Seventeen years ago, my parents and I came to North Carolina as immigrants.  Then, like now, North Carolina’s reality was on the verge of a big change.  The NAFTA accords would be signed in 1994, and by the end of the millennium tens of thousands of jobs and entire industries would be wiped off the table.  But, the state has kept going. It has kept changing. And, today is no exception.  The following is part two of a two part series that presents my take on how China has changed, is changing, and will change North Carolina in the days to come. Part I, A Shotgun Romance, can be found here.

//Damjan DeNoble

Within North Carolina’s industry centers and robust academic institutions, the state’s Chinese immigrants are poised for an epochal period of ascent to positions of strategic importance.  The collapse of traditional NC industries like textiles and furniture manufacturing due to NAFTA and the advent of cheap Chinese goods necessitated, somewhat ironically, the strengthening of bonds between North Carolina’s business interests and China.  Working with Chinese businesses that have China-based profit models, however, is new territory for most Carolinians, and in order to come out ahead, they need help. Chinese immigrants possess the professional training and business culture orientation necessary for providing such aid.  By helping facilitate beneficial and friendly relationships with Chinese partners, and providing counseling on the dos, the do nots, and the inevitabilities of the Chinese approach to business, they can help North Carolina’s business players get a Sino-Carolina partnership right the first time, and avoid the short end of a bargain most times.  For this reason – and, likely sooner than later –  North Carolina’s Chinese immigrants will start stealing newspaper headlines away from the political machinations of their eponymous country’s more publicized, internet-blocking technocrats.

Tenney Woo, President of the North Carolina China Business Association (NCCBA), is better aware than most people of this encroaching inevitability.  He refers to NC’s Chinese immigrants as, “the cream of the cream of the crop, because all of these people came to here from top schools in China and can compete in a second language in graduate schools and in the corporate work place.”

His organization, the NCCBA, was founded on the premise that two creamy-crop brains are better than one, and he hopes to turn it into a premier social networking organization for North Carolina based individuals and businesses contemplating doing business with China.

“The thing is,” says Mr. Woo, “China is an economic superpower, and America is an economic superpower.  Who [besides Chinese immigrants to America] can claim to be culturally fluent in the language of two economic superpowers?  How valuable is that?”

It is very valuable, and gets at the heart of what makes NC’s Chinese immigrants so unique; their destinies are not tied to market options available in the American economy.  The experience of many immigrant groups entering the American workforce is typified by career tracts in the service economy, or local market entrepreneurship in relatively low-skill-needed industries. By contrast, North Carolina’s Chinese immigrants of today are typically joining the ranks of high-tech firms and cutting-edge research facilities with the full authority granted to post-graduate degree holders[1]. This makes it more likely that they get to participate in decision making, and are available to offer informal council about how to respectfully approach potential Chinese partners or clients.

Moreover, NC’s Chinese population is expected to grow exponentially, offering an ample pool of candidates for NC companies wishing to benefit from their services.  Between 1990 and 2000 the Chinese population in NC experienced a 99 percent growth rate, second only to Nevada, where the growth rate during the same period was 123.7 percent.  Data from the 2010 census is likely to show that the growth trend has continued[2].  Mr. Woo would not be surprised if NC’s Chinese population growth rate from 2000 to 2010 was higher than Nevada’s.  He points out that NC’s offerings match up almost point for point with modern Chinese family values.

“Chinese love to invest in diversification. And, what’s so good about North Carolina? Number one – many top universities in one area; Number two – better living standard for money; Number three – ease of access to smart and influential people. Then you look at Chinese people, and they have the following three [characteristic cultural values].  First, they put high priority in education. Second, like most people they look for ‘good value’. Third, they have a heightened sense of relationship building. “

Of course, simply being able to hire a Chinese professional does not guarantee results in Chinese business dealings. Examples abound of companies, who – hoping to engage in business with China – have hired Chinese-Americans as de facto czars of anything China related simply because they were Chinese.  Like the Darwin award recipients who stuck a bullet into a fuse box just because it fit, some of these companies  learned the hard way that their plan was bound to backfire.  Dan Harris, noted China transactions lawyer, and editor of China Law Blog illustrates a hypothetical situation that he has often encountered;

“In spite of this Chinese person’s lack of ANY legal training or business training, this person is typically chosen to be the lead person to start up operations in China…

…Now once this Chinese person is put in total charge of bringing his or her company into China, what is this person to do? Can he or she tell the owner “hey, wait a minute, I left China at 15 years old, and I am an engineer, not a marketer and not a lawyer?”…Of course not…So this person acts like starting and running a foreign company in China is a piece of cake.”

This point is not hard to grasp, but there is a need to explain one of the argument’s subtleties. When going into business with a Chinese company, there is a difference between utilizing the inherent cultural advantages of some employees, and assuming that cultural supremacy in a market is enough for those individuals to run your company.  It does not mean to imply that Chinese professionals are unfit for oversight duty. In fact, if an organization is lucky enough to possess an individual with both the cultural and business chops for Chinese business, then there should be little debate about who gets the Beijing corner office.

North Carolina State Governor Bev Perdue congratulates Dr.William Greenlee on the creation of the new Hamner-CMC Institute for International Drug Development during the official signing ceremony in May. (Taken from 'At The Hamner ', a Hamner Institute news letter)

That being said, Mr. Harris would doubtless be impressed by how RTP’s The Hamner Institute for Health Sciences utilized the cultural talents of its Chinese professionals to secure a five million dollar deal with Shanghai’s China Medical City (CMC).  Normally , deals of this size take years of meet and greets to put together, but Rick Williams, chief business officer of The Hamner, testified that, “It took us less than fourteen months.  We met with some representatives of China Medical City at a San Diego biotechnology convention and it became apparent very quickly that our interests were aligned.”

That January, even before the conference had ended, it was decided that someone from the Hamner should travel to Shanghai and visit the CMC premises. Wisely, when the time for the trip arrived several months later, Mr. Williams and, Hamner CEO, Bill Greenlee decided to personally see the matter through.  They also brought along Chinese professionals from the Hamner Institute campus.

Mr. Williams recalled being in meetings the whole time, and attending a lot of meals.  But, one thing that he keenly remembered is patiently studying how the Hamner was received by the CMC delegation. He also reiterated again and again how his Chinese colleagues provided him with valuable cultural insight throughout the trip.    The Hamner team’s attention to cultural detail would prove crucial. At the time, CMC had suitors across America competing for its services, so a deal with the Hamner was by no means a foregone conclusion.  In early 2009, Mr. He Rong, the president of CMC, along with an executive team, undertook a tour of potential partner facilities in the United States.  The group’s last stop was the Hamner Institute for Health Science’s Raleigh campus.

“We had meticulously planned our reception of Mr. He Rong and his associates.  Our reception was very formal and ornamental…like we’d seen when in China,” explained Mr.Williams, “We also tried to make the [Chinese] meals as authentic as possible.  The whole thing was very detail focused. And, we were very fortunate to have our Chinese colleagues there to help.  And, by this time we’d figured out that they should be a part of our chief delegation when meeting Mr. Rong.”

Of course, their hospitality efforts were very quickly rewarded by a huge contract. The key to the Hamner’s success was putting their Chinese professionals in highly visible diplomatic roles, and to heeding their cultural advice.  Rick Williams recalls the moment when he knew that the deal would probably go through “Mr. Rong told me that of all the places he’d visited – and these were not small places– no one had a reception as kind and polite as ours.”

The case of The Hamner Institute, and many other NC organizations and individuals not mentioned in this article, should indicate that Southern charm has its place when doing business with China, but that, like almost anything international, it sometimes requires translation.  China is not going away, even though some North Carolinians might want it to.  Luckily, there is a veritable army of friends and neighbors, classmates and colleagues, doctors and shop owners, who are available to help make heads and tails of this new reality.  If that’s not enough, or it seems unfairly one sided (why does NC have to make all the effort?) one should rest assured that efforts at cultural understanding are being made on the other side of the Pacific, as well.

[1] According to Peter H. Koehn and Xiao-huang Yin in their book, The Expanding Role of Chinese Americans in US-China Relations, this latest group of North Carolina based, Chinese-Americans share several characteristics in common; Most are married, and most of their spouses are ethnic Chinese; The primary language spoken at home is Chinese (Mandarin); A large majority of them are content with the state of race relations.  However, the North Carolina group possesses more resources of value for political involvement.; They have benefited from the restructuring of the U.S. economy over the past two decades [1980 and 1990] that has created career opportunities in academia and high-tech industry for educated immigrants; They resemble the so-called “uptown” Chinese in terms of income and education level, but they differ from those middle- or upper-middle-class Chinese who live, for example, in Monterey Park, California, in the sense that they have fewer opportunities to be exposed to activities organized by Chinese or Asian American organizations.

[2] Despite the lack of more detailed demographic data, available information indicates that the Asian population (a classification that includes all non-white Caucasians from the Asian continent) has increased from 1.4% of the total population in 2000, to 1.9% of the total population in 2007.  Taking into account the population change of the state since 2000, these percentages would represent a population increase of around 60,000 Asians, or a growth of around 60%.  This figure can be taken as a baseline estimate for the corresponding increase of Chinese migrants during this time period, though the true numbers will not be available until the census figures are compiled late in 2010.