On Friday, November 14, I was able to catch the last section of the two-day green tech summit held in Shanghai. This summit is the companion event to the US-China Green Energy Conference, which Crossroads will be covering this week. Check out: http://ucgef.org/en/activities/beijing08/overview to look at the list of speakers. Crossroads will be taking notes on each of the presentations and offering side interviews as well.

Getting back to the Shanghai summit, I was able to catch panel 10 on “New Business and Financing Models” and a breakout session titled, “Competition & Regulation: What you need to know about China’s Green Technology Market.” Below are my notes for each the panel and breakout session.

Panel 10:
•    Government incentives are crucial in order to finance a greener economy.  Government must take the lead to help with start-up costs and the government’s policy innovation is the precursor to establishing a green market. A case in point would be San Francisco with their Solar Task Force, which cuts the cost of solar installation at different rates for residents, commercial buildings and nonprofits. If you look at the cost for solar, the only states in the US that are going for it are California and New Jersey because they have these government incentives.
•    When it comes to financing technology companies, inherent conflicts exist between: the cost of technology and the profitability of the firm and the growth of a region and meeting pollution reduction goals. There needs to be a good working relationship between government, technology businesses and investment banks in order to mitigate these conflicts.
•    There were a couple comments on the effects the financial crisis has brought to the financial sector for green tech. As a result of the crisis there is now higher equity and lower returns. In addition, it used to be all about collateral, but now it’s about the ability to re-pay: equity is not what it used to be.
•    China is showing a move away from the institutionalized banking system since they can now establish small loan companies. These small loan companies give money to SMEs (Small and Medium Enterprise).

Breakout Session:
•    Moderator David Gossack from the US Consulate General Shanghai highly recommends “Clean Energy: An Exporter’s Guide to China.” Check out www.export.gov or contact him directly to receive a copy.
•    Benjamin Pinney, from the Boston Consulting Group gave a refreshing overview of discussions at the two-day summit. He said he heard people talking about “solar collaboration” and “grid-parity.” He finds solar collaboration to be flat wrong because solar is about competition not collaboration. In addition, we are a long way off from even coming close to talking about grid-parity.
•    Mr. Pinney also had an excellent point about China’s consumer attitude about environmental protection that I think was dead-on. He said that we have to remember that alternative energies are a security issue and, thus, it is heavily financed by the defense bureau of government. Therefore, since consumers aren’t the one financing it, they only become aware of environmental protection and its importance because its being told to them from on-high. This type of “education” does not make them feel empowered because there is no role to play.
•    Regulations to achieve national goals: Renewable Energy Law (2006), Top-1000 Enterprise Energy Efficiency Action Plan (2007), Middle and Long-term Development Plan for renewable Energy (2007), tax incentives for renewables, and subsidies for renewables.
•    It is important that all sectors (wind, solar, hydro, etc.) do not have equal access to the market, government incentives, etc.
•    Charles McElwee gave a great presentation answering the often asked question: Can I do business legally in China?
1)    There is a catalog for foreign investment that is encouraged, restricted, prohibited, and other. See where you fall under these categories.
2)    What form of business? Contracting (easiest), establish a representative office (difficult), joint-venture (ok), WFOEs (ok).
3)    What about my IP (intellectual property)? Chinese businessmen do not use long contracts and the civil law system is not well developed. Also not a lot of case law to figure out ambiguous legal clauses. For dispute resolution don’t go to a Chinese court, arbitration is best. Arbitrary bodies include CIETAC, SAC and internationally Hong Kong’s HKIAC (preferred by the PRC).
4)    Major laws: Renewable Energy 2001, Conservation laws (April 2008), and be mindful of the Foreign Corrupt Practices Act (i.e. do not pay for guanxi)
“Slow, steady and wary wins the race in China”
•    According to Robert Theleen, Chairman of Chinavest, 90% of China’s bank loans go to State-owned enterprises and 10% to SME’s/private sector. Access to capital and bank funding has slowed in China, thereby changing the landscape of due diligence with commercial liability. Now, China finds the cost of capital as the most important, which is a sign of sophisticated banking.
•    An innovative technology came from the Solar Environment Technology Corporation case study. CENICOM is soon to be on the market. There technology can store solar energy for 5-10 days as opposed to the common 5-6 hours for existing solar thermal systems. There are no emissions and can be used with both local and regional grids.
•    The session closed with a recommendation to look for locally-sourced capital since it is your best bet for panicked-driven capital.
One interesting magazine distributed at the conference was called innocomm, published by the Knowledge & Innovation Community. Check the bilingual site out at: www.kic.net.cn
More to come this week from Beijing!

For many in China, the costs of health care are simply too high.  It was a cost that the state itself bore for many years, however as the country has grown the Chinese citizens themselves now carry the burden of paying for health care.

China’s wealthiest have access to the best money can buy of course, but for China’s vast majority, access to healthcare often does not come so easy. In fact, given China’s policy of pay as you go, for many who are at the bottom of the pyramid, gaining access to even some of the basics is a luxury that many cannot afford.

A point that was hammered home to me while visiting the children at a Shanghai children’s hospital, I found that many of the parents who had children with leukemia and other ailments were having to making huge sacrifices to get the proper care and medications.  Quitting jobs and moving to Shanghai as a first step, many families were actually selling their homes, selling their possessions, and taking out huge loans to pay for the treatments.

Sadly, efforts to raise money though were rarely enough and parents would simply pull their child out of the program until they were able to afford the treatments again…

This is a situation that the recent Shanghai Daily article Cancer pair’s orange lifeline that described the efforts of one couple to be able to afford their own health care treatments

The Chongming couple, who suffer from cancer, are depending on their Mandarin orange harvest to fund their treatment. And it just might not be enough.

To help them raise money, the Jing’an District Cancer Rehabilitation Club recently bought 1,500 kilograms of oranges from Shen for 2,000 yuan (US$293).

and worse yet, they seemed resigned to their fate:

“It’s very hard for us to continue living. We can afford only in half doses of our medicine,” Li said.

“We are doomed to lose money this year. We had planned on my surgery after we raised money from the sale of oranges. But now, I don’t think we can earn enough.”

As a westerner living in China, the above situations are hard for me to understand. that to ride in an ambulance you must pay first, that to see a doctor you must pay first, to have surgery pay first, and so on.

There is no credit. There is not life over limb. It simply is a cash based process that one needs to be able to afford in order to gain access.

Just a quote note to congratulate Cargill China for their recent Award for Corporate Excellence, from the US State Department.  I have known their team for quite a while now, and as I have come to see their programs develop, it is encouraging to see that they have received this award… it speaks a lot to their efforts and their commitment to building programs that have an impact in China.

According to the press release, the key highlights of Cargill’s engagement in China include:

Yours sincerely,

CSR360 Team

Hands On Chengdu is continuing rebuilding efforts 5 months after the Sichuan earthquake. “Community Flower” was a simple idea that shipping containers are strong, safe and easily moved and can be fitted out easily to provide support facilities. Designed by SMC ASLOP, Sponsored by GITI TIRE, Hands On Chengdu has developed a workable model that will not only provide space, but a lively community for people from affected area to relax, heal and restore their lives back.

A fundraiser event for the Community Flower project will be held on 7th November, organized by volunteers from the creativity industry at Bridge 8. All proceeds will go to Hands On Chengdu for the long term support and recovery in Sichuan community. Come and support us for a good cause and an eventful evening with auctions, music, food and wine! .

Click here for the INVITATION.

Autism is condition that has been a topic of conversation in the US as parents seek to learn more about its origins, and find ways to improve the quality of life for their children who are autistic.

In china, we have seen the same process start to take hold as groups Carnation Children’s Rehabilitation Center and QCQ in Shanghai (one of our partners) have been funding schools and institutions that are devoted to assisting the children and families of autism.

I recently found another group called The Five Project through the article Autism organization is giving voice to families in China.  A US based group, the founder has a very familiar story:

When Helen McCabe, the American student, met Zhang Ge in 1992, the girl couldn’t carry on a conversation and had limited self-care skills. She could, however, identify Chinese characters and say which page they were on in the dictionary.

After realizing that ignorance about autism in China was compounding the children’s problems, McCabe switched from East Asian studies to earn a doctoral degree in special education. She is now an assistant professor of education at Hobart and William Smith Colleges in New York and president of the Five Project, a nonprofit organization dedicated to helping those with autism in China.

Why I say familiar, is that in reading her story and learning more about her group, I am reminded of the organizations Room to Read and Half the Sky where both founders through their in-country experience developed an idea and when they returned home built phenomenally successful organizations.

In addressing the needs of the Chinese autistic community, one of the more interesting programs I have been able to find is that they are developing a DVD about autism in Chinese:

FIVE is working on creating an instructional DVD in Chinese about autism. The DVD is geared towards Chinese speaking families in the USA and Chinese families and professionals in China. The video will include topics helpful to families of and professionals working with children with autism. Topics will include behavior management, language and non-verbal communication, etc.

The training DVD will have topics useful for families of children, adolescents, and adults with autism. FIVE decided to create this training DVD because of the desperate need for information that we find in many parts of China. FIVE wants to create the DVD as a cost effective and time-efficient way of sharing information.

A firm believer in education programs, what I like about this is that it will allow parents and supporters the opportunity to learn about the real causes, remedies, and rehabilitions available.  It is a huge issue when discussing a child’s illness with parents, even with more well understood and medically definable diseases like cancer and leukemia (many parents feel those conditions were somehow their fault).

best of all.. the DVD will be given away for free.

To learn more about this organization, you can visit their website to learn more or go to their GoodSearch website to see which programs they are now looking to fund

Disclaimer: While we at Crossroads may highlight NGOs, and their programs, we strongly suggest individual, foundation, and corporate donors perform their own due diligence prior to granting or donating and money.

We invest, like you; but, maybe our returns are even greater than yours -actually, in times like these, I am sure they are!

Let me give you an example of one of our investments:

In an Early Childhood Care and Development program we are running in rural China,  we make a $17 return out of our every dollar we invest: this one dollar is to help improve the pre-school education quality for 3 to 6 year-old children in the rural community; and after the children grow up,  there is a 17 dollar return: 0.2 dollar less cost for social Welfare, 0.5 dollar less cost for Education, 4.2 dollars greater income, 0.9 dollar more Taxes paid to the government and 11.3 dollars less cost due to  reduction in Crime.

Let’s come to my name card; I’m no big person though, but what I want to show to you is the logo. A lovely child within the blue circle, being protected as she/he realize his/her potential. That’s us, where children are our centre and whom we invest in. After analyzing those factors that will impact children’s life, within the specific context in Western China, we choose the right project to invest and the right partner to invest with. Take a trip to the western part of China if you have a chance in the future, the country is not all about what you have seen here in Beijing or Shanghai. Over there, Education resources are poor so we build hardware such as school buildings and computers,; we provide training of various kinds (the so called software that often makes a greater difference than the hardware); water is scarce and polluted affecting children’s health so we do our best to build a deep pump well accessing cleaner water for them; families do not have enough financial income to meet their children’s needs so we help improve parents’ business skills and provide microfinance.

It’s about investment in family and community, the origin of all types of organizations including companies. And the return is a lot more than just money, 1 dollar not just for 17 dollars but also for the dignity and potential of a human being, the happiness and hope of a family, the union and development of a rural community. In modern society, calculating currency is an explicit but incomplete way of calculating real life value and improvements; if we revise the standard to be closer to true human nature, social organizations like Plan could probably go to the stock exchange market (well, not this year anyway). We buy and sell in pursuit of the maximization of life ’ssense: love, happiness, sharing and appreciation in life. Although buying and selling in those intangibles might resemble many of the intabgible products that have been traded causing recent problems -but surely these intanibles are worth much more!

Last but not least, I wish all of you enjoy your China trip; there are always more to see and more opportunities to invest in this huge and complex territory and I wish your business here a great success.

Located within its 2007 CSR Report, OKI has a 2 page section on their China based CSR activities.  Concise, within the 2 pages we can see that the firm is investing in its people, looking to meet environmental standards, and has a small (but growing) community program where they are building schools, playing baseball, and donating blood.

Not overloaded with data, but a nice way to make sure to cover China as part of the overall report when many others have yet to take that step.

To read more about their CSR practices you can click here, or read their special section on meeting their CSR commitments

This afternoon, Fonterra has announced a 5 million USD donation (5 year program) to the China Soong Ching Ling Foundation.

According to the press release

The new project will build maternal and infant community hubs in China’s rural and underdeveloped communities, providing them with tools and resources to support prenatal and postnatal care, and also provide information and education to pregnant women and mothers, helping to ensure healthy pregnancies and babies. This will allow families to build a strong future and give infants the brightest future.

A program that I know well, I am happy to see that Fonterra has decided to sign onto this program as well (AMCHAM donated to this program 2 years ago), and I am sure it is going for a worthy cause.

Reading this press release, I couldn’t help but wonder about the timing of such an announcement. After all, they are in the middle of a baby milk powder scandal that involves their partner.

Especially interesting to me was the quote:

“Fonterra has a 20-year history in China and is strongly committed to China. We are part of Chinese society and want to contribute to the development of the rural areas of China via our effort,” said Andrew Ferrier.

yet two lines down from that, the release says:

The project is the first charity activity launched by Fonterra in China, and is designed to provide long-term benefit to communities across the country.

I don’t know about you, but if their first charity initiative in China took 20 years, and it just so happens that this initiative was launched in the middle of a scandal.. I cannot help but feel skeptical of the real motive and intentions of this donation.  I won’t go so far as to say that we are witnessing some greenwashing, but for those of you who watched the Penny Burgess interview, you will surely gain a better appreciation of just how fine the line is that she an I discussed