So what does the future store for China in the next 40 years? Let’s see–

Prediction No. 2

Nation-state power around the globe will be increasingly “multi-polar” in terms of who wields it and where

• The economies of Brazil, China and India will become less US and EU centric.
• Foreign Direct Investments will shift toward developing economies.

Prediction No. 25

China will continue to position itself as a long-term economic power-player around the globe

• China teams with other emerging countries (Brazil, India and China) to influence currency utilization.
• China partners with other countries (Venezuela and Africa) to meet energy needs and to import a wide range of raw materials.

Former Foreign Prime Minister of Mexico Jorge Castañeda does not agree they are ready though, at least when he wrote his piece in the September/October issue of Foreign Affairs talking about China and the emerging countries joining the leadership of the global institutions.

At best, they are regional powers that pack a minuscule international punch; at worst they are neophytes whose participation in international institutions may undermine progress toward a stronger international legal order.

Prediction No. 37

China’s monopoly control of the world’s rare earth metals market will have a significant impact on US national security and the economy

• The seventeen elements that make up a group known as rare earth metals will remain critical to the performance of hundreds of products and technologies.
• The US will be reliant on China’s metals to produce such things as high-performance weapons components, internal guidance systems, microwave communications systems, radars, the motors and generators that power aircraft and ships, wind turbines, high-performance batteries, hybrid cars, superconductors, computer chips and digital displays.

This prediction is on a wait-and-see mode. Global Times reported early this month that China does not have monopoly over the rare earth reserves.

Among the world’s 88-million-ton known rare-earth deposits, China has about 36 million tons, hardly more than the combined deposits of the US (13 million tons) and Russia (19 million tons).

But over the years, due to the underregulated market in China, it supplies the world with close to 97 percent of the total market share. Japan, for example, depends solely on China for rare-earth minerals.

…with reports early on saying China blocked rare earth metal exports to Japan.

See anything new or trends moving towards the predictions? Considering the prognosis of the predictions before, they are not really that shocking.

The Chinese government seeks a harmonious society. But it’s Facebook’s social games that are cooperative, while China’s closer resemble the Ultimate Fighting Championships. Of China’s top 10 social games, 9 feature competitive actions that hurt other players (see graphic); the one exception is Renren Restaurant, an exact copy of Playfish’s Restaurant City on Facebook. Of Facebook’s top 10 games, only 1 features competitive actions. Chinese players cherish intense competition.

The post has more details on the game actions, which include enslaving and humiliating friends, bombs in the hospital, and looting at the farm.

Mischief Accomplished: worms added to friend's farm

Why all the Schadenfreude, Stealing, and Status?

Three speculations as to why Chinese games are more competitive.

1) Chinese Education System

Are Chinese children hard-wired for competition at a young age? Do Chinese become accustomed, even fond, of the tools required to succeed in a hyper-competitive education system? Are social games a lifelong detox from the gaokao?

2) Culture

Though ambiguous and slippery, culture is often cited as a source of societal differences (and even geopolitics, in Samuel Huntington’s Clash of the Civilizations) But real-life crime rates, including theft, are not notably higher appear in China (though harsher punishments and lackadaisical reporting muddle the issue). So why should they be in social games? Luxury goods, booming in China, help make the case that status is especially important in Chinese culture.

Nasty actions in the Wonder Hospital game

3) Specific to Social Games

Perhaps Chinese are more apt to add “friends” on social networks, even if there’s no close personal relationship. That could lead to fewer reservations about stealing from your “friends.” China’s prolific online friendships are evidenced by the finding that Chinese have more online than offline friends. Or perhaps Chinese netizens simply have a better sense of humor than Westerners when it comes to the value of virtual goods.

The new China Social Games Blog

China Social Games is a blog dedicated to tracking the hottest games, networks, and trends. Though already wildly popular in China (and on Facebook), social gaming is still in its infancy. Games are just starting to become truly social, so the China market is evolving, innovative, and yes, extremely competitive. China Social Games offer up-to-the-minute coverage as the market grows, consolidates, and Western players enter.

Our latest guest posts:

• TechCrunch: China To Police Social Games
• VentureBeat: China’s growing addiction: online farming games
• VentureBeat: The year it exploded: 10 hottest Chinese social games of 2009

China Social Games is brought to you by the BloggerInsight team, regular contributors to CNReviews. Follow @CNsocialgames on Twitter.

Last week, I attended the Ad:Tech conference in Beijing and participated in a panel discussion on microblogging, a relatively new phenomenon on the Chinese Internet, as it relates to marketing. The reason microblogging (for example: Twitter, Sina Microblogging, fanfou, etc.) has received so much attention is that the format is fresh to most Chinese netizens and is growing very quickly. As a result, the potential opportunities are worth paying attention to.

Since blogs and web 2.0 hit the world, information no longer spreads merely from top to bottom or from the minority to the majority. The microblog enables information to have more sources and become more diversified and authentic. However, microblogging has not yet become hot in China. There are several reasons for this, such as the controls on the Internet in China (Twitter and Fanfou are blocked), the level of knowledge amongst netizens in China, the polarization of thinking, etc. Microblogging appears ready to explode in China due to its growing energy.

The panel discussion on microblogs began with its potential impact on ads and promotion. As a result, the opinions of attendees on microblogs in general were not expressed. For some, microblogs are a new method of promotion by ad service providers. To web portals, it is a tool to help generate page views. What on earth is a microblog? I am a Chinese blogger and a Twitter user. I am co-founder of BloggerInsight, a startup that relies upon Chinese professional bloggers for social sourced intelligence. From my point of view, the microblog is a simplified version of the traditional blog. It focuses on short length and convenience so that people can post their opinion quickly. It shares many characteristics with traditional blogs in that it is characteristic, social, and passes trust to followers. But it has its unique features as well, such as breaking and hot news that connect people more directly. Blogs and microblogs are not one-way marketing that leads directly to more sales or larger market shares. Blogs and microblogs represent character–and to some extent, the formulaic, industrialized, big brands have unfortunately lost their unique characteristics and are not able to adapt to the microblog. Topics on microblogs are posted quickly, but also fade away quickly as well attracting attention for only a short period. For the promotion of topics that need longer-term attention, it is necessary to use microblogs in conjunction with other outlets such as websites and traditional blogs.

Now back to the panel questions we discussed. The first question asked was whether the microblog is a good or bad thing for ads and marketing.

For brand owners, microblogs are positive as it allows for additional contact with consumers. That is a relatively obvious and positive opinion.

To web portals which need traffic to attract more ads, microblogs are also beneficial. The attention span of modern netizens is becoming increasingly short. With the ability to generate a large number of hits in a short period, microblogs enable new issues to spread faster and attract more concentrated visits. As traffic increases, it can be roughly viewed as a gathering place of readers, which means that it’s a gathering place for an audience to view advertising. As a result, a web portal can sell more ads.

Personally, I believe that microblogs do no harm. To companies that consider consumers God and really want to know about the demands of the market, utilizing microblogs is a way to convey a grassroots feeling and close the gap between companies and consumers. But to those who still have the intention of “educating” consumers and “guiding” the target market, to those which fail to change or listen to the demands of consumers and to those who still place themselves above consumers, microblogs probably represent the beginning of a nightmare as the microblog has the ability to screen information. Information that is unconvincing, not beneficial or boring will not be spread. Every blogger is a processor who selects information he/she wants to spread.

Another phenomenon we have to pay attention to is that the young generation in China has changed its way of consuming information. The impact of ads on traditional media like TV, radio, newspapers, etc is. decreasing and many people tend to say, “Ads are just bragging.” This tells us that people don’t trust ads very much. On the other hand, recommendations from friends and sharing experience via the Internet are booming. People gather together to share good products and warnings of bad products. There is no right or wrong in it–it’s just their choice in the market.

The above are just personal observations, the reasons for which are relatively complex. One point that cannot be ignored is that bloggers want their content to have an impact. They hope that companies openly receive their suggestions and that their value is respected. Those who have high value naturally become opinion leaders on the Internet (distinct from “Internet Stars” who are promoted to entertain netizens).

How to define opinion leaders in the world of blogging and microblogging?

Openly available data include the amount of contributed content, the number of followers, time started, etc. But that information alone is not enough. We are all aware that information no longer spreads in limited directions: opinion leaders are not limited to a few individuals, but can arise from a large number of microbloggers. What’s more, an opinion leader should be someone who has unique perspective or rich knowledge in one or two fields, has been contributing a decent amount of content, and has a large number of active users following him. Generally speaking, microblogs create communities. It’s human instinct for people with similar characteristics or interests to gather together. Microblogs are just a platform that reflects the instinct of the Internet to classify opinions. Those who can gather a community are anything but ordinary. Last but not least, the ability to influence others is actually as important as how trustworthy the content or opinion is. If a piece gets lots of promotion (retweets) once it is published, it shows that people who are paying attention agree with and trust what the blogger puts forward. Then there are bloggers who are rarely trusted, and they cannot get extensive retweets even if they say “Please RT this for me” in their messages.

I want to especially put emphasis on the fact that opinion leaders are not objects for netizens to make fun of, nor are “Internet Stars” there to entertain the public. They are important amongst their community and they are strongly connected to their followers.

Opinion on paying bloggers to write Ads

As to this question, all three panelists disagreed. Let’s look at some facts first. Once there were some companies that closely interacted with many top bloggers and tried to use their blogs as a medium to promote clients’ products. The result was that no company was able to survive through this business model, which shows that this approach to promotion is not appreciated by the market. Ad agency, Blue, also claims that they wouldn’t promote this way. It takes some time for famous bloggers to build up their audience and gain their reputation. Insincere characters and opinions cannot survive or be spread in the virtual world of the Internet. Fake information is not accepted by most bloggers and as a result, it is not worthwhile to write phony articles for money. On the other hand, there are companies who pay bloggers to tell the truth. They ask the bloggers to share their real experience of using a product and express their true feelings to a product or a brand. That is different. Under that circumstance, the money represents respect, not a buy off.

I regret to say that most of Chinese netizens are lazy and are not content contributors.  We are far away from the ideal web 2.0 world, with each netizen as an independent knowledge disseminator. These people are easier to be led and used. They will thus become stepping stones for companies which pursue nothing but profit. Fortunately, I am witnessing Chinese netizens, especially bloggers, become increasingly mature and many networking techniques such as microblogs will bring us together and produce social intelligence, which will soon realize its value in the development of companies. The chance to take advantage of ignorance will disappear and this may catch many people off guard.

“Microblogging, flattening the world” (“微动力，广天地”)

Only those who understand the character of the microblog and its value can truly enjoy this Chinese phrase. It is a tendency for micro values to be gathered and become the energy supporting companies to grow. I would say more and more tech or applications will be innovated to empower social intelligence. BloggerInsight is one of them.

If you’re not familiar with BON, you’re not the only one. Apparently, however, it’s “a brand new, pioneering television network producing a wide range of objective English language content bringing the human side of China to homes across the Western world.  BON goes live on air in Summer 2009 in the United States.” You can read more about them here.

I’ve personally never heard of David Moser but that’s probably because I spend too little time rubbing elbows with major figures in China academia and media and waste too much of my time slumming it at chinaSMACK . Apparently, Moser has even been a host for everyone’s favorite CCTV. Either way, he seems like a nice guy.

Jeremy Goldkorn and Michael Anti, however, are both names long-time China watchers are probably familiar with. South African Goldkorn is the founder of  Danwei (Danwei.tv for those behind the GFW), one of the largest, oldest, and most influential English-language blogs covering China, updated multiple times a day with links to great reading as well as plenty of original content, including tons of excellent translations. Michael Anti is the Chinese journalist-blogger with the cool name, having worked for a number of known and reputable news organizations both domestic and foreign.

Reviewing the two part video took some time, as the videos often would not stream smoothly and happily, if at all. To help you decide if you want to try loading them up, I’ve included some of my notes from each part below the embedded videos here:

Part 1

Interesting Points:

• Goldkorn: SARS situation in 2003 and American political blogs helped inspire him to start Danwei, he felt there wasn’t enough English information available on China’s media to adequately reflect its “vibrancy and diversity”.
• Anti: China is so large that it is fragmented with influence only extending so far. “Internet is the first time in Chinese history we have a national community.”
• Anti: English blogs like Danwei and ESWN have a “two-direction effect” that benefits and “is crucial” for both English-readers and Chinese. Websites like these help the outside world better understand China and also help “make public” the Chinese voice. “If something isn’t written in English, it does not really exist in the world.”
• Anti: Bridge-blogging becoming bridge-tweeting.
• Moser: Questions the word “blog”. Is “blog” the right word? Or is “website” better because “blog” suggests “personal expression”. How should we refer to these “English blogs about China”?
• Moser: Brings up word “aggregator” and asks if ESWN’s content is Roland Soong‘s own content or he just “translates and copies” other people’s material.
• Goldkorn: “Sex scandals, people doing disgusting things” and “scandalous” BBS comments are things chinaSMACK does well.
• Anti: Reference News translates English news into Chinese to help Chinese know more of how the outside world is looking at China.
• Moser: On blogs replacing the fourth estate, discusses downside of blogs not being vetted, being “wild”.
• Goldkorn: Says blogs and newspapers can both make mistakes, vetting or not, but reputation and trust is built up over time.
• Moser: Alludes to process journalism.

English Blogs About China Mentioned:

• Danwei
• EastSouthWestNorth
• chinaSMACK
• RConversation
• Global Voices Online
• Sinosplice

Part 2

Interesting Points:

• Goldkorn: On financing Danwei, they make “some” money on advertising, “a little more” on job advertising/recruitment advertising, and make “most” of their money on research services for corporate customers.
• Goldkorn: Says most people use blogs as “loss-leaders” to build influence and reputation for other things like consulting.
• Anti: Blogs cannot depend on advertising because of possibility of being blocked.
• Moser: Suggests that English blogs have “a certain immunity” because most of the audience is English and overseas.
• Goldkorn: While Moser and Anti discuss Anti-CNN, jokes about American nationalists being scarier than their Chinese counterparts.
• Goldkorn: “So difficult when discussing China in English to get the right mix”, referring to always being criticized by someone for writing critical or complimentary pieces about China.
• Anti: On power of new technology like Twitter, Kaiser Kuo tweeted about Xinjiang riots 1 hour before Xinhua English news reported about it.
• Anti: Described NYT’s “agenda” as being “weird” for himself and many Chinese people because Chinese people come from a “propaganda society” where the media is usually used to promote or inspire people to do things, “positive media report”, but the NYT and most foreign media is mostly “negative reporting”.
• Anti: On fact-checking: “Don’t trust anything until someone denies it.”

English Blogs About China Mentioned:

• China Digital Times
• China Media Project

How can we cultivate our society’s capability to innovate in order to solve social issues? This year’s Clinton Global Initiative (CGI) convened government, business, and NGO leaders to explore ways to accelerate progress in CGI’s key focus areas: clean energy and climate change, education, health, and poverty alleviation.  Innovation was framed as one of the key enabling factors for how social ventures could be successful.

I watched a panel on “Approaches to Innovation” discussed various concepts of entrepreneurship.  The panelists were:

• William Drayton, Founder and CEO, Ashoka
• Kathleen M. Eisenhardt, S.W. Ascherman Professor of Strategy and Organization, School of Engineering, Stanford University
• Reena Jana, @rjmac,  Editor, Innovation Department, BusinessWeek
• John Kao, Chairman of the Institute for Large Scale Innovation

Summary

Each panelist had a different perspective on innovation.  Bill shared his perspective that innovation must be cultivated among youth, who must be provided with opportunities to succeed as a “changemaker” at a young age in order to cultivate the right skills and mindset to become an effective social entrepreneur down the road.  Kathleen introduced the concept of “recombination” and “collaboration” as key factors for entrepreneurial success, and John highlighted the trend of “bottom-up” innovation where products designed for India or China are being adaptived for the United States and Germany, not following the traditional “trickle-down” pattern of innovation.  The implications to me are as follows: (a) always see the opportunity to employ younger people, but only those who have the seed of a “changemaker” mindset, (b) consider rotating roles to bring fresh perspective to things, (c) look for innovation in unlikely places, like the copycat-nation of China.

Still interested?  Read on…

1.  “Everyone a Changemaker” – Bill Drayton, Ashoka

Ashoka’s starting premise is that society’s problems must be solved by “social entrepreneurs,” who pursue an innovation or idea with incredible tenacity to solve these problems.  However, in today’s world, only 1% of people have the necessary skills and self-perception to be a social entrepreneur, or “changemaker.”  Furthermore, adults who lack these skills and self-perception are impossible to change.

Ashoka believes that the biggest leverage point is increasing the % of “changemakers” in our society.  To accomplish this, we must provide experiences to youth that enable them to succeed in “changemaking” in their formative years.

Three key skills are needed for “changemaking”:

• applied empathy – entrepreneurs need empathy in order to build teams and coalitions to support their cause.
• teamwork
• leadership

Unfortunately 98% of children fail to get the experiences needed to consider themselves a “changemaker.”  One key insight for me is that, for social change, “youth are a huge, and in fact usually the only significant available human resource” (from Drayton’s “Changemakers” article), and that youth are or can be competent.  Drayton also highlighted Silicon Valley as a supportive ecosystem for innovation and an example of an “island” of innovation.

Related links:
Ashoka
Ashoka on Twitter
“Everyone’s a Changemaker” by Bill Drayton, founder Ashoka

2.  “Recombination and Collaboration” – Kathy Eisenhardt

Kathy Eisenhardt is Professor of Strategy and Organization at Stanford University and co-director of the Stanford Technology Ventures Program (STVP) with Tom Byers.  From her experience in Silicon Valley, she focuses on two key ideas.

First, ecosystems that support innovation are good at the recombination of individuals, ideas, and objects.  She gives the examples of how people and teams that previously worked at Internet ventures are now being “recycled” to work on young cleantech companies.

Second, collaboration is important.  One aspect of collaboration might be rotating leadership, so that different perspectives can be brought to bear on a problem. Reena Jana blogged at Business Week about the panel she led:

Eisenhardt also suggested rotating executives to work on various projects rather than keep them in place, to keep thinking fresh. “Bringing new people to a project can lead to them seeing what’s wrong immediately and identify what can be fixed,” she advised, “That can be difficult for people who have been on a project for a long time.”

3.  “Bottom-Up innovation” – John Kao

John Kao is founder of an NGO called Institute of Large Scale Innovation (ILSI).  ILSI researches the topic of “innovation stewardship” in places like Silicon Valley and Helsinki and try to figure out how supportive dynamics can be replicated to tackle new fields and in new geographic areas.

John talked of “Bottom-Up Innovation” where innovation can come from unexpected places, like middle-income or developing countries.  The traditional view of innovation is described by Reena Jana in another Business Week article:

Over the years, multinationals have prospered by turning out premium-priced products for the world’s affluent. Rather than also designing products for poorer people elsewhere, many businesses found they could simply pass yesteryear’s models down, as if they were unloading fleets of used cars….
…”The dominant logic holds that innovation comes from the U.S., goes to Europe and Japan, then gravitates to poor countries,” says C.K. Prahalad, a strategy professor at the University of Michigan’s Ross School of Business and author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. “But now we’re starting to see a reversal of that flow.”

This new trend of “Bottom-Up innovation” (or “Innovation at the Bottom of the Pyramid” in C.K. Prahalad-speak) creates opportunities to take ideas and learnings from developing countries and apply them to Western, advanced markets.

If this trend is true, then we should expect to find many ideas we can copy from China to apply to the US. A great example of “bottom-up innovation” is the virtual goods business model in gaming, which went from countries like Korea and China to more developed countries like the U.S.

Interested in more approaches to Innovation as applied toward social enterprise?  follow Philip Auerswald on Twitter.  He is co-editor of MIT Press’ Innovations Journal and associate professor at George Mason University.  He tweeted some interesting stuff during the Clinton Global Initiative Annual Meeting.  Here are some more attendees of CGI who have written in Innovations Journal:

• Fazle Abed (http://tinyurl.com/l3k577)
• Peter Blom (http://bit.ly/bzCBX)
• Paul Polak (http://bit.ly/14e0iu)
• Mary Robinson (http://tinyurl.com/klojqh)
• Paul Farmer (http://bit.ly/14e0iu)
• Stuart Hart (http://bit.ly/edPlG)
• Doug Solomon (http://tinyurl.com/l77rhg)
• Soraya Salti (http://tinyurl.com/mfpore)
• Jacqueline Novogratz (http://bit.ly/aLnWl)
• Bill Drayton (http://tinyurl.com/mepovb)
• Tom Kalil (http://bit.ly/1aXuUS)
• Larry Summers http://tinyurl.com/mkbyy8

If China was missing, Hollywood was not.

I personally spotted: Quincy Jones, Mira Sorvino, Ben Stiller, and Jessica Alba.  Brad Pitt, Alicia Keys, Ashton Kutcher, and Demi Moore were also in attendance.  Press attendance swelled when celebrities were present.  It appeared that a large number of photographers and media people were there just to cover celebrities.  The only two political or business leaders that enjoyed celebrity status were President Barack Obama and Queen Rania Al-Abdullah.  I attended a session on education and human capital in which Queen Rania spoke, and saw a number of photographers and media exit the session immediately after she finished.

For a few moments of the Clinton Global Initiative, I too became one of the detested paparazzi. I set aside my laptop–and my interest in US-China cooperation on energy, climate, and the economy–and picked up my rented Canon 70-200 f/2.8 L zoom lens, extended my Manfrotto monopod, and set my Canon T1i Rebel on continuous shot.  For a few moments, my sole purpose in life was to get a good shot of the smoking hot stunningly attractive Jessica Alba (whose involvement in CGI was covered by Kathy Ehrich Dowd at People Magazine).  Here’s my best shot (all photos available under Creative Commons on my Clinton Global Initiative Flickr set):

photo CC CN Reviews.  Feel free to use.  Credit as shown with link.

More Jessica Alba Clinton Initiative coverage (but of inane and/or catty quality) at Gossip Girls, Fafarazzi, and Daily Mail.

Queen Rania of Jordan also received star treatment by the media.

I got a blurry photo of Ben Stiller getting coffee about 15 feet away from me.  I hated myself for violating Ben’s privacy during his morning coffee ritual.

Why was China missing at the Clinton Global Initiative?

To be fair, many government and business leaders did speak about China’s role in climate change, the 5-year planning process and China’s initiatives in clean energy and energy independence, China’s successes in universal access to primary education, and China’s contribution to African development.  President Clinton also highlighted a partnership between Duke Energy and the ENN Group, one of China’s largest privately-held energy companies, to evaluate ways to cooperate in best practices around carbon capture technology and clean energy.

Here’s a few pictures of Jim Rogers, CEO of Duke Energy, and Wang Yusuo, Chairman of ENN Group:

Wang Yusuo and a woman who looks like his interpreter:

In my humble opinion, the subjects (even the interpreter) are much less photogenic than Jessica Alba, Queen Rania, or President Barack Obama.

Seven reasons (based entirely on speculation) on why China was underrepresented

1.  Limited integration into the international NGO “industry”

According to sources, its now possible to be part of entire internationalist community of NGO people in China that are creating job opportunities for both Chinese and foreigners in China.  However, NGO development has been hindered by a heritage of government monopoly on the sector, which is dominated by Government Owned NGOs (GONGOs),  analogous to the large State Owned Enterprises (SOE) in more heavily controlled commercial sectors.  I spoke to one source, who shared that most of the exciting activity in social enterprise is being done not by the large government controlled NGOs, but by unlicensed (or for-profit) entities skating beneath the government radar.  Recognition in a place like Clinton Global Initiative might only land them a big tax bill or even jail detention.  Who needs that?

2.  Heritage of independence in addressing “internal issues”

Related to the first point, my impression is that this government control has been motivated by the Party’s focus on maintaining power.  They just don’t want “foreign actors” (and I don’t mean of the Brad Pitt variety) meddling with internal issues like education, environment, women’s rights, health, and poverty alleviation. Many of these issues highlight China’s continued problems:  rural poverty, increasing rich-poor split, lack of opportunity for urban migrants, for example.  “Foreign actors” (including Brad Pitt) might come in, create unrest and instability, and fail to be effective in helping Chinese society anyway.

3.  Language

None of the speakers used a translator for the Plenary Sessions or even the breakout sessions.  All were fluent in English.  In Chinese government and business, the generation that holds much of the power probably went to college shortly after 1978, the year that colleges were reopened in China.  This generation is far less fluent in English that newer generations of Chinese.  When these new generations of Chinese take power, they will also likely engage in the Anglophone world.

4.  Expensive.

For businesses, the event costs more than $28,000 and you are expected to make a Commitment prior, during or shortly after the event.  Many Chinese companies may not want to spend the money to attend.

5.  Lack of interest in the subject among corporate players.

Despite a New York Times article to the contrary, most Chinese companies may not have that much interest in Corporate Social Responsibility, at least in the way that it is formulated in the West.

6.  No value seen in multilateral approaches.

The Clinton Global Initiative is about building multilateral partnerships among government, business, and NGO leaders to solve problems. Perhaps Chinese government and Party leaders don’t see any value in getting involved in international multilateralism on these issues.

7.  China’s doctrine of non-interference leaves it unprepared to lead.

Many people in the West expect China to flex its economic muscle and challenge American leadership of the world.  China’s lack of presence at Clinton Global Initiative may be just one sign that China is not ready to lead.  Jack Ma and Wang Yusuo notwithstanding, it lacks depth and bredth of government officials and private company executives who are interested and prepared to lead others from Africa, Latin America, Europe, and North America.  China’s “Go Global” imperative may very well be stalled out by the lack of native Chinese talent to carry out this imperative, at least for now.

These are just speculations on my part.  I don’t really know.  But I’d be curious to see how Bill Clinton can use his charm to pull in more government, business, and NGO leaders from China into the important work of the Clinton Global Initiative.

“Money and wealth are two different concepts,” he wrote his workers, some of whom have accumulated stock worth millions of dollars.
“If you have money, but have not turned this money into an experience to elevate your own or other people’s level of happiness, then you may very well only possess a lot of symbols and a mountain of very colorful pieces of paper.”
Mr. Ma is backing up his words with action. On Wednesday at the Clinton Global Initiative in New York, Mr. Ma and Muhammad Yunus, the Nobel-winning founder of Grameen Bank, a pioneer in the field of microfinance, unveiled plans for Grameen China.

Here’s Jack in Sichuan Province donating supplies to schoolchildren:

photo: courtesy Alibaba Group (via NYT)

While altruism may be a motivating factor, Alibaba also stands to gain unique insights into serving the very poor by partnering with the Grameen Trust.  I believe that this announcement represents an important strategic thrust–not just corporate philanthropy–that reveals Alibaba’s intention to be the dominant B2B trading platform serving small and medium sized businesses (SMB/SMEs) globally.  Jack Ma wore the demeanor of a crazy Chinese entrepreneur in his presentation to the Clinton Global Initiative audience, but to his credit, clearly outlined his intent to serve over 100 million businesses in the next 10 years (see our earlier post).

Serving the Bottom of the Pyramid can be a smart flanking strategy

Alibaba, by dominating the Chinese market in payments, consumer marketplace and E-commerce, and business-to-business marketplace services, already has tremendous advantages vs. potential competitors like Ebay in serving the developing world.  By partnering with Grameen Trust, Alibaba will learn to serve the very poor who are not yet served by their current marketplace platforms like Alibaba and Taobao.  A buzzword that was repeatedly used at the Clinton Global Initiative 2009 Annual Meeting was the “Bottom of the Pyramid,” which refers to 4-5 billion poor people and the developing countries that they live in (concept by C.K. Prahalad, see executive summary,book).  If Grameen China is successful, Alibaba will be poised to be uniquely capable of providing IT services, online marketing, E-commerce, B2B trading services, and software to the Bottom of the Pyramid.

Alibaba highlights several key points in their press release that reinforce this framing:

1. Alibaba Group will advise in “technology-based support” to help recipients build online businesses
2. Alibaba Group will help Grameen find other donors and get regulatory approval.
3. The approved quote from Muhammad Yunus, founder of the Grameen Bank, speaks directly about recipients potentially “even sell their products internationally.”
4. Jack Ma points to a “Internet-driven revolution where small businesses around the world will be able to compete with larger companies for customers like never before.”
5. All of these points explicitly link Grameen China to the overall Alibaba strategy, and are designed to “embrace” the poor and “extend” their products and services to serve them.

Debate: Should “social enterprises” be raised up as a separate form of business, or should it be integrated into for-profit businesses?

The esteemed Nobel laureate and Grameen founder Muhammad Yunus emphasized his belief that “social businesses” (meaning enterprises that have a double bottom line, including social benefit) is in need of more recognition and legitimacy as a separate form of business, so that students read about social business, prepare for a career in it, and potential raise funds from social venture funds and a social stock market.

But his partner in China couldn’t be taking a more opposite approach.  Their social venture efforts, such as Grameen China, are tightly integrated into their corporate strategy.  In some ways, this is encouragement that the effort will be sustainable and supported by the company, which is still closely held (Alibaba.com is a publicly listed subsidiary of Alibaba Group).  Perhaps that is why this “philanthropy” came from the corporate coffers at Alibaba Group rather than Jack Ma’s substantial personal wealth.

Are Chinese companies better equipped to serve the Bottom of the Pyramid than Western multinationals?

A more important point is that this visionary move to support Grameen China is further extending Alibaba Group’s lead in its ability to serve the Bottom of the Pyramid.  Its hard to imagine Silicon Valley based companies like Google and Ebay having the ability to serve the very poor when they have been incapable of winning in the middle-income market segment of China!

Perhaps Alibaba is a sign of things to come.  Chinese companies, having competed in a home market with extremely poor people, are far more qualified to serve the developing world than American and European companies used to serving developed markets.  On the other hand, perhaps Alibaba is uniquely capable in vision and abilities to “Go Global”.   What do you think?  Should this be a wake up call for American and European companies to actively seek to serve the Bottom of the Pyramid so they are not locked out of those markets in the future?

Hello there!

Teenagers are apt to experiment, and the Chinese are no exception. iPartment, or “love apartment” (爱情公寓) in Chinese, creates an online home that appeals to young, affluent women (about 60% of the site’s users are female). “The logic is [as] straightforward as ‘Boys like girls, girls like iPartment,” they write at The Little Red Book. If boy wants girl, he had better signup for iPartment, and not forget to water the virtual flowers and feed the virtual dog!

The ultimate experiment in digital love is for boy and girl to move into a virtual apartment together. Shanghai University student Gao Yi, 23, wistfully told China Daily: ”If the relationship with my boyfriend (on iPartment) deepens, I might go out and see him someday.” But if Gao Yi never goes to see him? Irrespective of their real lives, iPartment aims to make young women (and their suitors) feel at home, online.

From a loner in a naked room to a fly guy in a love pad, complete with lady, dog, and stylin’ pink pants. Virtually living the dream.

Are Ladies Luring in the Men?

iPartments are a hot digital property. In 2003, iPartment was launched in Taiwan where it has 1.8 million users. In 2004, iPartment entered the mainland where it now boasts over 20 million registered users.

Moreover, the ladies are certainly luring in the men in suits, the investors. A first round came in 2005 from IDT (Acer Capital), a second round of about USD 3 million in 2006 from Japanese firms JAIC and Cyber Agent Company, and a third round of USD 8.5 million in 2007 from a Singaporean investor. The company is targeting an A-shares or Hong Kong listing in one to two years. The “Ladies First” strategy is working like a charm.

Girls Just Want to Have Fun!

The main attraction is the decoration of a “love apartment” and the search for someone to share it with. But girls like accessories too and iPartment boasts a number of accessory features: pets, diaries, gardens, and games (like Parking Wars and Friends for Sale!) These simple SNS games are already ubiquitous across the Chinese internet, but one iPartment rep comments, “it’s like knowing one nasty character and one dear friend. With the former, even a feast might be disagreeable. But with the latter, sharing just an apple would be indescribably marvelous.” Cheers to like-minded communities.

Funny-looking little ones? 0.8 RMB a piece. Avatar (dress, shoes, haircut)? 4.6 RMB. Garden background? 5.7 RMB. Flower bouquet? 10 RMB. Online love? Priceless.

SHOW ME THE MONEY!

Monetization is the existential question for SNS today. Fortunately, iPartment is better positioned than most. The company is already profitable, a rarity amongst SNS, with revenue of $3 million in revenue for 2008 and an expected $10 million for 2009.

On the Chinese mainland site, 80% of revenues come from advertising. Leading brands also lust over iPartment ladies: Dior, L’Oreal, Estée  Lauder, Avon, Nivea, and Lancôme all want a piece. Advertising ranges from traditional banner ads and sponsored sections to in-game items and promotions (e.g., Starbucks promoting a new store opening). Starbucks, Adidas, Samsung, Aupres, Acer, HP, and Nescafé also all have stores on the “iPartment block.”

The remaining 20% of revenues come from micropayments & memberships. With VIP membership (10 RMB or 1.50 USD per month) a user has access to free and exclusive items and is featured in search results. For example, the site has piggybacked on the explosion of farming games  (see our coming BloggerInsight post) with a flower garden. Ordinary members: 3 flowers per day. VIP members: 6 per day!

An iPartment rep comments, “[the daily watering and harvest] creates a form of dependence. Our flower garden’s most vigorous user has already surpassed 16,514 virtual flowers—you can imagine our users’ enthusiasm!” Micropayments are testament to the site’s addictiveness: “water your flowers everyday lest they wilt.”

Nothing says “I Love You” like a bunch of virtual flowers. Price: 10 I-dollars (10 RMB = 1.50 USD), but free for VIP members!

Virtual Property for Real Money

On the Taiwanese site, the revenue sources are flipped: 80% comes from micropayments & memberships, 20% from advertising. Users are younger and richer, and the site offers more premium items. The Chinese mainland iPartment is focused on growing its 20+ million userbase (already more than 10x Taiwan), but “virtual property for real money” is clearly the model of the future.

World Domination?

Can iPartment conquer the world? Chinese SNS game developers are eyeing the Facebook market, where “FarmVille” has followed in the footsteps of the Chinese game “Happy Farm” and exploded in popularity (see our coming BloggerInsight post).

But the cultural translation challenges are much higher for an SNS platform than for a game. iPartment captures a certain Chinese lifestyle that might not fly elsewhere: “Honey, did you feed the online dog?” sounds like a tedious demand of Western internet users, even if pet food is but a click (and micropayment) away. A potential expansion to Japan was once reported in the media, but that is no longer in the immediate plans according to iPartment. For now, China’s 1.3 billion potential tenants will have to suffice.

Contributed by Kai Lukoff & Ying Xue.

Kaifu Lee "running away" from Google. Source: YNET

On Saturday, Google China President Kaifu Lee resigned. On Sunday, CNReviews tracked the news on his next step, Innovation Works, an early-stage investment fund and startup incubator. To track the Chinese blogosphere, BloggerInsight asked Chinese bloggers for responses to three questions:

Q1 : Why did Kaifu Lee resign from Google China?

There was early speculation that government politics led to his resignation (which Kaifu Lee has adamantly dismissed), but internal Google politics do seem to have played a role. Remaining at Google China meant enduring continual corporate pressure and cultural conflict. Google didn’t offer him the freedom to grow Chinese entrepreneurship as he envisions it.

Blogger comments:

“Because of the suffocating constraints of a large company, Kaifu Lee was not free to localize Google into China. He was likely a mere figurehead, unable to capitalize upon his abilities or realize his dreams.”

“To outsiders it looks like Kaifu Lee lived the high life as Google China President, but there must have been hardships that we cannot imagine. He mentioned his entrepreneurial aspirations as early as August 2008, but had to shelve them because of the financial crisis. While sick in the hospital this June, he became determined to make his move into entrepreneurship.”

Q2: How will Kaifu Lee’s resignation impact Google China?

Opinions are mixed on how Kaifu Lee’s resignation will impact Google China. While his efforts led Google market share to double (from 16.1% in 2006 to 31% at present), the consensus is that Google still has a long way to go in China.

Blogger comments:

“With the loss of a man of Kaifu Lee’s character and vision, there will certainly be a slight change at Google China. It’s uncertain if his successor will be able to localize Google’s products as well, a key determinant of the company’s success in China.”

“[Kaifu Lee’s resignation] will not have much influence on the competitive balance between Google and Baidu. With its extensive coverage online and in the traditional media, it may even bring Google extra traffic!”

Q3: What can we expect from Innovation Works

Chinese bloggers’ expectations are tempered by realism. Angel investing is in its infancy in China, so it will likely take at least ten years to reach success. Finding a model to identify, assist, and profit alongside Chinese innovators will take time.

Yet that doesn’t stop bloggers from having lofty dreams for what Innovation Works could incubate—if not the next Google, then something close. And if anyone is up to the task, it’s Kaifu Lee. With his extensive R&D background in China, Kaifu Lee has a deep understanding of how to nurture innovation. Perhaps his strongest asset at Innovation Works will be his personal charisma and ability to connect budding entrepreneurs: the next Larry and Sergei with Eric, or Bill Gates with Steve Ballmer.

Blogger comments:

“The primary challenge will be how to screen people. With the domestic education system as it is and the underdevelopment of creativity, Kaifu Lee with have plenty to ponder.”

“Success at Innovation Works will not come easily or quickly. The first concern is that VCs are well-established, so Kaifu Lee will have to convince the market that his model is also viable. The second challenge will be managing relationships. Will young Chinese entrepreneurs embrace his model? How will they share profits? Will entrepreneurs submit to management from Innovation Works, and if so, in what format?”

“The first hope is that he will incubate companies of Google’s caliber with Chinese characteristics. This may just be a dream of course, but it’s a dream shared by all of China’s technology industry.”

Contributed by Kai Lukoff & Ying Xue.

Professor Kevin Werbach’s Supernova Conference is one of my favorite conferences of the year, because it brings together a diverse group of people together–public policy makers, computer scientists, social scientists, economists, entrepreneurs, and participants from leading technology companies–to do some out of the box thinking about what Werbach calls “The Network Age.“  In addition to the Conference, Werbach hosts a series of conference calls about various “Network Age” topics.  I suggested to Kevin that we do a call on China’s internet, and he agreed to host it and let me moderate it.

What we will cover:

Most Western coverage of the Internet focuses on the narrative of censorship and control, but misses the vibrant social nature of what is now the largest internet market of the world.  In the West, the internet started in business/academia/government, fulfilling mostly functional & utilitarian needs.  But in China, the internet started as a consumer phenomenon, focused on entertainment and communications.  Also, like most of the developing world, China’s internet has developed hand-in-hand with the growth of mobile, Internet-connected devices – about 25% of total internet users access the internet NOT on a PC but via a mobile device.  Some potential questions we’ll cover:

• Tencent – how this Chinese internet company achieved a dominant, $1 billion revenue position and at HKD $207 Billion (about USD $26 Billion) now exceeds Yahoo!’s market capitalization of $20 Billion.
• QQ as an example of a mobile, social application – different from the West.
• Virtual goods, casual gaming, and the nature of social exchange on QQ and other social networks.
• The upstarts and the copycats – RenRen (Xiaonei), Kaixin001, and the rest.  Casual gaming and what is powering the growth.
• Opportunities in mobile applications – China Mobile’s mobile application ecosystem.
• The growth of video – Youku, Tudou, 56.com, and segmentation of the video market in China.
• Why Facebook and Twitter should forget about China

When is the call?

• The call is on Sept 15, 2009 at 4:00 pm Pacific Daylight Time US / 7:00 pm Eastern Daylight Time US.
• In China, the call is on Sept 16, 2009 at 7:00 am Beijing time / in Korea, 8:00 am Seoul time.

How do I access the call via web or phone?

• Call in Number – +1-347-945-6578
• Web and Chat - http://tobtr.com/s/662500
• More information here.

Who is on the call?

• Kaiser Kuo – (Twitter: @kaiserkuo)-Kaiser Kuo is an American-born writer, rock musician, technology watcher and cultural commentator. In 2007, he joined the leading advertising agency Ogilvy as their director of digital strategy for China, but left in early 2009 to devote more time to writing and to his advisory work for several Chinese Internet startups, including consulting work for China’s leading Internet video site, Youku.com. He currently also serves as digital strategy director, Team Nokia, for ad agency Wunderman. Previously, he served as China bureau chief for the Silicon Valley-based magazine Red Herring, and worked as a freelance technology and business writer for such publications as Time, China Economic Review, Asia Inc., and TelecomAsia. He has worked extensively in China-based Web and mobile startups. He is a frequent guest on CCTV-9 program Dialogue, where he has debated issues ranging from Internet vigilantism to Feng-shui. Kaiser has been the anchor columnist for the popular English-language magazine that’s Beijing and its successor, The Beijinger, for almost eight years, contributing the monthly satire column called “Ich Bin Ein Beijinger.” An anthology of 61 of his columns was published in a volume of the same title in June, 2009. Kaiser is a graduate of the University of California at Berkeley and holds an MA in East Asian Studies from the University of Arizona. He was co-founder and lead guitarist of one of China’s most successful rock bands, Tang Dynasty, and continues to be active in Beijing’s rock scene as lead guitarist of Chunqiu. He lives in Beijing with his wife and two young children. Kaiser is currently working on a new book on people-to-people relations between China and the United States in the Internet age.
• Benjamin Joffe (Twitter: @benjaminjoffe @plus8star; Plus8Star) – Benjamin Joffe founded the digital strategy company +8* (www.plus8star.com) after being part during the past 9 years of Japan’s mobile revolution, Korea’s Internet boom as well as China’s mobile crash and web 2.0 revival. +8* works with large companies (Adidas, Microsoft, Nokia), investors (MIH, leading investor in Tencent) and startups (IMVU, Baihe.com) to bring them proven and innovative service concepts and business models from advanced Asian markets.  Benjamin is a regular keynote at industry events (Ad:Tech, GSP East, Asia Venture Capital Forum, eComm, etc.), he was selected among China’s Top 100 Mobile Industry Influencers in 2007 and 2008 and co-founded Mobile Monday in Beijing, the leading mobile industry forum in China with over 3,000 members.
• TBD - I’ll be updating this post with another participant who is an operating executive in a leading social media company in China
• George Godula (Twitter: @web2asia)- George Godula, Shanghai resident for 4 years, is co-founder of Web2Asia– a full-service market entry partner for Western Internet companies in China, Japan and Korea. The company additionally incubates and invest in local start-ups in the region. George is also the Managing Director of the international direct marketing agency MH | direkt‘s Asian subsidiary.   George is an active member of the Asian web scene and co-founder & organizer of several established events and conferences such as of the pan-Asian web conference Open Web Asia. He also runs the monthly Shanghai Lunch 2.0  and together with partners CBN and CNReviews organized the China 2.0 Bloggertour in 2008 that for the first time introduced leading international bloggers and journalists such as Robert Scoble, Shel Israel, Techcrunch, Mashable, The Next Web and CNet Asia to Chinas biggest Internet companies and hottest start ups. Recently George and Web2Asia started working with FoundersFund to organize the Geeks on a Plane East Asia tour (http://www.geeksonaplane.com), which took Silicon Valley investors & entrepreneurs through the tech sectors of Tokyo, Beijing and Shanghai. George frequently speaks at conferences about Web 2.0 in Asia and publishes in online blogs such as Techcrunch or VentureBeat.
  George holds a Master’s Degree in International Business Administration, Marketing and Economics from Innsbruck University/Austria and Handelshögskolan in Göteborg/Sweden. He is an Austrian national and speaks German, English, French, Swedish, Spanish and basic Mandarin.
• Elliott Ng, moderator – (Twitter: @elliottng) – Elliott Ng is a Silicon Valley based entrepreneur and occasional angel investor/advisor to Chinese internet startups.  Companies Elliott has co-founded have created value for venture investors via acquisitions and one NASDAQ IPO, valued at $400 million.  He is currently co-founder of UpTake, a new travel search engine, and founder/blogger of CNReviews, a blog about China’s business, technology, and what’s interesting about China.
• Kevin Werbach, host, Wharton School’s Supernova Group – (Twitter: @kwerb @supernovahub) – Werbach is an Assistant Professor of Legal Studies and Business Ethics at The Wharton School, University of Pennsylvania. He is also the founder of the Supernova Group, a technology analysis and consulting firm. He advises companies, writes about emerging trends in communications and information technology, and organizes Supernova, a major executive technology conference. He co-led the review of the Federal Communications Commission for the Obama-Biden Transition Project.  Werbach is a fellow of the Center for Global Communications (GLOCOM) in Japan, a director of the TPRC Conference on Communication, Information and Internet Policy, a member of the International Editorial Board of I/S: A Journal of Law and Policy for the Information Society, and an advisor to Socialtext, Knowledge@Wharton, and Public Knowledge.

I’ve always been impressed by the caliber of the participants on Kevin’s calls and his events.  If you are in China and can get up early, please join us.  If you are in the US, I encourage you to join the call!