Pillsbury’s China practice stands on the cusp of what could be dramatic growth. Amid huge increases in Chinese investment into the U.S. and strong interest from U.S. companies in reaching China’s consumers, the practice is forging new bonds with potential clients.
Tom Shoesmith, leader of the China practice, recently spoke at the launch ceremony for China Silicon Valley, a California nonprofit entity established to promote investment and business cooperation between the People’s Republic and the Valley. Tom is the only attorney on CSV’s seven-member board of business advisers.
CSV is closely affiliated with Hanhai Z-Park, a tech venture incubator in San Jose that opened last year. Pillsbury is a close business partner of the incubator, and that relationship puts Tom and others in Pillsbury’s Silicon Valley practice in touch with the roughly 60 companies within it – all of them U.S.-based organizations whose business plans involve China in some way. Pillsbury offers the startup companies business plan advice, introductions to venture capitalists, corporate formation and organization services, counsel on structuring their operations for international expansion, and navigational advice on entry into the Chinese market.
“China Silicon Valley gives us a chance to collaborate with the government and business organizations that are working on attracting Chinese investment into the Bay Area,” Tom said in a recent interview. “Before the launch event, I had a private meeting with one of the up-and-coming vice mayors of San Jose and also the mayor of Cupertino, where Apple is based.”
Tom also met privately with a visiting Chinese official whose unusual pedigree speaks volumes about the evolution of business and politics in the PRC. Zhou Yunfan, executive deputy mayor of Beijing’s hi-tech Changping District, started two Internet ventures, taking one of them public on Nasdaq, and then ascended to a senior political position – all before reaching the age of 40. As China’s tech sector continues to boom, Tom said, “Deputy Mayor Zhou is an important person to know, and it’s equally important for him to know the Valley and our role in encouraging the growth of new companies as well as the expansion of existing ones.”
Bilateral Investments
A report issued last year by the Asia Society predicted that California might attract up to $60 billion in new Chinese investment by 2020, up from about $5 billion invested throughout the U.S. in 2010–2011. Since 2007, direct investment from China nationally has risen by some 130 percent a year, the report said. Tom believes much of that money is headed straight for the south end of the Bay. “Chinese companies and investors continue to look at Silicon Valley as the greatest concentration of innovation in the world,” he said.
It’s all a bit of a role reversal, of course. For a generation, many American companies have invested heavily in China – and they continue to do so. But the nature of the investments is changing. “Our clients aren’t just making stuff in China anymore,” Tom remarked. “They’re tapping into a consumer market of hundreds of millions of people new to the middle class, concentrated near the coast. China has nearly 20 cities with populations greater than Los Angeles.”