For more than 20 years, local companies looking to break into the Asian manufacturing market have increasingly turned to import/export expert Ben Zhang and Bellevue-based Greater China.
Few stories evoke the American dream quite like Ben Zhang’s.
In 1989, at the age of 23, Zhang immigrated to America with $330, money he had saved working as a chemistry teacher in China. He soon enrolled at the University of Washington and was close to earning a degree in economics and international studies when, in 1995, he tapped his meager savings again ($780 earned this time working two part-time jobs — one at a restaurant, another at a department store) and rented a booth at the three-day Seattle Gift Show.
The goal? Start his own business. The company would be called Greater China, and Zhang envisioned himself as its president, importing promotional products and other corporate-branded marketing handouts and freebies made in China for companies in America.
By the third day of the gift show, Zhang had yet to make a deal. At day’s end, a disappointed Zhang threw his product samples in the garbage and began to look through the help wanted ads in The Seattle Times.
Two weeks later, an opportunity presented itself. The head of Ultimate Presence, then a local supplier of promotional products for Washington Mutual, recalled seeing Zhang at the Seattle Gift Show and contacted him about placing seven orders for 250,000 items. The deal was worth a half-million dollars.
This was the lucky break Zhang needed to officially launch Greater China.
But Zhang was financially drained and needed a cash deposit of 10 percent, or $50,000, from the supplier to secure its order. According to Zhang, the supplier, in turn, was concerned he would take their money and fly to China under the guise of finding a manufacturer for their products, never to be seen again. Could Zhang provide business references? He could not, Zhang said, because he still was a UW student who was months away from earning his degree.
The supplier had second thoughts about the deal until Zhang’s business professor, Shannon Hauser, vouched for his student’s work ethic and integrity. According to Zhang, Hauser told Ultimate Presence that if Zhang took their $50,000 and fled the country, they could come to Hauser to collect.
Zhang fulfilled the order and was officially in the import/export business — even if he was running it out of his bedroom in those early days. That was more than 20 years ago. Today, Greater China is an industry leader.
“I was humble and helpless,” Zhang said during an interview in his roomy, top-floor corner office in Eastgate overlooking Interstate 90. The space is carefully appointed with neatly framed degrees he earned from Cornell University and Harvard University, and photographs of Zhang posing with Washington governors Gary Locke and Jay Inslee. Portraits of his family — his wife, Hisae, and teenage children Meili and Joe — line a credenza behind his desk.
Every year since 2009, Promo Marketing, a leading trade magazine that covers the import/export promotional products industry, has named Greater China one of the Top 50 suppliers in America. Last year, the company ranked number 46 on the list, and was the only Washington company on it. Greater China regularly posts annual revenue between $20 million and $35 million. It also works with U.S. distributors who supply products for leading national brands, such as Amazon, Apple, AT&T, BMW, Boeing, Coca-Cola, Costco, Delta Airlines, Microsoft, Nike, UPS, and Visa. Greater China has offices in Bellevue, Shanghai, San Diego, and Philadelphia, and employs nearly 50 people: 30 people are stateside in sales and support roles, while 17 people work in sourcing and quality-control capacities in Shanghai, and two people work in quality-control capacities in Cambodia.
It’s a competitive, $23 billion industry, with more than 10,000 American suppliers competing for business from top companies that each spend tens of millions of dollars on marketing to produce promotional T-shirts; hats; tote bags; pens; bobbleheads; and anything else that can be emblazoned with a logo, slipped into swag bags, or offered as some other form of customer perk.
Increasingly, local leaders in the import and export industry recognize that if you want to do business in Asia, you need to meet Zhang.
Mitch Mounger, president of Sunrise Identity in Bellevue — one of the top promotional merchandising and marketing firms with annual revenue between $35 million and $45 million — first met Zhang 15 years ago and has worked with Greater China ever since. He was most impressed by Zhang’s industry knowledge and connections to manufacturers in Asia.
“Ben just became a guy we would go to on just about anything,” said Mounger. “He could turn around a quote overnight. It was amazing what he was able to pull off. Time and time again, their prices are fantastic, the quality is great, and they have just been a good partner.”
He also appreciated that he and Zhang were like-minded when it came to finding not just the cheapest price or quickest turn-around, but also factories that could be vetted for social and ethical concerns.
“We only import from factories that we have been over to inspect and have gone through our social compliance, and we’ve had third-party inspections done, and that gets very expensive,” said Mounger. “Just to get online and look at a factory and they say that they can make something for you, there is a lot more that goes into it. With companies we work for, we wouldn’t risk it. Using Greater China, they do that prework for you. In most cases, it’s already been done. Greater China is only bringing the best factories to you that have been audited and are going to protect your brands.”
That said, Greater China still is able to land great manufacturing deals for its customers.
“We keep Ben honest,” said Mounger. “We bid Greater China out on most every product, and they win their fair share — even more so. They are good at what they do.”
Greater China is not just about importing from China to the United States. As China’s middle- and upper-classes have grown, so have their tastes for high-quality red wine, according to Zhang. In 2008, he created HarvardRen, a label that exports bottled wine from Woodinville and Walla Walla wineries to China. Greater China is also looking into exporting locally produced seafood, cherries, apples, and some biotech-related products.
A Competitive Global Marketplace
The import/export business is rife with controversy and often used as a political football during election cycles. Zhang is familiar with the argument that American jobs have been lost to other countries, most notably China, where the cost to manufacture is cheaper. But Zhang argued companies seeking wider profit margins and an increasingly connected global marketplace are incentivizing American companies to pursue manufacturing solutions overseas.
He pointed to a nested stack of colorful golf visors arranged on his desk. It’s a product he has provided to one customer for more than a decade. Every year, his customer compares the cost to produce the visors in China to the cost to produce the visors in America. It’s always more expensive to produce it in the U.S. than to produce it overseas, according to Zhang.
“American companies always look for the cheapest products and how to save money,” said Zhang. “It used to be (most of the manufacturing was in) Japan, Korea, Singapore, and Taiwan. Then it became China. When China became more expensive, they started talking about the Philippines, Thailand, and Vietnam. Right now, Southeast Asia is becoming more expensive, so they are moving to Africa, South America, and Mexico. Those jobs are never coming back here.”
That same shrinking global marketplace threatens the existing business model used by Greater China and its competitors. China-based Alibaba, most notably, is the leading business-to-business website that puts manufacturers in direct contact with the marketing departments of American companies, squeezing out suppliers and distributors. Zhang was concerned, particularly when Alibaba’s stock went public in 2014, garnering international media attention and luring some of his customers to the rising e-commerce website, which is valued at approximately $300 billion.
According to Zhang, Greater China has some advantages over Alibaba. “We make the manufacturing experience easy for them,” he said. “We are local. We are in America. If something goes wrong — the product isn’t delivered on time, the quality isn’t there, or there is some sort of intellectual infringement — any American company can file a lawsuit against me here. I am bounded by U.S. jurisdiction. With China, it is a different story. It’s tough to enforce the law in China.”
The cultural difference between the U.S. and China is also a factor. “In dealing with China, if you don’t speak the language, it’s night and day,” said Zhang. “If you call China and don’t speak the language, they don’t get it. The momentum slows down. Call a Greater China salesperson, and we got it. Give us five minutes, and we will have a price for you.”
The Chinese-Eastside Connector
When Chinese immigrants arrive on the Eastside, they often turn to Bellevue Chinese Chamber of Commerce President Timothy Lee to open doors and make connections.
Timothy Lee knows what it’s like to be a stranger in a strange land. He immigrated to San Francisco in 1968 with very little, and moved to Seattle in 1983. He saved enough money to buy property in the Chinatown-International District, buy a restaurant, and eventually move to the Eastside. Today he operates a real estate company based in Bellevue. He also is president of the Bellevue Chinese Chamber of Commerce, an organization founded in 2012, and that has seen its membership roster grow in concert with Bellevue’s booming Chinese-American population — from 70 members in 2015 to 120 members today. When immigrants arrive to the Eastside from China, Lee is one of the first people they reach out to. Lee discussed how the Bellevue Chinese Chamber of Commerce is helping new immigrants settle in the area and start businesses.
425 BUSINESS: What were the initial reasons for establishing the Bellevue Chinese Chamber of Commerce?
TIMOTHY LEE: I had friends from mainland China who wanted to settle down (in Bellevue). They were asking me what the education system was like; where to buy a house; and where to find bilingual doctors, lawyers, and CPAs. I saw there was a trend, and our service (the Bellevue Chamber of Commerce) was needed. There were already services in Seattle — Seattle Chinese Chamber and benevolent associations — but nothing in Bellevue.
425 BUSINESS: What does your membership roll look like?
LEE: Our members aren’t just Chinese. Americans want to join my chamber because they want to connect with Chinese members and do business with them. If you want to do business with the Chinese in China or here, it’s best to join us. Our members are doing business in real estate, aerospace, education, and restaurants. Our members are from China. They are realtors, coal mining, aerospace, restaurants, and education bilingual schools.
425 BUSINESS: Have the needs evolved since the Bellevue Chinese Chamber of Commerce was created five years ago?
LEE: A lot has been happening. New immigrants are participating in the local economy, getting jobs, and starting businesses. Five years ago, they wanted to buy a house, get their kids in the education system, and just get used to daily life. Two or three years after they settle down, they usually want to start a business. They want to own a Chinese restaurant, commercial building, or hotel. People ask me monthly, “I want to buy a restaurant. Can you help me?” Of course, I discourage them because owning restaurant is a tough business. If they listen to my advice, they buy a commercial building or own rental property. It’s safer.
Historic Trading Partners
Talking China-Washington state trade relations with Washington Council on International Trade President Lori Otto Punke
Few organizations monitor local trade activity as close as the Washington Council on International Trade (WCIT). The organization will turn 45 years old next year, and has spent much of that time speaking to congressional delegations on behalf of more than 100 of its member companies and organizations aspiring to be more competitive on the international trade front. WCIT’s membership roll includes some of the biggest employers in the state, many headquartered on the Eastside: Costco, Eddie Bauer, Microsoft, and REI, among others. WCIT President Lori Otto Punke offered insights on business and trade relations between our state and China.
425 BUSINESS: Historically, how would you describe business and trade relationships between Washington and China?
LORI OTTO PUNKE: U.S. President Richard Nixon really started the process of normalizing relations with China in the 1970s, and U.S. President Jimmy Carter officially normalized the relationship with China in 1978. Chinese Vice Premier Deng Xiaoping came to the United States in February 1979 and visited Washington, D.C.; Georgia; Texas, and Washington state. He came here to explore technology. He went to Boeing; the Washington Plaza Hotel, which is now the Westin; and he had dinner at Canlis. On top of that, former Secretary of State Henry Kissinger was in town, and they met. It was incredibly important and significant, particularly for a state like ours. The other big piece was Sen. Warren Magnuson, who was very involved in U.S. commerce issues and was an early thinker on the importance of U.S. and China relations. At that time, there were 700 million people living in China. Magnuson wondered why we wouldn’t engage with China; bring them into multilateral institutions, be it the United Nations or other organizations; and figure out trade and a path forward. Those were some of the foundational blocks that really blossomed the Washington state and China relationship. It really kind of created this broader community relationship that you still see the benefits of today.
425 BUSINESS: What is the current state of business and trade relations between Washington and China?
PUNKE: China is our largest trading partner — (ahead of) Canada and Mexico, which surprises some people. Every year, Washington state exports about $16.5 billion in goods to China, and imports about $11.6 billion. So, Washington state has a trade surplus with China. It’s a diverse portfolio of products that (Washington state) exports, from agriculture to aerospace to software.
425 BUSINESS: Your organization has formally listed 10 priorities, one of which is to advance Washington’s trade priorities on China. Specifically, what does that mean?
PUNKE: Washington state businesses face challenges getting into the China market. It’s certainly easier to bring products into the U.S. than it is to bring products to China. Continuing to open up and make for a level playing field is really important. That is something our members — whether they are in agriculture or other parts of the economy — care about. Market access is hugely important to our members. Apples are a good example. Until 2015, there were arbitrary rules saying we can’t bring these apples into China because they claimed the apples didn’t meet the health and safety standards. That is a classic market access issue. It was just meant to keep U.S. producers out. It wasn’t actually based in science. Forty percent of our jobs in Washington state are tied to trade, and a quarter of our exports are going to China. Ninety-five percent of the world market is outside the U.S. If our business and agriculture interests don’t have ready access outside of the U.S., it’s a problem for this economy and for the state. The more access we get to China, the more jobs we will get here.
China’s Local Influence
Washington State China Relations Council President Mercy Kuo sees China’s growing influence on every facet of our local economy.
On April 18, 1979, a cargo vessel arrived at the Port of Seattle’s Pier 91, and nearly four-dozen dock workers stood at the ready to load 37,000 tons of corn onto it.
It might sound like any other entry on a port activity log, but the ship, the M.V. Liu Lin Hai, was owned and operated by China Ocean Shipping Company, and it was the first Chinese flag vessel to arrive in the U.S. in three decades.
The arrival was part of cooling relations between the United States and the People’s Republic of China, and was largely brokered by Seattle attorney Stanley Barer, who had co-founded the Washington State China Relations Council (WSCRC) that same year.
Thirty-eight years later, the WSCRC still is a major player in facilitating business and trade relations between the two powerful nations. It has also helped to pave the way for visits by four Chinese presidents to the Evergreen state.
WSCRC President Mercy Kuo offered insights on China’s growing influence on Washington state and the Eastside.
425 BUSINESS: Where do you see China’s presence on the Eastside?
MERCY KUO: The Eastside already has major blue chip companies here. Baidu, Tencent, Huawei, and ZTE have all chosen to set up offices on the Eastside. Also, several Washington State China Relations Council members represent the state’s real estate industry, and all have a China practice area. They see a lot of Chinese buyers coming to the Eastside for residential and commercial interests and are positioning their companies to attract Chinese buyers. Another indication of the Eastside’s awareness of China’s importance is that there are a few Chinese primary schools on the Eastside with Chinese language immersion classes. They understand Chinese is the language of the future and are taking a concerted effort to educate their children in all things Chinese.
425 BUSINESS: What is the Eastside’s appeal to China?
KUO: We recently had a Chinese delegation investing in Augmented Reality and Virtual Reality technology. I asked why they came here and they said, to a certain extent, Silicon Valley is oversaturated, housing prices have skyrocketed, and the environment of creativity and innovation in the Seattle-Bellevue area was more conducive to what they wanted to do. I think they realize that even though San Francisco and Silicon Valley has had a much longer history with Chinese Americans in general, the Eastside is much more appealing in terms of standard of living and affordability. For Chinese people, it’s all about who they know and what their friends and colleagues recommend. If they start to affirm that the Eastside is an optimal environment, then that will continue to draw Chinese companies.
425 BUSINESS: When someone says a business needs to have a China Strategy, what does that mean?
KUO: At the most basic level, it means how does China factor into your business or the way you develop a business plan — whether it’s sales, brand identity, competing with technology coming out of China, or attracting investment from China. If the assumption is that Asia is the new center of gravity in terms of trade and economic integration, then it behooves businesses to begin thinking beyond local. Some companies might say they are just local or national at most. They don’t want to be bothered. But if they are a part of a global supply chain in a given sector, then somehow and somewhere down the line their business might be affected by what’s happening in U.S.-China relations or economic developments in Asia.