China Turns Pro-Entrepreneurship: A World of Start-ups

Robinhood is an American start-up company that uses technology to allow anyone to buy and sell stocks on a cell phone or iPhone, with no broker fee, with intent to democratize the market. DJI of China is the world market leader in easy-to-fly drones and aerial photography systems. What do the two have in common?

Innovation and technology.
In mid April, our speaker Jason Tu spoke to us about business innovation, technology, and financing startups in China. Jason has a long acquaintance with the USCPFA, dating from school in Evansville, Indiana, then Purdue, then France. He worked in Hong Kong in a British bank, then in Shenzhen in Financial Technology. Now he's an MBA student at Stanford Graduate School of Business. Recently he led a group of Stanford business students to visit new media and technology companies in China.
Jason told us about three key features of the recent technology startup trend in China.
1) China has moved from reverse engineering copycat to global innovation. Example: the Drone Market, where DJI accounts for 70% of the global commercial drone market share. Drones controlthemselves using deep learning, a kind of artificial intelligence. The Chinese use the drones to inspect railroad tracks, to inspect high-voltage power lines, and in agriculture to spray pesticides and fertilizers. Jason talked about how early drone technology evolved from ban open source code from Carnegie Mellon and how the Chinese further developed that to world standards.
2) China is bypassing some technology to focus on the future. Example: while still unable to manufacture good gasoline engines, China puts a lot of focus and investment into electric vehicle development and in other high-tech areas such as robotics. In 2015, China produced 33,000 electric cars, and has intent to produce 5 million by 2020.
3) Numbers and population really matter. Example: e-commerce. Wei Xin (WeChat), a smartphone app, reaches 700 million users—including me. Like the iPhone, one can do free calls, video, text, and even get a taxi and pay utility bills on the ap. One can find others on WeChat in ones area and connect with them. Consumer technology companies have gone far beyond their counterparts in the US, with many new business models flourishing in China. But the real engine behind the fast-developing consumer technology is its large population whose members constantly have a thirst for new things.

Where does the money come from?
From both public and private sources. There are a great number of venture capitalists nowadays in China, whose money is primarily from high net worth individuals and companies that made their money from traditional sectors such as manufacturing, real estate, and large tech companies. Some private companies, such as Alibaba, Tencent, and Baidu, put money into private financing as well.
Public sector money depends on the city, each of which has its startup incentive schemes rolled out by the government. Some venture capital firms and private equity firms have government backing as well.
Jason talked about Shenzhen, Shanghai, and Beijing. Of the three, Shenzhen will match private money that exceeds 1 million Renminbi. Beijing has a very large startup community. While Shanghai has its Free Trade Zone, it has the most rules and regulations, seemingly never-ending ones that keep changing.
With the current economic slowdown, there is great concern that the traditional big companies won’t provide enough jobs to new graduates. Sixteen million Chinese enter the labor market every year. Hence the Chinese government is now very pro-entrepreneurship—encouraging the private sector to expand.

By Jason Tu and John Marienthal

Walk of Remembrance May 14

April Meeting

Artist Wong Shares With Us

Last year, Oakland resident Flo Oy Wong came with author John Jung, and spoke about her life growing up in a restaurant. On Sunday, she returned to share her poetry and art. She showed us some of her installation artwork, which makes use of a unique medium: silk screening on rice sacks. 

1997 Solo Exhibition "Rice Grains" at University of Kansas

2004 Exhibit in Koret Gallery, SF Library

She also shared some of her poetry.  “Home,”which was first published in the 2nd zine of the Oakland Asian Cultural Center, is inspired by her mother who worked 17-hour days in a restaurant:

Home is Settled With Heart
I have traveled this road so long
Perhaps its flavor perfumes my dreams.
Often now when I look upon it
I taste joy and sorrow
Ancestors sprinkled upon me
A bit of rice here
A bit of rice there.
They, worn and tired,
From labor in wet fields
Whisper that home is settled with heart.
I go on, carrying their sweat and toil,
To embrace offspring whose journey
Glows warm through a curtained window
For which their lives are spent.
(July 2015)

"See That Tree?" was published in the inaugural issue of the online journal The Literary Nest.

"See that tree, Say So?
It is dying. So must I."
Your words float towards me in your small apartment
The freeway noise, an uninvited companion,
Rumbles into the living room
Where you and I sit
Our hearts linked, hands not touching
Your slippers sliding to the floor.
I smile to hide my unease
I look at you, kind eyes framed by wrinkles
Not many but they are there.
Your hair pulled back in a bun
Worn that way for many years
Except for the time you had a perm
Curls making you uncomfortable
I didn't know you then
But I know you now.
Our knowing shimmering like light green opals
Of your ring mounted in soft gold
Worn when you wiped your son's face
On a sultry summer's eve
That iridescence I feel now
As I fumble on a thin layer of dreams.
(Jan 25, 2015)

English-speaking Monks and their Disappearing Lifestyle

USCPFA Member John Marienthal has had the good fortune to travel to all 23 of China's provinces. In 1995, while living in Xinjiang for a year, he managed to arrange a trip to neighboring Tibet. (see blog posts one and post two.) One aspect of Tibet--which dragged down every visitor--was the altitude difference. It is the highest place on earth, starting in Lhasa at about 12,000ft. 

"The most recognized building in Tibet—the Potola Palace-- was built in the 13th century as a fortress. It sits high on a ridge. Fortunately, when we visited, our bus took us around back (and we were able to avoid the endless staircase). 

Potola Palace

"What most impressed me—aside from the beauty of the palace and a dance performance that was being staged for a different tourist group, was spotting my first solar cooker. Apparently, Lhasa has most direct sunshine in the world. The monks had welded a metal camera-like tripod that held a teakettle. At the bottom of the kettle was the focal point of a large parabolic solar reflector. I asked how long it took to boil tea. He said about fifteen minutes. (Yes, of course. Because of the altitude.)

"We had a new guide who was not very well-versed in the history of the palace. His grasp of English was also very basic. Still, he did his best, matching up each room with a description in his guidebook, and then translating that to us. At one point we passed a group of monks in meditation. I lingered to let the group go ahead, and one of the monks turned to me and said in perfect English, 'I’m sorry. Your guide is mistaken. He has confused this shrine with another room.' I was delighted to find this fluent English speaker—although I woudn’t have guessed him to know the language in a thousand years. In fact, so many times, we would be talking, assuming the people around us couldn’t follow our conversation only to realize that they did. Moral of the story: don’t gripe and moan--especially in elevators. You never know who understands you.
"We visited the living quarters of the Dalai and Panchen Lamas. The Dalai lives in India. The Panchen Lama has visiting quarters in the Potola Palace, but he usually lives in Beijing. As we left the Potola Palace by climbing down the endless front steps, I felt tired and overwhelmed. Still, we pushed onward to Ganden Monastery, which is built on a high ridge that is over 12,200 feet high. 

Ganden Monastery

There is no fresh water on the ridge. Each morning the young novitiates carry water buckets down the ridge, then carry fresh water back 800 feet to the top. This is said to teach humility and service to one’s fellow man. Instead of making the climb, we browbeat our guide into driving us up to the top of the ridge. It was a scarily narrow road with no shoulders to pull off onto, no barriers to prevent a tumble off the side. But it saved us walking up the endless ridge.
This monastery was destroyed during the Cultural Revolution , as it was the largest monastery. It became a target of the young red guards who were out to liberate people from “old ideas,” smash the old, and bring forth the new. To destroy the monastery, they commandeered an artillery piece, dragged it atop a nearby ridge, and shelled the monastery for three days. At the time the monastery had over 6000 monks and novitiates. Two thirds of all the buildings were destroyed.
When we visited in ‘95 the monastery was being rebuilt. Many of the outlying buildings that had been destroyed were to become the new living quarters for the new monks. We asked how many new monks would there be, and a lively discussion ensued. The answer? Maybe 400. Maybe 1600. Prior to 1960—and the onslaught of the Cultural Revolution—families routinely offered their sons into the monastery system. (A third of young men followed this path.) But this was 1995. How many people would continue to do that?

Pilgrimage to Jokkang Temple, Tibet

Member John Marienthal, who joined a tour in 1995, was one of the early travelers to Tibet. He had been living in neighboring XinJiang for a year, and he enjoyed comparing the two places, both of which have minority populations. (see post one) 

"Our first day of actual activity, we went downtown to the Drepung Monastery. 

Drepung Monastery

It was easier to walk, having adjusted a bit to the altitude. This was a good thing, as we spent several hours at the Drepung Monastery going up and down ladders to see rooms that were different shrines. 

Then we returned to our hotel for lunch. We avoided street vendors at first. As a result, our meals were mostly Chinese –rather than Tibetan—although our hotel did serve yak-butter tea (definitely an acquired taste.)
After lunch and a nap, we went downtown to the Jokkang temple. It is tradition to make a pilgrimage to Lhasa that ends at the Jokkang temple. The greater distance that you travel the more devout you are considered. In this case, traveling means you fall to your knees, push your body forward on the ground, pray-chant, then bring your knees up and push forward again. You slide, you jack-knife yourself forward, and you slide again. Once you reach Lhasa, you must then circle the Jokkang temple a certain number of times and then enter the temple and circle the temple. Our group did not go to all this effort, but instead rode a bus.
Surrounding the temple area were multiple small streets filled with street vendors. In the past, this area sold traditional Tibetan handicrafts-which people made to supplement their incomes in the winter. When we got there, the little stalls sold cheap goods that had come up by truck from Pakistan. I got the feeling that Lhasa was not overrun by Han Chinese coming to the city and selling things. Rather it was overrun by the Pakistani traders coming up to Lhasa by truck and selling cheap imported goods. Everywhere we saw young Tibetan and Han men listening to cheap transistor radios and walk-men with the latest Hong Kong pop, Taiwan and Japanese pop artists.."
(...to be continued. Next: English-Speaking Monks and their Disappearing Lifestyle)

Member John Marienthal's Early Travels to Mysterious Tibet

Historian (and USCPFA member) Tom Grunfeld said that prior to 1965 maybe only fifty westerners had actually traveled extensively within Tibet. I had always wanted to be one of those travelers. In 1995, when I was living in the bordering region of Xinjiang, I got my chance.

Xinjiang 1995

At the time there were only two flights a day to Lhasa, only 400 passengers a day. You had to be in a group, and if you ended up there alone, the hotel would call the Public Security Bureau. They would assign you to a group and you would be assessed a special group tour fee. So I booked the trip through a travel agency. They arranged our permit, a guide and our reservation at the Sunlight hotel.
Xinjiang --where I'd been living for a year--and Tibet are the two largest minority regions of China. Xinjiang has 16 minority groups and Tibet has 5 groups. Xinjiang is half the altitude of Tibet, and has more water, mineral, and cultural resources than Tibet. In 1995, there were Uighur, Kazah, and Han radio stations, and a Uighur-language TV channel and production station. Tibet only had a Han TV station, with minimal programming in the Tibetan language.
Tibetans are more dispersed than the people of Xinjiang, occupying Tibet, and the historical greater Tibet, which is the Qinghai basin and parts of the mountain regions of Sichuan and Yunnan. The Qinghai, basin is also the home of the Panchen Lama. He represents the historical division of Tibetan Buddhism into two sects. At one point in history these were two separate rival kingdoms.
I was excited to be going into the kingdoms. I had spoken with others who had traveled to Lhasa. They advised that on that first day, because of the altitude adjustment, I should head straight to my hotel. Nothing more. That seemed a tall order. Here we were landing in this mysterious land, and "do nothing" was not at the top of my list.
We climbed down the steps from the airplane to the ground, and I was thinking, “This is not so bad.” Then we walked over to an area to wait for a bus, and I was starting to feel the altitude a bit more. By the time we drove the 50 miles from the airport into the city, I felt winded. So when we reached our destination, it required supreme effort to climb the steps to our second-floor hotel rooms.
I was ready to do nothing.
However, my guide called me to come talk to him. He said that our permit was illegal, and that we would need to pay his company a group fee of 3000 rmb. He said that if we did not pay, he would turn us into the Public Security Bureau, they would confine us to the hotel, and they would put us on the first flight out on Tuesday. (It was Saturday.) While we all understood it as extortion, we also realized that it was only an extra 40 dollars a person. While we were thinking about this, we went down for dinner to the hotel dining room. We were the only ones in the hotel. Our waitresses were Tibetan, but our group spoke only a bit of Mandarin, and these women didn’t speak English. I ordered what I thought would be tomato soup. (Xi hong shir tang.) Unfortunately, “tang” can be either ‘soup’ or ‘sugar,’ depending on the understanding of the tones. We got sliced tomatoes with sugar.At that point we decided we needed our guide--extortion or no-- and agreed to pay him. (After that, he did all the food ordering for us.)
After all of that was settled, he sent us off to our rooms to sleep. Fat chance. My heart was thumping so loud, there was no way I could close my eyes. Later I discovered that, for emergencies, you could rent a rubber bag about the size of a pillow filled with compressed air. The air would last about five minutes but you would feel better for about an hour or so, enough time to fall asleep.
(...to be continued. Next: John Makes the Pilgrimage to Jokkang Temple.)