American opens doors in China

September 19, 2005 

  • Capt. Jimmy Chen likes to keep a low profile.

    Google him and you’ll find just a few obscure mentions: a chat room reference to his nautical museum; a snapshot of him, grinning, at a Tacoma World Trade Center gala; a note from the Dragon Boat Association, thanking him for boats and moorage.

    The Trade Center’s directory of businesses casts more light on him, but only a glimmer. The listing for Chenco Marine, his Puyallup-based company, says: “Steel trading. General import and export. Buy & sell ships.”

    Chen, 54, does in fact buy and sell ships. But that’s just the beginning.

    He is on a first-name basis with CEOs and policymakers around the world, and he has U.S. senators and foreign consuls general on speed dial.

    Working behind the scenes, Chen is an unofficial business ambassador between Washington state and China. His friendship is highly sought after by entrepreneurs in both countries who are looking to make a deals.

    Chen is an introducer, a deal-maker and when problems arise, he’s a fixer.

    “What we did in China would never have happened without what Jimmy did for us,” said Erik Johanson, the president of the Seattle-based float plane company, Edo Floats.

    With Chen orchestrating and refereeing, Edo set up a deal last year in which Chinese aerospace workers build Edo float planes in a top-secret military factory – at about half the price they can be made in the United States.

    “He knows a lot of people, he’s good at introducing people and getting people to work together,” Johanson said.

    Chen was born and raised in Taiwan and made a fortune rescuing old freighters and hauling them to China to be scrapped for steel. He piloted the towboats himself, hence the title, captain.

    He immigrated from Taiwan in 1980. Gradually, as the Chinese economy grew, he expanded into a Chinese ship-breaking yard, marinas and manufacturing plants.

    From the outside, Chen’s headquarters on Puyallup’s Main Street looks as if it might belong to a down-on-his-luck tax accountant or a hometown lawyer.

    But looks are deceiving. The no-frills exterior masks a sophisticated international enterprise. Chenco Marine has branches in Shanghai, London and Moscow.

    In the space of a single hour on a recent afternoon in Chen’s office, he rang up an American Indian tribal chairman, a Communist Party leader in Beijing, a former CIA operative and a ship broker in Moscow.

    “People like him,” Johanson said. “Jimmy is not an elitist kind of guy. He’s just as happy having a bowl of soup with the workers in a factory as he is going out to a fancy dinner.”

    “He has an aura about him, and people can feel that. It’s an aura of … I don’t know, influence, perhaps. They know he’s not the best choice of people to fool around with.”

    Chen seems embarrassed by such remarks. He is reluctant to talk about himself.

    “I might have some language and culture barrier,” he protests. “I am very worried about offending people by talking too much and creating unnecessary problems.”

    As far as his efforts to improve relations with China, he says only, “Being of Chinese origin, I feel it is my duty to build the bridge between two countries.”

    Chen does not get paid for his efforts, he says.

    “I never try to build the bridge and do business in the same time. If mixed together, people will look at me with different ideas. I think to give is a blessing better than to receive. I am always delighted to serve people.”

  • SHUNDE, China – The Washington state trade delegation is making all the right moves.

    The delegates donned their darkest business suits. They bowed slightly and used two hands when presenting their business cards. They gamely tried portions of the pickled squid and stir-fried crocodile.

    Then their leader, Lt. Gov. Brad Owen, seated at the dais with the mayor of the Chinese city of Shunde, pulled off a brief but masterful sales job for the state.

    Speaking through an interpreter, Owen managed to work Boeing, Microsoft, Washington wines, Starbucks coffee, biotech labs, Washington State University and the ports of Seattle and Tacoma all into a three-minute address.

    The mayor appears impressed.

    Speaking through his interpreter, the mayor says, “We are deeply honored to have such distinguished visitors from Washington, D.C.”

    Wait a minute.

    Washington, D.C.?

    It’s another day in the quest for “guanxi,” the personal relationships thought to be so important to doing business in China.

    With China’s economy rocketing forward, the world is desperately looking for handholds to catch a ride. Washington state is part of the crowd, sending trade missions, establishing sister cities, paddling dragon boats, all in hopes of closing lucrative deals.

    Does this stuff really work?

    It doesn’t hurt. Few would argue that former Gov. Gary Locke’s visits to his ancestral Guangdong Province did not raise the awareness of the first American state to elect a Chinese-American governor. And, while specifics are scarce, his visits probably helped create a friendly climate for Boeing, Microsoft and Starbucks.

    But the competition is stiff.

    Ira Kasoff, historian and the principal commercial officer at the U.S. Consulate in Shanghai, watched quietly as Washington delegates and their high-profile Chinese guests recently shared dim sum and threw back glass after glass of maotai, China’s high-octane economic lubricant.

    “The eating and drinking is part of the business,” Kasoff said. “They believe that by having the governors visit they can get good business for their companies.”

    Well, obviously. But does it work?

    Kasoff shrugs.

    “The governors of Idaho and Kentucky were here last week,” he says. “The governor of Hawaii is coming the week after next.”

    Businesses eager for contacts

    “China is like a pretty girl,” said Chilean businessman Fernando Carrasco Spano, smiling. “The whole world is chasing after her.”

    Spano was attending a trade conference in Chengdu, hosted by China’s Sichuan Province.

    The province, a thousand miles inland from China’s booming east coast, is looking for a little guanxi itself. Its distant location puts it at a disadvantage in attracting foreign investors.

    To compensate, Sichuan officials organized a conference this summer to advertise their attractions. Nineteen countries attended, including Russia, Germany, the Czech Republic … and Washington state.

    Washington has had a “sister state” relationship with Sichuan since 1982. But at the opening ceremonies, this fact suddenly seemed less important. A Chinese government official announced his country has established 2,259 sister city relationships since 1989.

    Owen attended the conference, too, accompanied by his wife, with a Washington State Patrol trooper assigned as their bodyguard and an entourage of hopeful Washington businessmen, eager to make personal contacts that might end up paying off in business deals.

    Owen and the delegation were treated like royalty, with police-escorted motorcades, constant gift exchanges and, occasionally, even big red-and-white welcoming banners tacked to the tops of buildings.

    Owen is a natural guanxi guy, balancing political poise with a down-to-earth sense of humor. On several occasions, he helped break the cultural ice with a saxophone, playing songs like Frank Sinatra’s “My Way” and the theme from “The Godfather.”

    Sometimes, though, the details were hard to control.

    At a Shanghai banquet he hosted, Owen made his standard pitch for Washington wine. As usual, he noted the state is second only to California in terms of the amount of wine produced in the United States.

    He got a murmur of amusement, as usual, when he followed up with, “We’re No. 2 in quantity; No. 1 in quality.”

    But as the glasses went up, filled with Washington’s Hedges Cellars wine, it became clear that Washington had been out-guanxied.

    Each glass was etched in red with the word, “Gallo.”

    The importance of shared interest

    Gig Harbor entrepreneur Irl Davis was one of the delegates on the trade mission, looking to expand his already considerable China operations.

    He’s a good guanxi guy, too.

    “Making friends really does lead to making money,” he said. “It’s all about shared interests.”

    Davis grew up in the isolated ranch country of eastern Oregon, which he remembers as a place where people left their keys in their cars and neighbors automatically turned out to help one another.

    No one ever gave a thought to how they were going to get paid back, he said. “It would have been offensive to ever bring it up.”

    Now, Davis says he’s found he can operate in China pretty much the same way.

    For example, he estimates he has $300,000 invested in a factory near Shenzhen with a Hong Kong partner, all on the basis of handshakes and good faith alone.

    “Not one piece of paper has been signed,” he said.

    Sidney Rittenberg, Chairman Mao Zedong’s former propagandist and perhaps America’s most respected China dealmaker, agrees the importance of personal relations cannot be overestimated when doing business in China.

    “Companies ask me, ‘Who should I send to manage our operations in China?’ said Rittenberg, who runs a China consulting business from his home on Fox Island. “I tell them, ‘Send a man who can get along with his neighbors.’ You can’t do anything in China except by consensus and shared interest.”

    Dipeng Sun, former chief financial officer of China’s Baosteel, the world’s third largest steel company, agrees, but only to a point.

    Sun arranged many joint ventures with foreign companies as head of the Baosteel Business Development Corp. Now he’s a business consultant in Shanghai.

    Sun has a reputation as a tough businessman in China, where he is famous for being the first Chinese employer to fire workers. That made him front-page news.

    In a conversation at the Marriott Hotel Hongqiao in Shanghai, Sun punctuates his remarks by jabbing his finger and raising his voice loud enough to attract attention from across the room.

    In general, he says, Washington state and anybody else who wants to do business in China needs to get focused, do their research and put serious resources behind their efforts.

    “Eating, drinking by itself is useless,” he said. “The first step must be research and developing strategy. Many of these people have no strategy. They don’t know what business to do in China.

    “They need to ask themselves, ‘What is our product? What is the advantage of our product?’ They need to compare their products with similar European products, compare their companies with other companies.

    “Everything else is surface.”

    Bernie Yau, an American businessman who has made a fortune in China making parts for jet engines, also is skeptical about friendship being the key.

    Yau has an unusual perspective on doing business in China. His father was one of Chiang Kai-shek’s generals who fought against communism, then escaped to Hawaii when Mao’s side won.

    Guanxi is fine, he said, but at its core, the Chinese approach to business is relentlessly hard-core and practical.

    “Friendship works,” he said, “but only if the facts are there to back it up.”

    Rob Carson: 253-597-8693

Fifty-eight years ago, Sidney Rittenberg was an idealistic young communist, dodging American bombs dropped on Mao Zedong’s revolutionary headquarters.

As the B-29s roared past, he remembers raising his arms to the sky and shouting, “Down with U.S. imperialism!”

Now he’s the go-to guy for U.S. entrepreneurs trying to get in on China’s red hot economy. He’s one of America’s most sought-after corporate matchmakers, whose clients have included Microsoft, Intel and Polaroid.

It’s been a neck-snapping ideological journey for Rittenberg, now 85 and living on Fox Island waterfront.

Rittenberg’s advice to businessmen who want to make it in the new China emphasizes perseverance and creativity.

“In almost every attempted business deal there’s a point where you hit a wall and things seem impossible,” he said. “One kind of guy just says, ‘Wall,’ and gives up. The other kind says, ‘Hmmm … There’s a wall. I wonder how I could get over it or around it or under it?’”

Those who get flummoxed by the walls are bound to fail, he said. For the others, the possibilities are nearly limitless.

Rittenberg is a small man, professorial yet down-to-earth and warm. The decor in his home, which he shares with Yulin, his wife of 49 years, is a marriage of East and West. His study, a comfortable retreat strewn with works in progress, is dominated by a vast library of books on China.

His past gives him great credibility in China, where he is widely known and revered by his Chinese name, Li Dunbai. (A Chinese bookseller gave him the name in 1945, combining the name of the famous Tang Dynasty poet, Li Bai, with “Dun,” the character for uprightness. The name was supposed to sound like Rittenberg.)

During the communist revolution he worked as a propagandist, translating news releases and public statements into English. He won the position after becoming enamoured of the Communists’ egalitarian dream and remaining in China after his service as a U.S. GI in World War II.

His autobiography, “The Man Who Stayed Behind,” tells of bouncing around in a Jeep with Mao and giving the leader’s daughter piggyback rides.

Rittenberg fell out of favor with the regime in 1949 and was put in prison, falsely accused of being a spy. He was released but imprisoned again in 1968 on the same charge. Both times he was released with apologies, but nevertheless served a total of 16 years.

Rittenberg’s work as a facilitator still takes him to China several times a year. He sees China’s ascendance to economic superpower as inevitable. Its advantages make it futile for American manufacturers to try to compete head to head. The best hope, he says, is to grab hold and ride.

“America has to partner,” he said, “or it will be left behind.”

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