In my last column, A Week of "Gan Bei" Marketing Across China, I wrote about the drivers behind the dramatic growth in China’s preschool and elementary education markets. In December I traveled with executives of First-Decision Education Group, an operator of private pre- and elementary schools, to Beijing, Kunming, Zhoushan and Hangzhou, cities spread across China. My hosts, Mrs. Zou Jing, CEO and co-founder of First-Decision (with her husband, Brad Reinert, an American), and Mr. Reinert, are star examples of a new breed of China-based entrepreneurs. Their story is a foreshadowing of tomorrow's global education market shifts and opportunities. Through them and their team I had a remarkable inside view of the changes underway in Chinese education and the business opportunities they present to Western publishers, especially those with English-as-a-Second-Language materials. My previous column focused on the business side of the equation; this one looks at it from the personal side, recounting insights and experiences that stuck with me and, hopefully, may be of use to those drawn to explore this remarkable business frontier further.
Nixon in China?
OK, the venture didn't have the significance of Nixon in China 40 years ago. Nonetheless, there was equivalence: opening a door to an education system hidden behind vast cultural, administrative and business chasms until now crossed only by a few giants of educational publishing. I’ve been to China before, most recently in 2005 with an AEP Beijing International Book Fair trade mission that opened my eyes to the nation’s phenomenal economic growth and dimensions.
Last month Beijing, in the northeast, was in the dead of winter; I wore gloves, a scarf and ear muffs. In addition to First-Decision’s preschool, I had time for a quick visit to the Olympic Park’s Birdcage stadium, and Tiananmen Square across from the gate to the Forbidden City with Mao’s famous portrait over the main portal. The square now includes two massive stone monuments each about a block wide and 30 feet tall, housing the largest “jumbotron” video displays I’ve ever seen, showing loops of the magic bounty of China for its people. There was no soundtrack but the Chinese equivalent of “America the Beautiful” would’ve fit the bill nicely.
Kunming, a 3-hour plane trip south and west from Beijing, near Myanmar and Vietnam, had San Diego’s mild winter weather. Its altitude, about that of Denver, spares it the subtropical clime of its neighbors. Never having even heard of Kunming, I expected a backwater burg but found a massive new airport that felt like O’Hare upgraded, a city of 7 million and a new elevated train system connecting the city and the airport.
Hangzhou, two hours by plane north and east of Kunming, near the China Sea and a two-hour drive from Shanghai, was surprisingly mild. Its four and five star hotels, traffic jams and boulevards proclaimed it another important commercial center.
Zhoushan, the largest island of an archipelago of 1,300 islands in the China Sea, was also mild. It’s a three-hour drive from Hangzhou via a handsome new causeway with graceful modern suspension bridges that look like Santiago Calatrava might have designed them.
A stateside travel analogy for this time of year would be starting in Boston and heading on to Houston and Atlanta with a side trip to Hilton Head. Except that every city we visited dwarfed its US analogy by a wide margin. Downtown San Diego’s office and residential neighborhoods, for example, would be an insignificant corner of any of the three main cities.
"Gan Bei" Means "Bottoms Up"
"Gan bei" are two characters in Chinese, "gan" means "dry", "bei" means "cup or glass." Together they mean "bottoms up." I learned this on my first evening in Beijing, a Sunday. Jing Zhao, “Michelle” Chong, First-Decision’s resident translator and manager of foreign affairs, Mrs. Cai "Feifei" Mengfei, the COO of First-Decision, and I motored to a substantial Szechuan restaurant emporium to meet Mr Guo Fuchang, President, Chinese Association for Non-Government Education (CANGE) Preschool Education Committee and Mr Yang Zhibing, Secretary General, CANGE Preschool Education Committee. The setting reminded me of the venues where we dined in 2005 when I came to China with the AEP trade mission. Unlike then, when Robert Baensch, President, Baensch International Group Ltd, mission leader and esteemed elder US partner to China's educational publishing industry, was always guest of honor and seated at the special seat facing the door, I was caught off guard as I was ushered to the honoree's spot. "Uh oh," I said to myself, hoping I'd handle it properly. The custom is to share one-on-one toasts with goblets about a quarter full, say "gan bei," clink the glasses and drain them. Honored guests draw more toasts and it was a challenge keeping up with them. We exchanged pleasantries and personal histories via Jing and Michelle since the others spoke no English. Mr. Guo is 76 and a retired educational administrator who spent decades as the top education official for Inner Mongolia and later for special programs for China's 50 ethnic minorities (the country is 90% Han Chinese so the minorities are a tiny part of the population). Our discussions were lubricated by a 20-year old Chinese red wine that tasted astringent at first and got better as the evening wore on. Michelle did most of the heavy translating, managing to convey the humor as well as the serious talk in both directions. Between wine toasts Jing took pictures, including the one above, that'll someday be nostalgic proof for me that all this actually happened.
Later in the week, in a private dining room at the 5-star Yellow Dragon hotel in Hangzhou, seven of us, three government officials from Zhejiang and Shandong provinces, three First-Decision executives and I finished six bottles of a 1995 French Pommard red over dinner around the traditional circular table with its rotating platter constantly supplied with delicacies by silent staff. With only a few words of Chinese in my vocabulary, I smiled and stood to return toasts. Hearing "EdNET" and "Heller boshi" ("borshia" means “Doctor”) gave me occasional clues to the animated conversation, which Michelle did her best to translate. Behind the political theater of our guests, a Vice Mayor and his senior aides, was their city's relentless need to educate more children, especially in English language skills.
Vignettes
Here are highlights of some insights and scenes that have stayed with me.
- The nation’s new-found wealth is apparent everywhere I visited. The size of the cities, modernity, scope of the infrastructure, and auto and truck traffic are staggering. I expected gas conscious Fiat-like mini cars and instead saw new full-size Audis, Mercedes, BMWs, Buicks, Toyotas and Nissans, SUVs as well as sedans and vans. The country’s affluence has come so quickly there are hardly any old junkers on the roads, the exceptions being some taxis and police cars which used to have the roads to themself. I didn’t see a hand-drawn cart or conical straw hat anywhere, though a few motor scooters overloaded with cartons impossibly balanced behind drivers hinted at old China. Scanning the landscape from airplanes as we traveled, the highway and skyway construction seemed endless, as did the residential and commercial building sites. There are some overbuilt areas and empty buildings but by and large the structures fill when completed.
- The Chinese government’s golden goose is its ownership of all the real estate in the nation. Land can’t be owned privately but can be leased for periods of 30 to 75 years. Think about being on the receiving end of that torrent of rent checks. The resulting affluence, so far spread among a sufficiently large part of the population to keep people motivated, is stunning. Living standards are clearly benefiting from the drift from Mao’s cultural orthodoxy to the Chinese version of a market economy. That and years of religious suppression are changing Chinese culture. A fascinating chat I had with an individual there about the origins of Judaism, Christianity and Islam moved her to observe that with Communist ideals declining in favor of material goals and no strong religious inclinations, many Chinese are “empty inside.” Not all that different from the drift away from religious affiliation in our own materialistic culture.
- Also as for us, there’s a hidden underbelly of society that slips through the cracks. In Kunming we visited the shores of Green Lake whose promenade reminded me downtown Chicago’s Lake Michigan waterfront parks and walks. Street vendors cooked meat delicacies on portable grills selling to strollers. Suddenly one of the vendors grabbed his grill, still smoking with cooking meat, and lit out down the walkway followed closely behind by a police officer looking for his license papers. Unlicensed vendors are just one of many disenfranchised segments, like our own undocumented workers and homeless. A big group is the laborers drawn from rural areas to urban construction work who don’t have the necessary local residential certificates required, for example, for their children to be eligible for public education.
- For a Westerner, social conversation has some tricky parts. Because China’s one child policy has been in place since the ‘70s, almost none of the adults with whom I met had any siblings, aunts, uncles, cousins, nieces or nephews. Your relatives are your grandparents, parents, spouse and child. When making small talk I had to constantly restrain myself from drifting to chatting about extended family. It’s easy to see why the child or grandchild is the focus of one’s life and the beneficiary of whatever advantages can be provided, including schooling. The only populations exempt from the one child policy are the officially recognized minorities, so small in numbers the government excuses them from family size limits.
- At work, superiors don't say please, they just tell subordinates what to do and expect them to do it. Learning to say please at appropriate times is one of the cultural challenges of Chinese interacting with the outside world. When introducing a Chinese official s/he is always introduced with her/his title, which, for those second in command, is upgraded to that of their superior, with the tacit understanding that their secondary role will be understood without making it explicit (e.g., a vice mayor will be introduced as mayor).
- Kentucky Fried Chicken, known as KFC in China, is a runaway hit with the largest number of fast food outlets in the nation. Brad Reinert attributes their success to carefully localizing the menu to fit regional tastes and to the rising middle class with less time for cooking meals and the affluence to eat out or carry in. Starbucks is growing fast too – on my 2005 trip I spotted only one, at the Beijing airport. This time there were many in Beijing and elsewhere including one in the shopping mall adjoining my Beijing hotel, and the menu, largely the same as in the US, was in both English and Chinese.
- Despite the government’s filtering, the Internet is dramatically opening Chinese minds to the rest of the world; it’s also raising today’s China in Western public imagination. YouTube isn’t available there but their own Youku is roughly equivalent and top hits from Youku are often picked up on YouTube. [Interestingly, if you log into youku.com from outside China and select a video to watch you sometimes get a message reading "Sorry, this video can only be streamed in Mainland China," which seems like a local IP protection gesture.] Mike Sui is a young Chinese comedian whose viral Youku videos had my First-Decision friends in stitches. In their favorite he plays a dozen Chinese and American characters in a bar, right down regional accents for the Americans. You can see it yourself on YouTube here. The bigger insight, which I’m probably late in noticing because I rarely use YouTube, is that the ‘Net, like movies and TV, is creating a new global humor in which national boundaries morph into cultural wallpaper. Beyond humor, serious global issues like environmental sustainability are gaining awareness and support, evidenced by trash bins for recyclables in public places and notes about reusing towels in hotel rooms. How deep this goes is hard to tell. You can’t come away from any Chinese city or experience Beijing’s occasional super smog without realizing the environmental jolt the nation, like the rest of the First World, is giving our planet.
- Beijing – fact all of China despite its great width - is a mind boggling 16 hours ahead of San Diego and I really had to work at figuring out what time it was back home. Before bed on my first night in Beijing I discovered the hotel’s Internet service was quite good and during the night it hit me that I could probably do a FaceTime video call back home. The next morning, Sunday, still in my bathrobe about 10:30 am, I called my wife Pam who was visiting our kids and grandkids in San Francisco where it was about 6:30 pm Saturday night. They were just about to light the candles for the first night of Chanukah. It was pure magic to spend a few minutes video chatting and then share the candle lighting and singing the prayers.
As the Disney song asserts, “it’s a small world after all,” and getting smaller fast.
[First-Decision and HellerResults Group are exploring ways to jointly help non-Chinese firms explore the Chinese education market. Additional photos from the trip are here.]
