The Negotiation

Topics Discussed and Key Points:●      How workspaces change as people’s work change●      Efficient communication with clients in the design space●      Redefining the purpose of the office●      Differences in the work environment in China versus the West●      The impact of COVID-19 on the way work is done in China●      Commercial architecture in China Episode Summary:Today on The Negotiation, we speak with Nabil Sabet, Group Director at global workplace design firm M Moser Associates in North America and Greater China. The company “has specialized in the design and delivery of workplace environments since 1981, with clients from the corporate, private healthcare and education sectors.” Nabil’s experience in the China market goes back to 2006 when he worked as a space manager at M+W Group in Shanghai.Nabil shares his thoughts on evolving work environments as the nature of work itself changes. He also discusses how different sectors vary in their understanding and appreciation for workspaces that are appropriate to what they do. Ownership of space in the tech sector, for example, is relatively low because there is a lot of sharing of spaces. Legal work, on the other hand, is done in more segmented, even hierarchical, spaces.However, Nabil says that the COVID crisis has put the office space in “an existential crisis”. Due to the many uncertainties that most businesses continue to face moving forward into 2021, Nabil and his team are spending a lot of time “redefining the purpose of the office altogether.” He also explains how China in many respects was able to rebound relatively quickly in spite of the pandemic.Nabil gives his observations on the differences between how Westerners and the Chinese approach work, and how these differences impact the design of their respective work environments. He says that the workforce in China “really has a strong sense of obligation” to the country, the company, the team, and their leaders. This collective attitude makes work incredibly fast and efficient. In the West, there is “a stronger sense of rights and individuality”, meaning organizations spend more time creating consensus among their people.M Moser owes its effectiveness as a design firm to its complete focus on environments to which people go to work, including research centers, office spaces, innovation centers, and so on. This narrow focus allows them to collect an abundance of data and a thorough understanding of both “the hard stuff and the soft stuff”.There are many factors that go into an office that is totally dependent on the nature of the work to be done, and M Moser positions itself as a company that “owns the entire problem”. Key Quotes:“When people’s work changes, then the environments that support that work also need to change.” “The office is a gathering place for the team. The real purpose of the office is for people to come together. Yes, there’s an element of focus: You go to the office and you focus and you work. But, largely, the reason we will be going to the office is for human connection. It’s for connecting to other team members; corralling around a common purpose; getting inspired about our work and seeing our contributions as part of a team.” “Depending on where you live in the world and the culture, the home setting can be more conducive or less conducive to remote work.”

Topics Discussed and Key Points:●      The increasing simultaneous “closeness” and “friction” between California and China●      What makes California special to China as opposed to other U.S. states?●      Matt speaks on co-hosting the Heartland Mainland: The Iowa China Podcast●      Emerging tech trends in China●      Eroding trust in Chinese tech platforms●      Key takeaways on MacroPolo’s October 2020 report on what China will look like in 2025●      How AI, blockchain, and other emerging technologies will transform Chinese society●      How China is able to consistently stay on the cutting edge of AI●      Why China has been incredibly malleable and willing to overhaul its society over time●      What Silicon Valley thinks of Chinese tech Episode Summary:Today on The Negotiation, we speak with Matt Sheehan, Fellow, and Researcher at MacroPolo, the digital think tank of The Paulson Institute. MacroPolo covers politics, economics, technology, and energy in China. Matt’s portfolio features writings on technology in China and its interactions with the U.S. and the rest of the world. His subfield focuses on artificial intelligence, a topic to which he has dedicated 90% of the last three years of his work.In 2016, Matt wrote The Transpacific Experiment: How China and California Collaborate and Compete for our Future. His thesis for the book is that “California is Ground Zero for a new era and a new type of U.S.-China relationship.”Matt notes that the relationship between the U.S. and China back in 2010 was characteristically more distant and “trade-based”. Around 2018, that relationship had become more “ground-level and face-to-face” as a result of the opportunities generated via the gradual influx of Chinese students, investors, immigrants, and homebuyers over the years. Matt’s book goes into how California (i.e. Silicon Valley and Hollywood) and China have been both collaborative and competitive at the same time.Listen in as Matt explains how the multifaceted powerhouse that is California influences the trajectory of China’s economic growth. He also dives deep into what he means by the two regions being collaborative and competitive at the same time.Matt then describes Iowa’s unexpected importance to the U.S.-China relationship and why he, in fact, co-hosted and co-produced the Heartland Mainland: The Iowa China Podcast. He goes on to speak on the future of the Chinese tech ecosystem as written about in MacroPolo’s October 2020 report. Finally, Matt reflects on shifting perceptions of China through the years and how the country is able to stay so malleable all this time. Key Quotes:“Even as California and China have become closer in recent years, that closeness also brings a lot of new frictions.” “In five years, I don’t foresee chip restrictions and export controls hobbling Chinese transition to this industrial tech juggernaut that it wants to become. But as we stretch it out further to 2025 to 2030 and beyond, I do think that restrictions on China’s ability to access leading-edge semiconductors are eventually going to serve as a bit of a cap on how far they can go with this foundational technology.”

This episode is a look back at all of our podcast guests and the topics we covered in 2020, putting together some of our favorite moments for you into one single episode of goodness. The guests featured in this special episode are William Bao Bean, episode 22 released on January 7th; Scott Silverman, episode 28 released on January 31st; Scott Laprise, episode 34 released on March 6th; Dr. Julie Klinger, episode 42 released on April 13th; Gen Kanai, episode 54 released on July 17th; Wei Liang, episode 55 released on July 28th; James McGregor, episode 57 released on August 17th; Anne Stephenson Yang, episodes 58 & 59 released on August 25th and September 1st; Aynne Kokas, episode 61 released on September 16th; Kevin Xu, episodes 66 & 67 released October 27th and November 3rd; and Matthew Brennan, episodes 72 & 73 released December 8th and 15th.

Topics Discussed and Key Points:●      What is the “middle platform” and how does it benefit ByteDance?●      Other innovations by ByteDance that other companies are trying to imitate●      TikTok versus Snapchat, and why the former is thriving while the latter is dying●      Up-and-coming tech companies to keep an eye on●      Why Oracle attempted to partner with TikTok●      The future of TikTok in the U.S. with a Biden administration in place●      Why America is seen as a high-risk market in China●      The ramifications of Jack Ma’s speech on the Ant IPO Episode Summary:Today on The Negotiation, we continue our conversation with Matthew Brennan, a highly sought-after speaker on Chinese internet and tech innovation, with a particular focus on WeChat and ByteDance. He is also the author of Attention Factory: The Story of TikTok and China's ByteDance (2020).Matthew is the Co-Founder of China Channel, which “provides digital marketing services for brands wishing to perform better on WeChat and China's digital ecosystem.” China Channel also organizes “China’s largest WeChat marketing conference series for international companies, China Channel delivers regular presentations, workshops, trainings and events globally about WeChat.”The “middle platform”, first conceptualized by Jack Ma and Alibaba, is a third-party group that does the “heavy lifting” in terms of technology and resource management. ByteDance’s apps can all plug into this central service called the middle platform, allowing these resources to be shared and ensuring no overlap between different teams.ByteDance has risen to prominence in the China tech space—and that of the world, by extension—through a myriad of innovations, from launching their unique internal tools as a product, selling their recommendation algorithm ala “recommendation as a service”, and their various avenues for growth hacking.Listen in as Matthew goes on to discuss the importance of how psychology can inform the potential success (or failure) of a social platform, other tech companies in China set to explode soon as ByteDance did, make sense of Oracle’s decision to partner with TikTok, and what a Biden administration (as well as current, strained U.S.-China relations) would mean for the future of TikTok and ByteDance as a whole. Key Quotes:“It wasn’t always obvious that TikTok would be so successful because they almost ruined it in the early days.” “When it comes to apps such as TikTok or Snapchat, it’s really important to understand the psychology behind these applications. It says so much about them and where the opportunity is in terms of business.” “When you speak to entrepreneurs and VCs on the ground in China, nobody really wants to invest in America anymore. It’s too risky. They don’t want to launch apps there. They just see it as a high-risk market.”

Topics Discussed and Key Points:●      How Matthew built a fascination for WeChat and digital innovation in China●      Writing objectively about big tech brands in a country known for heavy censorship●      The huge potential of sharing short videos via these newest social media platforms●      What is ByteDance, exactly?●      How ByteDance compares to the other tech giants in China●      What makes TikTok unique?●      Localizing TikTok’s content in other markets Episode Summary:Today on The Negotiation, we speak with Matthew Brennan, a highly sought-after speaker on the Chinese internet and tech innovation space, with a particular focus on WeChat and ByteDance. He is also the author of Attention Factory: The Story of TikTok and China's ByteDance (2020).Matthew is the Co-Founder of China Channel, which “provides digital marketing services for brands wishing to perform better on WeChat and China's digital ecosystem.” China Channel also organizes “China’s largest WeChat marketing conference series for international companies, China Channel delivers regular presentations, workshops, training, and events globally about WeChat.”Matthew says that his interest in digital innovation in China transcends geopolitics. Since writing his book, there has been a swell of controversy around TikTok as the U.S. and India worked to ban the popular social media app. Matthew, however, would rather focus on the bigger picture that is the trajectory this opens up for internet usage, globally. Short video is changing the way we use the internet, we are only in the early stages of this new trend.Listen in as Matthew goes on to share how ByteDance and TikTok came to be and how they sparked massive innovation in the mobile landscape, as well as how ByteDance compares to China’s other tech giants today and what the future holds. Key Quotes:“I do believe that short video is a very important trend for internet usage, globally. What TikTok provides is a new way that people are using the internet, and it’s not going away.” “China is all about mobile. It’s an app economy. People don’t tend to use browsers that much. Browser usage is very low in China.” “ByteDance has the potential to be a viable option to the Facebook and Google duopoly around online advertising globally.”

Topics Discussed and Key Points:●      Commercial and residential real estate trends in China from 2008 to 2011●      How real estate investors tend to operate in the China market●      Where the real estate industry is going in the next ten years●      Why China’s economic future may mirror that of Japan’s●      China in the new normal●      Property Passbook’s mission●      Running a global business based in Shanghai●      How COVID-19 has changed real estate planning in China Episode Summary:Today on The Negotiation, we speak with Colin Bogar, CEO and Head of Product Development at Property Passbook. His 12-year journey in China also saw him as Chairman on the Board of Advisors for The Canadian Chamber of Commerce in Shanghai, an Associate Professor at Shanghai Jiaotong University, the Managing Director of MGI Pacific, and Head of Research at Colliers International.Colin discusses his observations on both the commercial and residential real estate markets in China over his decade-long career. With regards to urbanization today, he touches on how bigger cities tend to have a much greater influx of new residents looking for opportunity as opposed to the country. Anecdotally, the first-tier cities of Shanghai, Beijing, and Shenzhen have seen the most growth during Colin’s time. Second Tier cities and below are not expected to see growth anywhere near the same pace as populations and wages stagnate.Listen in as Colin goes on to share how COVID-19 affected the real estate market both financially and around health and sanitation, projected reductions in investments toward office spaces in a post-COVID world, the aim of his startup Property Passbook, the advantages of doing business as an expat in the melting pot that is Shanghai, and whether or not megacities are soon going to be a thing of the past. Key Quotes:“Real estate developers in China today are less concerned with green as much as they are with health.” “People in Western countries tend to want to be green and do the right things to fight global warming, but sometimes their solutions are not the most practical.” “By doing business in Shanghai, you have a pulse on the direction in which the world is going.” “COVID-19 and tensions with the U.S. aside, it’s hard not to be extremely optimistic about China’s economic future.” “Soon, travel to China is going to bounce back in a bigger way than most people would imagine.”

Today on The Negotiation, we are taking aim at trying to understand the housing bubble in China, by speaking with Professor Simon Zhao, Former Director at the International Centre for China Development Studies, University of Hong Kong. Simon has recently published an article on the housing bubble in China, so we thought he would be an excellent place to start our conversation.Simon tells us that it has only been in the last 40 years that its citizens could actually purchase property and homes; before then it belonged to the government, and the government provided housing to the people. Therefore, land and property had no value. However, China was quite interested in the Hong Kong model, and soon adopted the method of allowing private citizens to purchase and own land. Soon the government was pouring resources into land development in order to create a marketplace where it could tax purchases and development and grow its GDP. As Simon mentions, the government “did not allow the market price to go down”, which has contributed to the problem it has today.We ask Simon about the famous ghost towns, rather ghost cities, the massive developments that could house tens of thousands of people, seemingly built with the knowledge it was purely a surplus where no one needed to live. Simon tells us that the government would enable the banks to lend with protection against defaults so that demand stayed high and development would continue, allowing the country to artificially inflate GDP and collect taxes on 30% to 50% of the development and sale costs.When we asked Simon if China has a housing bubble, he said not in Tier 1 cities, there are so many people still moving to these cities the demand is still high and the value is true. Where the issue lies is where there is no liquidity in the market. In smaller cities to the North and to the West, there is shrinking demand, and those that own property is unable to get out from under their mortgages. Simon points to some major milestones to recognize as important dates in history that impacted the housing sector greatly. The first was entering the WTO in 2001, and the other was the Olympics in 2008. They coincided with tremendous growth in the manufacturing sector and China’s economic growth spurt overall. However the “financial tsunami” of 2009 drew $4 Trillion in aid from the government that was largely injected into the housing sector as well, which overcooked the economy in general, but the housing sector felt it the most. From that point to now the government has been doing everything it can to try and cool the housing sector without causing a drastic deflation in the RMB.

Today on The Negotiation, we speak with Jacob Cooke, co-founder of WPIC Marketing and Technologies, and his experiences since returning to China recently.Jacob notes the huge amount of digitization efforts since his last time in China. eCommerce is booming. What was once a convenience has now become a necessity. Digitization now encompasses all parts of society and users now include people of all ages, not just the youth.Masks have always been normal in China. Today, 90% of people continue to wear them despite no reported COVID-19 cases since Jacob’s return. However, contact tracing has become widespread and apps are incredibly efficient, which is especially necessary for a country that cannot realistically maintain social distancing measures due to its population size.Unlike in the West, big companies in China often were not given bailouts. In fact, many were allowed to fail. Instead, the government had begun to invest in smaller businesses. This is how unemployment is being addressed. The country is seeing shifts around the prominence of certain industries. Industries that were dependent upon export markets have suffered, but those who have adapted to the current needs of society have seen a good amount of growth. Namely, the technology and biomedical sectors are thriving. Businesses that cater to the needs of the home, including home exercise solutions, are also doing well this year.There may be a collapse in the commercial real estate market as many organizations have learned that a work-from-home setup yields virtually the same amount of productivity as an office-based one.Companies who do business in both the U.S. and China should not worry about any drastic shifts regarding trade between the two countries. Even in spite of the pandemic, trade has been continuing at practically the same pace as before, and higher taxes should not deter imports into an “already-high-tax environment”.Listen in as Jacob goes to share WPIC’s own investments in China, and what he sees in the future of the Ant Financial IPO, cryptocurrency, the hemp industry, and battery technology in China.

Today on The Negotiation, we speak with fashion designer and entrepreneur Bruno Schiavi. With a background in the retail industry spanning 25 years, he has launched many brands internationally with some of the biggest companies and names in the world. His latest brand is Uncle Bud’s Hemp and CBD, which focuses on topicals that cover everything from pain relief to anti-aging to bath and body. Uncle Bud’s products are exclusively manufactured in the U.S. and are sold in over 15,000 stories locally. As of today, Uncle Bud’s is available in Australia and is about to launch in China in partnership with Tmall and Alibaba.Bruno decided to expand into China knowing that the Chinese love exploring new brands and are always curious when it comes to new ingredients. Hemp and CBD are, in fact, still novelty ingredients in the Chinese market and the industry itself is seen as the fastest-growing category in the world today (projected to be at $25 billion globally by the end of 2025). For these reasons and more, Bruno believes that the various challenges in doing business in China are worth overcoming.Listen in as Bruno shares the key differences between Chinese consumers and their American and European counterparts, how to find the right brand ambassadors for your product, and tips for building a local team in China when you are based overseas.

Today on The Negotiation, we continue our conversation with Kevin Xu, founder and author at Interconnected, “a publication that analyzes businesses and trends from the lens of builders (entrepreneurs & engineers), operators (business managers), investors (capitalists), regulators (politicians and government officials), and how they are all connected.” He is also a contributor for and the co-creator of COSS Media, a knowledge media platform aimed at helping Commercial Open Source Software (COSS) founders build lasting companies. Finally, Kevin is an investor and EIR at the venture capital firm OSS Capital, L.P.Unlike the U.S., the Chinese government can make decisions “that could impact your pocketbook tomorrow”. Entrepreneurs in China are, as a result, much more politically astute, as the only way to get ahead in business is to align your vision for your business with the government’s vision for the country for the next several years. Americans, on the other hand, have the freedom to influence outcomes in ways the Chinese cannot; but at the same time, this has paved the way for more ignorance regarding Americans’ knowledge about their own government, simply because they have less to worry about concerning the government's power to control their lives. This difference in worldviews and level of political knowledge between the citizens of these two countries serves as the theme underlying the rest of the topics which Kevin covers.Listen in as Kevin explains his perspective on the countless developments currently taking place between the U.S. and China, from each country’s competitive edge in business to the long-term consequences of decoupling, and whether more Chinese companies will delist from the U.S. stock exchange. He then ties these issues together, explaining just how all of these unfolding events between these two superpowers are, in fact, interconnected.