In Episode #13, we discuss what it’s like working for the Chinese government as an American with former Senior Government Consultant, James Moore. We cover:

  • China’s general business environment pre-Covid and post-Covid.
  • The division of labor between Chinese provincial governments and local governments with regard to business and fostering entrepreneurship.
  • What it is like to work inside the Chinese government as a foreigner.
  • Major draws to foreign businesses to continue to engage with China.
  • Major limitations toward foreign businesses doing business with China.
  • Reading, listening, and watching recommendations from:

If you have comments on this episode or if you’d like to suggest topics for future episodes, please email globallawbiz [at] harrisbricken [dot] com.

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This podcast audio has been transcribed by an automatic transcriber.

Fred Rocafort 0:08
Global law and global business go hand in hand, but never seemed to keep pace with each other, developing and developed nations wax and wane their importance in the global stage. While consumption and interconnectedness both increase, laws and regulations change incessantly, requiring businesses to stay nimble. How do we make sense of it all? Welcome to global lawn business, hosted by Harris Bricken International Business attorneys. I’m Fred Rocafort

Jonathan Bench 0:34
and I’m Jonathan Bench. Every Thursday, we take a bite sized look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of our international guests. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter. We cover the important the seemingly unimportant, the relatively simple and the complex.

Fred Rocafort 0:59
We hope you enjoy today’s podcast. Please connect with us via email and social media to comment and suggest future topics and guests.

Jonathan Bench 1:18
China is a country that almost needs no introduction. It boasts thousands of years of continuous history and culture, though its continuity as a civilization has often been marred by internal conflict among warlords and rival factions. In recent history after the defeat of the Japanese invaders in 1945, and the expulsion of the Nationalist Party, the woman down to Taiwan, its communist roots firmly took hold under Mao Zedong’s leadership formally beginning in 1949. Deng Xiaoping led and championed China’s significant economic reforms from the late 1970s through his death in 1997. China joined the WTO in 2001, and its GDP has grown on average at nine and a half percent year over year, bringing an estimated 800 million of It’s nearly 1.4 billion population out of poverty. At the same time, China’s socialism with Chinese characteristics, as ledand directed by the Chinese Communist Party recently culminated in the most significant adversarial standoff between China and the US and its allies in memory. From its Belt and Road initiative to it’s Made in China 2025 plan to say that China under the Communist Party is ambitious, strong and confident is an understatement. Today we are joined by James Moore, a former senior government consultant to the entrepreneurship and innovation Bureau in Hangzhou Zhejiang Province, China. He was the first foreigner to hold such a position inZhejiang province. Moore was responsible for various research, policy and economic development projects. He has lived in Asia for over 10 years working in the retail, consulting and government sectors. He has personally set up and run for wholly owned foreign enterprises in China, and currently sits on the board of a global firm based in Salt Lake City. He holds a BA in Chinese from the Brigham Young Diversity and a PhD from Georgetown University in entrepreneurship management. James and his wife are the proud parents of four children with one on the way. James, thanks for being with us today.

James Moore 3:10
Thanks, John.Thanks for having me.

Fred Rocafort 3:12
James, welcome to the podcast. Let’s kick things off by having you tell us a little bit about how you chose your current career path. And how is it that you ended up in China?

James Moore 3:26
Great question, kind of a long story. I’ll give you the short version. But it all kind of began when I was called to serve a mission in Taiwan for the Church of Jesus Christ of Latter Day Saints. During that time I gained to greet just a really deep regard for the Chinese people and their culture and language. And even after I returned home, I wanted to keep focusing my career and, and opportunities that are there. We’re continually growing in Asia and so I wanted to see what I could do there. So I continued to study Chinese at Brigham Young University and then later was recruited by a company in LA that had large retail operations in China and worked for them for several years. Eventually, I switched industries and took a job with a global quality assurance firm. And I worked with some big brand retailers there like IKEA Costco and Macy’s. And around that time, though, I kind of became an expert in setting up and managing wholly foreign owned enterprises and local companies in China and one of them grew to a multimillion dollar business. And so that was a good thing. With with that experience, though, of setting these companies up by began partnering with the CEO and others to create five other company fast divisions within the organization, four of which were unsuccessful, but one of them grew to another multimillion dollar business unit that was also a positive thing. And these kinds of entrepreneurial experiences were the catalysts that led me to, to obtain a PhD in entrepreneurship, at Zhejiang University and that academic experience is what actually led me to work for the Chinese government there and Hangzhou. Then as you know, you know to work for the Chinese government it’s foreigners don’t really have that opportunity very much because typically you need to be Chinese or a member of the Communist Party or not necessarily a member of the party, but most of them are. I’m obviously neither yet in a rather innovative stunt to bring talent back home from abroad, the Chinese government kind of sidestepped tradition and offered a kind of three year leadership program in the form of a consulting role. And if you completed it successfully, bigger within integrates you into a more formal government career track. The interview process was really crazy to say the least and I won’t bore you with that, but I don’t think I or they thought occasion would make it to the final rounds because it was all in Chinese. But in the end, I was fortunate enough to receive the offer and my wife and I thought long and hard about it because the US trade war had just began to develop and you know, we had a much higher paying job at the time and but we saw these increasing tensions between these two large superpowers and we thought, well, maybe we can help. And maybe we can see if we can help these two places get along, at least in some areas and find some win wins. Because, you know, it’s as these two countries, if they become increasingly more contentious, it’s not good for the whole world. And so we With that in mind, we tried to jump in with both feet and see if we could do some good. And it was a great experience for my family.

We learned a lot that we couldn’t have learned in any other way. I always made it my principal that I wouldn’t do anything that didn’t help both parties in which I was engaging with achieve win wins. I think I was able to accomplish that. You know, I tried to just be a bridge as much as I could between these foreigner organizations who were interested in China and the local government and helping them find synergistic ways to work together. But due to the initial outbreak of COVID-19 in China, my and my wife’s pregnancy, we just, I decided, you know, my family’s more important at this point. And so I decided to resign and take my wife and children to the USA for the birth of our fifth child. And so that’s kind of where my journey started. And now where it’s kind of here now, and we’ll see what the what the future holds for us.

Jonathan Bench 7:26
James, you have a real boots on the ground view of China’s business environment pre COVID and during COVID. Can you talk a little bit about that? What you saw in Sudan province, compared to the rest of the country, and then how that started to change in late 19 or early 20?

James Moore 7:44
Yeah, so pre COVID things were difficult between the US and China obviously with the trade war. So I mean, I personally started working with you know, fewer organizations from the us since the the trade war had begun and an escalated, but there was still, you know, business was was booming for the most part and in at least in Szechuan province, still quite a bit of foreign investment and the foreign companies that were there were that at least that I was associated with or had some connections with, seemed to be doing very well. At least if they, you know, the ones that were dealing specifically with the US China market struggled because of the trade war, but others seem to be doing well. But then, after COVID-19, as you’re aware, US China relations, you know, became even worse, even less investment from the US side. And, you know, most foreign firms in China were shut down for a period of time, which was not positive for business, obviously, and, but I mean, now, things have resumed, for the most part and people are getting back to work. But it’s kind of the new normal, you know, like 30, 40, 50% less work or revenue than they used to have. And so, you know, post COVID, things aren’t good. And China may be going into a recession at some point if they’re not already there. So, things post COVID are much worse than they were pre COVID. But I still think there’s opportunities for companies that are currently there in China or companies that want to invest or enter China.

Fred Rocafort 9:30
James, I’d like to talk a little bit about the division of labor between different levels of the Chinese government, how do provincial and local governments and for that matter, the national government split up the work when it comes to business and fostering entrepreneurship.

James Moore 9:51
So for that’s a really good question. And not something that people aren’t very familiar with when they’re entering the China market. But is Something important for everyone to know that wants to do business in China. So most people are aware that China’s just like the US is made up of a bunch of states, you China is made up of provinces. And these provinces are like our states. They’re made up of cities, and the cities are then made up of districts. So this division that they have is important to know because it’s in the district, at the local levels where the rubber hits the road. Because at the district level is where you’re going to register your business. It’s where you’re going to pay your taxes. And obviously, some of those texts will go to the city into the province, but but at the district level, those are the people who you’re going to be working with. And when you have any issues, you’re going to be working with the local leaders there in the in the district. So it’s really important to know and make sure that you’re in a good district for your business. And, you know, I’ll just add this for entrepreneurs or for those that are wanting to enter China. a suggestion that I would have for you is, is to just remember that China’s, you know, kind of has three major regional economies. It has one of the North with the hub, a Beijing tinging area. It has one kind of Central on the East Coast central with Hangzhou, Shanghai, and Suzhou, that kind of area that’s called the Yangtze River Delta, if you’ve heard that thrown around before, and then there’s one in the south, which is the Pearl River Delta by Guangzhou and Shenzhen, and those are the three major regional economies and the drivers of the Chinese economy.

And so if you are to enter China, I recommend getting close to one of those main economic drivers because so much of China’s money infrastructure and investments are in those areas. But then once you’ve selected the region in which you want to attack now you got to choose a city. A lot of people often will think of Beijing, Shanghai or Shenzhen. But those are first tier cities and very competitive, very crammed, saturated with all sorts of businesses and industries. And so they’re usually more expensive. And because everybody wants to be there, you know, there’s no reason for the government for the most part to try to attract various labor or, or companies to come because everybody already wants to be there. So they’re not really spending their money that way, but just outside of those first tier cities, you usually have these second tier cities and the second tier cities are very interesting because they’re ambitious. They want to become a first tier city, and they’re spending lots of their tax dollars on Trying to incentivize businesses to come and set up their whether it’s foreign or local. And you’ll find you’ll probably get a lot better deal in terms of company setup, maybe a tax break in some of these second tier cities than you would in the first year cities in that I would even go further to make one more distinction that I think there’s actually a middle level there between the first tier city and second tier say I would call it an emerging first tier city category, kind of a new category. And these are cities that are, you know, 10 million plus people. very robust. subway systems, high speed railway systems, lots of inch infrastructure, a fortune 500. But they’re, you know, they’re not the size of the mega cities like Shanghai and Beijing where you got 25 30 million people, but they’re still, you know, large and up and coming cities.

The city that I was in was actually one of those emerging first two cities called Hangzhou. It’s about an hour Outside of Shanghai by high speed train, and they had many more incentives than you would find in Shanghai or Beijing to attract local and foreign businesses to set up shop there. And not just incentives to attract businesses, but also incentives to attract talent. So like recent graduates from colleges, whether it’s foreign or domestic, could get certain subsidies and a certain set of money from the government just by coming there and working there for one to three years. And so you find a lot more support in the second emerging first tier cities than you would in these first tier cities. So, you know, there’s definitely a division of labor between what happens at these provincial, city and district levels. And so when you decide on a region, and then you decide on a city, now you got to decide which district within that city and so that same kind of setup where I was talking about certain cities will have more policies. To attract more companies, the same thing for a district, all of these districts are also competing with each other. And so for let’s take that same city that I was just talking about Hangzhou that I was in. So there’s 10 districts in that city. I was actually stationed in the largest district, both in terms of GDP and land. That’s where Alibaba is headquartered, if the listeners are familiar with that company, and that particular district had some policies that were different from some of the other districts that were in that area, and that that district specifically focused on like biotech, artificial intelligence, the Internet of Things, software development with Alibaba and some other big companies there and so each district will kind of focus on its own area, and will have policies specific to helping those types of companies. You you hung that just that district was about 3 million people, and they were really big into e commerce. And so there were a lot of e commerce policies that were very preferential to certain types of businesses. And a lot of e commerce companies would set up there and Alibaba was a big part of that.

So anyway, the point is, is that depending on what your businesses, you’re going to want to make sure you select the right, I would suggest second or emerging first tier city, close to one of those economic regions. And then I would suggest, you know, doing your homework and finding out which district might be better and it and it is possible that several of the districts focus on certain specific industries that you know, that you’re in. And for example, two of the districts in Hong Joe, both were focused on biotech. And so in that kind of a situation, you know, if you were a biotech firm, you have an advantage because now you could play the two districts against each other and see which one gives you the better deal. Now, not to say that you need to, you know, just go with whichever one gives you the better deal, but because there’s a lot more Then just money in terms of when you’re setting up in a district, maybe one district wants to attract to you, as a foreign firm there, or a domestic firm is willing to give you more money, but maybe their infrastructure is less. They have maybe, you know, less freeways and, and maybe they’re a little farther away from the port or other things like that. So there’s a lot of factors that still go into it. But nonetheless, it’s just good to know that how these districts work and, and also, sorry, to wax long here. But, you know, it’s important to note that a lot of these districts and the way the government works, in my opinion, although it’s run by the Communist Party, you know, it has these Chinese characteristics that they would call it but I think it’s really just some capitalistic principles because what they’re trying to do is they have all these indicators they track like how many people they have, that are, you know, have Master’s or above graduate level talent that are in their district. How many patents applied for in their district and granted, you know, their tax revenue, how many businesses reset all these different indicators that the government leaders above them are ranking how well they’re doing in their area. And so a lot of these government leaders are just trying to take these tax dollars and then throw them back into private enterprises to try to stimulate their growth for their area, so they can get promoted and move on. I mean, I’m sure some leaders, they’re doing it for the good of the people as well. But that’s kind of you know, it’s very much a meritocracy in terms of how they get promoted and where they go next. And so I don’t know that I think that’s yours might be kind of helpful for you to see and understand that, why they do some of the things they do and why they’re throwing incentives out because a lot of these incentives and things that they throw out, I mean, they’re not taking a piece of the company. They’re not, you know, taking any kind of shares like that. They’re just trying to grease the wheels so they can get the right talent to where they need to be because if they don’t have the right companies, they’re not going to grow in the ways in which they want to and achieve their goals? So, but I’ll stop there and let you ask any more questions that you might have.

Jonathan Bench 19:07
That’s fascinating. James, it really is interesting to think about the meritocracy in the Communist Party and Fred and I’ve been reading about the, about the government enforcing taxes much more than it used to, and we sometimes get clients who say, Well, you know, how big of a deal is it? Or I’ve been doing this for years. And you know, I’ve I’ve been paying these people’s independent contractors, it hasn’t hit me yet. You know, why do you think it’s going to change and we say, we know that we know the reality, which is that it’s changing, but you’re inside your inside information about why the enforcement is going up, but it’s not necessarily top down. It’s it’s very interesting, think about it in terms of individual rewards, you know, people trying to get ahead on on the communist platform, that fascinating. So can you describe for us what it’s like to work inside the Chinese government? It just, you know, I’m picturing you in your suit. By walking in with, with 1000 other people in the morning or 10,000 other people in the morning into a government building, you know, what, what did you learn about the Chinese bureaucracy? And how are you treated as a foreigner? I want to hear all that.

James Moore 20:11
Sure. So, you know, just typical, you hear you’re gonna walk into a really big building with lots of other people. And you’ll have your own little cubicle and what you just sit and do your meetings at, but a couple, maybe those kinds of details. I don’t know if anyone’s that interested in but I think what you may be a couple things you might be able to take away, or at least that I took away from working inside the Chinese government was they are incredibly good at long term planning. And I think there’s several reasons for this. One, there’s just not a lot of internal debate at lower levels. You know, whatever the top leader says they typically will, you know, follow there’s not a lot of push Unless there’s something obvious, you know, then they’ll try to find a way to get to the leader. So no one loses face. But for the most part, there’s not a lot of debate. So in other words, there’s a lot of unity behind what said, and and so that’s one thing that I think helps these long term plans go. Because, you know, when someone sets their mind and a goal, there’s not a lot of obstacles to move it people just kind of, you know, fallen behind it. Another reason why I think they’re really good at long term planning. Obviously, there’s, there’s a fallbacks to what I just said, but nonetheless, that’s the approach at least it seemed like from my perspective, but another reason is, the leaders don’t change very frequently. The leader may be in power for quite some time. Now, it is true that at lower levels, you know, they do a lot of cross training and people jump around from different bureaus and departments to if they’re up and coming leader to you know, to give them lots of experiences. That That is true. But I mean, in terms of, you know, the the higher level leaders like the, the general secretaries, you know, they, they might be in a position of power for quite some time. Whereas, you know, in western more democratic countries, you have elections, people change out quite frequently. And, you know, every time someone changes, they kind of throw away everybody’s plans before, but in in China, you know, people are staying in power a little longer. And so, you know, they’re able to execute more on those plans. And like I said before, there’s not a lot of, you know, attacking previous leaders or unless there was some corruption involved. There’s usually quite a bit of unity on with the successor and with what they were trying to accomplish. And so, you know, the long term plans really seem to to do well in China. So they’re very good at long term planning, that was something that I took away. Another another takeaway is that the Chinese government is incredibly organized. I, when I was, you know, entering I was what I didn’t know what to expect to be honest. But with the amount of, for example, performance reviews that I myself had, and the amount of meetings that I had to attend, and the documents that were prepared before the meetings and how they tied into the long term plans and how everybody seemed to be on the same page, and I was, I was just amazed at how organized all of the meetings were and their goals were and objectives. It was it was, it was interesting. Now, I wouldn’t say there was a whole lot of creativity going on. Because there was a whole lot of debate, but the being able to execute on these on on these long term plans that they had was phenomenal. That’s something that I took away. But in terms of how I was treated, you know, I definitely think there was some, some people that were skeptical of me and you know, they might have thought, who is this guy? He’s American spy. Tonight, I can only imagine what a lot of them are thinking of course, they would never tell me because Chinese people from smarter, critically polite and would want to say anything that would make me look face or something. But I think over time, the I gained their trust and and, you know, I think less people were maybe suspicious that way of me and some of the ideas that I would have, they were more willing to try and do.

But on a personal note, I you know, I was very different from them. I’m a patriotic American I value A lot of freedom and I religious, you know, and for my Chinese colleagues, you know, they’re, they’re part of the Communist Party and not religious, at least for them. You know, if you’re a member of the Communist Party, they don’t really have a religion. And, and so you think that, you know, we would really butt heads a lot and wouldn’t be able to work together. But it, it didn’t that wasn’t the case. For the most part. I was able to develop really, really good relationships with everybody I work with. And, you know, I, I just one quick story that I think is fascinating. So I’m, I’m, like I mentioned, I’m a religious person, and I try to keep the 10 commandments and one of them is to keep the Sabbath day holy. And I remember one particular instance where there was a meeting called on Sunday. Oh, by the way, that’s another thing that I learned by working with Chinese government, They work constantly, especially the higher up leaders and the leaders. I’m going to tell you about just a second. I don’t think he took a weekend for like, three months to six months. I don’t think he even had a weekend off. He and it was in every time I had to leave late or something like that I’d always turn around and see that top floor and see it and his office light was always on. And it’s just, I’m sure there’s times it wasn’t on but it just seemed like he was always there. always working and a lot of these higher level leaders, they just give everything to their job. I was I was stunned at the work ethic in a government job that doesn’t pay that much. Anyway. So yeah, so this meeting was called on on a Sunday and I’m actually there on a Saturday trying to finish something up. And I got the text that I need to go to this important meeting. And you know, and I’m trying to figure out how should I handle this because, you know, when I took this job, I just I committed it to myself that I would not compromise in any way, who I am as a person and what I value and what I think is important, regardless of pressure or anything else like that, and, and, you know, so this, this moment comes and on Sunday I try not to work at the 10 commandments state.

And so I went up to this guy’s office I still remember walking down the hall because this guy kind of had a temper. He’s known for having a hothead. And so I didn’t know how he was going to take this because you know, the trade war wasn’t exactly good for for Chinese business at the time and and here comes this American trying to get off of this really important meeting and so anyway, so I’m, I go all the way to the top floor. I’m walking down the hall and the offices just keep getting bigger and bigger and bigger till I finally get to this guy’s office. I knock on the door, and once again on Saturday, he buzzes me and I go in, I sit down and Hey, you know, I have this commitment to God and my family on Sundays, and I just tried to do service and not work. And it’s kind of my part of my beliefs. And I appreciate it if I could not attend this meeting, and here’s my suggestions for the meeting, though. And so something kinda like that. And he, and he looked at me, and I think he was kind of surprised, but he was incredibly polite. He said, No problem, please, please take off. And I said, Thank you. And I and I left and I just thought that was it. And then I think the next day, a colleague texted me on the phone or sent me a text and said that he had chewed out everybody in the meeting, because I guess he thought their ideas were bad or something, I don’t know. But he chewed them all out. And then he said, but the colleague told me, but he praised you. And he said, You were you had really good ideas and, and that and just talked about me for a little bit. And you know, and I just thought That was, that was interesting, you know, the one guy that didn’t go to the meeting that was, you know, trying to follow his beliefs that they don’t believe in or support. And I just you know, and that was typical my experience, although I was very different than them and thought differently in a lot of ways. They always seem to be very respectful of how I approached life and how I approach things and and I never felt that I was ever asked to do anything that conflicted with my with my values and it was just a good experience for for me and my family.

Fred Rocafort 29:37
James listening to talk about your experiences in the Chinese government really takes me back to my own time in China, especially the first couple of years that I spent there, when I was working for the for the Foreign Service and number one, dealing very almost a daily basis with with different Chinese government offices but also working in a, in an environment that was different, of course in many ways but also bureaucratic and in its own way. When you talk about the level of planning that went into activities, I have to concur with that I was actually quite surprised and impressed really by the attention to detail how much thought would go into preparing for meetings even even at relatively low levels. The the way in which officials and your staff would prepare to, to meet with with someone from the consulate was was quite noticeable. And also going along the lines of what you described there was that that unity of purpose that there was a consistency in the message that that was written Remarkable and going back to the beginning of your, your your comments when you were talking about you know going to work I think might have been Jonathan he said you know going going to work and you’re in your suit and tie. I remember my very first meeting with a Chinese official, we were driving in the in the car to do where we were, we were on our way. We got a call from from this office and they they said listen, it’s really hot today. So we just want to make sure that we are all dressed informally. You know, we don’t want anyone to be to be embarrassed and of course all of us were dressed up in suits and but of course you know, we didn’t want to make them feel uncomfortable. So here we are, you know, taking off our jackets and taking off our neckties and rolling up our sleeves and I’m really glad we did because it was it was quite hot, but It was my, my first exposure to that certain informality in some regards, obviously in others, it was actually very formal, but I do remember and for the most part being pleasantly surprised that I could get away with with not wearing a jacket and the torrid South China summer. But anyway, turning, turning back to our conversation about China, as we continue on this path of seemingly increasing tension between the United States and perhaps more broadly, the the world community and China what are some of the factors that continue to draw foreign businesses to China and and what is your take on how that will continue to play out over the coming years?

James Moore 32:57
Okay, so another good question. You know I think there’s going to be plenty of opportunities and draws for foreign business going forward for several reasons. Right now, a lot of companies have been disrupted because of the trade war, as well as COVID. And so people are trying to diversify their supply chains and get some of that outside of China. And so you’re seeing somewhat of an exodus of, you know, foreign companies, talent, capital, etc. and China is going to want to balance that somehow they’re going to want to try to either attract that talent back or attract new investments to come in. And so with, you know, with this will basically try to stop the hemorrhaging, right? They’re going to try to fill these gaps with other investments. And so I think you’re going to see policies that I’ve never even heard about pop up at the district level. city level at the provincial level, they’re going to try to attract companies that fit the bill. And so I think there’s definitely going to be some draws for foreign businesses that want to take advantage of this. Me China has to keep capital, and, and, you know, attract the best kind of companies. So that’s definitely going to be there. But with that said, I would, I would also say, you know, we, it’s, it’s important for any company to diversify their portfolio. And that’s just sound business practice, and you don’t want to have all your eggs in one basket. And so, you know, you’ll just whether you decide to expand in China, enter China, I think should be handled very objectively shouldn’t be mesmerized by the size of the market, but you should factor all of the different things that are important for your business. See where your ROI falls and how you could manage the risks. If it makes sense. Then that’s great, then you can follow a similar approach that I mentioned in terms of finding the economic region, the right second to first emerging or first, first emerging first tier city, and then finding the right district for your business and getting the policies and incentives that are related to your industry, making sure that will help grease the wheels a little bit as you have a soft so you can have a softer landing China. But at the same time, you know, you’re gonna want to make sure you’re diversified and you don’t have all of your eggs in in the China basket because the trade war is disrupted things cope. It’s disrupted things and who knows what’s next. Right? So I just want to be wise and how you how you decide what you do. And in addition, I mean, we could you could throw in the political arguments there, right? It depends on what kind of technology your company has, and how you feel about those debates. So you just have to weigh all of that and, you know, make a decision that you feel is best for for you, your company. And and you know what you feel is right. So now, but going back to some of the draws and opportunities that I think will be in China, I think you’ll just, you’ll see a lot more industries that are currently closed opening. Because like I mentioned you, you see this Exodus, for lack of a better word out of China, they’re going to in order to keep the companies or attract them back or attract new ones, they have to find new ways to do so. And there’s a lot of industries that are currently close to foreign investors. And I think those will start to open gradually or maybe more quickly, depending on China’s need and how much they need capital inside their country. And I think there’s two examples worth noting.

One is the the JP Morgan case where China gave the nod for the first fully foreign owned futures business. That’s huge. It’s previously been closed and now it’s open at least to one foreign firm. And that’s, that’s big news. In addition, also in the financial industry, which is one that’s been very highly regulated and somewhat close to foreigners, American Express their JV, they got final approval to launch operations in China’s first foreign credit card, I believe, having to having the chance to expand to China. So I think we’re seeing some evidence of things opening up. But I don’t necessarily think it’s necessarily the pressure from Donald Trump saying you got to open up more, I think there’s that will play a part of it, but I think it’s more so they just, they realize that if they’re going to be able to fill the void of what’s been created from the trade war, and the Coronavirus, and whatever is going to come next that they need to make some reforms internally. So they can keep that inflow of talent and capital coming in. Otherwise, it’s going to go other places. And so I’m sure China’s going to try to compete. And but at the same time, there’s going to be other opportunities in the Southeast Asian market. And you just want to be wise in which one you select and how much you invest in each one by weighing your risks. Just doing those things, you know, you should do so. Maybe I’ll stop there and see if you have any other questions.

Jonathan Bench 38:25
James, we’ve had a great time speaking with you today, learning from you. Your insider’s view has been fascinating. And sure, we’d love to have you on again in the future to talk more about, about what you’re up to and what you’re seeing in terms of China and other global developments. We always like to end our podcasts with a question asking our guests what you’ve been reading or listening to or watching that would be interesting to our listeners. It could be something about China about Asia about international affairs, generally it could be something entirely off the wall. So what do you have for us?

James Moore 38:58
Well, thanks again for having me, Jonathan. And then Fred, it’s been a pleasure. Be happy to join you again, anytime. In terms of what I’ve been listening to, and, and what’s what might be interesting to you? Well, first economist, they have a pretty good Chinese English dual language version of an app. I think you can get it on the Google Play Store. And it’s the economist version with actual Chinese characters. It’s called like sunburn, like, you know, kind of business discussion. And it basically takes a lot of the economist articles and kind of condenses them, so they’re more like, five minute reads. And they have it. You can either listen to it via audio or you can read it. So they’re a little briefer, and they have them in English in Chinese. And so that’s, that’s been a very valuable resource for me over the past year or two, and they become It’s in Chinese, they kind of focus on a lot of more China related articles, or because they have it also in Chinese, they focus on more China related stuff. And so it’s a, it’s a good one, in order to kind of get a good macro view on what’s going on, I’d recommend that I’d also, you know, your country’s local Chamber of Commerce. The Chamber of Commerce associations that they have in China, us has a lot of Chamber of Commerce associations in the south in Shanghai and Beijing. And, you know, subscribing to their newsletters and their updates, I think is important. That’s always been helpful to kind of get the latest and greatest of what’s going on. You know, I subscribe to the US China Business Council. I think what they produce is really good. They have a lot of good articles themselves and they pull in a lot of other articles and information from other sources, and kind of summarize that for you if you could subscribe to them. Those are very helpful you can pick and choose which topics are most interest to you. They do just about everything from, you know, just doing business in China to law, policy, Trade, Industry updates, etc.

So I think the US China Business Council is a good place to subscribe to their newsletter and visit their site. Something that you may not know or do that has been helpful for me is just finding like a foreign marketing firm in China. And maybe, I mean, there are big ones there but maybe even finding some kind of smaller niche ones. I found a pretty good one called Nanjing marketing group, and they saw their foreigners that started marketing from there in China. And, you know, they’ll most of these marketing firms have some form of a newsletter that they produce an English because they’re for marketing from day one. Because that worked for them, but they’re trying to help the form companies learn how to market to the Chinese. And so what’s nice about newsletters coming from smaller niche companies like this is that, you know, they’re typically very close to the consumer and close to those social media channels and what Chinese people are saying and what the new technologies are apps that people like, and, you know, they just, they hit all sorts of different types of consumer products and, and just, you know, reading through their occasional newsletter is fascinating and good because you’re, you’re getting a lot of stuff that you wouldn’t get from the economist or The Wall Street Journal, you’re you’re getting more local feedback and reactions to what’s taking place in the marketplace. And that can be also very valuable, just to get that kind of information. So I would recommend subscribing to A group like that. yeah, and I reason why I say a local foreign firm is because Chinese is super hard. It’s not an easy language to learn. And I find whenever I tried to just read the news, myself and Chinese, even though I’ve been there 10 years as an undergrad and Chinese and I feel like I’m still still learning a lot and I spend way too much time unless it’s for language study, trying to read through articles, then when I could just quickly glance through, you know, some of these English newsletters much quicker. So I’d recommend finding a local firm there that produces English to save you time.

Jonathan Bench 43:44
James that is great advice all around. appreciate those definitely will help me I’m like you. I’ve been studying Chinese for 20 years and I still feel like I’m learning and I still feel like I’m at the beginning. I’m always learning I definitely feel like I am on the early side of the curve. Fred, What about you? What do you have to recommend for us today?

Fred Rocafort 44:02
Well, I recently got called out by a friend regarding one of my recommendations. He said, Listen, what I didn’t get what the connection was between your recommendation and the topic, and I did explain that. We don’t always connect the the topic we’re discussing with the recommendations. But today, given that we were talking about China, and that there are certainly many, many books I’ve read on the on the topic and many, many resources that I that I could recommend, I thought I should try to stick to the topic. And that got me thinking about what specifically to highlight and I’ve decided to go with a bit of an oldie, but it’s one of the most significant reads that I’ve made regarding China and definitely impacted the way that I looked at China. I read it sort of halfway through through my time in the country. And the more that time that goes on, the more, the more I realize how valuable that experience exposure to a different way of thinking to my to my book exposure to that way of thinking, how valuable that was. So the book is the China Fantasy by James Mann and it’s very likely or that one or two of you have have read, but it was the first time that well, I guess, not the first time but it was one of the clearest manifestations of a doubt with the the idea that 10 years was pretty much accepted as gospel that as China continued to engage economically With the rest of the world that openness and democracy would would inevitably follow. This book was the first. The first time that I was confronted with a well argued counter argument. And it has, in my view turned out to turn out that way. So I know that James Mann has has written other books since but I this was definitely an instrumental book for for my own China education. So I’ll recommend that. What about you, Jonathan?

Jonathan Bench 46:41
I also chose a book that was apropos of our topic today. This was called The Ugly Chinaman and the Crisis of Chinese Culture. It’s a book that was published originally in 1982. The author’s name is Bo Yang and he grew up in mainland China exited when the Kuomintang left. And then he was kicked out of the Kuomintang in Taiwan as well for being too harsh critic, and it’s, it’s written it’s a basically a series of essays or conversations that he had, that were put into a book format and then translated into English. And it’s, it’s based off of the same same genre as the Ugly American that was published in 1958. That kind of took a hard look at why the US Diplomatic Corps was failing and Southeast Asia you know, what made what the bad things about the culture I didn’t so certainly I don’t feel comfortable as an outsider critiquing Chinese culture, Chinese people at all on the way they think or live or do business. I have my own thoughts. I try to keep them myself for the most part, but I’m very interested in the way that boy young describes what what he sees as issues with with Chinese culture generally says, you know, something like China’s China’s had thousands of years of civilization yet we’re still we still fight with each other, right? You put three, three Chinese in a room together, and they’ll have three different opinions, and they’ll they’ll end up hating each other at the end of the conversation. And so I’m not saying that that is gospel, but it’s interesting since this was from essays and conversations he had in 1980s. that a lot of what he’s saying still seems very relevant to the way China is projecting itself on the international stage. And so I recommend that for any of you who are interested in getting a better look inside the Chinese psyche. James, we want to thank you again for being with us. We certainly enjoyed it. Looking forward to talking more and learning from you as well, and hopefully we can pick your brain in the future.

James Moore 48:38
Thanks, Fred. Thanks, Jonathan.

Jonathan Bench 48:41
We hope you enjoyed this week’s episode. We look forward to connecting with you on social media to continue to discuss developments in global law and business. and tune in next week for another episode. We’ll see you then.

Transcribed by https://otter.ai

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About This Podcast

Every week, we take a bite-sized look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of our international guests. No topic is too big, too small, too simple, or too complicated. We plan to cover continents, countries, regimes, governance, finances, legal developments, and whatever is trending on Twitter.