3 Quick Ways to Impress Your Guests at the DCBA Chinese New Year Gala

Today, February 24th, marks the end of the official Chinese New Year holiday. But, the party doesn’t have to stop. In fact, my friends at the Detroit Chinese Business Association are throwing a belated Chinese New Year Gala this coming Friday, February 27th, at Motor City Casino. Lucky for you, I have three quick CNY tips that you can use to impress your Chinese guests.

1. The many ways to say “Happy New Year!”

There is an assortment of Chinese phrases used to express Happy New Year. Here are a few:

新年快乐 (Pinyin: Xīnnián kuàilè!; prounounced: shin -NEEan – kwai – le)- This is the most basic, traditional “Happy New Year” greeting.

全家幸福(Pinyin:Quánjiā xìngfú;pronounced: Chew-enn Jia Shing-Foo) – Here you are wishing their entire family good fortune.

万事如意(Pinyin:Wànshì rúyì;pronounced: Wan-SHH ROO-EE)- Ok, this will REALLY impress them. It is a very traditional phrase meaning “Good luck and may all your wishes come true.”

If you can’t remember them, you can always download Google translate (iPhone, Android). Make sure you are translating from CHINESE TO ENGLISH, and then paste the Chinese characters I wrote above into the translation window. You can click on the little speaker next to the phrase and the phone will pronounce it in Chinese for you. Pretty slick.

2. Download WeChat

If you’re doing business in China and you or someone at your office doesn’t have WeChat yet on your smartphone, GET IT NOW! WeChat is used prolifically in business, and according to statista.com, there are now over 438 million active monthly users. It is by far the best way for you to keep communication with your business partners in China, and new friends you will make at this year’s gala.

Trust me, your Chinese guests will be really impressed when right after you meet them you say “Hey, can I add your Wechat?” You can read in Forbes about how WeChat was used across China during this Chinese New Year.

3. Gan Bei! Cheers!

Drinking is a huge part of the Chinese New Year tradition. So you can survive, and thrive, at this year’s Chinese New Year Gala, you need to remember the phrase for cheers in Chinese, “Gan Bei” (pronounced GAAN-BAY). Critically, make a point to cheers everyone INDIVIDUALLY at your table, and if you’re up for it, everyone around the room. Don’t be lazy! Clinking glasses with everyone for a personal toast is very important, and it should be fun. If you can remember to add one of my Happy New Year phrases above, you get bonus points!

I hope you enjoy your time at the gala and that you find these tips useful. If you do happen to use them, I would love to hear about it! You can write me at danredford10@gmail.com or tweet me @DanRedford. Gan Bei!

"Gan Bei" with my girlfriend and her cousins for Chinese New Year 2015 in Yueyang, Hunan Province
“Gan Bei” with my girlfriend and her cousins for Chinese New Year 2015 in Yueyang, Hunan Province

 

The Age of Chinese Outbound Private Investment – Published in China US Focus

I am honored to once again be published in a great periodical, China US Focus. This week, I discuss a growing trend that deserves all of our attention: the rise of Chinese private outbound investment. You can read the article on China US Focus here, or read on below:

The Age of Chinese Outbound Private Investment

While the mainstream media debates the future of the Chinese economy, the opportunist understands that China’s rapid economic growth path is only just now starting to bear fruit. We are at the beginning of a new chapter in the Chinese economy: the age of outbound private investment.

It is no secret that during China’s historic economic rise, the country has made significant investments abroad. But up until just a few years ago, a vast majority of this investment was state-led. According to the Rhodium Group, from 2000 – 2011, 70% of China’s outbound investment was carried out by state-owned enterprises. The economic climate has changed drastically in a short amount of time. In 2012, private firms represented 80% of China’s outbound transactions, and just this year, private companies accounted for 16 out of 17 Chinese outbound M&A deals.

Private firms are increasingly looking into more mature markets like the United States to grow their companies. Top industries of choice for Chinese firms include engineering and contracting, energy and mining, household appliances, automotive, and financial services. These types of investments save and even create jobs in the United States, further integrating our two economies and building a great pie.

Recently, there have been a few high profile purchases by large Chinese companies. Last year, Chinese real estate and entertainment conglomerate, Dalian Wanda Group, purchased AMC Theatres for over $2 billion, and is gearing up to use it as a platform for further expansion into the U.S. market. Even more recently, China’s biggest pork producer, Shuanghui International, bought out Virginia-based pork producer Smithfield foods for $4.7 billion.

It’s Not Just About the Companies, It is About the People 

These large-scale private purchases are merely harbingers of a greater trend of private investment and people flow between the United States and China. It truly is the dawning of a new age.

Chinese individuals are more and more looking for ways to get their assets out of China. They are spurred not only by uncertainties about the future of the Chinese market, but also certain present realities. A great majority of China’s private wealth has been built on real estate. But now, in an effort to push down inflation and prevent a housing bubble, the Chinese government has been imposed strict regulations on real estate speculation. In Beijing, for example, the purchase of a pre-owned home is now subject to a 20% tax. On top of that, even owning a second home in Beijing has been banned for new buyers.

There seem to be more changes on the horizon that are causing Chinese investors to look outward. The Chinese weibosphere (equivalent of U.S “twittersphere”) went crazy early in October when a State Council member announced that as part of the upcoming plenary session, the government is considered installing an inheritance tax.

In light of all of all this, entrepreneurial Chinese are wasting no time figuring out ways to get around this by getting out. Emigration to the West has become a preferred option. Tens of thousands of Chinese high net worth individuals are emigrating every year. They see an American green card or other residency permits in Western countries as a safety precaution; a vehicle to make it easier to move money, and their families, out.

Still, China does not make it easy on individuals to get their money out of China. According to Chinese law, an individual is only allowed to transfer up to 50,000 USD worth of Chinese yuan out of the country annually. That means that these investors need to be creative and use their network to move their assets into foreign markets.

This bodes well for foreign financial firms and money managers that stand to grow a multitude of Chinese clients in this space. Currently, there is $4 trillion of private wealth sitting around in China. Astonishingly, only 7% of that is under management. That means over $3.7 trillion of Chinese wealth is unmanaged. Why is this the case? The concept of having third party management of wealth has only begun to emerge in China. In the Chinese economy, the guanxiculture that places so much emphasis on who you know that it makes people very unwilling to trust others, even professional financial managers, with their money. But now, the learning curve that comes with investing in foreign markets is now forcing Chinese to look to professionals to help them.

New Investors, New Markets 

In fact, if Americans can understand how new and untapped this opportunity is, an earnest effort to seek out and welcome private investment from China can help to resurge our economy and rebuild communities that need a kickstart. Americans and Chinese people are actual two sides of the same coin; largely what we know about each other is what we read in the newspaper. For that reason, it is no surprise that historically, individual investment in the United States from China has been concentrated in large, high-exposure markets like New York or Los Angeles. The tide could be turning, however, as more and more investors understand that those markets are becoming saturated. They are starting to look for answers elsewhere.

Take Detroit for example. Although the Detroit market on the surface seems decrepit and failed, the Detroit real estate market has struck a cord amongst Chinese homebuyers. According to the United States National Association of Realtors, the Detroit market was one of the top 5 most inquired about markets amongst Chinese real estate buyers. This seemingly is an anomaly when considering the other markets that have historically caught the eye of Chinese such as New York and Los Angeles.

In Milwaukee, we have been able to attract hundreds of millions of dollars through the EB5 program from Chinese investors. These people are becoming more sophisticated, understanding that the best, safest, and even potentially biggest boon markets in the United States are outside of the major metropolises that they have heard of.

The time is now to start building relationships of trust directly with Chinese investors. The wave of outbound Chinese investment is only just beginning; the playing field is leveled. The question is, are you ready to ride the wave?

Governor Snyder Delegation Makes Waves in China

Two years ago, Governor Snyder came to China to start building a relationship almost out of nothing. At the time, it had been 11 years since a governor of the state of Michigan had come to China; Snyder vowed to reverse this trend and put Michigan back in the game to attract business and investment from this economic giant.

On Friday, Snyder and a delegation of 60-plus Michigan business owners and MEDC representatives left China after his now 3rd consecutive trade mission in as many years. As a Michigander that has been living in Beijing since the governor made his first trip, I am amazed and encouraged by the progress that has been made. Last year, the trip was headlined by the opening of the Michigan China Center in Shanghai, and this year, the governor took the message of the “Comeback State” on the road to Beijing, Shanghai, and Chongqing.

Third Trade Mission Delegation was dynamic, successful

Governor Snyder and I at the Beijing Reception - September 11, 2013
Governor Snyder and I at the Beijing Reception – September 11, 2013

The delegation itself has matured greatly from two years ago. It was exciting to mingle with so many high quality Michiganders at the governor’s reception in Beijing and see the hope and excitement they have being introduced to business in China. Although auto-related companies still represent the lion’s share of stakeholders in the bilateral relationship, this year’s delegation had a larger presence from service providers in a variety of industries. Terry Terry, President of Lansing-based video production and event management company MessageMakers, came with the delegation to not only film the historic visit but to also identify partners in China to grow his global business.

It was clear that real business was done on this trip. Prior to the Beijing reception, timber manufacturer and designer Morabark Industries of Winn, MI signed an agreement with a Chinese partner to formalize a business collaboration that will bring jobs to both Michigan and China.

The Pure Michigan Brand is gaining steam in China

Snyder’s efforts are clearly helping the name and reputation of the  “Pure Michigan” brand spread very quickly in China. During this trip, he secured a meeting and press conference with China’s Vice Premier Wang Yang, in which both agreed that there were a myriad of opportunities for a state like Michigan to collaborate with China. The Mayor of Chongqing, Huang Qifen, seemed to agree, penning a memorandum of understanding to build stronger economic ties between the city of 30 million people and Michigan. Government meetings at that high of a level would have been impossible two years ago.

What is even more amazing is the quality of the contacts the state has built in the private sector as well. In Beijing, the governor led the MEDC in meetings with the Chinese giant entertainment and real estate conglomerate, Wanda Group. Wanda group is growing into one of the largest and fastest growing private companies in China; last year, Wanda bought AMC Theaters for $2.6 billion, and is gearing up for huge foreign investment projects in the U.S. and throughout the world. The fact that Snyder’s team has at least put Michigan on the radar shows that Michigan is starting to get taken seriously.

Congratulations to Governor Snyder and this year’s trade mission for a successful trip! Please remember there are still thousands of Michigan resident expats here in China that are proud of where we come from, and are looking forward to helping contribute to building the Pure Michigan brand in China!

 

Top 5 “To Dos” for Governor Snyder’s China Trade Mission

Next week, Governor Rick Snyder will be traveling to China on his 3rd trade mission in as many years. Here are 5 things I hope he does during his trip (heck, I’d take 2!):

1. Bring home the bacon

Obviously, we need to see some real business deals signed that bring home jobs. There are at least 30 delegates going on the trip with Snyder, and I hope that at least one of them, such as Lori Huisman of Classic Design Concepts, can benefit from associating with the governor on this junket with a real business deal.

2. Declare that “密西根”is the standard Chinese name for the state of Michigan

It sounds crazy, but the state of Michigan does not even have a standard name in Chinese. There are at least 3 popular versions throughout China, but the state itself has never made it a point to standardize. The name 密西根 (pronounced mi-shee-gen) is the best choice and is already being implemented at the Michigan China Center in Shanghai, Michigan’s official office in China.

This will greatly help George Zimmerman, Director of Travel Michigan, and those of us Michiganders in China helping to promote our state!

3. Announce that he will personally sign visa invitation letters for serious real estate buyers

Quartz.com, and many other news outlets, commented about how Chinese have been going crazy over cheap buys in the Detroit Real Estate market. According to Fox News, though, many were unable to make purchases because they were denied visas to the United States. Ouch!

If the Governor signs an invitation letter, that goes a long way for a foreigner to get an approved visa. We could greatly avoid the missed opportunities created when serious buyers are denied entry. (Note: I understand that we don’t want the corrupt or the criminal entering either…proper due diligence on invitees would have to be a prerequisite.)

4. Pen a Sister City Memorandum of Understanding between Detroit and Chongqing

With almost 30 million people, Chongqing is China’s largest city. Lucky for Detroit, it is already sister cities with this giant! Snyder should re-ignite the sister city relationship by signing an MOU with their new party chief  to work towards sustained collaboration. (Ironically, the Party Chief of Chongqing was sacked last year in a corruption scandal and recently went on trial…I guess you could say there are some similarities between the two cities?).

5. Commission a “Detroit Dialogues” Series in Beijing

There are thousands of Michiganders and Chinese with Michigan ties that are ready to serve on the front lines to change the narrative about Michigan in China. We have access to corporate CEOs and government officials that we’ve worked with during our time here – – commission us to start a “Detroit Dialogues” series to get people talking about the realities of Detroit and Michigan. Consider this my application to volunteer!

Good luck to Governor Snyder and this year’s trade mission! 中国欢迎您!Welcome to China!

 

Holland Sentinel – A Global Journey Back to Pure Michigan

It is always a privilege to be published in some great publications back in Michigan. This week, the Holland Sentinel published my article about my reflections on my trip back to Michigan last week.

I have always believed that this crazy journey to China would lead me back to Michigan someday…and do not believe that I’m alone.

You can read the full text of the article in the Holland Sentinel by clicking here, or read below:

A Global Journey Back to Pure Michigan

Last week, my family and I gathered in beautiful South Haven to celebrate the 60th wedding anniversary of my grandparents, Neil and Phyllis Redford. It truly was a once in a lifetime occasion. As families get older, and kids grow up and move away, these special moments become more profound and important.

 

Soon after graduating from Michigan State University, I moved to Beijing, China. I often proudly remark to my colleagues here that I am from the most beautiful state in America. During my time in South Haven, I was reminded by just how true that really is. The life of a 25 year old doing international business in one of the world’s most dynamic cities is certainly exciting, but there is no comparison to the comfort and joy I felt walking the streets of South Haven and swimming in the pure waters of Lake Michigan. After living two years in disgusting, polluted Beijing, it was overwhelmingly refreshing to daily breath in the fresh air.

 

Even more inspiring than the climate were the people. The beaches were lined with parents and kids taking in the sunshine, making sand castles and doing all the “good stuff” that young families do. In town, the streets were filled with dad’s carrying their daughters on their backs, and little boys trying to eat ice cream cones bigger than their heads.

 

These are the moments and the memories I carry with me back to China. Pure Michigan is a dream that I am working towards; a dream to live out my life raising a family in a beautiful place with fantastic people, just like my grandparents.

 

Since leaving Michigan, I’ve come to understand that this dream is indeed a monumental challenge, not just for me, but also for the state of Michigan. There is a lot of darkness behind all of the sunshine I’ve just described. With many high profile problems, such as the recent Detroit bankruptcy, we know that despite all of the beauty, many people across our state are hurting.

 

In the midst of all of this, young people like me are leaving the state in droves. In March, one of the hot discussion topics of Governor Snyder’s Economic Summit was how to reverse the brain drain of many Michigan college grads that ship out to places like Chicago and New York every year.

 

Amy Cell, who serves as Vice President of the Michigan Economic Development Corporation for Talent Enhancement, has been doing a great job building programs to aid young people to build their careers within the state of Michigan. These efforts will ultimately be successful, and may be even more effective than the numbers suggest. Michigan is an attractive place for many young people – just maybe not right now. We live in a globally interconnected economy. Many of us are just on a journey to figure out what is out there. During this journey, we are building global networks and accessing global resources that eventually we will bring right back to where we were headed all along – Pure Michigan. All we need is a few years to spread our wings.

 

I could not have asked for a more vivid example of how this works than one evening I had at a restaurant in Sawgutuck. As three generations of my family gathered for dinner with grandma and grandpa, I noticed that sitting behind us was a table with some Chinese guests. I went over to talk with them, and it turned out that they were from Guangzhou and were meeting with their Holland-based partner, AlSentis, to discuss a business deal. We exchanged cards and I plan on meeting them the next time I go to Guangzhou.

 

I believe that Michigan’s best days are still ahead. With beautiful, friendly cities like South Haven and Sawgutuck, it will continue to be a place that offers a quality life that young Michiganders gravitate to and will eventually return to after our exploring. This is the formula for a purer, more global Michigan.

 

The Six-Step Approach For China to Help Rebuild Detroit

Detroit’s announcement of chapter 9 bankruptcy was a difficult but essential step for the city’s resurgence. Now, more than ever, what Detroit needs is belief. Detroiters have to believe that the city will come back; and if new people are going to be attracted to become residents, they’ll have to believe that Detroit is safe, exciting, and profitable.

This type of belief only comes from raising and executing bold ideas. Here’s one: invite China to be a key partner in the revitalization of Detroit. What better statement could be made than to have a city like Detroit, for years mired by resentment of a China that is “stealing our jobs,” finally grow up to strategically engage the world’s second largest economy?

The Washington Post recently published an article outlining six crazy ideas for rebuilding Detroit, so I thought I’d add a twist to that. Below, I propose a six-pronged approach to building the “China Engagement Strategy to Help Rebuild Detroit.” It is a long-term vision, which needs to start with getting people face-to-face, building trust, and ultimately result in real investment and jobs coming into Detroit from this unlikely partner.

1. Pure Michigan in Chinese

Unsurprisingly, Chinese people largely associate the city with the blight, unemployment, and violence that they see on TV. The only way to bring in investment is to get actual people into the city. Investing in a “Pure Michigan in Chinese campaign” will allow Michigan and Detroit to cash in on the growing number of Chinese tourists using their expendable cash to tour America and hopefully change their perception through a direct exchange.

2. Build a strong Sister City Relationship between Detroit and Chongqing

People-to-people exchange needs to increase to build trust. A great platform for this would be bolstering the Sister City relationship between Detroit and Chongqing, which happens to be one of the world’s fastest growing cities

Governor Snyder seems to be ahead of the game on this one as he is planning a stop in Chongqing on his upcoming trade mission. May I suggest he kindly ask Chongqing to write a check to fund a vibrant sister cities program with Detroit?

3. Engage Chinese students in Michigan

Between the University of Michigan and Michigan State University alone there are currently over 5,700 Chinese students going to school in Michigan. While they are pumping in millions of dollars in revenue to the state every year through tuition and fees, that just tips the iceberg. Most of these students would be dying to get job experience during their time in Michigan, even if that required living in Detroit for the summer. These students have the power to change the narrative.

4. Get the EB5 program working in Detroit

Developers around the country have been using the EB5 immigration investment program since 1992 to fund job-creating businesses. Though there are six approved regional centers in Michigan, all with jurisdiction in Detroit, so far, there has not been a successful EB5 case in Detroit, or even in the state of Michigan for that matter. In 2012, over 80% of the visas issued to foreigners thru this program came from China.

5. Detroit Real Estate purchases

Recently, the United States National Association of Realtors noted that Detroit cracked the top 5 most asked about real estate markets from Chinese buyers. Why not use the attention the city is getting now to promote the great properties that already exist? The bankruptcy could indicate to some that now would be the time to buy when prices are at rock bottom in anticipation of a climb.

6. Court China to buy Detroit ‘s assets and invest in companies

China’s government is in a position to make outward investment. They have the world’s largest stockpile of foreign currency reserves, now standing at over $3.44 trillion. China is in the midst of deciding whether or not maintaining such a high number of reserves is literally getting the most bang for its buck, and is making a pivot to make overseas purchases and investments.

What might Detroit have that would be interesting to the Chinese? Of course, as an industrial and manufacturing hub, Detroit has access to infrastructure and technology patents that have continued to grow the presence of Chinese automakers in Detroit. Huge parcels of land are also available at rock bottom prices that are ripe for business development.

If we really believe that Detroit can rise up from rock bottom, it is going to take a few bold ideas like these to make this city tick again. Consider me a believer!

What is China saying about the Detroit bankruptcy?

Obviously, some of the biggest news to come out recently in Michigan, and quite frankly, the nation’s, history, was that of the Detroit bankruptcy. Since I live in China, I took the liberty of compiling a few headlines from major Chinese newspapers and e-zines to give you a glimpse into what Chinese media is saying about the bankruptcy. Indeed, Detroit has a long way to go to change the perception as a crime-ridden, impoverished place. Here’s to looking up!!

 

1. “底特律破产带给中国的启示:城市不是造出来的”  (Detroit’s bankruptcy has revealed to China one thing: The city cannot be built)

Source: Sohu Business

2.” 底特律破产警示城镇化弯路 “(Detroit bankruptcy warns the winding course of urbanization)

Source: Guangzhou Focus

3. “七嘴八舌话底特律破产” (A Lively Discussion in the Auto Industry about Detroit Bankruptcy)

Source: Auto.sina.com.cn

4. 底特律申请破产 “造中国底特律”论遭质疑 (Detroit’s Bankruptcy Raises Doubts about building a “Chinese Detroit” Partnership)

Source: Anyang Online (originally from Xinhua)

5. 底特律破产风险有多大 (Detroit’s Bankruptcy: How Big are the Risks?)

Source: QQ.com Auto

Detroit Attracts Chinese Real Estate Buyers – Detroit News Op Ed

The U.S. National Realtors Association recently announced as part of its report that Detroit ranked in the top 5 in terms of inquiries from Chinese buyers interested in U.S. real estate.

This is an awesome revelation and opportunity for Detroit! I co-wrote a piece on the topic with my colleague, Lamar Irby and Bryan Withall, and the Detroit News picked it up! You can read the op ed by clicking here or read the original below:

Detroit breaks the top 5 for inquiries from Chinese Buyers of U.S. Real Estate

By Dan Redford, Bryan Withall, and Lamar Irby

The time may be right for Detroit to roll out the red carpet for Chinese real estate buyers. In the recently published, “2013 Profile of International Home Buying Activity” by the U.S. National Association of Realtors (NAR), Detroit ranked in the top 5 among hottest cities receiving inquiries from Chinese buyers looking to purchase real estate in the U.S. It certainly stood out as the most unlikely in the group, considering the other cities – Los Angeles, Irvine, Las Vegas, and Orlando – have long been established as strongholds for attracting Chinese investors.

 

How could this be? This recent announcement may not come as a surprise to those that were following Chinese CCTV and social media on the Detroit Real Estate market earlier this year. In March, the China Daily reported that some real estate properties were available in Detroit for $100. On China’s Twitter, Weibo, the term “Detroit Real Estate” was also trending along with “pixie” (English: “leather shoes”), using leather shoes as a metaphor for how cheap Detroit real estate is. The CCTV report alone garnered 1.2 million posts on Weibo, according to “Want China Times.”

 

The “leather shoes” phenomenon quickly died down in the media, but not before at least some Chinese buyers made purchases. And what is now made clear from the NAR report is that Chinese buyers for the moment have their eyes on Detroit. With increasingly strict purchase restrictions and higher taxes for Chinese citizens in their domestic market, the increasing trend is for Chinese to invest their growing assets abroad.

So, how can Detroit take advantage of this opportunity? While it is unlikely for the cheap $500 home buys to be a boon for the city of Detroit, the last thing Detroit needs is to lure Chinese investors into quick, cheap deals that end up being “less juice than squeeze,” if not financial disasters. Clearly, Detroit has a compelling real estate market and economic story of rebirth to tell. A strategy that highlights good deals in good communities in Metro Detroit could build a pipeline for long term Chinese real estate investment and more.

 

Success will come down to how well real estate brokers and officials can tell the story of Detroit and ultimately execute purchases. It’s not that Detroit is without merit. For starters, Detroit’s real estate market prices climbed 13.6% year on year from 2011 to 2012. With prices for homes in Detroit well within the median Chinese purchase price of $425,000, this evidence should be taken as an encouraging sign of vibrancy in the Detroit market.

 

The Chinese should also be invited to be part of the revitalization of Detroit. In the June 7, 2013, Financial Times Life Section cover story, “The Future of the American City,” Detroit was profiled as a “city in the midst of a mini-boom.” The article cited several large investments and businesses recently moving in to the city, such as the high-profile purchases of Quicken Loans CEO Dan Gilbert, as evidence to show that Detroit is indeed gradually rising. Real estate brokers in Detroit should consider translating this article into Chinese and spreading it to the Chinese market.

This can happen. Detroit can build again, and now is the time to welcome the help of our Chinese friends whose interest is already peaked.

Dan Redford graduated from Michigan State University and is the Director of China Operations for FirstPathway Partners, an industry leading EB5 immigration investment fund management company. You can follow him at danredford.com

 

Bryan Withall is the Managing Director and CEO of Sino Outbound Limited, a financial advisory firm serving Chinese investors, including both institutions and individuals, interested in overseas real estate assets and real estate related investments. For inquiries: bryan@sino-outbound.com

 

Lamar Irby is a Detroit native and serves as the Director of Finance for China ProSol Consulting Services Co., Limited (www.prosolchina.com). He is based in Beijing.