hanergy Holding Group Limited, addresses the National Committee of the Chinese People's Political Consultative Conference in Beijing on March 9.
entrepreneurialism and innovation. New business start-ups will be supported by improved legal protections for private property and other measures. The other is to increase the provision of public goods such as education and healthcare via Industries to be encouraged include third parties contracted by government procurement. elderly care, clean energy, ICT, Industries to be encouraged include elderly care, clean energy, machine and machine tools and ICT, machine and machine tools and financial services. financial services.” SOE reform
The government must also tread a tightrope by reforming the country’s state sector while remaining in control of one of following the release of the environmental documentary Under the key levers of economic and political power. The role of the the Dome, which garnered 200 million views in the days before state-owned sector is changing, and virtually all provinces have this year’s political gathering, or lianghui as it is often called. published plans for mixed-ownership state enterprises, paving The environment has been a key priority for the current the way for further SOE reform. administration over the last three years and in this year’s However, the current government work report, which lays session the authorities pledged to further reduce emissions of out the vision for policy directives in 2015, tones down the major pollutants and cut energy intensity by 3.1 percent. language of reform and focuses more on a progressive reform Beijing is taking a two-pronged approach to finding new program. Many of the directives are designed to strengthen the sources of economic growth. One prong is encouraging regulation of state owned enterprises, guarding against loss,
28 insight MAY 2015 cover story
Key Take-Aways
• The government is working to reduce red tape and improve access for foreign investment, which could aid approvals in sectors not on the restricted list.
• The “New Normal” is not just the economic environment – it is also the expectations on those that operate in China and includes the anti-corruption crackdown. The Zhou Xiaochuan, President of the People’s Bank of China crackdown is having some beneficial at an NPC press conference in Beijing impact, although it remains unpredictable.
• National interests, as ever, overshadow the reform agenda; foreign companies need to and ensuring performance is maximized. The message is clear demonstrate how their value propositions that while SOE reform remains paramount, the authorities will are aligned with China’s economic and not eliminate the SOE sector via this reform drive, but actually developmental goals. use reform to reinforce the role of the sector as a key pillar of China’s future. • Regulators are getting tougher, and multinational corporations are increasingly Foreign investment vulnerable to high-profile corruption or anti-trust investigations; corporate Li Keqiang committed to halving the number of fields in governance matters more than ever. service and manufacturing industries in which foreign investment is restricted and reducing the thicket of restrictions imaginechina foreign companies have traditionally faced when seeking market access. Prior to the conclusion of the lianghui, the government promulgated the revised catalogue guiding foreign investment which reduces the sectors in which foreign investment is restricted from 79 to 38 and sectors in which it is prohibited from 38 to 36. The authorities also stated that they will work to evolve the catalogue to a “negative list” approach that specifies which sectors are restricted for foreign investors; sectors not mentioned will be considered open. Some areas such as healthcare, new energy, tourism and agribusiness are to be prioritized, but the caveat remains that sectors where Beijing has a clear national interest, such as telecoms and finance, will become very difficult to operate in. Policy contradictions will require careful navigation. On one hand, Beijing still needs – and is actively courting – foreign investment. On the other, policymakers remain keen to build domestic industrial champions. The need for articulating Deputies leave the Great Hall at the closing of a local value proposition – and the complexity of doing so – the Third Session of the 12th National People’s will increase as regulators strip away investment incentives and Congress in Beijing in March try to put foreign investors on a more equal footing with their
MAY 2015 insight 2 9 local rivals. In cases where there is a clear national interest, local players will get preferential treatment. Many sectors, such as Internet and telecom that the government has prioritized as engines of future growth are coming under tighter regulation.
Getting tough
Both domestic and foreign companies are already facing greater scrutiny from regulators and can expect this to continue, but while regulators often get tough with domestic players behind closed doors, foreign companies face a far higher risk that their issues will be brought out in the Chinese media spotlight with implications for global reputation. MNCs may also be vulnerable to high profile public corruption or anti-trust investigations because they present more straightforward targets for regulators looking to send clear signals to the market. Many of the landmark cases that made headlines over the last three years have been significant learning exercises for the investigating authorities involved and in the years ahead companies should anticipate more investigations.
Technology and cyber-security
Highlighting the complexity of the reform agenda is the role of the Internet. Authorities see the Internet as central to promoting innovation and fueling economic growth, but continue to have to balance this with an ideological desire to Premier Li Keqiang manage content. Li mentioned the Internet no less than eight times in his speech, versus twice the previous year. He also scattered Internet and the Internet-related economy. A new strategy his speech with Internet called “Internet Plus” is designed to “integrate the mobile jargon such as “renxing,” Internet, cloud computing, big data and the Internet of things a frequent hashtag on with modern manufacturing, to encourage the healthy social media meaning development of e-commerce” while also encouraging China’s “capricious.” Internet companies to increase their presence in international Having complained markets. In parallel, the authorities will continue to push publically on the convergence to deliver telecom, radio, television, and Internet opening day of the services over a single broadband connection. And to address lianghui that “some speed concerns, the authorities will accelerate the development developing countries of fiber-optic networks and significantly increase broadband have faster Internet speed. In 2014 national Internet backbone access points were speeds than Beijing,” the built in seven more cities and fiber-optic broadband was The government realizes Premier outlined a expanded to more than 30 million additional households. health is a major issue in the number of measures to However, the government is stepping up ideological control country support the country’s and draft legislation on cybersecurity and finance could lead to
30 insight MAY 2015 cover story
President Barack Obama and President Xi Jinping share a toast in Beijing
some tough choices for U.S. tech firms operating here. In September 2014, the China Banking Regulation Commission published a guiding opinion under which 75 percent of technology products used by Chinese banks in 2019 must be considered “secure and controllable.” The rule is part of a series If these plans are passed into law in of expected policies aiming to strengthen cybersecurity in their current form then U.S. sectors where Beijing has a clear national interest. Three months later, a follow-up action plan of the CBRC technology and Internet firms will be asked companies that sell computer equipment to Chinese faced with a stark choice…” banks to turn over secret source code, submit to invasive audits and build back doors into hardware and software. This raises intellectual property and security concerns and, in some cases, violates U.S. export law. If these plans are passed into Legal reforms law in their current form then U.S. technology and Internet firms will be faced with a stark choice between obeying At this year’s NPC, the government continued to give the Chinese law or withdrawing from the market. It remains to be right signals on legal and governance reform. This stems from seen how Beijing’s desire to use e-commerce and the Internet recognition that the stakes for legal reform are very high. As Xi to boost growth, while tightening control over cybersecurity Jinping has noted, “The judicial system is the last line of and ideology play out. defense for social justice and if it fails, people will widely
MAY 2015 insight 3 1 Miao Wei, Minister of the Ministry of Industry and Information Technology at the NPC session.
question (the country’s ability to realize) social justice, and taxes, only three are levied through legislation, including stability will be hard to maintain.” individual income tax, corporate income tax, and vehicle and One key plank of cleaner government is a more transparent vessel tax. The remaining taxes are imposed through formal or and efficient court system. This year’s NPC builds on the theme provisional regulations issued by the State Council. All taxes in of a stronger legal system laid out at the Party’s Fourth Plenum breach of the revised Law are to be compliant by 2020. in October. While the plenum fell far short of Western Meanwhile, a first batch of seven provinces and cities have expectations because it affirmed the Party’s position above the already been nominated for various pilot reforms aimed at law, it remains a potentially significant step toward a more increasing professionalism, accountability and job security predictable rules-based system. Despite the fact that judicial among judges. A second batch is due to be selected this year. reform has failed to move forward in the past following There is, however, a wide gap between the letter and promising statements, we have seen some encouraging steps implementation of the law. It remains to be seen how well the since October. The Supreme People’s Court has set a five-year government’s legal reforms are implemented at a local level. timetable for reforms that will increase the transparency of Nevertheless, because the judiciary has been a large source of trials and create committees at the central and provincial levels public grievance, the government has made genuine progress with the power to punish judges who flout judicial rules. in pure policy terms through a raft of policies designed to The cornerstone of this reform is an amendment to China’s improve transparency and oversight. Legislation Law, adopted at the NPC this year, which expands Among these is a commitment to a three-year review of the power of local legislatures to pass legislation. The revised State Council regulations, after which those deemed lacking in Law grants legislative power to 288 cities in China, a marked legal legitimacy or to be contrary to the public interest will be encrease from the previous 49. The Law also clarifies important amended. Other areas slated for legal reform include science principals related to setting tax. A tax can only be levied and a and technology, advertising, Internet security, food safety, anti- tax rate set if it is endorsed by law. Of the country’s 18 existing terrorism, elections and philanthropy.
32 insight MAY 2015 social media
BY NATALIE LOWE
Look Before You Leap A communications experts says the popular WeChat platform can be a powerful tool for business but only with a thoughtful strategy
Natalie Lowe
ou probably don’t need to hear it billion, so almost half of the Chinese population again, but participating in social is on WeChat. media is becoming even more In response to these trends, a lot of companies critical to business success than are jumping on the WeChat Bandwagon without ever before. Increasingly, more and fully understanding why. more brands are using social media to talk to and First of all, too many brand marketers start Yengage their customers, hoping to enhance their channels without first putting together a customer and brand loyalty. plan on how to make their brand thrive in today’s No doubt, you have heard of WeChat. Even digital landscape. To break it down, before brands though it’s only three years young, it’s already start looking at the executional piece, they need to gotten 600 million subscribers, of which roughly start with the overall picture by asking a few 460 million are active users, with 150 million simple yet fundamental questions: users located outside of China. To put things into • What are my business objectives and perspective, China has a population of 1.369 communication goals and how can I leverage imaginechina
College student Che Yanjiao, 22, left, makes 500,000 yuan ($80,453) a month selling masks on WeChat. She is seen here in Chongqing among her supplies
MAY 2015 insight 3 3 communications (this includes all digital and WeChat accounts, you could be receiving the same traditional communication channels) to help me information three times. As a customer, would you “ reach my business objectives? feel like you’re getting value from the brand? A lot of brands • How will I measure success? Measurement is a So, how can you make WeChat work for your topic that generates a lot of discussion as there isn’t brand, and build a loyal fan base? make the a benchmark as to how campaigns are best • Figure out if WeChat is for you – even though measured. The most common and easiest way for WeChat is the latest craze, don’t just jump on mistake of using most marketers to measure the success of any because everyone else has. As mentioned social media campaign is to put forward quantitative results. above, do a deep exploration of your business For example, number of fans, views per post and so goals and how communications can help you just to forth. But realistically, how do these numbers achieve those. Communications can be an broadcast translate into ROI (return on investments) for a effective and strategic tool when the right level brand? It might be more valuable to measure of planning is done correctly. company qualitative results such as engagement, brand • Understand your brand audience: Your brand awareness, message comprehension, purchase audience could be your most loyal customers, information…” intention and so forth. Of course, the KPIs set for influencers in the industry, media, target your brand will depend on your overall business customers or all of the above. Once you’ve and communication goals. identified your brand audience, define their demographics and consumer behavior: who Secondly, many brand marketers continue to use are they, how do they access and consume WeChat as another mechanism to broadcast news and information, what influences them to choose updates that are being published on digital platforms that your brand over competitors and who do they already exist. So if you were to follow a brand using their listen to? corporate website and subscribe to their Weibo and • Develop great content to build your fan base –
China Digital Landscape Snapshot
Source: We are social, January 2015
34 insight MAY 2015 Content is more than just copy and visuals. Expand your horizons to include multimedia, videos, audio, infographics, animation and so forth. As a result of the ubiquity of information and the accessibility of thousands of digital platforms and sites, brands need to cut through the noise and present content that is digestible and easy to comprehend in a matter of seconds. WeChat is a permission-based application, so in order to get a strong following, you need to develop content that is compelling and sticks in people’s minds, encouraging them to share with their own network and community. To put it simply: think of WeChat as a connection platform that facilitates a relationship. You want to grow and build on it, define what type of relationship you want, and what will enhance the loyalty of all parties involved. For example, PwC is committed to diversity
MAY 2015 insight 3 5
COSTA and inclusion, which are important pillars of PWC’s corporate culture and strategic priorities for the growth of the organization. “We recognize the value that diversity brings to PwC and we celebrate that richness in our work force and clients,” said Connie Lau, PwC Diversity and Inclusion Manager. “We believe diverse talent and teams working together make better decisions and deliver more robust outcomes. Everyone wins.” To reinforce that message, PwC, in support of understanding of your audience and to identify a International Women’s Day, launched a two- shared belief and value system from which to pronged approach to demonstrate their active build the relationship.” support of diversity to their brand audience, Let’s take a look at how Kongming works with which includes professional women, graduates Costa. Both are aligned in the sense that they and university students. On March 5, 2015, as a agree product content should not dominate the lead-up to International Women’s Day, PWC content mix of their WeChat channels. Instead, launched their “The Female Millennial: A New Kongming and Costa dug deeper into their Era of Talent Thought Leadership” piece, which audience and learned that they are interested in was published globally. On March 8, 2015, PwC British lifestyle and coffee culture. Kongming also produced a video message by Zhou Xing, PwC’s continued to monitor what types of content China and Hong Kong Diversity Leader, that went resonates most strongly with the audience and out on PwC’s WeChat and Weibo channels, uses this information to inform future content attracting more than 15,000 views and 400 planning. forwards and favorites on WeChat and 27, 000 “We also look at fun and engaging ways to reads on Weibo. The same message was internally have the consumer help co-create with us and circulated to employees to demonstrate the firm’s share their stories,” said Voon. “Most recently, we appreciation for its people. (Note: PwC measures helped Costa launch a DIY stencil interactive the success of their posts based on 10 percent of experience that allows consumers to create their their overall fan base) own latte art on WeChat.” • Engage, not broadcast – A lot of brands make WeChat is becoming the preferred social the mistake of using social media just to media network in China. However before broadcast company information. Social media jumping on the bandwagon, brands need to is much more personalized than conventional strategically build out their digital ecosystem and media platforms. The use of WeChat permits assess whether WeChat will be a part of it, and brands to build stronger one-on-one how to best leverage this channel to enhance relationships with customers, which means stronger one-to-one relationships with their messages need to be personalized and appeal brand audience. to one’s emotions rather than shouting out their own corporate mission statement. “Traditionally, Chinese consumers have had a Lowe is Managing Director of COMM&D (pro- transactional relationship with brands based on nounced “command”), an independent branding products and offers,” said Charles Voon, General and communications agency based in Shanghai. Manager of Kongming, a social marketing and Lowe advises leading foreign and local brands e-commerce agency based in Shanghai. across B2B and B2C sectors. Lowe is also co-chair “Emotion-based and service-based relationships of AmCham Shanghai’s Marketing & Media Com- with consumers require you to acquire a deeper mittee.
MAY 2015 insight 3 7 Celebrating 100 Years
Anne Walter Fearn: Pioneer of Shanghai’s American Community
Anne Walter Fearn
nne Walter Fearn was a well- for foreign visitors to China. Fearn loved known physician, hostess, and Shanghai and was truly a founding member of activist – and a beloved figure in the American community here, serving both as Shanghai – for 30 years at the president of the American Women’s Club and start of the 20th century. She was helping to establish the Shanghai American also an entrepreneur, having founded the Fearn School in 1912. ASanatorium, a private hospital, in 1916 (shortly Fearn was born Anne Walter in Holly Springs, after AmCham Shanghai got its start). As a Mississippi in 1865. She had nine siblings but physician, Fearn delivered over 6,000 babies lost her father, a prominent lawyer, and three during her time in China and pioneered a older brothers during an epidemic of yellow coeducational medical school for Chinese fever in 1878. In the summer of 1889, Fearn met students. She was also a socially skilled southern several women doctors, who sparked her own belle, often hosting dinner parties and concerts interest in medical studies. In those days, career
38 insight MAY 2015 Anne Walter Fearn The Fearn Sanatorium in 1916 on today’s Fenyang Road
women – and women physicians in particular – a children’s ward at the mission hospital, and in were rare in the American South. Her mother 1895 started a pioneering coeducational medical was strongly against the idea of Fearn pursuing a school for Chinese students. career, and even threatened to disown her. In 1896, Anne Walter married John Burrus Fearn’s persistence and passion, however, Fearn, a fellow medical missionary from eventually won over her mother. Mississippi who was in charge of the men’s After graduating from the Women’s Medical hospital in Suzhou. When John Fearn resigned College of Pennsylvania in Philadelphia in 1893, his post in 1907, the couple returned to the Fearn traveled to Suzhou as a temporary United States. They loved China too much to substitute for a medical school classmate who stay away, though, and returned just a year later was a medical missionary. Although never a in 1908, this time settling in Shanghai to practice church member herself, Dr. Fearn agreed to take medicine. on the position as an employee of the Women’s Fearn established her own hospital for Board of Foreign Missions of the Methodist private patients, the Fearn Sanatorium, which Episcopal Church. she operated from 1916 until the death of her As happens with so many expats, the husband – himself director of the Shanghai temporary position that brought Fearn to China General Hospital – in 1926. She remained in turned into 14 years of work in Suzhou. In her Shanghai, where she was active in fundraising 1939 memoir, My Days of Strength, she wrote “I for the Shanghai American School and worked started in a whirlwind of energy to open a closely with Finance Minister H. H. Kung in hospital, establish some sort of system, clean up the National Child Welfare Association of the building, the compound, the servants, the China. patients and the houses of the patients. I even After her retirement in 1938, Fearn returned had a few nebulous notions about cleaning up to Berkeley, California to write her the city. My endeavors along these lines created autobiography, My Days of Strength. Fearn died considerable amusement among the Chinese, on April 28, 1939, only two weeks after the book who immediately gave me the nickname Tai was published. Her ashes were sent to Shanghai Foong (Typhoon).” During this period, Fearn for interment in Bubbling Well Road Cemetery, performed operations, delivered babies, opened which is now Jingan Park.
MAY 2015 insight 3 9 inside amcham from the chairman We’re in Good Shape
Ken Jarrett and I receive are always warm and Chinese leaders make strong points about why their respective areas are fertile ground for U.S. corporate interests and investments. Another positive note came in April as AmCham Shanghai hosted a reception in Pudong for Secretary of Commerce Penny Pritzker, Ambassador Max Baucus and Deputy Secretary of Energy, Dr. Elizabeth Sherwood-Randall. They were in China to lead a delegation of U.S. business leaders in a follow up to Presidents Xi and Obama’s signing of a clean energy agreement at the APEC meetings in Beijing late last year. The focus of their trip was clean and smart cities in China. Secretary Pritzker gave a rousingly energetic happy 100th birthday greeting where she said: “The AmCham here in Shanghai is the number one partner for the Foreign Commercial Service of the Department of Commerce. And that partnership has existed now for 35 years. So we’ve got a lot of history together.” She did not have to say those words, and I am certain she was sincere as AmCham Shanghai continues to build strong and well-coordinated relations with her department and with Consul General Smith’s talented team. Further evidence of the importance of business in Asia came in April, as Congress signaled it was willing to give the Robert Theleen President fast track authority to negotiate the Trans Pacific Chair of the Board of Governors Partnership (TPP) with a dozen countries. This should also provide momentum to the ongoing negotiations with China to complete a Bilateral Investment Treaty. It is a reflection of a he news in international business this past month common-sense approach to international trade and investment has been volatile – talk of a Greek exit from the that our polarized congressional leaders came together to pass E.U., a white-hot China stock market boom and this important legislation. disappointing numbers for the U.S. economy. I believe that our original founding members of AmCham ThereT is also the very annoying talk from some in the Western would smile to see, 100 years later, what the American business media of growing tensions between the U.S. and China. Putting community has accomplished in the year 2015. aside, for a moment, disputes on cyber-security and technology For those of you who attended our historical 100th anniversary restrictions for U.S. companies, my bellwether for Sino- gala last month, I thank you for your support. A special thanks American relations lies in the overall success of our business to both GM, who contributed a new Cadillac, and American community. From that point of view, U.S. interests are in Airlines, who, again, donated a pair of first-class round-trip reasonably good shape. tickets to the U.S. You will have another opportunity to celebrate As AmCham Shanghai continues to expand in the Yangtze with us at the Fall Government Appreciation Dinner. Thank you, River Delta, I have made it a point to visit both governors and Ken Jarrett, and the remarkable AmCham Shanghai team for mayors of Jiangsu and Zhejiang provinces. The receptions that organizing our great Centennial Ball this year.
40 insight may 2015 inside amcham
BOARD of governors briefing Board Gets Latest on Charity Ball, 2016 Board Elections, and 100th Anniversary Plans Highlights from the April 2015 Board of Governors Meeting
Charity Ball Review and the next event will be a “Global CEO” talk co-hosted by the President Kenneth Jarrett reported that the Charity Ball held on British Chamber, which is also celebrating their 100th anniversary April 11 was a success and that an estimated RMB750,000 was this year. There will also be a special members briefing to raised for the designated charity organizations and scholarship commemorate the actual founding of AmCham on June 9. The fund. Jarrett said a car donation from GM, efforts to control Chamber hopes to hold this event at the Swatch Peace Hotel costs, corporate sponsorships and even the raffle contributed to which is the actual venue where AmCham Shanghai was founded. the positive outcome. AmCham Shanghai Chair Robert Theleen congratulated the Chamber staff on the Charity Ball and reported Doorknock that he received positive feedback. Jarrett reminded Board members of September’s Doorknock visit to Washington on September 8-10. This will be right before NEC Chair Election President Xi’s trip to the United States and the level of interest in The Board elected current Chairman Robert Theleen as the China will be very high. Chairman of the Nominations Election Committee (NEC), which will soon begin its work in preparation for the next election of the Meeting Attendance Board of Governors. The Chair of the NEC can be a past Chair of Present: Jimmy Chen (via phone), Ker Gibbs, Cecilia Ho, the Board, a current board member who will not be continuing Curtis Hutchins, Aina Konold, Ning Lei, Robert Theleen (Chair), as a board member next year or a Committee Chair. The NEC Glen Walter (via phone), Helen Yang, Shirley Zhao generally has five members altogether. Apologies: William Duff, Jun Ge, Cameron Werker Attendees: Veomayoury Baccam, Ken Jarrett (President), Li Qiang, 100th Anniversary Update Helen Ren, Scott Williams, Jessica Wu The Chamber continues to make plans for the 100th Anniversary
The AmCham Shanghai 2015 Board of Governors
Chairman Governors
Cecilia Ho Jimmy Chen Jun Ge International FedEx Express Apple Paper Asia
Robert Theleen ChinaVest
Vice Chairman Curtis Hutchins Eaton (China) Aina E. Konold Ning Lei Investments GAP Inc. Navistar
Helen Ching- Ker Gibbs Glen Walter Hsien Yang Shirley Zhao BW Ventures Coca-Cola DuPont Allergan AmCham Shanghai Month in Pictures
Secretary of Commerce Penny Pritzker and Ambassador Max Baucus in Pudong Ambassador Max Baucus addresses the crowd
Industrial Park Series Navigating the New Normal event
Signing ceremony with AmCham President Kenneth Jarrett and German Chamber of Commerce Executive Director Simone Pohl Training session
42 insight may 2015 AmCham Shanghai Month in Pictures
CSR workshop
CSR Innovation event Shanghai government briefing
Monthly Member Briefing
may 2015 insight 4 3 44 insight may 2015 Government Relations
USITO Official Discusses Foreign Investment Continues to Pick up Security Issues Gu Jun, the Deputy Director General of the Shanghai Municipal Commission of Commerce, spoke to AmCham Shanghai members on April 8.
Deputy Director Gu painted a rosy picture of foreign investment in Shanghai, noting that investment in the city is shifting away from manufacturing to the service industry. He added that Shanghai provided an excellent atmosphere for foreign investors and that the city was seeking more investment in the high-tech and high-value manufacturing sectors.
During the question and answer period, Deputy Director Gu tried to alleviate concerns about State Council Circular 62 which would eliminate the incentives that local governments use to attract foreign investment. He said that the purpose of the regulations was to create an even playing field for both domestic and foreign companies. In the short term, the circular could cause some stress for companies, but in the long USITO Managing Director Matt Roberts term it should lead to a more stable investment climate.
While China has grown to become the world’s largest A number of new Chinese regulations designed to protect investment destination, Shanghai, which aims to become an national security are creating potential market access barriers international financial and shipping center, saw a structural shift for foreign information communications technology (ICT) from manufacturing to the service industry. As shown in the companies. data provided by Deputy Director Gu, 90.2 percent of paid-in foreign capital in 2014 was invested in the service sector in Members of AmCham Shanghai were treated to an Shanghai. Meanwhile, foreign investment in manufacturing informative talk from United States Information Technology continues to decline, reflecting an accelerating industrial Office (USITO) Managing Director Matt Roberts on April 9 adjustment in the city. concerning this topical issue. The Shanghai Free Trade Zone (FTZ) and the newly released Roberts discussed the recent security regulations, implications Foreign Investment Catalogue also play a positive role in for businesses, and also went into some depth on the United promoting greater economic reform. These initiatives are States Cyber Security Framework promoted by the US helping to open more areas for foreign investors especially in National Institute of Standards and Technology (NIST). the finance, logistics, senior care and other sectors.
Roberts discussed the evolution of China’s cyber security policies over the last ten years, including the recent elevation by the State Council and other central government agencies of cyber security to the highest level of priority with the establishment in early 2014 of the Cyberspace Administration of China. He also discussed recent cyber security policies promulgated by the China Banking Regulatory Commission.
Roberts emphasized that ICT is a global industry. Discrimination against foreign providers of ICT products, solutions and services for commercial use would not only hurt operations of foreign companies in China, it would also likely Gu Jun, Deputy Director General of the Shanghai limit Chinese businesses’ access to the best and most secure Municipal Commission of Commerce technologies available.
MAY 2015 insight 4 5 inside amchamEvent highlights
State Council Releases 2015 FTZ Negative List ima g inechina
A store in Shanghai Free Trade Zone
China’s State Council released the 2015 Free Trade Zone Alongside the April 20th release of the negative list were two negative list on April 20 along with other updates regarding updates regarding Foreign Invested Enterprises (FIE). The State Foreign Invested Enterprises (FIE). This year, the special Council released national security trial measures for FIEs in the administrative measures on the negative list total 122 items, FTZ. This release lays out the procedures and mechanisms for down from 139 items in 2014 and 190 items in the original FIEs subjected to a security review. MOFCOM also issued a 2013 list. series of administrative measures regarding how FIEs in the FTZ interact with the government. AmCham Shanghai is still reviewing This further reduction in the list is welcome but the significance both measures to evaluate their impact. of the changes has more to do with the qualitative nature of the changes and less with the actual number on the list. AmCham The Shanghai FTZ was established on September 29, 2013 as a Shanghai is still assessing the significance of the specific changes. pilot project to promote further economic reform and opening This year’s negative list applies not only to Shanghai’s FTZ, but up, with a special emphasis on trade facilitation, financial sector also to the other three free trade zones in Guangdong, Tianjin liberalization and opening of professional services. Over 10,500 and Fujian. The inclusion of these zones on the negative list may companies have registered in the FTZ, including approximately indicate a more “unified” approach towards policy in the four 120 U.S. companies. Although the pace of reforms in the zones. Shanghai FTZ has been slow, it continues to be used by the central government as an experimental zone to test new reforms before they are extended to the rest of the country.
46 insight may 2015 Event highlightsinside amcham
U.S. Commerce Secretary Helps Chamber Celebrate 100 Years
AmCham Shanghai hosted a reception to commemorate the AmCham Shanghai as a valuable partner in its mission. Chamber’s 100th Anniversary and honor the Smart Cities-Smart Sherwood-Randall wished American companies a bright future Growth Business Development Mission at the Grand Hyatt both in English and Chinese, a remark appropriately suited for Pudong on April 15. The 200 person reception featured toasts those in attendance. from the U.S. Secretary of Commerce, Penny Pritzker, the U.S. Deputy Secretary of Energy, Elizabeth Sherwood-Randall, and the Ambassador Baucus noted the importance of the business U.S. Ambassador to China, Max Baucus. delegation and its goal of promoting ties between U.S. and Chinese energy companies. He congratulated AmCham Shanghai Pritzker and Sherwood-Randall are in China leading a large on its 100th Anniversary and thanked AmCham Shanghai for business delegation called the “Smart Cities-Smart Growth being a good partner with the U.S. Government in promoting Business Development Mission.” The focus of the mission is to the U.S.-China business relationship. AmCham Chairman Robert promote U.S. clean energy exports to China. In addition to Theleen attended and also emphasized AmCham Shanghai’s long Pritzker and Sherwood-Randall, the delegation includes senior presence and positive influence in China. executives from 24 U.S. companies, many of whom were at the reception. In addition to members of the business mission, the reception also included Chinese government officials, high-ranking In her toast, Secretary Pritzker said that over the past 100 years representatives of Chinese steel and energy companies and AmCham Shanghai has served as a crucial resource for U.S. prominent AmCham Shanghai members. business in China and that the Department of Commerce views
U.S. Secretary of Commerce Penny Pritzker
MAY 2015 insight 4 7 inside amchamEvent highlights
AmCham Renews Partnership with German Chamber
AmCham Shanghai announced a renewal of its one year partnership with The German Chamber of Commerce in Shanghai (GCC) to jointly leverage the resources of both Chambers to better provide all members with business and social events in Jiangsu and Zhejiang.
The two parties renewed an official partnership agreement in a ceremony at the AmCham Shanghai offices on April 2, 2015, with the goal of expanding and developing AmCham President Kenneth Jarrett and GCC Executive Director membership engagement of both Chambers, as well as initiating collaboration on joint events in Changzhou and Simone Pohl renew partnership Wuxi, Jiangsu and Hangzhou, Zhejiang.
Presiding at the signing ceremony were AmCham Shanghai President Kenneth Jarrett and Simone Pohl, GCC Executive Director and Delegate of the German Industry and Commerce in Shanghai (AHK). Jarrett and Pohl were joined by Jonathan Shyu, Manager of AmCham Shanghai’s Yangtze River Delta Center and Ulf Schneider, Regional Manager Jiangsu and Zhejiang, German Chamber of Commerce in Shanghai.
Consul General Updates Chamber Members
Hanscom Smith, Consul General at the United States Consulate in Shanghai, spoke to AmCham members at the Monthly Member Briefing on April 7. During the event, Smith discussed current events and political and economic trends that have the potential to impact businesses in China. Consul General Hanscom Smith briefed Smith began by addressing speculation about what effect, if any, the recent members on political and economic trends negotiations with Iran are likely to have on the current sanctions regime, as well as possible implications of the talks for American businesses. Smith stressed that U.S companies considering doing business with Iran should keep in mind that sanctions are likely to remain in place for the foreseeable future despite the talks, and that current sanction relief remains limited and applies only to a small number of specific industries.
Smith also discussed the Asian Infrastructure Investment Bank (AIIB). He said that the U.S. hopes that the organization will be able to work effectively with existing multilateral financial institutions in the future. Smith also mentioned the effect that extended visa validity for Chinese and American citizens has had on wait times, and urged members interested in obtaining visas to apply as early as possible, since wait times are likely to increase as summer approaches. He emphasized that, to be safe, members should allow two weeks for visa processing during the summer months.
After the conclusion of his remarks, the Consul General also fielded questions from members about a variety of topics, including several questions about the AIIB, as well as queries related to visa issues, President Xi’s planned visit to the U.S. and recent Chinese internet restrictions. Members were particularly interested in what can be done about the slow speed of foreign websites within China.
For more information on AmCham Shanghai’s 23 industry-specific committees, please contact [email protected].
48 insight may 2015 Committee highlightsinside amcham
CSR Panel Debate Future of Urban Development
Xiong Jian addresses the audience
What will Shanghai and other Chinese mega-cities look like in the year undeveloped land will cease, and Shanghai will begin to find new ways 2040? to make the best possible use of existing land resources.
Participants in the first installment of the new AmCham Shanghai CSR The third strategy, “care,” involves efforts to enhance city residents’ Innovation Series, Smart City Urbanization, took a stab at answering sense of belonging by constructing a network of green space and this question at an event hosted on March 31. The event provided an protecting historical culture. It also includes plans to create a opportunity to explore the Shanghai government’s plans for future convenient distribution of resources and services within the city so sustainable urban development and learn how businesses can help in that residents will be able to find most things they need on a daily the process. basis within a 15 minute radius.
The event featured three speakers: Xiong Jian, Director of the Overall Jian emphasized that when drawing up plans for future urban Planning Department of the Shanghai Municipal Planning, Land and development, it is important to consider not only the expectations of Resources Administration, Roger Qian, Director of Sustainability and the central and local government, but also the views of ordinary Development Management, Land Lease and Davis Wang, General citizens of Shanghai. To this end, the government is using surveys and a Manager at Uber. WeChat platform to help encourage public participation in the planning process. Xiong began the event by outlining the government’s ambitious vision for Shanghai’s sustainable future, which she said has been influenced by Jian’s speech was followed by two speakers offering concrete concepts like sustainable development and by urban planning projects examples of what companies can do to put urban sustainability into in major cities like New York and Chicago. practice.
In order to achieve the government’s goals for Shanghai, which include Qian examined strategies for urban regeneration using specific a shift to a more human-oriented model of development, Jian outlined examples of projects in Australia and China, and discussed how things three strategies, which she termed “opening up,” “green” and “care.” like parking and rain management can be managed in a more efficient, sustainable way. “Opening up” emphasizes the importance of enhancing innovation- driven development in Shanghai in hopes of making the city a future Wang offered his vision for the future of the Chinese branch of center for innovation. Uber, a company which uses apps to connect riders to drivers. Services like Uber can help to reduce emissions and urban “Green” refers to finding ways to protect the environment and make congestion by cutting down on the number of cars on the road. The rational use of existing space. As part of its “green” strategy, Shanghai big data on Uber’s digital platform allows the company to collect hopes to implement a strategy of zero land development. Starting in information on traffic patterns and can help city planners in 2020, urban expansion into agricultural and other previously improving traffic conditions.
MAY 2015 insight 4 9 EXECUTIVE MEDIA ROOM
This month, executives tell us about their favorite social media platform and how they use it.
Luke Lu, President, Axalta Coating Systems Remarks: “I use WeChat in China and WhatsApp for outside of China. Platform: WeChat The reason is that I use whatever my friends use. In China, WeChat is Remarks: “WeChat connects people in an easy way. Every day I use it for social and business purposes and also a platform for staff internal to talk to my colleagues and friends, sometimes a group of colleagues communication. It is a convenient and powerful social media tool and friends – for free. We have a corporate WeChat to share our though sometimes can be too time consuming to respond.” corporate news. And if necessary, everybody can help to spread a great piece of corporate news so news sharing can be very fast. I also use Sandy Soong, Director, Sales and Marketing, East China, Ascott China WeChat to talk to my two college kids who are studying in the States. Platform: Facebook and WeChat Using the voice chat and video chat functions, I can hear their voice Remarks: “While Facebook is inaccessible in China, I also use and see their faces so easily.” WeChat and connects me to all of my colleagues and friends locally. WeChat is becoming more advanced now as it has an official site with membership features. Its voice message function is awesome which allows less tech savvy users to still enjoy social media – a big help to connect family.”
Esther Molina, Senior Account Director, GHC Asia Plaform: WeChat Remarks: “It is very user friendly and I use it for work and personal communication. For work, it’s a great tool for group chats when working on a project or just sharing information with people across different groups. On the personal side, it’s a good tool to share with friends on Moments any recommendations and happenings in town. It is very handy having all these options on one app. I don’t use the payment and e-commerce parts due to the language barrier.”
Rao Talasila, Director, Asia Renaissance Partners Platform: WeChat Remarks: “I see WeChat as the perfect ‘Swiss-knife’ of communications in China. It is simple, user friendly, and provides a quick way to Li Ting Wei, SVP of Sales and President, Greater China, Broadcom communicate with your social circle. I am starting to see the platform Corporation develop handy features such as making a request for Kuaidi pickup, and Platform: WeChat ordering a taxi.” Remarks: “I used to log in to quite a few social media platforms every day to stay connected with my family, friends, colleagues and even Bei (Helen) Pei, Head, Asia Pacific Communications/Government business partners. Now, we only use WeChat. It even allows people to Relations, Ashland (China) Holdings Co. send red-envelopes during the Chinese Spring Festival.” Platform: WeChat Remarks: “I have tried to resist WeChat but failed as all my good Agnes Hsia, President, Achieve Wise Management Consulting friends are using it. The beauty of WeChat is its flexibility. You can Company choose to dialogue with only your closest friends, your coworkers or Platform: WeChat and WhatsApp even your customers.”
50 insight may 2015
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