Insight Magazine July-August 2012

The Journal of the American Chamber of Commerce in Shanghai July/August 2012

INSIGHT JULY/AUGUST 2012

The Journal of the American Chamber of Commerce in Shanghai

amcham shanghai President

Brenda Foster Directors Business Development & Marketing

Karen Yuen

F eat u res

12 Working in Shanghai

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Profiles

Meet an executive at Goodyear, an architect from New York and an advertising professional from JWT – part of a special feature on workers in the city.

Committees

Stefanie Myers insight editor-in-chief/ Communications & Publications

David Basmajian Events

Jessica Wu Finance & Administration

Helen Ren

Membership & CVP

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22 China’s Consumer Market CONSUMERS

By Ryan Balis What are MNCs and domestic companies doing to capture the ever-changing, ever-maturing Chinese consumer market?

Linda X. Wang

INSIGHT managing editor

Bryan Virasami

senior communications associate

Ryan Balis Design

26 Game On!

By Susie Gordon The NFL and PGA are getting help from some celebrity Chinese athletes as they work to win over fans in the China market. Plus: Yao Ming the Businessman.

Layout & Printing

Mickey Zhou Snap Printing, Inc.

INSIGHT Sponsorship Sophia Chen

(86-21) 6279-7119 ext. 5667 Story ideas, questions or comments on Insight: Please contact David Basmajian (86-21) 6279-7119 ext. 8066 david.basmajian@amcham-shanghai.org Insight is a free monthly publication for the 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, officers, members or staff of the Chamber. No part of this publication may be reproduced without written consent of the copyright holder.

36 Buy, Sell or Hold?

INTERVIEW

By Ryan Balis

K.K. Fung of Jones Lang LaSalle talks to Insight about the latest real estate trends.

I nsight standards

5 News Briefs

24 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

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COVER STORY

Alicia Beebe

sponsorship manager

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Esther Young

Courtesy NFL China

Senior Associate Editor

11 Movers & Shakers

Manager’s Notebook

Culture of Change

50 Summer Reading List

EXECUTIVE READING ROOM

I N S I D E A m C ham

40 From the Chair 41 Board of Governors Meeting 44 AmCham Shanghai in Pictures 49 Committee Highlights cover design by Tian Chi

Editor's note

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David Basmajian editor-in-chief/ Director Communications & Publications

hat China’s consumer market is growing is no news to anyone who has taken a stroll down Nanjing Xi Lu, a shopper’s paradise if there ever was one. But a key finding from a report released in June by AmCham Shanghai and Booz & Company indicates that Chinese consumers, especially those in Tier 1 and 2 cities, are beginning to behave more and more like consumers in the U.S. and other developed economies. Beyond the well publicized demand among China’s rich for Louis Vuitton bags, Cartier watches and Gucci sunglasses, the report highlights an increasing interest among Chinese consumers in more mainstream foreign brands. So it should be no surprise that iconic American sports brands such as the NFL and the PGA are trying to make inroads into the China market.

Their objective is to turn Chinese sports fans, currently devoted to badminton, ping pong and football (the round ball version, not the olive ball one), into devoted watchers of the Super Bowl, the Pittsburg Steelers, the Masters and Tiger Woods. Is it working? Read this month’s cover story to find out and learn about Ed Wang and Feng Shanshan who, if all goes as planned, will soon be household names

in China.

Sex sells in China, but only with Chinese characteristics. This according to JWT Art Director Lv Haoxi, who leads off a new Insight series titled Workers in Shanghai that puts the spotlight on ordinary people with extraordinary jobs who help make Shanghai tick, people just like you. David Riedel, an American architect from Providence, RI tells us how he was inspired by the Plaza 66 building to pursue his profession and about his unique experience designing buildings in one of the world’s fastest growing cities. And finally, we talk to Wendy Radtke, the vice president of HR who said “no” to doing shout-outs at birthday parties and had to ruffle a few other feathers to elevate HR to a strategic role it deserves within her company.

While summer in Shanghai does not always include kicking back on a white sand beach and losing yourself in a novel, we here at Insight hope you have a few spare moments to peruse the reading list of top executives who live and work in Shanghai. Turn to page 50 for their recommendations.

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News

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CHINA BUSINESS

Swiss watch appetite exploding Statistics from the Federation of the Swiss Watch Industry show China received nearly 30% of all Swiss watch exports last year. In 2011, shoppers in mainland China and in Hong Kong purchased US$5.9 billion worth of Swiss watches. Mainland China ranks third by number of Swiss watches shipped behind first-place Hong Kong and the U.S. Growing appetite for Swiss watches among Chinese shoppers was attributed to increasing purchasing power. Chinese shoppers and travelers are projected to buy more than 200,000 high-end watches worldwide this year, which are the top luxury item in China.

The average price of each imported high-end watch reached US$6,812 in 2011, up 205% since 2007.

Urban wages growing by double digits Data from China’s National Bureau of Statistics show average wages of Chinese urban workers reached RMB42,452 (US$6,717) per year in 2011, increasing 14% year-on-year or 8.5% in inflation adjusted terms. Urban Chinese workers at private businesses earned an average annual salary of RMB24,556 (US$3,885) compared to RMB42,452 among workers in nonprivate firms, up 18% and 14% yearon-year, respectively. Urban workers in finance, telecommunications, computer services and software development enjoy the highest salaries, according to the Bureau. The data are complied from a survey of nearly 1.5 million nonprivate firms and 620,000 private firms.

A Bureau representative attributed the increase to strong economic growth and

Angry Birds descend on China Rovio Entertainment Ltd., the Finnish maker of the hugely popular Angry Birds game, will build several activity parks and retail stores in China over the next year. Shanghai will be home to the first retail outlet, which will open in July 2012.

Another outlet will be opened soon thereafter in Beijing with plans for stores in 100 Chinese cities over the next year.

Rovio will also build an Angry Birds Activity Park in the SinoFinnish Centre at Tongji University and in Haining, Zhejiang province. “Instead of building one massive amusement park, we’re planning to build hundreds, maybe even thousands of activity parks here in China,” Peter Vesterbacka, Rovio cofounder and chief marketing officer, is quoted as saying.

“We’re looking at the amazing stories in Chinese history as themes for our parks.”

Chinese consumers have downloaded Angry Birds 40 million times, helping China become the second largest market for Rovio behind the U.S. In June, Rovio opened its first foreign office in Shanghai.

minimum wage hikes, the latter of which two-thirds of provincial governments increased an average of 22% in 2011.

Foxconn to build Apple plant in Jiangsu Authorities in east China’s Jiangsu

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province announced the Foxconn Technology Group will build a new Jiangsu-based plant exclusively to produce components for Apple, Inc. products. When construction begins in October 2012, the US$210 million plant in Huai’an city, Jiangsu will cover an area of 40,000 square meters. Taiwan-based

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Foxconn is expected to employ 35,800 employees at the plant and achieve an annual output value of up to RMB7 billion (US$1.1 billion). The products produced at the facility will hold an estimated trade value of US$55.8 million. Foxconn is the major manufacturer in China of popular Apple electronics.

Baosteel gets nod on $11 b. project State-owned Baosteel Group received the approval of China’s National Development and Reform Commission (NDRC) to build a RMB69.7 billion (US$11 billion) steel project in Guangdong province, as China moves to stimulate growth amid a slowing national economy. Preliminary construction on the 10 million ton per year steel facility at Zhanjiang Port began in 2008. Along with receiving the goahead, Baosteel agreed to phase out 16.1 million tons of outdated steel capacity in Guangdong province before the Zhanjiang project is complete. In 2011, Baosteel produced 43.3 million tons of crude steel, or roughly 6% of the 683 million tons produced nationwide.

CORPORATE NEWS

Burger King plans 1,000 restaurant expansion in China Burger King Worldwide Holdings, Inc. has formed a joint venture to open 1,000 restaurants in China over the next 5–7 years, marking the U.S. fast food chain’s largest ever expansion. The agreement gives joint venture partners Cartesian Capital Group LLC, a New York-based private-equity firm, and members of Turkey’s Kurdoglu family, a Burger King master franchisee, exclusive rights to expand the chain in China. Burger King operates 63 restaurants in China compared to competitor McDonald’s Corp.’s 1,400. As the world’s second largest hamburger chain, Miami, Florida-based Burger King operates more than 12,500 restaurants worldwide.

GE launches first China Innovation Center General Electric Co. (GE) opened the company’s first functional China Innovation Center (CIC) in Chengdu, capital of Sichuan province in southwest China. GE is investing US$80 million in the project, which includes 33,500 square meters of office space in the Chengdu High-Tech Industrial Development Zone (CDHT), more than 30 laboratories and a staff of more than 500. The center will localize its operations and focus, featuring research and development (R&D) and marketing functions. An emphasis will be placed on bringing together consumers and engineers to find local market solutions targeting the local healthcare industry, shale gas drilling technology, industrial automation and green energy.

Dow Chemical to build Zhejiang plant Dow Chemical Co. announced it will build a new water treatment plant in Huzhou, Zhejiang province without providing an investment figure, as the Midland, MI-based company looks to exploit growth opportunities in China’s water treatment market. The new plant will be capable of treating portable, nonportable and industrial water, using advanced technology. Dow’s move is timely considering China will enact tougher drinking water standards in July 2012. “Stricter standards will for sure create more business opportunities,” Wang Xiaolan, Asia-Pacific commercial director of Dow Water & Process Solutions, is quoted as saying. The plant is scheduled to come online in 2013. Dow also operates an ultra-filtration manufacturing site in Huzhou.

Shanghai GM building Wuhan facility Shanghai GM announced construction began on a new RMB7 billion manufacturing facility in Wuhan, Hubei province, as the venture between General Motors Co. (GM)

and SAIC Motor aims to better reach a growing customer base in central China.

When production begins in 2014, the facility will be capable of producing a total of 300,000 small- and medium-size passenger cars, SUVs and new energy vehicles. Covering an area of 2.32 square kilometers, the facility is in addition to existing manufacturing bases in Shanghai, as well as a facility in Yantai, Shandong province through Shanghai GM Dong Yue Motors and Shanghai GM Dong Yue Automotive Powertrain and a fourth facility in Shenyang, Liaoning province through Shanghai GM (Shenyang) Norsom Motors.

MACROECONOMICS

Record trade value in May Data from China’s General Administration of Customs show China achieved a new trade value record in May, reaching a combined monthly export and import value of US$343.5 billion. The country recorded stronger export and import growth in May with the data showing that exports increased to US$181.1 billion in May, up 15% year-on-year. Similarly, imports increased 13% year-on-year to US$162.4 billion in May. The monthly trade surplus remained relatively unchanged in May, increasingly slightly to US$18.7 billion from US$18.4 billion the previous month.

Analysts point out that China’s exports could decrease in the months ahead on economic concerns in Europe. China’s trade value over the first five months of the year increased 8% to US$1.51 trillion with a surplus of US$37.9 billion.

Manufacturing activity slows Data from China’s official Purchasing Managers’ Index show the country recorded its weakest month of manufacturing activity in six months, reflecting a slowdown in China’s national economy. The manufacturing reading decreased to 50.4 in May, down from a 13-month high of 53.3 achieved in April.

A reading over 50 suggests an expansion of manufacturing activity, while a reading below 50 signals a contraction. By contrast,

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the HSBC China Services Purchasing Managers Index (PMI) expanded to 54.7 in May, up from 54.1 in April and increasing at its fastest clip in 19 months.

Inflation eases to 3% China’s Consumer Price Index (CPI) fell to 3% in May, according to the National Bureau of Statistics. The reading marks a 17-month low, continuing an easing trend over the previous two months with the CPI recording a 3.4% increase in April and 3.6% in March. Food prices, which make up roughly a third of the index, slowed to a 6.4% increase in May, down from 7% in April. Analysts anticipate China’s inflation will continue to decrease through the end of 2012. The CPI is estimated to fall to 2.9% in 2012, down from 5.4% in 2011 and within the government’s target of 4% for this year.

U.S.-CHINA

Goldman locates regional chairman in Beijing The Goldman Sachs Group, Inc. installed Mark Schwartz as chairman of its AsiaPacific unit to be based in Beijing. The New York-based firm is the first global investment bank to locate its regional chairman in Beijing. Schwartz’s placement calls attention to China’s, and the region’s, increasing importance for growing the firm’s business. Schwartz, who rejoins Goldman Sachs after previously serving as its Asia chairman from 1999–2001, will also be vice chairman. “The Asia-Pacific region continues to represent many of the most dynamic and important economies in the world and I’m thrilled to help lead Goldman Sachs’ efforts as we respond to the multi-faceted needs of our clients,” Schwartz is quoted as saying. Schwartz replaces J. Michael Evans as regional chairman.

JPMorgan Chase boosts China investment JPMorgan Chase & Co. added RMB2.5 billion (US$395 million) to its banking

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subsidiary in China, underscoring the growing importance of China to the bank.

The additional capital raises JPMorgan’s total registered capital in China to RMB6.5 billion, according to the bank. “The [additional] capital will be used to expand the bank’s branch network, develop products, increase corporate lending, and recruit employees,” Zili Shao, chairman and chief executive of JPMorgan China, is quoted as saying. JPMorgan also said the China Banking Regulatory Commission (CBRC) approved its opening a branch in Suzhou, its seventh branch in China.

China boasts the world’s third largest banking system with a total of RMB114 trillion in assets, behind only the U.S. and Japan.

Starwood to double China hotels Starwood Hotels & Resorts Worldwide, Inc. announced it plans to roughly double the number of its hotels in China, adding 100 units to grab a larger share of China’s rapidly expanding travel market. White Plains, NY-based Starwood will focus its efforts in smaller Chinese cities, with 40 of the hotels under its Sheraton brand.

China’s tourism market is projected to become a RMB5.5 trillion (US$860 billion) market over the next eight years.

“China presents itself as a major growth opportunity for Starwood and we look to be cutting edge for these consumers,” Starwood finance chief Vasant Prabhu is quoted as saying. Starwood’s more than 1,000 worldwide hotels include brands Westin and St. Regis.

GOVERNMENT & POLICY

China cuts interest rates The People’s Bank of China (PBoC), China’s central bank, cut interest rates for the first time since 2008 in a move seen as an effort to tackle a slower economy. PBoC slashed the one-year lending rate a quarter of a percentage point to 6.31%. The central bank also decreased the one-year deposit rate by a quarter of a percentage point to 3.25%. In a significant liberalization move,

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PBoC is allowing banks for the first time to offer their own deposit rates as high as 110% the benchmark rate. Banks also have been given increased flexibility to discount interest rates on new loans 20% below the official rate, up from a 10% discount previously set.

MOFCOM: IPR violations trending lower According to China’s Ministry of Commerce (MOFCOM), the number of reported cases of counterfeit products produced and sold in China is trending lower this year. China investigated and punished intellectual property rights (IPR) infringement and counterfeit activity in a total of 78,773 cases from January through April 2012, or an average of 645 cases each day, according to MOFCOM. The number of IPR investigations conducted over the same period in 2011 was not revealed.

The products investigated stood at a value of RMB1.81 billion (US$287 million).

“We have continued our crack-down efforts since we launched a special law enforcement campaign last year,” Chang Xiaocun, director of MOFCOM’s Market Order Department, is quoted as saying.

He added that “the number of counterfeits is now declining.”

Bank lending picks up Data from the People’s Bank of China (PBoC), show bank loans in China increased in May to RMB793.2 billion (US$125 billion), up by RMB241.6 billion on an annualized basis. May’s total also is above the RMB681.8 billion in new loans recorded in April and beat market expectations of RMB750 billion. The increase in lending activity follows several recent moves by the central bank to loosen monetary policy, including China’s first interest rate cut since 2008 and the third decrease in the reserve ratio requirement since December 2011. The latest cut in the amount banks are required to hold in reserve is estimated to add RMB400 billion worth of liquidity to a slowing domestic economy.

Electricity prices hiked for larger users The price of electricity will increase for those residential users who consume larger amounts, according to a new pricing scheme that China’s National Development and Reform Commission (NDRC) announced it will introduce. The new progressive, or three-tiered, charges mean the largest residential users in Beijing, for example, will pay an additional RMB300 for every 1,000 kwh of electricity beyond 400 kwh used per month. Rates there will go unchanged for residents in the lowest bracket who use 240 kwh of power or less per month – a usage bracket that includes 80% of residents across China. Lower income residents will not be charged for a certain amount of power use.

Urbanization rate reaches 51% More than half of Chinese residents lived in cities at the end of 2011, according to the China Urban Development Report

2011 released by the China Association of Mayors (CAM). The new record high for urbanization in China reflects a country that now has 30 cities with a population exceeding eight million and 13 cities with more than 10 million residents. CAM, which was approved by China’s State Council in 1991, has published The China Urban Development Report annually since 2011.

SHANGHAI BUSINESS

Yuan-yen trading launched in Shanghai China and Japan agreed to introduce yuan-yen direct currency trading in Shanghai and Tokyo, effective June 1.

The agreement between Asia’s two largest economies is aimed at boosting financial ties and cooperation, as well as facilitating investment and trade by reducing foreign exchange transaction costs. By trading the yuan and yen directly instead of using the U.S. dollar as an intermediary, Japan and China will avoid paying some US$3 billion per year to the U.S. in transaction fees

tied to trade settlement. Direct yuan-yen trading, which is supported by the People’s Bank of China (PBoC), also will help China further its aim to internationalize the yuan.

The yen is the only major currency besides the U.S. dollar that China permits direct trading with the yuan.

City to offer free Wi-Fi As part of Shanghai’s plan to become a “smart city,” the Shanghai Municipal Government soon will provide two hours of free Internet service across many parts of the city. Called “i.Shanghai,” the scheme calls for Internet service to reach 450 public venues by the end of 2012 and eventually 2,400 areas, beginning with transportation hubs, parks, hospitals, shopping streets and government service halls. In addition, Lujiazui recently launched a free wireless program across 1.7 square kilometers in the core area, covering 30 office buildings. By spreading Internet access, Shanghai is aiming to improve the speed and convenience of going online.

CHINA & THE WORLD

SOUTH AMERICA ASIA-PACIFIC SIA PACIFIC

SOUTH KOREA: LG Display plans largest LCD plant LG Display held a groundbreaking ceremony in Guangzhou to mark construction on what will become the world’s largest LCD plant. The Korean company and its Chinese partners plan for the advanced eighth generation technology plant to help tap into the growing market in China for high-end consumer electronics. LG is investing US$4 billion into the project, or 70% of the cost.

Chinese partner Skyworth Digital Holdings will invest 20%, and the Guangzhou government the remaining 10%. The plant is scheduled to become operational by the second half of 2014 and initially to produce film-patterned displays for 3D televisions. The Guangzhou plant will help LG save on logical and other costs.

MIDDLE EAST

ASIA-PACIFIC SIA PACIFIC EUROPE

Report: Africa, Middle East poised to be manufacturing hubs Ernst & Young’s Rapid Growth Markets (RGM) Forecast predicts Africa and the Middle East are in a good position to become key manufacturing hubs for low cost goods thanks to such drivers as a fast growing labor force and government investment. The report says that although China remains competitive, rising wages are opening opportunities for other low-cost manufacturing locations.

“With a fast-growing labor force, they [Africa and the Middle East] have the potential to become the next world assembler, possibly replacing China, as China specialises in higher-value added goods,” says Bassam Hage, MENA Markets Leader, Ernst & Young, in a press release.

AFRICA

GERMANY: Qingdao to host third German Centre in China The German Centre Shanghai and the Qingdao Municipal Government signed a strategic alliance agreement to establish a German Centre in Qingdao, Shandong province. The German Centre Qingdao will be the third German Centre in China alongside Beijing and Shanghai and the eighth center worldwide. The new 66,300 square meter center will be located in the Sino-Germany ecopark in the Qingdao Economic Technological Development Zone and offer support and services, such as leasing space, for small- and medium-sized German enterprises looking to enter or boost their interest in the China market. The German Centre Qingdao also is expected to help attract German investment and contribute to advanced technology and practices in Qingdao.

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NORTH AMERICA MIDDLE EAST

UNITED ARAB EMIRATES: Dubai hosts China sourcing fair The 6th annual China Sourcing Fairs concluded in Dubai in what is the largest exhibition of Chinese made products in the Middle East. The three-day fair featured seven halls at the Dubai World Trade Center with more than 500 Chinese small- and medium-enterprises showcasing products from the baby & children’s products, electronics, garments & textiles, gifts, hardware & building materials and home products industries. China had a strong presence at the fair with municipal governments from Fujian, Hebei, Hunan, Jiangxi, Tianjin, Dalian and Yiwu sponsoring pavilions. The fair is aimed at bringing together Chinese suppliers and buyers in the Gulf region and Middle East to generate trading opportunities.

AFRICA

NORTH AMERICA

SOUTH AMERICA MIDDLE EAST AFRICA

UNITED STATES: Eli Lilly ups China investment U.S. pharmaceutical giant Eli Lilly LLY & Co. will add US$20 million to its investment in Chinese generic drug maker Novast Laboratories Ltd. Eli Lilly expects the investment to help it capitalize on growth opportunities in the Chinese generic drug market by boosting manufacturing capacity at a facility in Nantong, Jiangsu province. “We are committed to help meet the medical needs of the Chinese people by providing innovative medicines of the highest quality,” said Eric Baclet, president and general manager of Lilly China, in a press statement. Novas is part of the Indianapolis, INbased company’s US$100 million investment fund in Chinese life-sciences firms through its capital arm, Lilly Asian Ventures.

AFRICA ASIA-PACIFIC SIA PACIFIC NORTH AMERICA

SOUTH AMERICA

BRAZIL: State Grid buys electricity transmission assets Chinese state-owned power operator State Grid Corp. announced it will buy US$531 million for seven high-voltage electricity transmission assets in Brazil from Spain’s Actividades de Construcción y Servicios SA, while also assuming US$411 million in debt. The deal marks State Grid’s second in Brazil, capitalizing on the European firm’s exit to reduce its debt load. The assets, most of which are currently operational, cover a total length of roughly 2,792 kilometers across eight states in Brazil. The acquisition through State Grid’s wholly-owned subsidiary, State Grid International Development Ltd., is expected to close in Q4, pending regulatory approval in China and Brazil.

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NORTH SOUTHAMERICA AMERICA EUROPE

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Movers and Shakers c o m p i l e d by j o y c e b i a n

Movers and Shakers highlights major personnel changes within the Chinese government at various levels and senior management-level movements within multinational companies in China.

UPS UPS appointed Brendan Canavan president for the Asia-Pacific region in June. Canavan is responsible for more than 40 countries and territories for the company throughout Asia. Canavan most recently served as president of UPS’s North-East District in Europe, a position he was appointed to in 2007.

Canavan began his career at the company in 1981 as a part-time package loader and has served in various operational management roles.

Brendan Canavan

PRIVATE SECTOR DELTA AIR LINES Delta Air Lines promoted Man Zhou general manager of Delta Air Lines China in May. Zhou was promoted from sales manager of Delta Air Lines China, in which role she helped the company expand direct flights between the U.S. and China. Meanwhile, Delta Airlines appointed Jeffrey Bernier managing director for Delta Air Lines Asia-Pacific, responsible for the company’s markets in the region excluding Japan.

Jeffrey Bernier

WERC Worldwide ERC (WERC), a Washington, D.C.-based firm that specializes in relocation and international assignments, appointed Karen Yuen as Asia-Pacific director in June. Yuen will be responsible for the organization’s branding and positioning in the Asia-Pacific region. Yuen was formerly director of Business Development and Marketing at The American Chamber of Commerce in Shanghai.

Karen Yuen

JP MORGAN CHASE & CO. J.P. Morgan Chase & Co. appointed Jeff Urwin chief executive officer for Asia-Pacific in April.

Erwin was previously global head of investment banking at J.P. Morgan. The company said the appointment highlights the importance of Asia to the overall franchise and its commitment to servicing its clients as Asia is increasing its impact on the world’s financial markets.

Jeff Urwin GOLDMAN SACHS Goldman Sachs rehired Mark Schwartz as vice chairman and chairman of Goldman Sachs Asia Pacific in June. The company said the appointment underscores the importance of China and the Asia-Pacific region to the company’s overall business.

GOVERNMENT STATE COUNCIL MINISTRY OF HEALTH Ke Xu was appointed Vice Minister of Health in May. Xu has served positions in the ministry in various functions including disease control, rural area public health administration and public health supervision after holding positions in China’s northeastern Jilin province in the public health administration.

Ke Xu

NATIONAL FOOD SAFETY COMMISSION Jiping Li and Mingzhu Wang were both appointed to posts of deputy director general of the Office of the Food Safety Commission under the State Council in May. Li was formerly deputy director general of the National Food and Drug Administration, a position he was appointed to in 2009 after serving as director general of Jiangsu Provincial Food and Drug Administration for more than four years. Wang was formerly division chief of Policy and Rules of the State Commission Office for Public Sector Reform under the State Council.

If your company has executive personnel changes, please contact Joyce Bian at joyce.bian@amcham-shanghai.org.

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Working in Shanghai The People Professional The vice president of human resources at Goodyear talks about work-life balance, workers who jump ship and building trust

By Jill Petzinger

W WENDY RADTKE Company: The Goodyear Tire & Rubber Company, Shanghai, China Title: Asia-Pacific Vice President, Human Resources Hometown: Durham, North Carolina, USA

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endy Radtke has the positive energy and ready smile of a woman who genuinely loves her job. The glass walls of her light-filled corner office, high above Huaihai Road at Goodyear Shanghai, reflect her openminded, accessible personality. Radtke has been vice president of human resources at Goodyear since 2009, with complete HR responsibility for Goodyear Asia-Pacific’s 10,000 employees, around 150 of which sit in the Shanghai office.

Her remit includes HR strategy development to support business growth, talent management, organizational design, leadership development and process improvement.

Radtke’s first taste of HR was at Indiana University in the early 90s, when the English and psychology major ran tours and interviewed prospective students for the university’s admissions office.

In 2003, she visited Shenzhen while she was the HR director at Honeywell-ACS, and that trip ignited her interest in China.

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“Shenzhen was my first exposure to China and I was in awe,” she says. “I was fascinated by the culture, the growth and the energy.”

She came back excited and told her husband that if she were ever to take an overseas assignment it would be in China.

This wish came true in 2007, when she accepted a job to serve as the Asia-Pacific Vice President of HR at Honeywell-ACS. The couple, along with their son, who was 16 months old at the time and their two dogs, packed up and headed for Shanghai.

It isn’t just the cosmopolitan nature of life in the city that has changed dramatically in the last five years. According to Radtke, people’s lifestyles have changed and their desire for a better life-work balance has increased. On the other hand, competition for the best managerial talent has ramped up significantly.

Changing picture She has witnessed – and been instrumental in driving – a big shift in the

profiles

perception of what HR departments do.

“When I moved here I noticed that HR departments in China were focused on partyplanning, payroll, hiring and firing versus getting the right capabilities and talent into an organization, and helping people to develop their careers within the company,” she says.

Radtke was determined to change this perception of HR at Goodyear, and that included getting a bit serious in the office.

“After about three weeks on the job, we had a town hall meeting, and someone said that I had to announce a birthday to which I replied, ‘I don’t do birthdays’,” she says. “I may have had to ruffle a few feathers, but I wanted to make sure that HR was regarded as a part of the organization that helps grow the business. We Members of Goodyear Asia Pacific HR Leadership team during the HR don’t get out there and sell tires, but we help Leadership Meeting on Shanghai in June build the capability for people to get out there and sell tires.”

In the past, HR staff tended to be female and to come from administrative assistant positions. She is now “Radtke was determined to change this witnessing more college graduates actively choosing careers in HR – and HR generalist roles in particular. perception of HR at Goodyear, and that The role of an HR generalist is a strategic one, and incorporates included getting a bit serious in the office.” workforce planning, talent management and employee career development. She believes that the people who are most appropriate for HR roles are not those who say they want to go into it because they “like people.” with a better offer,” she says.

“These are the ones who definitely should not go into HR,” Finding local nationals for more senior level positions is still she says. “The most successful people I have seen in this industry pretty tough, according to Radtke, who says she would like to see are those who have a mix of common sense, business sense, a lot more local talent in upper management in the Goodyear high ethics and flexibility – HR professionals need to be resultsShanghai office. oriented and strategic.”

“My hypothesis, which has in some cases turned out to be

Talent wars Radtke says that the battle for the best talent is ferocious in China. Even though Shanghai is a city of 22 million people, those with the skills and experience to work for Goodyear are a small group. Chinese companies can often afford to pay a lot more than U.S. MNCs too, and sometimes this cutthroat competition can lead to rather dubious behavior.

“We’ve had people at senior level positions start with us and leave three weeks later, because they had been negotiating with another company as well, and the other company finally came in

true, is that there are people who have progressed very quickly in their organizations because their English is very good but they haven’t really developed as managers, and when they start to fail a little bit they jump to the next job,” she says.

She says it is not unusual for workers to jump ship when they feel they deserve a director title and more money when they hit 30. They address this by challenging workers and giving them opportunities to grow before they earn a higher title.

She attributes Goodyear’s low turnover to its strong managers, who want to teach their employees. Her anecdotal evidence repeatedly shows that people want to work for a manager whom they like, and will be loyal to the manager, not the company.

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The famous Goodyear blimp

“The importance of building relationships cannot be underestimated,” – Wendy Radtke

“People in China will tell you they are leaving for money reasons, because that’s much less confrontational,” she says. “But if someone doesn’t like their manager they will leave, and if we start to see a lot of attrition in one department, typically it’s a leadership issue.”

According to Radtke, people in Asia tend to stay at a company for three to five years. The ongoing challenge for her and her team is building a better talent pipeline.

Life outside work Lifestyle changes in China are creating a particular disadvantage for American multinationals like Goodyear, according to the HR head. The stereotype that people in Asia will happily work around the clock is changing. They want a better work-life balance, and that is when working for an American company and the U.S.-China time difference can become an issue.

“This is a generation growing up with lots of friends, social networks and activities,” she says. “They are still dedicated, but don’t necessarily want to sit here on conference calls until 10 or 11 o’clock every night.”

Radtke has certainly had lots of practice at being flexible.

Yet she admits that maintaining global standards while being sensitive to how things are done locally can be a challenge.

“The key thing for me is remembering that English is not the first language for people I work with, so I have to be more explicit – what is clear in my head may not necessarily be clear to others,” she says.

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She says that her job sometimes demands a lot of managerial courage, to stand up when things are not being done correctly in the APAC countries where Goodyear does business and to insert herself to teach local managers how to operate in a way that is appropriate for a multinational.

The toughest part of her job, she says, is establishing relationships and trust.

“If you don’t spend time with people, they won’t feel they can talk to you, nor trust you to use information wisely. The importance of building relationships cannot be underestimated,” she says.

When asked about her proudest achievement, her face lights up. “My team,” she says without hesitation. Her team is made up of about 80 people across the region. “I can’t do my job if I don’t have the right people supporting me, and I have extremely wonderful people in each discipline.”

It seems the team holds her in equally high esteem.

Richard Liu, the HR director for China, says that the most important things he has learnt from Radtke are to stand up for what you believe, and that sometimes it will be necessary to challenge the status quo and do the right thing, even though it might make people feel uncomfortable.

“Wendy taught me that my job is not to get everyone to like me, but to add value to the business. She is always willing to give talent early responsibilities and I've seen many great talents thrive under Wendy's leadership,” Liu says.

Jill Petzinger is a freelance writer based in Shanghai.

Working in Shanghai

The Ad Man The Senior Art Director at JWT uses sex appeal and art to capture the hearts and minds of Chinese consumers

By Alexander Gladstone

I

n the eyes of multinational companies around the world, Chinese consumers are seen as some of the most prized.

There are several ways to capture their hearts and minds and at one top advertising firm in Shanghai, a big part of that responsibility rests with Lv Haoxi.

Lv, 29, is the senior art director in the Shanghai office of JWT, one of the most prestigious advertising companies with a global footprint that stretches from New York to Mumbai and from Rio de Janeiro to Shanghai. So inventing ads for some of the world’s most well-known brands require a certain set of skills.

During an interview in his office on Changle Road, the shy and reserved Lv says one of the things he has been seeing recently is a blurring of the lines between Western and Chinese print advertisements.

He says content, images and messages which are effective in Western countries are now becoming more popular in China.

“The Chinese market is becoming more like the rest of the world,” he says, explaining that Chinese advertisements and media content today are relying more on sexual appeal.

Lv, 29, is from Fujian province and studied design and advertising at Xiamen University. During his freshman year, he and another student entered a Taiwanese design competition and submitted a print ad for a juice company. They were selected as finalists. He later used the same piece for another contest and won gold, and that at point, he decided to become an ad man.

After college, he worked at two ad agencies before he joined JWT. Asked why he got into this business, Lv was clear.

“Actually, I wanted to become a creative designer because I wanted to see my ad work displayed on a street (billboard) or on TV. I think that’s something very valuable,” he says. “I like my job now because I can spread my idea through ads to many people.”

What’s eye-catching?

LV HAOXI Company: JWT, Shanghai Title: Senior Art Director Hometown: Fujian province, China

Lv works with a team of six in an office of 250 people. The office is unique: the spacious lobby at first appears to be a bar or restaurant of some kind. Nearly all of the mostly young workers sit side-by-side on long wooden tables, giving off the sense that people are brainstorming, drawing, talking

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An Adidas ad from Lv Haoxi’s team

and creating in their living rooms, instead of a stuffy office or impersonal cubicles.

Asked about his best work so far, Lv pointed to “Heaven and Hell,” a Samsonite ad. The luggage company’s ad earned his team five awards at the 58th Cannes Lions International Festivity of Creativity last June, including the Grand Prix prize in the Press Lions category, along with three golds for Art Direction, Outdoor Billboards, Outdoor Posters and Illustration.

The poster depicts a man who checks in a suitcase at the airport before boarding. The man is seen relaxing in a heavenly state of mind while in a second pane, his suitcase undertakes the hellish journey in the belly of the plane, after which the two are reunited.

When asked about what makes a good ad, Lv says ideas alone are not enough.

“A good design is eye-catching instantly. The key is the execution of the design work has to be original and has the visual power to grab the attention of consumers,” Lv says. “But a good ad is not only about good execution, the idea is equally important. Only by combining a good idea and good execution can it attract the attention of consumers and appeal to them. That would make a good ad.”

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Understanding the mindset of consumers, what they care about and what will make them want to open up their wallets can be difficult in a country that’s changing all the time. Lv says he’s required to use images that appeal to Chinese consumers, as well as design ads that push the envelope, look fresh and stand out.

‘Culturally relevant’ Tom Doctoroff, JWT North Asia Area Director and Greater China CEO, says that although the Chinese are gradually embracing Western style and images, the Chinese market will always be distinct, and advertisements must always be “culturally relevant.”

“China is developing, becoming wealthier and more international. However, the Chinese culture will never change,” says Doctoroff. “Advertisements in China must always take into account the Chinese mentality and culture.”

Lv says his top challenge is to create concepts that will satisfy clients as well as fulfill his goal of doing work that will win him more awards. While the pressure can be great, it is rewarding to see ideas becoming reality.

Doctoroff says that Western culture typically emphasizes

The award-winning Samsonite ad

“The Chinese market is becoming more like the rest of the world.”

— Lv Haoxi

individuality but in China, it is more important to keep in mind “the individual’s relationship with society.”

For example, in a Western-style ad for a diamond company, the tagline is likely to be “love” or “passion,” something which is shared between two people. However, in Chinese society, marriage is generally perceived as a union of two families, Doctoroff says, and the tagline “commitment” would be more appropriate.

Additionally, advertisements in China need to demonstrate a “product’s externalized benefit,” and professionals like Lv must think about how the product makes consumers look to society.

In other words, Chinese consumers do not buy products just for their intrinsic value, but because they demonstrate status to the people around them.

The ad business here is different in other ways. In the U.S., clients tend to stick with one agency over many years, to develop a distinctive brand image while Chinese companies take a shortterm approach to advertising, and typically hire ad agencies on a project by project basis, Doctoroff says.

This might change, as more high quality Chinese companies emerge, and the advertising industry in China is already adapting rapidly to accommodate China’s new economy.

“In China, advertising is sales driven, not brand driven,” Doctoroff says.

Alexander Gladstone is a freelance writer based in Shanghai.

A cereal ad

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Working in Shanghai

He’s Building Bridges A New York architect talks about how Plaza 66 inspired him years ago

By Meredith Rodriguez

D

avid Riedel is sipping an espresso at Baker and Spice inside the Shanghai Centre complex that also houses other Western-style restaurants, luxury shops and offices. Over his shoulder and partly visible through the glass windows is Plaza 66, the very building on Nanjing Road West that inspired Riedel years earlier to become an architect.

At present, the exterior of the lower floors are camouflaged with fake grass due to a long-term renovation project. While Riedel had no role in the original design of the building, he currently works for the New York architectural firm that designed it and which is currently in charge of the renovation. Tower One was completed in 2001 and the second tower was finished in 2006.

Riedel, 32, said he had considered law and public service because of their emphasis on ideas and people, but there was something singular about the field that brought him to China.

“The decision for me was all about how I can contribute the most,” Riedel said.

“Architecture provides a more tangible work

David Riedel Company: Kohn Pedersen Associates Title: Associate Principal Hometown: Providence, Rhode Island, USA

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product – a building, which is also about ideas and people, but also has a physical manifestation.”

Riedel’s first visit to China was in 2002 when he was an undergraduate majoring in East Asian Studies and when he saw new, sleek and shiny Plaza 66 for the first time.

Back then, only one of the building’s two office towers was complete, and back then he didn’t know that his future employer, Kohn Pedersen Fox Associates, designed the building. He also didn’t yet know he wanted to be an architect. Nevertheless, he was impressed. It represented for him a spirit of globalization that now is more apparent than ever in Shanghai.

“There was nothing else like it,” Riedel said. “It was obviously a project of international collaboration in some way.

I thought, that’s the kind of collaborative project I want to be a part of.”

Plaza 66 was one of the first of its type of modern, high-rise buildings in Shanghai now more commonly found in Pudong. The city’s tallest building and second tallest in the world, Shanghai World Financial Center, also designed by KPF, was completed in 2008.

Ten years later, Plaza 66 is no longer just a building, Riedel said. Known for its luxury shops such as Prada, Christian Dior and Chanel and high-rent office space, the building is now arguably the definition of what a high-end shopping environment in Shanghai is today.

The structure is being renovated to change with the times and give retailers more street presence, Riedel said. No specifics were available.

“Retail is somewhat like fashion, and retailers’ expectations change over time, so design has to be flexible to allow retail stores to re-invent themselves every so often,” Riedel said.

China bound Riedel’s mother is a photographer and his father is a doctor.

At The Wheeler School in Providence, Rhode Island, he was one of just eight students who enrolled in Mandarin Chinese courses that were being offered for the first time.

In 2003, Riedel graduated with a B.A. in East Asian Studies

“Another thing Riedel has learned during his stint here is that the job requires some finesse.” from Carleton College. During college, when he felt like he was learning more outside of school than in school, he took a year off to travel through Asia. Later, when the Three Gorges Dam was almost finished, Riedel used a grant to visit the Yangtze River area to draw the scenes of towns that would soon be destroyed.

At this point, he was fluent in Mandarin and he joined Kohn Pedersen Fox Associates in 2008 after Yale architecture school.

Riedel dabbled on projects around Asia, London and on such notable projects as New York’s Hudson Yards, an ambitious plan to turn 26 acres of a former industrial area on the far West side of Manhattan into a high-rise commercial and residential district.

“The funny thing is,” he said, “most projects at that scale (of

imaginechina

The interior of Plaza 66 on Nanjing West Road

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Hudson Yards) are happening in China.”

When someone slapped down Plaza 66 renovations at his New York desk a couple of years ago, he quickly realized he had been working for the company that inspired him all those years back on Nanjing Road.

After six months in KPF’s Shanghai office, Riedel said he is understanding more about the process it takes to design and build in China. Back at headquarters where most of the design is done, days are more flexible as teams draw designs, according to his China colleague, Ding Yong. Here in China, his top focus is to serve as a liaison between the two offices and so he’s often in meetings with developers and consultants, who present practical deadlines, problems and changes that must be made to the original plan. In other words, he must help the New York and Shanghai offices understand each other and collaborate cross-culturally across the Atlantic.

For Reidel, that often involves late nights at dinners and trade events followed by phone calls to the New York office.

“In China, the heart of the business doesn’t happen at a business meeting,” Riedel said.

In China, where the approval process is opaque and where developers want instant profit, it is easy for the end result to suffer. This can be difficult for foreigners to accept and understand, according to Ding.

“The local practice is lower than the international,” Ding said.

“Sometimes you have to accept those things you don’t want– lower design standards, construction standards, workmanship, everything.”

Finesse Another thing Riedel has learned during his stint here is that the job requires some finesse. This discussion process, for example, is unique.

“In New York, the more direct you are, the more people respond to you, respond to your opinion. You say it loudly and say it with conviction that what you say is right,” Riedel said.

“Here if you’re too direct, you may offend somebody.”

Since Riedel has been in Shanghai, he has been working mostly on two mixed-use projects – one in Beijing and another in Chongqing. He is thinking of extending his one year stay. But even if he doesn’t, he intends to return often to China.

Meredith Rodriguez is a freelance writer based in Shanghai.

Riedel was inspired by the building

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deal of the month B y E s t h e r Yo u n g

imaginechina

It’s the RealD in China

B

everly Hills-based 3-D technology company RealD has struck a deal with China’s HNA Group to install 3-D technology in up to 500 of HNA’s new theater movie screens, significantly increasing the company’s presence in China.

RealD’s 3-D systems are currently installed in 650 Chinese movie screens and it had earlier made deals with theater operators Bona Film Group and Poly Film Investment to install 3-D technology in 200 of their cinema screens, in addition to the 1,250 screens it has already committed to refitting. RealD operates approximately 20,600 3-D screens worldwide. Financial terms of RealD’s deal with HNA were not disclosed at the time of announcement.

The California company’s timing is strategic.

China in the past limited the number of foreign films in China to 20 films, but the government announced in January that it would allow an additional 14. The stipulation was that the 14 films needed to be of “enhanced format,” meaning that it would have to be either 3-D or a large format, like Imax. The deal also increased the revenue foreign producers can make

on each film, from 13 to 25 percent.

RealD’s agreement is also the latest in a series of high-profile partnerships in the film industry in the last few months. In May, Dalian Wanda Group, China’s largest movie theater operator, inked a deal to buy U.S. movie theater chain AMC Entertainment for US$2.6 billion.

Also in May, Rupert Murdoch’s News Corp. agreed to buy a nearly 20 percent stake in Bona Film Group, which produces and distributes films in China, as well as manages China talent. Bona Films is currently in talks with several Hollywood companies, including Universal Pictures and Paramount Pictures, to co-produce films for international distribution.

Disney had previously announced that it would co-produce comic book film Iron Man 3 with Beijing’s DMG Entertainment.

China this year passed Japan as the second largest movie market and the largest foreign market for Hollywood films, accounting for about 45 percent of China’s total box office. China Film Group head Han Sanping predicts that the market will grow to US$3 billion this year. Forbes estimates that China opens four or more screens each day.

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CONSUM E RS B y R ya n B a l i s a n d J o y c e B i a n

A Maturing Consumer Market

A new consumer market report finds MNCs and Chinese companies converge on key market segments

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he Chinese consumer marketplace is quickly growing more segmented and mature, with an increasing number of consumers in top tier cities demanding higher quality products – and showing a willingness to pay a premium for them, according to AmCham Shanghai and Booz & Company’s second annual joint report, 2012 China Consumer Market Strategies.

In stark contrast to the results in last year’s re p or t , b ot h C h i n e s e an d mu lt i n at i on a l companies (MNCs) view the opportunities, challenges and trends in an increasingly complex China consumer marketplace as similarly leading to heightened competition for the same market segments – for both Chinese companies and MNCs. “This year’s report highlights an increasingly mature and competitive consumer market in China, one which U.S. companies are fully committed to,” said Brenda Foster, president,

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AmCham Shanghai.

AmCham Shanghai and Booz & Company, a global management-consulting firm, released the report on June 13 at a breakfast event in Shanghai. The program included a presentation

by Joni Bessler, director of Booz, and a panel discussion of industry experts.

The report is based on a survey of more than 150 Chinese and multinational companies.

Companies were asked to rank how prepared they felt they were to respond to nine disruptive consumer t rends ident if ie d by Am C ham Shanghai and Booz and then to rate their top challenges in response to those trends.

Below are highlights from the report on what is shaping the increasingly competitive Chinese consumer market – forecast to become the world’s second largest by 2015 – and how both MNCs and Chinese companies are responding to the explosion in Chinese consumerism.

Value v. choice consumers Two distinct buying behaviors emerged from the sur vey results: “value consumers” and “choice consumers.”

Among value consumers, or those who prioritize value when making purchasing decisions, both Chinese companies and MNCs ranked “value as a differentiator” the most important consumer trend in China today. In Tier-1 and Tier-2 cities, an increasing number of consumers are seeking greater value, quality and integrity in the products they purchase.

This represents a significant evolution from what has been a price-driven market in China.

The survey results show a vast majority (83 percent) of MNCs and Chinese companies expect the trend to increase brand loyalty among consumers focused on value, and 87 percent e x p e c t to s e e an i nc re a s e i n c onsu m e rs’ willingness to pay more for quality products and

services.

“This is a positive trend for the overall market and one that respondents believe MNCs are best positioned to respond to,” said Bessler of Booz.

“At least for now, the gap between MNCs and Chinese companies in responding to value consumers appears to be in branding capabilities. Chinese companies admit that they have not gone far enough to promote their brands.”

By contrast are “choice consumers,” or those who prioritize price on the products they buy. In smaller but rapidly expanding Tier-3 and Tier-4 cities (such as Ningbo, Wuxi and Dongguan), the survey indicates price remains the key driver in purchase decisions, but the choice of available products has dramatically increased. Price points and purchasing channels are also in flux as companies battle to win over these more fickle consumers, hoping to align their products and services with customer tastes.

“In contrast to the top trend, value, companies told us the increase in choice has reduced consumer loyalty to specific brands and consumers in this segment expect to pay less for products or services of similar quality,” said Adam Xu, a principal at Booz.

Looking ahead The 2012 China Consumer Market Strategies report provides detail of what is an increasingly competitive market. Both Chinese companies and MNCs view the market and its challenges similarly, and they are targeting the same potential customers. “ This year’s sur vey found that in their strategic approach to the market, as well as in their responses to the challenges they face in product development, marketing and sales – domestic and international companies have converged,” said Foster. “This, in turn, has made an already competitive Chinese consumer market much more competitive.”

To succeed in the Chinese consumer market today, the report outlines four priorities for companies:

2012 Edition

China Consumer Market Strategies How MNCs and Chinese companies are competing in the world’s fastest growing market

• Clearly articulate the role that each of four c o r e c ap a b i l i t i e s – p r o d u c t i n n ov at i o n , marketing and branding, sales and distribution and people – will play in the organization’s operating and business model.

• Develop detailed strategies within each of these four capabilities and understand, against the company’s strategy, where it is important to be truly great versus acceptable.

• Ensure that these capabilities and underlying strategies are mutually reinforcing and coherent.

• B e nimble and adaptive, and use the company’s capabilities to shift strategies as the market transforms.

Visit the AmCham Shanghai website at www. amcham-shanghai.org to download the complete 2012 China Consumer Market Strategies report.

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“

Price points and purchasing channels are also in flux as companies battle to win over these more fickle consumers…”

M a n a g e r ’ s N ot eb o o k

A Culture of Change

By Anthony Couse Anthony Couse

O

ur business strategy is focused around our people.” How many times have you heard this said at a seminar or team briefing in China?

Personally, I have heard numerous “people-focused” strategies that all sounded interesting at first but were ultimately ineffective. The common failing of such plans are that they did not address a crucial factor – not only are markets evolving in China, but staff ’s career priorities are also continuously changing.

As a profe ss i ona l s e r v i c e s f i r m specializing in real estate, we recognize that our primary asset is our staff, who differentiate us from our competitors.

But for Jones Lang LaSalle China to grow during ever-changing economic conditions, our staff need tailored onthe-job training, coaching and mentoring to develop their skills and enhance their contribution to the business.

Five years ago, we embarked on a training strategy to enable staff to adapt our company culture for the future. A key principle was to deliver training that

An th on y Co us e is ma na gin g director of Jo nes Lang LaSalle Shanghai in charge of Eastern China with more than 25 ye ar s of ex pe rie nc e in the real estate ind ustry. He ca n be rea ch ed at An th on y.

Couse@ap.jll.com.

enhances teamwork and creates more dynamic relationships between managers and their teams.

Initially, this involved “training the trainer” – in essence, cultivating a mindset for our senior managers that “teaming” means more than just “mentoring.” We nurture a culture where managers and teams work together to analyze and understand day-to-day issues, and where team members feel confident in presenting their own ideas to senior management.

In this way, the direct-reporting process becomes more flexible and responsive.

Measuring change One challenge we quickly encountered was measuring the effectiveness of change.

How do you measure whether a training program has a direct impact on someone’s day-to-day life?

Staff turnover is one metric, and we are proud to have significantly reduced this from 35 percent to 15 percent per annum.

Another indicator is exit interviews. Over the past five years, we have noticed that the phrase “I’m not learning anything new in my daily role…” has disappeared as a reason for leaving a position.

Productivity is also an invaluable metric. Our productivity indicator, or profitability per staff member, remained relatively static three to five years ago, but is now improving each year. Individuals are clearly taking on what they have

learned from their training and applying it to their work. We no longer expect to see significant headcount growth but rather higher returns from our existing staff.

Another lesson we learned is that training programs should evolve with the organization. We reassess every aspect of our training syllabus on a yearly basis.

A five, or even three-year, training plan is relatively meaningless in a business environment that is diversifying at such speed.

The latest phase of our strategy was the opening of a dedicated training academy.

The academy originated in Hong Kong then expanded across China with the aim of improving our partnerships with local universities. Once fully developed, the training programs will be linked directly to post-study performance and promotional opportunities. I believe that these changes have been possible because our company culture is focused on transparency.

It’s important for employees in China to understand what the organization wants to achieve, how it will be delivered, and the part each individual can play in the process.

It should then be no surprise that people will take pride in working for a company like Jones Lang LaSalle. People appreciate that being part of a company with a change-driven culture provides for their own career aspirations. After all, no matter what role you perform in a business, the chance to continue learning is invaluable.

Got an article idea for “Manager’s Notebook”? Contact Insight Editor-in-Chief David Basmajian at david.basmajian@amcham-shanghai.org.

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GAME ON! American sports brands such as the NFL and PGA are making inroads into the China market with help from some celebrity athletes Courtesy NFL China

Ed Wang is the first football player of full Chinese descent to play in the NFL

I

By Susie Gordon

t’s probably hard to find many Chinese sports fans who could name the quarterback of the Miami Dolphins or explain what a “turnover” or “line of scrimmage” means.

But, even if they have not watched an American football game before, they probably know that “olive ball” is an action-packed game played by big men covered in lots of safety gear using a complex rule book.

It may not be news that the National Football League (NFL) wants to turn millions of Chinese into football fans and the same is true for the Professional Golfers Association (PGA) of America.

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Both organizations have taken several steps over the years to do exactly that. And now, thanks to a crop of talented athletes – specifically those with Chinese heritage – American football, golf and a few other sports, are beginning to win over fans from Shanghai to Sichuan.

For example, Beijing-born golfer Feng Shanshan’s recent victory at the LPGA Championship in New York made her the first Chinese player to scoop the top prize, while Virginia-born Chinese-American football player Ed Wang, who recently signed as an offensive tackle for the NFL’s Oakland Raiders, is being

c o v e R s to r y

“Millions of kids in the U.S. play and it builds character and they enjoy the game tremendously and we believe it can build in the same way here.”

— Richard Young, NFL China

than he likes. Another challenge is the time zone differences which means games are played in the U.S. when most fans here may be sleeping.

According to the NFL, China is working to improve the delivery of the games to their fans in a way that will allow them to watch games and highlights when and where they want it. In 2011, the NFL announced a season-long partnership with PPTV, China’s largest Internet TV provider, to bring HD-quality live broadcasts of Sunday Night Football and Monday Night Football games. There has been a 407 percent year-on-year growth in online live streaming viewership of American games in China since 2009, with 1.1 million people watching the 2012 Super Bowl live online.

Broadcast TV numbers are positive as well. There’s been a 281 percent annual growth in total television reach, and 400 percent growth in the number of TV channels airing NFL programs since 2009. These days, 19 television channels across China air

Courtesy NFL China

watched closely. Another young football player, kicker Long Ding, 24, who was born in Qingdao, is practicing at the rookie camp for the Jacksonville Jaguars. While basketball needs no publicity in China, Taiwanese-American Jeremy Lin made waves with the New York Knicks in the NBA. American football, the most quintessential of all U.S. sports, is being introduced to China via the NFL, and progress is brisk. With international offices in London, Tokyo, Mexico City and Toronto, the NFL set up its China office in Beijing in 2007, and plans to open a branch in Shanghai this summer.

Richard Young is NFL China’s managing director and something of a football ambassador here. He said he and his colleagues have made progress over the years and a growing number of Chinese are watching games online and during television broadcasts. But it may take a while for American football to become as popular as the NBA in China and it’s one reason the NFL is trying to introduce the sport to young people.

“China sees sport mainly in terms of ethnic and national pride.

Right now there are no family ties to certain teams that are passed down from parents to children as there are in the West,” Young says during an interview in Shanghai. “This allows us to introduce a new sport more easily than it would be in Western countries, especially to the younger people.”

Are you ready for some football?

Young says Chinese television stations have been airing NFL games for at least 10 years but more needs to be done to make the game more accessible. He said the TV business model here and television landscape make his mission a bit more challenging

Ed Wang presents a football to Chinese President Hu Jintao during his State visit in January 2011. They’re flanked by Secretary of State Hillary Clinton and Vice President Joe Biden and Wang’s parents, Nancy and Robert Wang, left, former Chinese national team members in track and field.

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Courtesy Jacksonville Jaguars

American football games, with viewership topping 80 million across the country.

A series of annual NFL Experiences, outdoor events held throughout China in 2011, the last of which attracted nearly 10,000 people, reached another 13.5 million through various media. The events, sometimes attended by actual NFL players, are intended to introduce the rules, spirit and culture of American football to Chinese people through shows and exhibitions.

But the NFL knows that a few events and television rights are not enough. The game must be introduced to people while they’re young. In addition to Gameday China, Shanghai’s amateur American football league, the NFL runs its own grassroots development program called the NFL University Flag Football League. In 2011, 44 universities participated in the League, which is now in its fourth year and they have more than 900 Chinese players. The University Bowl Championships was watched by over 2,000 spectators and aired on Shanghai’s Great

photos Courtesy NFL China

Ed Wang interacts with Chinese children at a flag football clinic held at Shijingshan Gymnasium in Beijing in 2011

Sport channel.

NFL China and the International Federation of American Football (IFAF) are working together to raise the game’s status at an even younger level, with coaching for under 8, 10 and 14 teams, continuing through high school.

American football is not the only Western sport that is following this strategy. The NFL’s dedication to grassroots development is shared by Oliver Austin, a British national who is president of the Shanghai Cricket Club.

“It’s very important to nurture Chinese players from an early age.

We have seen three of our former members go on to join China’s national cricket team, which proves that success is very achievable given the right training and encouragement,” Austin says.

Cultural challenges Another obstacle is related to cultural challenges. For one, American football doesn’t have a history in China and there is no tradition of young people playing it. The rules are complex, and it looks dangerous.

To some observers, the NFL should expect some fouls and fumbles along the way. Tom Doctoroff, the Greater China CEO of advertising giant JWT and who recently published a book entitled

University students cheer during “University Bowl III” at the Shanghai NFL Experience in November

Cheerleaders from the San Francisco 49ers put on a halftime show at “University Bowl III” during Shanghai NFL Experience held at the Shanghai Sports Center in November 2011

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‘A Great Sport’ A Chat with Ed Wang of the Oakland Raiders

“…American football is too hulking for a people who prefer quick pace and subtlety.”

— Tom Doctoroff, author of What China Wants What Chinese Want, is among the skeptics.

“I think American football is a very tough sell in China. The Chinese like sports in which quick skill, clever resourcefulness and understatement can be demonstrated.

Soccer is popular because there is always the possibility of big heroic moments,” Doctoroff says. “And basketball is a passion because the court is a temple of individualism, the perfect and socially-acceptable platform to demonstrate who has the best, sharpest moves.”

There’s also a more obvious obstacle, he says.

“American football lacks the rhythmic grace Chinese like. And the uniforms and helmets keep identities masked. Despite the game’s strategy, American football is too hulking for a people who prefer quick pace and subtlety,” Doctoroff says.

But Young believes that the game is far less about brute strength than strategy and tactical movements. But what about protective parents who may see it as too dangerous for kids?

“There’s no question it’s a contact sport but it also has very deep elements of strategy, cooperation and interdependency. And these things are highly valued in Chinese society and we think these values are appreciated here in China as well as in the United States,” Young said.

“Millions of kids in the U.S. play and it builds character and they enjoy the game tremendously and we believe it can build in the same way here.”

Few can argue that basketball is perhaps the best example of a foreign sport taking root in a very successful way in China.

Indonesian-born Chinese and Shanghai resident Virginia Zheng set up an amateur female basketball team in 2004, and she now manages a league of around 45 regular players. About 80 percent are Chinese.

She attributes basketball’s status partly to the fact that

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laying offensive tackle for the Oakland Raiders, Edward Kai Wang is the first ethnically Chinese player in the NFL. He was born in Fairfax, Virginia, in 1987 to parents who had been track and field athletes for China at the 1984 Olympics.

Ed played college football at Virginia Tech before being drafted by the Buffalo Bills in 2010. During a break in training for the Raiders, he took some time out to chat about his career and hopes for the future.

Insight: Ed, How did you get into American football?

Ed Wang: “I first became interested in the game when I was a young child. It was actually my parents who signed me up for it when I was six years old. I was such a big kid that they thought I would be good at it.”

Insight: So your parents didn’t object to the violent nature of the sport?

Wang: “I guess they had reservations about it at first, but they soon realized that the parts of the game that look rough are actually played in a controlled atmosphere, so it’s not like fighting.”

Insight: Do you think football will take off in China?

Wang: “I really think it will. American football is such a great sport, and many countries outside of the USA are starting to play it. I believe that the more Chinese people get to discover it, the more its popularity will grow.”

Insight: Do you have a role in educating Chinese people about American football?

Wang: “Sure. I have been over to China and taught camps in Beijing and Shanghai with Under Armour and the NFL. I think it’s very important for me, as an ambassador, to spread the word and get people curious about playing. I’m sure that once it catches on, it will take off in a big way.”

Insight: Are you ever compared to Yao Ming, and if so, do you like the comparison?

Wang: “Yes, I have been compared to him many times! It is a great honor to be mentioned in the same sentence as Yao Ming. He has done so many great things for China and basketball and is a great role model. I would like to do the same for American football.”

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of 13-year-old amateur Guan Tianlang becoming the youngest player on the LPGA European Tour.

Speaking to ESPN about her win, Feng said, “I think I’m just lucky, you know. There are good players from China now.

I became the first one [to win], but I’m sure there will be more people winning in the States and in the majors.’’

The PGA has been working with the China Golf Association for years. Through its partnership with world-leading trade exhibition organizer Reed in the U.S., the PGA extended its role in China in 2011 through a cooperative agreement with Reed Guanghe Exhibitions Co., Ltd. to promote and support two annual golf shows in China – the China Golf Show/PGA Merchandise Show (China) and the Asia Golf Show/PGA Merchandise Show (Asia) in Guangzhou. These shows further promoted golf within China, attracting hundreds of exhibitors and thousands of visitors.

Paul Metzler, senior director of marketing and industry relations at the PGA, has witnessed the uptake of golf in China.

Tiger Woods hosts a a golf clinic for junior Chinese golfers at the Mission Hills Golf Club in Guangdong province last year xinhua

increasing numbers of Chinese students are going overseas to study and live, meaning that they are exposed to Western sports. She also puts it down to the Yao Ming effect.

“Ever since Yao went to play for the NBA, more and more Chinese people have gotten into basketball. Particularly in his native Shanghai, Yao is seen as an idol and a mentor,” Zheng says. “People see the sport as a lifestyle instead of just a game.”

To a tee Another Western sport that is making footholds in China is golf. It is one of the fastest growing sports here, with new multihole courses being built at a rapid pace. It is estimated that there will be 20 million players here by 2020 – up from just a few million currently – as the economy develops and the affluent middle class grows.

The victory of Beijing-born Feng at the LPGA championship in June will help inspire more to play the game in China and send more athletes to international tournaments. Feng, 22, is the first Chinese player to win a major golfing title, finishing at six-under 282 to beat Mika Miyazato from Japan. She grabbed her first golf club at age 10, and moved to the U.S. as a teenager and joined the LPGA in 2008. Feng’s success comes in the wake

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Golfer Feng Shanshan

imaginechina

Driving force One of the most popular and anticipated events on China’s sporting calendar is the F1 Chinese Grand Prix, held annually since 2004 at the Shanghai International Circuit in Jiading. When it was constructed, the 5.451 km track was among the most expensive in the world, costing US$240 million. The race was sponsored by Sinopec between 2004 and 2008, and UBS thereafter.

The story of F1’s arrival in China stretches back to the early 1990s, when the Zhuhai International Circuit was built in

An F1 racer in Shanghai gets an escort xinhua

“We have observed modest growth of golf in China over the last few years, and attribute it partly to the broader growth of the game in Asia as China looks outward, as well as increased interest in golf broadcasts and professional golf tournaments in China,” he said.

However, the most significant boost for golf ’s popularity in China came in 2010 when it was announced the sport will be part of the 2016 and 2020 Olympics.

Chris Roberts, who runs a Fantasy Sevens amateur soccer league in Shanghai, acknowledges China’s ability to excel at individual sports. But he believes this has held back the development of Western team sports.

“The 2008 Beijing Olympics were a triumph for China, with 52 gold medals. However, when you look at the games they won, it becomes apparent that they were able to excel at individual events, such as archery, skeet shooting and weight lifting. They didn’t win a lot of team sport events,” Roberts says. Golf is certainly an individual game, and the promotion of golf in China is not without its hurdles, but Metzler is confident that they are surmountable.

“For The PGA of America, it is less about the challenges we may face and more about the opportunity to support China in its growth in golf,” Metzler said.

The PGA’s aim is to promote golf in China through spectator events, education and training programs, outreach initiatives and promotions. The PGA Merchandise Shows in China have brought golf to a wider audience, and its education and training programs have been extended through China and Asia. These involve teaching and coaching professionals to help them grow, and introducing them to player development program principles that improve their chances for success. One of the most interesting was the PGA Teaching & Coaching Summit (Asia) that was held in Guangzhou last December. The two-day program included keynote presentations on instruction and coaching from Hank Haney, an international golf expert, and Steve Bann, one of Australia’s most respected and accomplished golf coaches.

Jeremy Lin of the New York Knicks

Guangdong province and financed by the government. It was provisionally added to the 1999 F1 World Championship calendar, but did not meet the standards set by the FIA. Despite this setback, the government gained support from the organizers of the Macau Grand Prix, and held China’s first F1 race in 2004 at the Shanghai International Circuit. The Shanghai International Circuit signed a seven-year contract with Formula One Management in 2001 to host the Chinese Grand Prix from the 2004 season until the 2011 season. There was a threat of cancellation in 2008 due to loss-making and non-payment of fees from the organizers to F1 Management, but a deal was signed in February 2011 for another seven years.

Given China’s love affair with cars (the largest auto market in the world), it is no surprise that F1 took off. Celebrity figures like writer and racing enthusiast Han Han have boosted its appeal even further with blog posts and Weibo. In April 2012, the Spanish HRT F1 team announced that Shanghainese driver Ma Qinghua had been accepted onto its young driver development program.

Susie Gordon is a freelance writer based in Shanghai

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Yao Ming: Balls, Bottles The retired NBA star shares a passion for both California wine and his Shanghai Sharks

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and a Book The retired NBA star shares a passion for both California wine and his Shanghai Sharks

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By Esther Young

ao Ming is standing in The Napa Wine Bar and Kitchen in Shanghai in a dark suit and tie, holding a large wine glass in front of a crowd of 20 or so well-dressed and well-heeled guests. The restaurant has a crystal chandelier, gently illuminating wood paneled walls against egg shell white paint.

Yao, a former NBA All-Star, launched his own wine label in 2011 named Yao Family Wines. And so, every so often, Yao finds himself in restaurants like this one, toasting the launch of his new business. Around him this evening are key invited guests — people involved in Yao Family Wines, including Tom Hinde, president and director of winemaking for Yao Family Wines, and Sladjan Maksimovic, brand director at Pernod Ricard China, the sole distributer for Yao Family Wines in China. There are a few reporters as well.

Yao Ming’s legacy looms large in China. A Shanghai native, he first played on the local basketball circuit with the Shanghai Sharks before reaching international fame as a center on the NBA’s Houston Rockets. His 7’6” frame wasn’t his only special trait. Although there had previously been Chinese-born basketball players in the NBA, Yao was notable as a great player – with graceful footwork and a sure shot. Though his career was plagued with injures, he was eight times an NBA All-Star.

He is a hero in his native country. When Yao and the Rockets played the Milwaukee Bucks in 2007, led by fellow Chinese player Yi Jianlian, the game was broadcast on 19 television networks in China and watched by 200 million people. In 2008, Yao led China in the Parade of Nations at the Beijing Olympics opening ceremonies.

Today, he seems to be far more active dabbling in a variety of new business ventures – most of which would be considered a risk for a

skilled businessman but not as much so for the most famous athlete in China. Some of the same traits that characterized Yao as an athlete may have helped him in his latest outing.

“Yao's attention to detail and the fabulous wine making team he built starting with Tom Hinde has catapulted his wines to immediate ‘cult status,’” says Adam Strum, editor and publisher of Wine Enthusiast Magazine, which launched their first Chinese-language edition in May. When his wine was launched last November, Yao shared a few thoughts about the link between playing ball and wine.

“Basketball gave me the opportunity to live in the United States and discover many wonderful things in America. Now I look forward to bringing great wines from California back to the Chinese people,” he said in a statement.

His wine business appears to be getting off the ground. Getting Yao to talk about his businesses and views about using his celebrity as a launching pad for his business ventures, however, has been a tricky undertaking. Insight was invited to the dinner where Yao sat down briefly for a chat before he was interrupted.

A bottle of Yao Family Wines’ 2009 Napa Valley Cabernet Sauvignon produced in Napa Valley, California, retails for RMB1,775 (US$289), a luxury item for even the most serious wine enthusiast.

The 2009 Napa Valley Cabernet Sauvignon vintage Yao served at this dinner received 95 points (out of 100) from Wine Enthusiast, an excellent showing for a first wine. The wine was considered by Wine Enthusiast reporter Steve Heimoff as “richly attractive and deeply flavored in blackberries, blueberries and black currants.”

“He is bi-cultural and he has a foot in both China and the U.S., which provides a unique perspective and connection between these

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certain he was very thoughtful and careful about this choice. This is a strong endorsement for California wines in China where the U.S. has a very tiny market share compared to the wines of France.”

Challenges

“On a national level, we are too focused on reaching goals – a gold medal, a championship. And that’s a very big part of sports – winning a game – but that’s not all of it.”

— Yao Ming

two diverse cultures,” says Wine Enthusiast’s Strum. “Since Yao was raised in Shanghai and he lived for more than 10 years in the United States he epitomizes an East meets West persona.”

In China, Yao’s Napa wines compete with the French heavyweights of Chateau Lafite, Chateau Margaux and other Bordeaux wines, historically the top contenders in the local wine market. “It speaks accolades that Yao Ming selected California and more specifically Napa to produce his first wine,” says Strum. “I’m

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As much as Yao and his business associates want the story to be about his wine business, or the recent book deal for a “limited edition volume” covering his professional career, Yao and basketball cannot be so easily separated.

Today, he owns the Shanghai Sharks, which he bought in 2009.

Yao has hired American coaches and has tried to put what he learned playing for Houston to good use here. He has stated that he wanted to “pay back his home team and Shanghai where he started his basketball career” and will “help Shanghai return to glory.”

Despite the weight of his name, Yao Family Wines also faces what other importers have to deal with: a hefty import duty of 14 percent, in addition to a further 10 percent consumption tax and a VAT of 17 percent.

It is also unclear how Yao will overcome the many challenges that face any professional basketball team owner in China. Yao has not been shy about the frustrations he has encountered with the Chinese Basketball Association (CBA).

All CBA teams face the same burden that even a retired NBA star cannot strategize to avoid, especially in regards to the staterun, Soviet style sports institution that characterizes most if not all national sports programs in China. Under this system, not all who love the game can play. Those who want to become athletes join a limited number of special sports schools or training facilities.

The Sports Bureau, the agency that governs sports in China, has other priorities in mind than developing the Shanghai Sharks.

Looking to develop a winning National Team, rather than a vibrant and competitive CBA, is one.

“The Sports Bureau is more focused on how the national team does,” Yao laments at the wine dinner.

Erik Zhang, manager for the Shanghai Sharks, shared similar sentiments during an interview at AmCham Shanghai’s offices.

“Because of the lack of resources, [the government] poured them onto a few individuals for them to go on and win medals,” he explains. “It’s very results-driven.”

Occasionally, that means that fewer resources are allotted to basketball, given that it is cheaper to train a gymnast or a weightlifter than an entire team. “Private entrepreneurship exists in perpetual tension with the state,” writes author Jim Yardley in his book Brave Dragons, “and those tensions seemed more starkly

xinhua

Chinese hurdler Liu Xiang and Yao Ming at the opening ceremony of the Citizens’ Games of Shanghai in June

evident in a basketball league organized to be a commercial exercise, even when it actually was not one.”

Widening the talent pool is one way that the Shanghai Sharks has tried to up their game, but even that is a limited option. “Every single team has a development program. We’re recruiting kids that are 10 to 12 years old, to bring them into the pro system,” explains Zhang. But nurturing a few players does not necessarily guarantee success.

“It’s quite an inefficient system in a country of 1.3 billion people,” continues Zhang. “Our national team coach says that he can’t find a single point guard in that population.”

Sharks attack Li Qiuping, Yao’s former coach at the Shanghai Sharks, is familiar with the system and is open about the challenges he also faced. He explains that most players come from specialty sports schools, and academics and sports are sharply separated. “Students at sports school are driven in one sport, and other academic subjects are neglected,” he explains. “Most kids in the U.S. have many choices in what they’d like to do. Football, basketball – they can do it all and at the same time keep up with their studies. Their overall development is stronger.”

Despite Yao’s popularity in China, the player pool is not strong yet. Local teams in China are trying different solutions. Coach Li explains that many are bringing in foreign coaches and trainers to

help the players they have.

The change may also have to come from a more fundamental place. “Sports as a business industry only exists if it is driven on a grassroots level,” says Zhang. “People in the U.S. are enthralled with the idea of kids being athletes. Therefore, there are training programs, Little Leagues, driving sports interest. In China, you don’t see that yet.”

A need to build up familiarity and a love of the sport? Perhaps Yao’s involvement in popularizing California wines and the Shanghai Sharks is not as different as the two may seem.

“For the sports market, you need a sports culture,” says Yao at the dinner. “Our sports culture is way behind the U.S. It is a lifestyle. In China, at the grassroots level, people are not concentrated on it, even as there are more places to run and stretch. On a national level, we are too focused on reaching goals – a gold medal, a championship.

And that’s a very big part of sports – winning a game – but that’s not all of it.”

Yao, Zhang and Coach Li are still leading the effort to do just that.

“Yao Ming’s time in the U.S. stirred up hope in the Chinese people,” says Coach Li, “with them developing a dream that they could too one day play professional basketball.” Coach Li himself is involved in youth sports camps, encouraging students to engage in team sports.

“In the U.S. there are many great sports movies, like Coach Carter,” says Yao. “In those movies, the team doesn’t every time win, but they are life winners. That’s the kind of message we have to spread.”

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interview B y R ya n B a l i s

Buy, Sell or Hold? istockphoto

K.K. Fung, Jones Lang LaSalle managing director for Greater China, speaks to Insight about the current real estate environment in China

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hina’s real estate market has cooled since the central government, beginning in 2012, i nt r o d u c e d a s e r i e s o f s t i f f restrictions that targeted investors. What once had been a red-hot property market continues to edge further south with prices reaching a 16-month low in May 2012, according to a survey of 100 Chinese cities

by SouFun Holdings.

Although the government maintains the curbs will remain in place, it recently has begun to stimulate fresh demand for homebuyers amid a slowing economy. In June, the People’s Bank of China (PBoC) cut interest rates for the first time since 2008. Some banks are slashing mortgage rates for first-time buyers, and the government is encouraging developers to build more affordable homes.

Today, some are looking to re-enter the market, albeit cautiously, says K.K. Fung, managing director for Greater China at Jones Lang LaSalle, a global real estate services firm with 12 corporate offices across Greater China.

Insight spoke to Fung at his Shanghai office about the current state of the market. The following is an excerpt from that interview.

Insight: What is the feeling among China’s real estate developers regarding the health of China’s residential sector today – and what do you think is the prognosis for the future?

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K.K. Fung: “We saw price came down in major cities in the last 12 months. We saw some of the transaction volume slow down, although in certain cities it has picked up a little bit in the last couple months. But overall we would say the policy that the government imposed on the residential market is working, although we do not believe neither the government nor the people who are the owner of the residential would like to see the price come down in a big way. I think it’s for everyone’s interest that we stabilize the price rather than seeing the price coming down quickly.

“The government still e nc ou r age s f i rst - t i me home buyers to come into the market, albeit by encouraging the developers to develop the more affordable residential [properties] or the governments themselves provide the more affordable housing. So, really it’s the first-time homebuyers that the government is encouraging to come into the market.

“Whereas, if you already own one [home], the second one you probably need to still pay down the whole lump sum to buy that. The third [home], if you own two, the third investment is probably impossible at the moment.”

Insight: Are potential homebuyers still taking a wait and see approach?

Fung: “If you already own one [home], you probably would like to wait a little bit longer. But if you don’t have any [home] and if you’re a firsttime homebuyer, there are a few [buyers who] see this as now the opportunity because price did come down and the general belief is the price will not come down any further in a big manner.”

Insight: What are developers most worried about today?

Fung: “The developers, obviously some of them, they will face the cash flow issue. The lack of ability

to sell the units the way they used to will obviously have a negative impact on their cash flow….

“Because of [the government’s purchase] restrictions, we will continue to see developers shift their products. In the past, it was high-end, it was luxury because more profits can be made from the high-end residential market.

Now, they probably will have to accept a lower profit than before – that’s another trend that we will see. Another one is we’ll probably see some major developers, some of the more experienced residential developers, diversify their interest. The old days of buying land, building residential units and selling them – that formula will not work anymore.

“If they continue to want to be big players in the market, they will have to diversify their skill sets, including they will probably develop more of the commercial buildings, shopping centers, offices.

They may even want to hold some of those new products as a long-term investment portfolio rather than churning them. So, we will see the market mature as a result as well.”

Insight: Is Shanghai still one of the most expensive cities in China for homes, and do you expect this to change?

Fung: “I think home price has come down a wee bit in Shanghai, but we do not expect price cuts to broaden or deepen in the following months.

It’s still the financial hub of China. You still have a lot of expatriates, whether from overseas or from other parts of the country, that come to Shanghai looking for opportunities. Shanghai does offer these opportunities and also you will continue to see big corporations coming to Shanghai and set up their offices or expand their offices in Shanghai.

“You don’t come to a city because it is cheap to operate; you come to a city because it offers you the opportunities.”

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“

The old days of buying land, building residential units and selling them – that formula will not work anymore.”

– K.K. Fung

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inside amcham By simon smith

The 2012 AmCham Shanghai China Food Industry & Food Safety Forum

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m C h a m S h a n g h a i ’s F o o d , Agriculture & Beverage Committee hosted The 2012 AmCham Shanghai China Food Industry & Food Safety Forum on May 25 at the Westin Shanghai. A panel of industry experts touched on various topics including new government policies, market foresights and trends, risk prevention strategies and key strategic considerations for food related businesses.

The Forum kicked off with Vice President of Chinese Institute of Food Science and Technology, Dr. Liu Xiumei, as the keynote speaker. Dr. Liu explained that the Chinese government is working to be more efficient and transparent in making food safer for the general public by establishing new legal rules and capacity building for risk management. There have already been 72 new food safety standards introduced in 2012.

Chinese consumers want a diverse range of

premium goods, according to speakers from Booz & Co. and Nielsen. Product innovation accounted for 75 percent of the food and beverage industry’s annual growth this past year, and the companies which pushed premium items saw the biggest growths overall. Scott Minoie of Element Fresh explained that to produce safe premium products, companies need to control and regulate measures at all stages of the production process, from having more QC inspectors to retraining both company employees and suppliers.

Ted Hurley of Nielsen also explained that with the rise of social networking sites like Weibo, companies need to anticipate and handle media scare stories. In the past year, the number of posts on Weibo regarding food safety jumped from 100,000 to 4 million per month. According to Sam Hsu of Ecolab Global, by knowing where to find and control potential negative press, companies can avoid having to deal with crisis management through risk prevention.

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inside amcham from the chair

Your Chamber – Active on Multiple Fronts

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or this month’s message, allow me to move away from those larger themes in U.S.-China relations which often serve as the theme for this column. In fact, I’ll even steer clear of the SME Center and the YRD Initiative, key strategic objectives for the Chamber this year and topics that have also featured prominently in my columns.

Instead, my theme for this column is the Chamber itself. A look back at the Chamber’s many activities in June underscores a simple but important fact: AmCham Shanghai is a vibrant and influential organization working to support the success of its members and the strengthening of U.S.-China commercial ties.

Tooting our own horn? Yes, in this case, I am happy to plead guilty. But it is hard not to look back at the Chamber’s calendar for June and feel impressed with the Chamber’s level of activity and the media attention it received. We all know that the Chamber hosts countless functions each month. But June was particularly noteworthy for the number of events involving key stakeholders or those focused on critical topics for Shanghai and the surrounding provinces. Let me provide some examples.

We began the month with a well-attended luncheon address by the Director General of Shanghai Customs, Mr. Huang Shengqiang. Six years ago, the Chamber established a special liaison taskforce with Shanghai Customs and this channel has proved valuable for our members. As part of the lunch, the Chamber released its annual survey results on Shanghai Customs’ regulatory policies. The feedback and recommendations were welcomed by Mr. Huang, and over 300 foreign media reported on the survey release. Quite an outcome.

Kenneth Jarrett Chair of the Board of Governors

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But that was not all. Later in the month saw the release of two other important reports.

In collaboration with Booz & Company, the Chamber issued “China Consumer Market Strategies 2012,” our second annual report analyzing how Chinese and foreign companies are responding to emerging trends among Chinese consumers. This insightful study on a topic of critical importance to almost all our members also received extensive media attention. The second report, carried out by the Chamber’s Financial Services Committee in conjunction with the Brookings Institution, assesses Shanghai’s plan to become an international financial center by 2020. This study focuses on Shanghai’s core aspiration, but also one not easily realized. Here too, the media was intensely interested in what we had to say.

There’s plenty more but only space in this column for one more example: the 3rd Annual China Auto Forum organized by the Chamber in collaboration with MOFCOM, the Ningbo Municipal Government and the China Association of Automobile Manufacturing.

The forum provided an extraordinary platform for our members to meet with key government officials and leading industry players, both domestic and foreign.

These are just four examples from an even longer list of June events. But these four alone demonstrate how much your Chamber can do for you. My thanks to the many members who made these initiatives possible and to the Chamber staff who provided support. It’s certainly cause for celebration. Speaking of celebration, as this column goes to print, we are just days away from the July 4 Independence Day party, a day of terrific fun that is always a highlight of the Chamber’s calendar.

inside amcham B OA R D o f g o v e r n o r s br i e f i n g

Highlights from the June 2012 Board of Governors Meeting 2012 Suzhou Government Appreciation Dinner Jessica Wu, director, events, provided a recap of the 2012 Suzhou Government Appreciation Dinner, held on May 21. The 2012 event had a similar number of Suzhou officials and guests in attendance as in 2011, and the post-event member satisfaction survey showed that most members found the event to be a positive experience. Feedback from members included a request for more time to be allotted for networking with government officials, and Board members recommended acting upon that recommendation in 2013.

SME Advisory Committee/SME Center Update Andrew Au, SME Advisory Committee Chair and Board Governor, provided an overview of the SME Advisory Committee meeting held on Tuesday, June 5. He reported that further discussions were held on a formal pricing structure for services to be offered by the SME Center and that SME Director Kirt Greenburg would develop a formal recommendation to be discussed by the Board. The planned SME Conference was also discussed, including possible themes. Advisory committee members emphasized the importance of making the conference a practical opportunity for SMEs to generate business with each

other and other companies, rather than simply a discussion on SMEs in China.

Doorknock Issue Discussion Board members discussed issues to be considered for the 2012 AmCham Shanghai Washington, D.C. Doorknock.

David Basmajian, director, communications and publications, presented general themes that have been agreed upon by the Doorknock Committee. Board members recommended adding the opportunity for greentech products and services in China as well as ways to promote Chinese foreign direct investment in the U.S. Also discussed was the importance of seeking input from the Chamber’s Committee leadership.

In Attendance Governors: Andrew Au, William Brekke, Kenneth Jarrett (Chair), Ted Hornbein, Dan Krassenstein, Jim Rice, Peter Sykes, Eric Zheng Apologies: Brenda Foster (President), Eddy Chan, Robert Theleen, Chen Lienjing, Jim Mullinax, Marie Kissel Attendees: David Basmajian, Kirt Greenburg, Stefanie Myers, Helen Ren, Linda Wang, Jessica Wu

The AmCham Shanghai 2012 Board of Governors Governors

Chair

Andrew Au Citibank China

Eddy Chan FedEx Express

Chen Lienjing Pratt & Whitney

Ted Hornbein Richco

Marie Kissel Baxter Asia-Pacific

Daniel M. Krassenstein Procon Pacific

James Rice CSM nv China

Peter Sykes Dow Chemical

Eric Zheng Chartis Insurance

Kenneth Jarrett APCO Worldwide

Vice Chair

Robert Theleen ChinaVest

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AmCham Shanghai New Members U.S. Corporate Membership

Associate Membership

Alcoa Wheel Products (Suzhou) Co., Ltd. CAMPBELL Ronald Graydon

Armstrong Teasdale LLP, Shanghai Office (USA) CANG Chenyang

Entropic Communications (Shanghai) Co., Ltd. LE Vivian

Compuware Covisint (Shanghai) Software Services Co., Ltd. CHA Deming

Shanghai Laticrete Building Materials Co., Ltd. QIU Bill

Lovells LLP, Shanghai Rep. Office (U.K.) CHIU Kuen Kuen

Supply Source International (Shanghai) Co., Ltd. WU Dick

Rockwell Automation (China) Co., Ltd. COLE Kevin Peter

Micromeritics Instrument (Shanghai) Ltd. XU Renliang

Dow AgroSciences (China) Co., Ltd., Shanghai Branch DU Hui

U.S. Associated Corporate Membership Johnson Controls New Energy Battery Research and Development (Shanghai) Ltd. CUE David Dow AgroSciences (China) Co., Ltd., Shanghai Branch FLYE SAINTE MARIE Pierre Marie Guy Zurich Technical and Consulting Service (Beijing) Co., Ltd., Shanghai Branch HU Xiaoqin

Savills Property Services (Shanghai) Co., Ltd. EVENNETT Adam Jones Lang LaSalle Surveyors (Shanghai) Co., Ltd. HANSCHEN Michael Cummins Co., Inc., USA Shanghai Rep. Office HE Qizhi Air Products & Chemicals (Shanghai) Gases Co., Ltd. HE Xin Citibank (China) Co., Ltd. HU Shenghua KPMG JENG Dylan LEUNG Sun Yin

Ernst & Young (China) Advisory Ltd. LEUNG Wai Lap Philip CHC (Shanghai) Ltd. LIU Lily AstraZeneca (Wuxi) Trading Co., Ltd. SNOW David Pittman Armstrong Advanced Flooring (China) Co., Ltd. TAO Shengyan Netrada Trading and Consulting (Shanghai) Co., Ltd. VAHRENBRINK Lutz Panalpina World Transport (PRC), Ltd. XIONG Rick

AsiaMedia, Ltd. CRANLEY Wm Patrick Constellium China Co., Ltd. MEACHAM David Sinovantage International Ltd. TARBEEVA Ksenia Kokuyo Furniture Commerce and Trading (Shanghai) Co., Ltd. YAMAOKA Hiro

Non-Resident Corporate Membership Chrysan Industries, Inc. KOH Suk-Kyu

Individual U.S. Citizen Membership Broadnet Technology, Inc. CHEN Amy Cafe, Inc. PLASTER Todd Cannon Design LIU Xin Fosun International Ltd. LISSY Joel Global Law Office, Shanghai Branch PRATT Sean J. Golden Image Ent. HALLSTED Steven Herbert Smith LLP, Shanghai Office HORRIGAN Brenda MSH International HSU Tuan Ko

United Airlines Shanghai Office LIN Xinjia

Sears Holdings Global Sourcing Ltd. PANTUSO Kelly

Tyco Electronics (Shanghai) Co., Ltd. LIU Nick

Shanghai International Industrial Design Center TIPPETTS John Daniel

Eastman (Shanghai) Chemical Commercial Co., Ltd. Jing’an Branch LIU Tom

Shanghai Matsu Furniture Co., Ltd. JOHNSON Sean

Textron Trading (Shanghai) Co., Ltd. MA Keith

The US-China Business Council WALTON Julie BUTCHER Luke GUO-SORENSEN Stella

Alcoa Fastening Systems (Suzhou) Co., Ltd. MILEY William

HUANG Haiying

Constellium China Co., Ltd. MUROMACHI Kristine

SUNG Virginia

Intralox Conveyor Belts (Shanghai) Ltd. OSBORNE Donald Hangzhou MSD Pharmaceutical Co., Ltd., Shanghai Branch ROTA Steve AstraZeneca (Wuxi) Trading Co., Ltd. SHEN David

Small Business Membership

Textron Trading (Shanghai) Co., Ltd. SHIH Michael Kien Yuen

DRP Capital (Shanghai) Ltd. DODDS Robert

Bayer Technology and Engineering (Shanghai) Co., Ltd. SUN Jack

CRCC Asia, Ltd. NIVERN Daniel

Brady Investment Management (Shanghai) Co., Ltd. VEUM Mike insight

Armstrong Building Products Co., (Shanghai), Ltd. ZHANG Dahong

Professional Way Ltd. WHITEHORN Greg

Tyco Electronics (Shanghai) Co., Ltd. SHEN Thomas

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Armstrong Teasdale LLP, Shanghai Office (USA) YU Steve

Korn/Ferry (Shanghai) Human Capital Consulting Co., Ltd. LIN Richard

Hu Business (Shanghai) Co., Ltd. LUO Qi Corporate Int’l Affiliate Membership

Boeing Shanghai Aviation Services Co., Ltd. YIN Lynn

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MILGRIM Steve

ZENG Kai

Individual Int’l Affiliate Memberhsip AVCI Ayca Shanghai Centre SIGOUIN Kurt

Non-Resident Individual Membership AsiaSource, LLC HAMMOND Peter

Do you want to share more information about your company? Contact Sophia Chen at (86 21) 6279-7119 ext. 5667 or sophia.chen@amcham-shanghai.org for a “Standout Listing” opportunity in the New Members Section.

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AmCham Shanghai

2012 Food Safety Forum

IP Forum with U.S. Federal Circuit Judges

Customs Forum, with Director General of Shanghai Customs Huang Shengqiang4 4 i n s i g h t j u ly / a u g u s t

2012

Nike Factory Tour

Shanghai Calling

in Pictures

Gov. of Minnesota Mark Dayton

Booz Consumer Report

These are a selection of photos from AmCham Shanghai events in June.

Zhejiang Fair

Shanghai Calling

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t ra d e ta l k s B y j o n abram o v i c

ECWG Advances Export Control Dialogue at Seminar

T

o better understand export control regulations and compliance, AmCham Shanghai’s Export Compliance Working Group (ECWG) partnered with the U.S. Department of Commerce Bureau of Industry and Security (BIS) and the Chinese Ministry of Commerce (MOFCOM) to host the “U.S.-China High Technology Trade Seminar” on May 31 and June 1 in Shanghai.

Over 200 government and industry leaders participated in this event designed to clear up misperceptions about export controls and maximize bilateral high-tech trade. Leading the U.S. side were Deputy Undersecretary of Commerce Daniel O. Hill from Washington, Consul General Robert Griffiths from the U.S. Consulate in Shanghai and Minister for Commercial Affairs William Zarit from the U.S. Embassy in Beijing. Leading the Chinese side were MOFCOM Vice Minister Jiang Yao Ping, MOFCOM Director General Li Minglin and Ministry of Foreign Affairs Division Director Jing Quan.

ECWG leadership also featured prominently in the agenda. Co-Chair Marc Allen of Boeing and Vice Chair Paul Marks of Argosy emphasized the importance of all parties working together to achieve mutually beneficial goals. ECWG Co-Chair Chris Szymanski of SMIC shared his experience with VEU authorization, including a cost-benefit comparison with individual licenses.

While the Chinese side highlighted the tradedeterrent effects of export controls, and the U.S. side highlighted their national security benefits, both sides agreed that export controls should not be a barrier to future commercial cooperation. In that spirit, the seminar focused on many of the positives in U.S.-China high technology trade, emphasizing the vast mutual gains of the trade relationship over

the past decade.

Most speakers urged pragmatic and effective measures to capitalize on a Chinese economy that continues to grow amidst a stagnant global economy. One such measure was to match U.S. companies with Chinese partners, so that they can grow together in China and globally. A similar message was conveyed at the U.S.-China Strategic & Economic Dialogue in early May. Reflecting the seminar’s theme, both sides promoted mutual understanding and agreement as the keys to future gains for all. Both sides urged open and transparent communication to dispel false myths over export controls and to build mutual trust, commercial high technology trade and a stronger bilateral economic relationship.

For more information on becoming a member of ECWG or to receive information on the next event, please contact Jon Abramovic at jabramovic@amchamchina.org.

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GoverNment Relations AmCham Shanghai Welcomes New GR Director AmCham Shanghai will soon have a new Government Affairs Director. Steven Chan, who brings over a decade of experience working with East Asia Affairs in both the U.S. State Department and the Department of Commerce, is expected to join the organization in early July.

Steven most recently served as the Deputy Director of the Office of China and Mongolia for the U.S. Department of Commerce, where he managed key trade dialogues with China, including the U.S.-China Joint Commission on Commerce and Trade (JCCT) and the U.S.China Strategic & Economic Dialogue (S&ED); and various capacity building and training programs. He also developed advocacy strategies to help U.S. industries overcome obstacles in China. He was competitively selected for the Commerce Department's Senior Executive Service career development program.

At the State Department, he served as Deputy Economic Chief at the Office of Korean Affairs at the Bureau of East Asian and Pacific Affairs in Washington, D.C. During this time, he managed key bilateral programs with Korea and worked closely with the Commerce Department and the United States Trade Representative to conduct and coordinate pre-Free Trade Agreement negotiations with South Korea. He was also a Trade Policy Advisor at the U.S. Embassy in Beijing, where he was given the Department of State Meritorious Honor Award.

His experience in the private sector includes work with both Deloitte Consulting and Booz Allen Hamilton, where he provided policy analysis and audited performance and management for the Department of Defense and the Department of Homeland Security; and assisted other U.S. government agencies to ensure compliance with Congressional mandated programs. He received the Deloitte Applause and Booz Allen Personal Best awards and also served as president of the Deloitte Asian American Business Resource Group.

Minnesota Governor Meets Members AmCham Shanghai hosted Governor Mark Dayton of Minnesota. Dayton joined AmCham Shanghai members and 50 other state business leaders to announce the opening of a new version of the state’s Shanghai office (originally opened in 2005). Now with an outreach office in partnership with Greater Minneapolis-St. Paul, Minnesota’s Shanghai office is part of an increasingly large collection of U.S. states strengthening engagement in the Chinese market. China is Minnesota’s second largest trading partner, recording US$2.5 billion in exports in 2011. Two thirds of that was agricultural commodities like corn, soybean and pork, the prices of which have been driven up in recent years due to the growth of China’s consumer class. He also went on to emphasize that Chinese investment is welcome in Minnesota, which is effective in retaining local jobs. During the presentation, Dayton recalled an example of a Chinese company, Laiwu Steel Group Ltd., investing in a steel enterprise in northern Minnesota. The company “would have gone bankrupt if it hadn’t been for that investment,” and the deal “saved a couple hundred jobs,” said Dayton. (June 13)

AmCham Shanghai Members Discuss IP with U.S. Federal Circuit Judges On May 31, AmCham Shanghai hosted three federal circuit judges, Timothy B. Dyk, Richard Linn and Sharon Prost, from the United States Court of Appeals for the Federal Circuit to discuss Intellectual Property issues in China with member companies. They gave an overview of the United States – China Adjudication Conference, which the judges attended in Beijing. Hosted by the China Law Society, with participation of the Federal Circuit Bar Association, the discussion touched on a number of IPR adjudication issues like Case Management in Patent Litigation, Enforcement of Patent Issues and Commercialization of IP. Members provided the judges with their business and legal experiences protecting and managing IP in Shanghai and China. While legal standards and practices are in place, enforcement still remains an issue. This includes patent infringement, forced technology transfer and copyright infringement. Members agreed that IPR protection in China is improving and likely on an upward path, and continuing high level dialogues between Chinese and U.S. legal bodies is good for sharing of best practices and aligning standards. (May 31) 48

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Committee highlights

i n s i d e amc h am

Marketing & Media Committee Retail and China's Lower Tiers AmCham Shanghai’s Marketing & Media Committee hosted +CW Associates Managing Partner, Corbett Wall, Adidas Retail Development Director, Tom Brown, and Tesco’s Senior Site Research Manager, Alex Coidan, for a panel discussion on “Retail in the Real China” and the challenges, experiences and opportunities of expanding to lower-tier cities.

The discussion began with a visual presentation led by Corbett Wall where he described daily life and the differences in Tiers 1-7.

He referenced Tier 7 city, Xiaochang, in eastern Hubei province Panelists speak on best practices to expand to where advertisements abound for iPhone4s mobile devices. Even second- and third-tier cities in the lowest defined tier, some residents have the disposable income to buy these types of devices. For others, these brands and products become aspirational. Next, Tom Brown explained some of the challenges faced by Adidas in expanding to lower tier markets. At the top of the list is finding the resources to dedicate the time to exploring these remote areas. With their franchisee model, he expressed difficulty in finding local operators which meet the Adidas standard. Alex Coidan rounded out the discussion with his knowledge of Tesco’s expansion. (June 12)

Healthcare Committee Anti-Counterfeit Medicines Forum

Forum speakers spoke on the challenges of cracking down on counterfeit medicines

The AmCham Shanghai Healthcare Committee hosted a half day roundtable in Shanghai in association with the U.S. Commerce Department’s Office of Health and Consumer Goods on counterfeit medicines and tainted active pharmaceutical ingredients (APIs) in China. The roundtable builds on collaborative efforts between the Healthcare Committee and the U.S. government to address issues in China’s healthcare landscape. Speakers included Jeffrey Gren, Director of the Office of Health and Consumer Goods, and several industry experts and international officials, including Jeannie Salo, Director of Global Anti-Counterfeiting, International Government Affairs at Eli Lilly and Chair of the PhRMA Anti-counterfeiting Task Force, JunGuo Hao, Regional Director - Asia Pacific, Global Security Team of Pfizer, and

Lim Chin Chin, Director, Singapore Health Science Authority.

Speakers talked about the history of counterfeiting medicines and ongoing attempts by governments and companies to mitigate the issue. Counterfeiting, according to the Organization for Economic Cooperation and Development (OECD), is a US$200 billion global industry. The counterfeiting of APIs is a potentially deadly industry, and according to Gren, “China is ground zero for this problem.”

According to the speakers, there are multiple aspects to the problem, including an increasing role of the Internet in distribution of counterfeit products. Smaller counterfeiting agencies are able to receive orders online and ship fake products overseas through the postal service, with consumers often unable to tell the difference between legitimate and fake products. (May 18)

Reporting by Ryan Balis, Caitlin Elling, Matt Garner, Simon Smith, Jessica Spring and Esther Young

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EXECUTIVE READING ROOM In this issue, executives tell us what books they plan to read this summer and they also recommend some they’ve finished.

Constantino Flores, Vice President of Operations – Asia Book: Midnight’s

Children by Salman Rushdie

Remarks: “This book is indeed the story of independent India herself, cleverly sprinkling factual events with a narrative full of magical characters and fantastical happenings. It is a thoroughly enjoyable read, a few pages into it and the reader understands why this book has earned the accolade of being considered the best among the winners of the Man Booker prize of the first 40 years since the prize was instituted.”

Also Reading: 1Q84 by Haruki Murakami Remarks: “I have read a lot of Murakami’s fiction and really enjoy his intermingling of alternate worlds with our sensorial reality. I heard that this book was all the rage in Japan, where it gathered a huge following and since it has just been translated into English (I’m hopeless about reading it in its original Japanese), I’m going for it.”

Jonathan Chajet, CEO, China, Dragon Rouge Book: All

Eyes East: Lessons from the Front Lines of Marketing to China's Youth by Mary Bergstrom

Remarks: “I recommend my wife’s new book. Based on research gleaned from her insights consultancy, The Bergstrom Group, the book profiles youth attitudes on work, relationships, technology, media, brands and their role in the future of China. Perhaps the best part is the use of well-known stories covered in the media in the past few years to illustrate key trends that are emerging. It's a very fun and very educational look at perhaps the most important consumer market of our generation.”

Thomas L. Ward, President, PIM Ltd. Book: Heaven Cracks, Earth Shakes: The Tangshan Earthquake and the Death of Mao’s China by James Palmer Remarks: “Palmer provides an insightful view of the multiple events in the pivotal year of 1976, the tragedy of the earthquake, the demise of the Mao cult and rise of Deng Xiaoping.”

Sean Fitzgerald, Executive Vice President for China, Ketchum Book: What

Chinese Want by Tom Doctoroff

Remarks: “The book focuses on the psyche of the Chinese consumer and the implications that the country’s dynamic economy will have on consumer decisions and marketers now and in the immediate future.”

Also reading: The

Emperor’s Tomb by Steve Berry

Remarks: “An ‘Indiana Jones’ meets high-tech private investigator meets adventure novel that bases its plotline on secrets of China’s First Emperor’s tomb, sealed for 2,000 years, that are about to be revealed.”

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