James Bagnall
The Ottawa Citizen
Tony Yang was surprised to receive a letter earlier this year from a Chinese government agency, inviting him home for a visit. Yang, who had recently been laid off from his job as an engineer at Nortel Networks, hadn't visited his native country for more than a decade. But he was intrigued by the idea. It seemed China was seeking advice from him and other expatriates about how it could improve its ability to do business with the rest of the world.
So, in late August, Yang joined a group of nearly 100 fellow expatriates in a multi-city tour of east China. Like Yang, most members of the group had earned their doctorates abroad. Yang had a PhD in bio-medical engineering at the University of Strathclyde in Scotland and had done post-doctoral work at Queen's University in Kingston. His travel companions had studied at dozens of different universities in Europe, Asia and North America -- the Chinese government had kept tabs on their whereabouts and was anxious to tap their knowledge.
But first, it wanted to show its prodigal progeny how much China had changed in the past few years. The official tour began in the capital, Beijing, and wound its way south through the cities of Suzhou, Nanjing and Shanghai. At every stop, the expatriates were greeted by provincial governors and urban mayors. Without fail, they proudly pointed out the new technology parks on the cities' outskirts.
"The focus was high-tech development," says Yang, who has recently established Altton International, a technology services operation with offices in Shanghai, Ottawa and Boston. "I was very impressed because all the manufacturing facilities, buildings and roads were state-of-the-art."
That's not an idle compliment. Yang was a senior software engineer on Nortel's HDX project -- a massive, next-generation opto-electronic switch, which was developed in the company's ultra-modern labs at Baseline and Merivale Roads in west-end Ottawa.
Yang decided to stay on for a few weeks after the official tour ended, and visited another 10 cities in the high-tech strips surrounding Shanghai. He also travelled west to Xi'an, where he had graduated 20 years earlier with a degree in electrical and computer engineering.
By the time he returned to Ottawa early in the fall, Yang had decided, along with his U.S. partner Alan Zhong, to set up a business, Altton, to facilitate business between North America and China. Yang intends to introduce westerners to the right players in government and China's burgeoning technology industry. "We understand the cultures of East and West," he says, "and can serve as a bridge." Before he left China in 1992 on a scholarship, Yang had worked for a decade as an engineer for a variety of high-tech concerns in eastern China.
Certainly, Yang's timing is impeccable. Even as North America's high-tech industry tries to navigate out of a downturn, its strongest players are already worried about the potential for China to become dominant in five or 10 years. Intel's chief technology executive Pat Gelsinger mused recently at a technology conference in Arizona that the U.S. could become "a second-class citizen in the world of information technology."
It's a question of numbers, combined with the sheer determination of the Chinese government to become a tech power. To gain access to China's 1.3 billion population, western corporations such as Nortel, Nokia, Intel, Alcatel and many others have invested billions in new labs and manufacturing facilities. Last year alone, China attracted $47 billion worth of foreign capital, up from just $3.4 billion in 1989.
China is still a long way from climbing into the top tier, let alone challenging for the lead in high-tech. A recent Business Week survey estimates that China's annual R&D spending in high tech is a paltry $11 billion, barely five per cent of the money spent on technology research in the U.S. Less than two per cent of China's population have Internet access or a computer compared to more than one-third in the U.S. and Canada.
Even so, China is proving to be a first-class workshop when it comes to manufacturing high-tech gear on behalf of Western corporations. And there are signs some home-grown stars already have what it takes to compete in the export markets.
Consider the example of Huawei Technologies, a 14-year-old computer and telecommunications equipment manufacturer headquartered in Shenzhen, just north of Hong Kong. Huawei was founded by Ren Shengfei, a former Peoples Liberation Army officer, and has transformed itself into a $3-billion-a-year giant. The company started out reselling other companies' products. Once its engineers became familiar with the telecom business, Huawei built increasingly sophisticated products in-house.
The vast majority of its sales have been made in China. But more recently it has been taking dead aim at telecom suppliers such as Cisco Systems and Nortel. Using a mixture of low costs and high-quality manufacturing, Huawei has already won contracts in Britain and Germany. Huawei earlier this year opened up a subsidiary, FutureWei Technologies, in Plano, Texas.
With China now part of the World Trade Organization and having pledged to eliminate tariffs on high-tech products, the incentives for its domestic developers to compete internationally will only increase.
China will be able to draw upon a huge base of expatriates. The Stanford Journal of East Asian Affairs estimates that from 1978 to 1998 more than 320,000 Chinese left to study abroad. To date, most have chosen not to return. But that pattern could change if China begins to offer the same high-quality jobs and working environment at home.
Some, such as Xi-Nam Dam -- another Ottawa entrepreneur with deep roots in east Asia -- simply move back and forth, and commute endlessly. Dam, a former Nortel manager, six years ago founded Global Mart International Technology, an Ottawa-based e-business software and services provider. About 50 of his 70 employees are in Dalian, just east of Beijing, and he expects the Chinese workforce will grow in line with his company's sales.
Dam recalls vividly when he left Nortel in the early 1990s to take up a post as CEO of Beijing Shangrong Electronics -- a joint venture of China Electronic Corp., Toshiba and Inventec. On a trip to Shanghai, he stood on the western bank of the Huangpu Jiang river and looked towards the Pudong New Area which had just recently been declared a development site. "I counted nearly three dozen construction cranes," he says. The district is now a forest of office towers and one of China's most important financial districts. One more sign of China's relentless march towards gaining respect as a technology and business power.
The Ottawa Citizen
Tony Yang was surprised to receive a letter earlier this year from a Chinese government agency, inviting him home for a visit. Yang, who had recently been laid off from his job as an engineer at Nortel Networks, hadn't visited his native country for more than a decade. But he was intrigued by the idea. It seemed China was seeking advice from him and other expatriates about how it could improve its ability to do business with the rest of the world.
So, in late August, Yang joined a group of nearly 100 fellow expatriates in a multi-city tour of east China. Like Yang, most members of the group had earned their doctorates abroad. Yang had a PhD in bio-medical engineering at the University of Strathclyde in Scotland and had done post-doctoral work at Queen's University in Kingston. His travel companions had studied at dozens of different universities in Europe, Asia and North America -- the Chinese government had kept tabs on their whereabouts and was anxious to tap their knowledge.
But first, it wanted to show its prodigal progeny how much China had changed in the past few years. The official tour began in the capital, Beijing, and wound its way south through the cities of Suzhou, Nanjing and Shanghai. At every stop, the expatriates were greeted by provincial governors and urban mayors. Without fail, they proudly pointed out the new technology parks on the cities' outskirts.
"The focus was high-tech development," says Yang, who has recently established Altton International, a technology services operation with offices in Shanghai, Ottawa and Boston. "I was very impressed because all the manufacturing facilities, buildings and roads were state-of-the-art."
That's not an idle compliment. Yang was a senior software engineer on Nortel's HDX project -- a massive, next-generation opto-electronic switch, which was developed in the company's ultra-modern labs at Baseline and Merivale Roads in west-end Ottawa.
Yang decided to stay on for a few weeks after the official tour ended, and visited another 10 cities in the high-tech strips surrounding Shanghai. He also travelled west to Xi'an, where he had graduated 20 years earlier with a degree in electrical and computer engineering.
By the time he returned to Ottawa early in the fall, Yang had decided, along with his U.S. partner Alan Zhong, to set up a business, Altton, to facilitate business between North America and China. Yang intends to introduce westerners to the right players in government and China's burgeoning technology industry. "We understand the cultures of East and West," he says, "and can serve as a bridge." Before he left China in 1992 on a scholarship, Yang had worked for a decade as an engineer for a variety of high-tech concerns in eastern China.
Certainly, Yang's timing is impeccable. Even as North America's high-tech industry tries to navigate out of a downturn, its strongest players are already worried about the potential for China to become dominant in five or 10 years. Intel's chief technology executive Pat Gelsinger mused recently at a technology conference in Arizona that the U.S. could become "a second-class citizen in the world of information technology."
It's a question of numbers, combined with the sheer determination of the Chinese government to become a tech power. To gain access to China's 1.3 billion population, western corporations such as Nortel, Nokia, Intel, Alcatel and many others have invested billions in new labs and manufacturing facilities. Last year alone, China attracted $47 billion worth of foreign capital, up from just $3.4 billion in 1989.
China is still a long way from climbing into the top tier, let alone challenging for the lead in high-tech. A recent Business Week survey estimates that China's annual R&D spending in high tech is a paltry $11 billion, barely five per cent of the money spent on technology research in the U.S. Less than two per cent of China's population have Internet access or a computer compared to more than one-third in the U.S. and Canada.
Even so, China is proving to be a first-class workshop when it comes to manufacturing high-tech gear on behalf of Western corporations. And there are signs some home-grown stars already have what it takes to compete in the export markets.
Consider the example of Huawei Technologies, a 14-year-old computer and telecommunications equipment manufacturer headquartered in Shenzhen, just north of Hong Kong. Huawei was founded by Ren Shengfei, a former Peoples Liberation Army officer, and has transformed itself into a $3-billion-a-year giant. The company started out reselling other companies' products. Once its engineers became familiar with the telecom business, Huawei built increasingly sophisticated products in-house.
The vast majority of its sales have been made in China. But more recently it has been taking dead aim at telecom suppliers such as Cisco Systems and Nortel. Using a mixture of low costs and high-quality manufacturing, Huawei has already won contracts in Britain and Germany. Huawei earlier this year opened up a subsidiary, FutureWei Technologies, in Plano, Texas.
With China now part of the World Trade Organization and having pledged to eliminate tariffs on high-tech products, the incentives for its domestic developers to compete internationally will only increase.
China will be able to draw upon a huge base of expatriates. The Stanford Journal of East Asian Affairs estimates that from 1978 to 1998 more than 320,000 Chinese left to study abroad. To date, most have chosen not to return. But that pattern could change if China begins to offer the same high-quality jobs and working environment at home.
Some, such as Xi-Nam Dam -- another Ottawa entrepreneur with deep roots in east Asia -- simply move back and forth, and commute endlessly. Dam, a former Nortel manager, six years ago founded Global Mart International Technology, an Ottawa-based e-business software and services provider. About 50 of his 70 employees are in Dalian, just east of Beijing, and he expects the Chinese workforce will grow in line with his company's sales.
Dam recalls vividly when he left Nortel in the early 1990s to take up a post as CEO of Beijing Shangrong Electronics -- a joint venture of China Electronic Corp., Toshiba and Inventec. On a trip to Shanghai, he stood on the western bank of the Huangpu Jiang river and looked towards the Pudong New Area which had just recently been declared a development site. "I counted nearly three dozen construction cranes," he says. The district is now a forest of office towers and one of China's most important financial districts. One more sign of China's relentless march towards gaining respect as a technology and business power.
