 Welcome back to Think Tech here in the four o'clock rock. This is Think Tech Asia on a given Monday. And we're talking about attracting Chinese investment to the United States. Our special guest is Lou Gibbons. And he joins our co-host, Russell Liu. And both of them are in China in Beijing. And we are connected with them for the duration by Skype. Now, Lou Gibbons first came to China in the late 90s as a Fulbright scholar. He's a well-known scholar and lecturer on doing business in China. He also holds a faculty position at the University of Toledo in Ohio College of Law. Lou has organized many conferences on doing business in China. He chaired the Confucius Institute at the University of Toledo. And has been instrumental in working on public-private partnerships. That's very important in China. Developing greater awareness of business opportunities in China in the Toledo region. So Toledo, although a small city of 280,000, that would be one quarter the size of Honolulu, has attracted Chinese investments, especially in some areas, including the glass industry and the automotive supply chain. Very impressive. So today with my co-host, Russell Liu, with Lou Gibbons, we're going to examine how U.S. cities and regions have to reinvent themselves these days, in light of declining U.S. spending, and in light of rising China. What is the next step for Honolulu to reinvent itself in the global economy? We're going to get some really important advice today from Lou Gibbons. So Russell Liu, co-host, take it away. Morning, Jay, and fellow think-tech audience. I'm really happy here today to introduce Lou Gibbons. Lou is a really old-time China head, and has been very instrumental in working in his community. Now, it's only a city of 280,000 people, but I think if we hear the numbers of what kind of investments and the amount of investments going into their community, we'd be astonished. So we really want to examine today what lessons we can learn in our larger community. Is it too late? What's the platform to develop this, and how do we do this? Navigating a new world. And we're really fortunate of Lou because he's been here all the time for 20 years. In fact, he's going to give a lecture next coming week on intellectual property here, some of the things that he does to interface with the Chinese world. Lou, can you tell me a little bit about your city, Toledo, how large it is, and what's the Chinese investments in the city? Toledo is, as we said before, a small industrial city. It was largely a producer of glass and things that supported the automobile industry in Detroit. So we have Libby Corning's, Lib Owen's Corning's, the glass industry. We have branches of the automobile industry that produces transmissions, and of course the Chrysler factory. What's the second part of the question? Tell us, give us an idea. You know, I was blown away because in 2013, as some of my audience will know, I've been a lawyer in China, and I picked up the New York Times, and I saw this thing about an article about the city of Toledo, and the article was about the blue color industry in the US, the small town of Toledo, is getting a windfall of Chinese investment. Tell me, what was happening in 2013? Okay, basically around the time, we had a mayor who could call Beijing or Shanghai their second home. The mayor was constantly coming to China, and his staff were heavily pushing economic development, encouraging economic development, and insulting economic development. The mayor also supported our sister cities program, and we have a sister city in China called Chenghuang Tao, and again, the mayor was using, leveraging all these resources to encourage Chinese businesses to come to Toledo, take a look, and many of those businesses like what they saw. If I remember correctly, there was something that impressed me, that there was sort of this public private partnership that was a new platform that I haven't seen, and this is in 2013, and where it seemed to be a vehicle to bring investment. Tell me about that. Okay, one of the things we have in Toledo is the regional partnership. This is more or less, as in many states, Ohio has a very robust open records law, and things made available to the state, are freely available to anyone who wants to see them, and for a business, you do not want your competitors to know where you're looking, what you're thinking about doing, how you think about expanding. One way to solve that, Ohio created the regional partnership, which represents the county's Northwest Ohio and Southern Michigan, which is a public-private partnership, and largely it's a private corporation where businesses can go and say, I'm looking for land to build, I'm looking for the factory to remodel, I'm looking to do something, and they would facilitate both the regulatory aspects of it, and help the company make the necessary connections with the university, or the next service connection to see whether or not this would fit. That's brilliant, that's brilliant in the sense that the Chinese like to deal with government agencies, I can tell you that from my own experience, and so when you make a public-private partnership in Toledo, Ohio, and part of it is the government, there's a sort of an assurance that the government will cooperate, that there's also the credibility of the government through the Chinese, so they're much more likely to make a deal with this organization, and they're much more likely to invest in the project, don't you think? You're telling me a unique aspect about this, where it's actually private. It's legally a private corporation, so it can deal with things privately, for example, you can come to them and give them information, they don't have to share it with anybody, and so the business can go in quietly, everyone knows you want to buy land, the price of land goes up, they can go, they'll help you facilitate the contacts, help you facilitate the relationship with the government, but it remains private. That's interesting because the Chinese world, they are so quiet when they do business, they don't want competitors to know in their own world what they're doing, so it gives them assurance that they can do the business quietly, no fanfare, no morale, but get the business done, and the investment closes. Yes, and also it has the credibility because it's struck by the state, and the state has a heavy interest in it, so it's a mixture of both, and the people on the board of directors and the board of advisors are all business people, they know the Toledo, they know the community, and they are able to help you find whatever it is a Chinese business might need to find in Northwest Ohio or Southern Michigan. One thing that strikes me is that we have a U.S. government system where the election comes up every four years, and it seems to me that many times the government leaders are worried about four years, so in other words, if there aren't four years, that project may die because they're not there. Now with this kind of private entity that works with government, it seems like, do you think it removes a lot of political risk? Okay, first of all, the staff people, many of them have been there, I would say 15 to 20 years, so you know the staff, and the leadership will be there, it's continuity of leadership, first you spoke last year, be the next year, regardless who is the governor or regardless who's the mayor of Toledo, which gives you continuity of leadership. Again, they're largely the advisory board and people involved with business people, more business people, they know what you want, and they're not running for election. The mayor of the city, no disrespect to the mayor of Toledo or the governor, they want to announce publicly, I created jobs, I didn't have direct investment, but the business may not be ready, but the business may not, anyone to know, the quantity of the investment or the number of jobs will be created. RPG can help business move as quietly or as publicly as the business wants to, and when the business is ready. So Jay, maybe you can like ask for help. I'm thinking that this is a situation where there might be, and in Hawaii, there might be political pushback, because some companies are having the benefit and others may not be having the benefit. And I wonder if in Toledo, Ohio, there is political pushback, called competition in the city, competition for having these public-private partnerships, competition for having the benefit of these public-private partnerships. Is there a political tension around that in Toledo? I would say some mayors and some politicians, like anything else, are more enthusiastic, some are less. I think the local business community realizes overall this is advantageous. Business comes in, even if they're your competitor, they produce jobs, they pay taxes, they make the community better. And again, RPG is an honest broker, in my opinion, like I speak to myself and not the University of Toledo, is an honest broker. They help the international business, the business looking to relocate to West Ohio, get the best opportunities they can, so hopefully they'll choose Northwest Ohio. But let me just move, I don't know who could cut it. Some of the RPG, what's the economic consequences of the recent years, numbers in Toledo investments? Um, recently some numbers that came out on their annual report indicated that they created, I think with the last year or so, about 1,000 jobs, they've saved about 6,000, almost 7,000 jobs, and about $450 million investments. And so it seems like a pretty unique platform, successfully that it can marry the two, the public sector, the public community, the government leadership, and the private community. So it allows business investment in a fashion that is within the law. It seems to be also great because the Chinese culture coming to the U.S., they don't want a lot of fanfare, they want to be in the radar, because not for purposes, I think more purposes that they don't want their local competition, domestic competitors, see what they're doing. So it seems to be a model to bring investments in. The other thing is, again, since it's politically neutral, it comes and goes regardless of Democrats or Republicans, and it leverages all aspects of the community. It has strong relationships with the University of Toledo, it has strong relationships with the Dolores Community College, and the other community colleges and public, and not for profits in the community that could facilitate the relocation or success of a new business. Well, I wanted to ask you about that. You know, what facilitation does the academic world play here? I mean, you're part of it. Do you help to facilitate? Do you help to negotiate these deals? Do you help to do, you know, find parties to come together? Personally, I don't. I am not involved in details. To realize negotiations, they are tightly done in small rooms that handful of people need to know. However, I would say on a regular basis, I have seen Chinese potential investors touring the facilities at the University of Toledo, looking at the School of Engineering, looking at the science labs. They want to do public-private partnerships. They're looking to have the University assist them in doing research or facilitating other things. We're an honest broker. We're also, over the past, the school business has provided consulting services. And again, we're there as a, one of our commitments as public universities support the economic development of Central Ohio and particularly Northwest Ohio. And we're there as neutral US brokers to provide whatever support we can to facilitate our trade to business. I will put it the other way. When our little businesses want to go to China, the University has provided foreign language training, cultural training. We provide interpretation services. We have done whatever it could we could do to facilitate moving, either way. Let me have this note from my perspective in your 14 years. As I say, in the Chinese world, there seems to be that the education academic world is an honest, credible institution. And a lot of things actually are, they come in the Chinese world to the academic world asking, we need help. They don't necessarily go to a law firm because I have this feeling, my understanding is that they tend to say, you're not there for money. So you can help us. And my experience is going to meetings, when I give them my lawyer card and I give them my law professor card, they put the lawyer card on the bottom. They don't look at it. And they stare at my card and it says, Professor. And I think it, tell me, is your observation the same? I found that the title Professor carries a lot more respect than title lawyer. I would say the United States made me my lawyer title carries more respect. We're honest brokers. I'm not looking through business. I'm not looking to compete. So people will talk to me or can't believe that they might talk to a fellow business person because looking at the fellow business person, how this might, these potentially is my competitor. How can you leverage this information against me? I am just here to learn and talk. And so occasionally businesses have called, just wanted to chat on the phone, I'll chat with them and tell them, I'm just talking, you've got my opinion. Or I can't help you. Why don't you call someone at the university, well, so it's for the community. Maybe they can help you. As we can help you, we can help you with a short break. We're going to help you with a short break right now. We're going to let you relax for one minute and we'll be back right after this break. That's Lou Gibbons and Russell Liu. We'll be right back. Aloha and how only Makahiki Ho, which is happy New Year. And I hope it's a happy and prosperous New Year for you. I'm Kili Ikeena with the Grass Root Institute. Every week we partner with Think Tech Hawaii and produce a program called Ehana Kako. Let's work together. We bring together movers and shakers who are making a difference here in Hawaii, making a better Hawaii for everyone. If you're interested in improving the economy, the government and society, join us every week on Mondays at 2 o'clock p.m. for Ehana Kako on the Think Tech Hawaii broadcast network. Until you see me then, Aloha. Aloha ladies and gentlemen. My name is Pauline Shakmaak-Chen. I'm the host for a new show on Think Tech Hawaii called Outside In. Outside In will be taking a look at how the external world can help shape Hawaii's future. And I will be starting the show hopefully next year in terms of regularly scheduled programming. And we hope to invite a wide variety of different guests ranging from history, philosophy, art and architectural fields all the way to robotics, biotech, cryptocurrency, bitcoin, and the like. So we're going to have a full range of guests to cover many different areas of interest. And I hope to see you next year. Until then, Aloha. We're live. We're happy to be on Skype with Beijing. And we have our special guest, Lou Gibbons, an old China hand and a faculty member at the University of Toronto who consults about business in China. Or Toledo. But I said, I'm sorry. Make that University of Toledo. You know, the mainland is all the same. And Russell Liu, who's a professor also. We have two professors on the scene here. So Russell, you had some more to follow up on this. Yes, I think I'm a selfish point of view looking back to Hawaii. You know, how does this translate to what we can do in Hawaii? And I think we can look at the model of Toledo and understand also the culture of China. How would you bring the vests to Hawaii? And I think one of the things that we look at is, first of all, the public-private partnership, the role of the August broker education industry. But let's look quickly, and let's look at, for example, one industry in Hawaii that emphasis now be placed as an education industry. And I think that that has also been a very big industry in Ohio and Lou impact economy. In Hawaii, there were 4,295 international students that brought in 108.9 million dollars created 969 jobs last year. Now, what's the numbers in Ohio? Toledo, Northwestern, Ohio, we have almost 37,000, a little over 37,000. It's right at 1.1 billion in economic transactions and they create 14,000 jobs. One average point of statistics, three international students result in seven jobs. Think about what students need. They need to go shopping, they need food, they need clothes, they need everything, and they spend money and they can be a little bit more affluent than the average American students. And it's very interesting because this is a North Isle. This is Ohio where it's cold, winters are cold, heavy manufacturing, but they're yet able to capitalize on the education industry. You know, Lou mentioned that Hawaii is beautiful because the weather is beautiful, conscious of crossroads of Asia and the US, English is spoken, a lot of good things to offer. So the question is, maybe we need to look at these certain industries. We need to push it better. And I think hearing from Lou to hear the way Toledo has done it is really the government gets involved with the private community and we sit down to remove political risk. What I think what we're talking about is maybe this private entity comes up within five and 10-year plan, just like China, central planning. So that way we're on the same page and it doesn't matter who the next mayor is or the next governor, we have a direction that we're all working together. And it's important because Ohio is a blue collar industry and yet you're able to do this. Gregory, you need to have consistency. Businesses like planning three, five, ten years in the future, they do not like planning election cycle to election cycle with the Williamson public. You need to know if I put money down today, the money will still buy me what I want to do tomorrow. In terms of the students, I do not speak for the University of Hawaii, but we have negotiated special relationships with our sister universities here to give them certain tuition advantages, to give them certain preferences. One of the reasons I'm in China is to meet with all students and hopefully encourage them to come to the University of Toledo because China is a relationship country. I can send them all the propaganda I want. We can have the world's most beautiful websites, but I can put the most beautiful website as a certain university that started to be named after they're nameless had a beautiful website with nothing behind it. So students want to meet people, they want to have a relationship. Their parents, we have materials in China because our Chinese students speak English, but the parents have to decide. We want the parents to know Northwest Ohio is safe and that we want their students and we'll treat their students with respect and we're committed to their student's success. That's why they come. We were talking earlier, you mentioned that one important aspect is it's not just that the education comes here, that there's a spin-off on that. They like the community and they do their spin-off business. Tell me about that. We've had Chinese students who come, they get their bachelor's degree, their PhD. They decide what to stay. They found a professor they're working with and they work with H-1B Visa. They decided to do other things. We've had several Chinese people who spun off and credit their own companies. Some were more or less successful, but they came here and I think we're back towards leap year country in case you're entrepreneurial and you want to take risk. And I don't know the numbers. I think the number of patents that we have as a result of that, our Chinese faculty is impressive though. They made substantial contributions to our community. So, you know, when you did this, when the state of Ohio did this and Toledo did it, I'm sure you were there, Lou. And I'm sure you saw how the governmental vectors were working together and how people came into the center of attention and made this project happen. Because it doesn't happen by itself. It doesn't happen automatically. Somebody has to conceive of it and execute the plan. And I wonder if you could offer Russell and me some advice on how Hawaii could conceive and execute a plan to achieve this educational investment, educational interaction between China and Hawaii. You know, Jay, that's a very good question. And the way I see it is that, number one, for 14 years up here, I see the major universities from Wisconsin, Minnesota, Ohio, they come out here with the university president. They bring the governor and the mayor with them. They bring the chamber of commerce and they bring the private business and they have these receptions here and they bring their alumni from the university. Now, every year, the University of Hawaii, I believe has about 500 plus, maybe more now, Chinese Student Scholars Association. You need to integrate them with this plan. What happens is that when they come back to China, these students, they introduce and develop relationships. But we really need a partnership of the public and private community on the same page. We need people to share relationships, contacts, second of all, just imagine, I don't think we're utilizing our resources where we need to get more engineering students, high tech people, the film school, out here together with the president and the governor to bring these students back to Hawaii, fill the schools up. Now, think about this. About a court, about 300, 400,000 students come from China alone to the colleges. Just imagine, we get more of these students that like Hawaii, great businesses, they develop relationships. And then what happens is we call Intel saying, we have a large community of Chinese scholars here, we're in the computer chip industry, we've developed here. They speak English and Chinese, they have relationships back in China. We're working with the city of Sun Tso China to create high tech things here. China's big policy now is innovation. So it's no mystery that the students are coming to the US and this is a win-win for the community where we can integrate the ability of these students, their relationships, and the local community. And the local community students will benefit because they become global. They all started to understand. But I think one thing that we need to talk about is from your experience being on the Confucian Institute, how important is language and culture? It's definitely important. I think Chris just said a moment ago, if you have 500 Chinese students every year, that means you have 10 years, a decade, you have 5,000 alums in China. Each one of those alums has contacts and connections that can help you leverage in China, their family, their friends. After a period of time, 15, 20 years, they're now the directors and the managers. You can call and call in favor to come back to you. Relationship between the university and the student in China is like a father and son. It lasts long after child leaves. Two years ago, the university still had its first alumni association meeting for our Chinese alumni. This was the first time I've ever seen alums complaining that they did not get an invitation on time. And then we arranged them to give money to start a scholarship for a Chinese student. And when they came, they followed up the year later in Slido for their alumni meeting in Slido, I had alums complain to me that the system was down and they couldn't give as much money as they wanted to. The credit card system, for some reason, wouldn't process it. They had to process the credit card two or three times. Well, Kudo should tell Lido. I think it's great what you've done. Students tell me the credit card machine will process by donation. We have one or two or three times to get the card card through. Well, it sounds good. It's very cultural because in China, I find that there is a lifelong relationship between the two students. They're called lock shirt. For the rest of your life, they're lock shirt. They listen to you and they are respectful. And it's sort of like this, where they come to, becomes graduates of the University of Hawaii or University of Lido and they come back and that relationship is nurtured. And that means they bring, not only the fact that they were there, they bring their business. They bring their relationships to the university. Have the state. Yep. And so those relationships have to be nurtured and built. If you want to get, if you want to either send people out or bring people back, you have this base of family that is willing to help you if you call and let them know. In fact, you don't even have to call. Just let them know somehow that they're needed and they will come. Now, but you guys are both assuming. There are a lot of pieces too. You're both assuming that all things will remain constant here. There's many communities. And I'd like to just offer one thing that may change. And we have a new president. And that's a dynamic that changes from day to day. It's when people read The New York Times more assiduously now than maybe they ever did for all the changes that are happening, including changes in the US relationship with China and the relationship of Donald Trump with Xi Jinping. It's a very interesting story. And it's dynamic and it's changing. And I need for you guys to cover this one question. How is that going to change what you're talking about? Will it make it easier? Will it be nutritious ultimately? Do you think? Or will it be a problem? Can we assume everything will remain constant? Or should we be hedging against changes that may not be constant? What do you think? Okay. In my opinion, one is that we have been reaching out to our third Chinese students and incoming students, trying to tell them, regardless of the direction Washington goes in, people of Northwest Ohio, respect. And we want our Chinese colleagues and our Chinese students to come and spend time with us. This is an ongoing relationship that presidents will come and go, emperors and dynasties come and go. But the people will still be there. The old 100, if you Chinese call them, will still be there. For you. The second thing is the more problematic the HIC is sort of like after September 11th is getting visas. And that might become a little more difficult. The financing and the bureaucracy we go through to get the Chinese there. And again, when we find the exceptionally talented people, the generation, the entrepreneurs, and the scientists for the next generation, it's going to be a little bit harder to get them the H1B visas and the visas that they will need to stay and improve the U.S. economy. But those things will come and go. I will worry about that four years from now. Trust my students. If I can add something quickly to that, I think there's a realization in China that if you're not going to welcome, the government's not going to welcome, you know, the universities in America have to work harder. The state governments have to work harder because you can't rely on federal money. We just have to work harder in our local community to create our destiny. That means universities should make a stronger tab to bring these students in. Notwithstanding, talk about controlling the number of student visas into the U.S. Let the governments handle that. Let Xi Jinping, who realizes that China's policy is innovation. They need students to go to U.S. to learn, get innovation, learn the global culture. Let him take care of that. But what we need to do that I've never seen is how we can get on one page, the state of Hawaii, university president, with the governor and the mayor together, and private visits at the Chamber of Commerce, to come out here and to attract the students there. That's the foundation. That's the lifelong relationship. Laos sure to student. They bring their family, they bring their wealth, they bring their relationships. That's the incubator. That's the safe way. The risk is low. Political risk is low for everyone. But again, as I see it, that window's going to close because if we're not going to do something soon, we have a lot of Chinese students, maybe possibly going to the U.K., going to London. There'll be the benefit. Okay, we'll have to leave it there, Russell and Luz. Thank you so much. Two law professors here on this show, Lou Gibbons, an old China hand, and a faculty member at the University of Toledo College of Law, and Russell Luz, who teaches law in Beijing and who's a Hawaii lawyer. Very important that we have this conversation. Very important that we bring the government into our efforts. Very important that we learn from Toledo. Thank you so much. Shai Shai and Sajian. Yes, yes, Sajian.