Over the past three decades, China's government, economy, and society have been undergoing a transformation, the momentum of which has intensified in recent years. Stanford sociologist Xueguang Zhou has been conducting a detailed ethnographic study in a rural township a few hours' drive from Beijing in order to understand these changes, especially in terms of China's political institutions. He is also beginning research about the behavior of urban government organizations and about the trajectory of personnel mobility in the Chinese bureaucracy.

Image

Zhou's rural governance study branched out into three interrelated directions. He has been studying agricultural markets, including: how they have been taking shape and evolving over time, how harvests are conducted, and where local elites and farmers interact with large outside companies. China's rural election system, which Zhou suggests has become more institutionalized in the past six to eight years, has been another area of focus. He has examined how the system was first established, and how it has evolved into its current shape. Finally, he has followed patterns of government behavior within the context of the significant changes now underway in China.
"From a research point of view, this is really a critical moment in the Chinese economic transformation.

-Xueguang Zhou

FSI Senior Fellow and Kwoh-Ting Li Professor in Economic Development
Gradually shifting his focus to the study of China's urban political institutions, Zhou has been working with a doctoral candidate from Peking University to study the behavior of urban government bureaus for the past three years, and they are now working on articles highlighting the major findings from this research. In addition, Zhou is in the process of selecting urban sites in which to conduct a more prolonged and detailed study similar to his rural township project. He is also working with a Stanford master's student to analyze twenty years of government personnel data, tracing the movement of specific individuals across offices and bureaus as they have been promoted through the bureaucratic system. "It is all a public record," says Zhou, "but once you piece these trajectories together, they shed light on the inner working of, and dynamics in, the Chinese bureaucracy."

China's overall transformation has greatly accelerated in the past decade, and even as urban life is changing, life in rural areas around China's coastal megalopolises is perhaps changing even more quickly. Zhou suggests that within the next five to ten years the contribution of China's shrinking rural areas towards the country's GDP will become quite insignificant. "The speed is really just astonishing," he emphasizes. As cities expand, local governments purchase up land from rural residents for commercial development projects like shopping centers and apartment complexes. Real estate is a huge source of income for city governments and so there has been an aggressive push toward urbanization. As a result, says Zhou: "Millions of rural residents lost their land and became urban overnight without any relevant work skills." Although they are compensated to various degrees for their land, the bigger question is how this will affect the new city dwellers and their families in the future as they must develop new skills and adapt to the social and environmental conditions of urban life.

"From a research point of view," states Zhou, "This is really a critical moment in the Chinese economic transformation: the way that they deal with the process of urbanization will have tremendous consequences for the years to come because it is creating so much tension and social conflict." Even away from coastal areas, government-driven urbanization is taking place everywhere in China—even in provinces with vast expanses of remote land like Xinjiang. "This is exactly why you want to study government," maintains Zhou. "Because they play a key role in this process." Understanding China's government institutional structures, its decision-making processes, and the way that resources are mobilized will lead the way to better understanding about the future impact of these decisions that are now so rapidly changing both the rural and urban landscape.

From how failure drives innovation to the role of government in supporting entrepreneurship, two expert professors at Stanford led a training session for executives from Chinese state-owned enterprises (SOE) as part of the 2011 Cisco China 21st Century Enterprise Leader Program (ELP) hosted by Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) on March 22, 2011.

Professor William F. Miller, Co-Director of SPRIE, kicked off the session with a stimulating presentation on Silicon Valley's habitat for innovation. He pointed out that turning technology into business was the essence of Silicon Valley, and a favorable business, social and political environment in the region had facilitated the process. Despite the emergence of other venture capital locations, Silicon Valley scooped up almost 40% of venture deals and dollars across the U.S. in the last quarter of 2010, according to the MoneyTree Report.

The "restless pioneer spirit" of Stanford had always played a crucial role in the effective interaction between research institutes and industry, Miller argued.

Following Miller's discussion of features of Silicon Valley's entrepreneurial habitat, William Barnett, Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations at the Stanford Graduate School of Business, shared his thoughts on how to discover successful business models.

"Having great technologies is not enough," said Barnett. "Entrepreneurs are like scientists. Successful business models are learned from failures." Barnett encouraged the leaders present to create a working environment within which failure would be tolerated. He further urged them to accelerate the learning process by asking what might go wrong.

The purpose of the SPRIE session, which is part of a 12-day US-based program organized by Cisco Systems and China's State-owned Assets Supervision and Administration Commission (SASAC), is to help the SOE executives understand how to foster innovation and to drive operational excellence. The delegation is composed of SASAC officials, Peking University professors and leaders from 17 SOEs in China, including Southern Power Grid, Three Gorges Corporation, China Telecom, China Unicom, China Mobile, China FAW Group, Harbin Electric Corp., Anshan Iron and Steel Group, Baosteel Group, China Ocean Shipping Company, China Eastern Airlines, China Oil and Foodstuffs Corporation, State Development and Investment Corporation, China Merchants, China Railway Group and China Railway Construction.

After completing the postdoc program, I landed a dream academic job, where I can continue to research health policy with a focus on the Asia-Pacific region. Despite its relatively short period, my postdoc experience also helped expand the scope of my research and the breadth of professional network.

-Dr. Young Kyung Do 
Former Asia Health Policy Postdoctoral Fellow (2008–09)

The Asia Health Policy Program (AHPP) at the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) is pleased to announce that Ang Sun has been awarded the 2011–12 Asia Health Policy Postdoctoral Fellowship. Sun is currently completing her PhD in development economics at Brown University. She earned bachelor degrees in computer science and economics from Peking University in 2002. Sun's research focuses on resource allocation within households, especially in developing Asia. In her dissertation, she provides empirical evidence that the 2001 divorce law in China empowered women and decreased sex-selective abortion. She has also studied multi-generational living arrangements and household decisions about fertility and labor-force participation.

We also are delighted to announce that Yuki Takagi, currently completing her PhD in government at Harvard University, will be the 2012-13 Asia Health Policy Postdoctoral Fellow. Takagi is completing her dissertation on the political economy of insurance provision and intergenerational family transfers, such as nursing and childcare, focusing on East Asia. She has earned bachelor of economics and master of law degrees from the University of Tokyo. Takagi will join Shorenstein APARC after completing a postdoctoral fellowship in the Department of Politics at Princeton University in 2011–12.

The research of these two postdoctoral fellows will complement the Shorenstein APARC research initiative on demographic change in East Asia.

The Asia Health Policy Postdoctoral Fellowship is designed to strengthen research in the field of Asian comparative health policy and demographic change, drawing from junior scholars in a variety of disciplines, including: demography, sociology, political science, economics, law, anthropology, public policy, health services research, and related fields. Fellows participate in AHPP events and collaborative research while completing their own projects on health policy or the social and economic implications of population aging in Asia.

Previous postdoctoral fellows in the program have accepted faculty positions in Asia and the United States. Dr. Young Kyung Do (2008–09), who earned his PhD from the University of North Carolina at Chapel Hill, is now an assistant professor at the Duke-National University of Singapore Graduate Medical School. Dr. Brian Chen (2009–10), who earned his PhD in 2009 from the University of California, Berkeley, has accepted a faculty position at the Arnold School of Public Health at the University of South Carolina. The current postdoctoral fellow, Dr. Qiulin Chen, earned his PhD from Peking University. He studies the political economy of China's health reforms as well as how China compares to other countries in terms of public and private intergenerational transfers (the China component of the National Transfer Accounts project).

Thoughts from the postdoctoral fellows

Dr. Do notes that "given that the primary goal of most postdoc programs is to help fresh PhD graduates prepare a successful academic career, my postdoc experience at Stanford['s Shorenstein] APARC has proved to be effective in my professional career thus far. After completing the postdoc program, I landed a dream academic job, where I can continue to research health policy with a focus on the Asia-Pacific region. Despite its relatively short period, my postdoc experience also helped expand the scope of my research and the breadth of professional network."

Dr. Chen adds that "the postdoctoral position opened many more doors than I had coming directly out of my Ph.D. program... The support I received was phenomenal... The wider Stanford community affords the postdoctoral fellow the opportunity to meet and interact with leading scholars of virtually any field in the arts and sciences."

The new postdoctoral fellows anticipate similarly stimulating experiences at Stanford:  Takagi says she is "delighted and excited" to accept the fellowship, and Sun emphasizes that she appreciates "the opportunity to spend one year at such a prestigious place as the Shorenstein Asia-Pacific Research Center at Stanford, which will be a very nice start of my research career."

Go out there and change the world.
- Tim Draper, Draper Fisher Jurvetson

"Whatever the world looks like now, it will change," said Tim Draper, founder and managing director of Draper Fisher Jurvetson (DFJ), during the keynote session at the March 1 Entrepreneurship in the Global Marketplace seminar, organized by the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) with sponsorship from Alibaba.com, the first in a series of seminars by the Schwarzenegger Emerging Entrepreneur Initiative. Concluding his remarks, Draper urged the overflow audience: "Go out there and change the world."

Draper and the nine other participants shared different perspectives on entrepreneurship, but a key message underlying all of the presentations was that the world is a dynamic, rapidly changing place where entrepreneurs can succeed by anticipating and responding to global trends. In doing so, many suggested, it is also possible to change the world—for the better. The participants all concurred that China is one of the key places in the world—now and in the future—to do business, representing a challenging but a vast frontier of opportunity.

Global demographic trends are a major factor that venture capitalists consider when making investments. Addressing the worldwide aging phenomenon, which is particularly acute in Asia-Pacific countries such as Japan and China, Draper explained how DFJ has invested in a company that manufactures videogame-like devices designed to improve cognition, noting the growing market for such devices that help keep cognitive health apace with a longer life span. Hans Tung, a partner with the Shanghai-based venture capital firm Qiming Ventures, described how his firm is tracking the large segment of China's population living in small cities away from commercial hubs. These members of the populace, who prefer to shop online where they can find a wider selection of goods than in their local shopping malls, are quickly becoming a driving force in China's e-commerce market.

It is China's e-commerce and other Internet firms—fueled by the explosion of Internet users—that carry increasingly significant weight in China's domestic and the global economy. Duncan Clark, a visiting scholar at SPRIE, presented related findings from SPRIE's China 2.0: The Rise of a Digital Superpower research initiative, which is led by Marguerite Gong Hancock, associate director of SPRIE. China 2.0, explores the conditions generating such rapid growth of the Internet, and investigates questions surrounding the possible global implications of it. Clark noted that as China's three largest Internet firms—search engine Baidu, instant-messaging service Tencent, and e-commerce portal Taobao—expand, domestic competition will not only intensify, but move further into the global economic arena. The "big three" firms are already ranked among the top 20 Internet sites in the world based on site traffic. According to Clark, the key question in the future for U.S. companies will be how to partner with Chinese companies in order to insure their own growth.

Riding the global wave of innovation and entrepreneurship, Jonathan Ross Shriftman, co-founder of Solé Bicycle Company, and Ryder Fyrwald, vice president of global operations at the Kairos Society, have discovered opportunities to effect positive change despite a global climate of intense economic competition. Shriftman, a recent University of Southern California (USC) graduate, described the lessons that he has learned through his company's quest to manufacture low-cost, quality fixed-gear bicycles that provide a stylish, alternate form of transportation. Despite funding and language challenges, Shriftman and his partner succeeded in connecting with a manufacturer in China through Alibaba.com, and have sold nearly 800 bicycles to date. Fyrwald, who is still an undergraduate at USC's Marshall School of Business, explained the philosophy behind the Kairos Society, an international network of student entrepreneurs who seek to solve world issues through entrepreneurship and innovation. He cited the example of WaterWalla, a company that has developed, among other technologies, a low-cost water purification device for use by urban slum dwellers.

From the perspective of seasoned venture capitalists Draper and Tung and emerging entrepreneurs Shriftman and Fyrwald, the message at Entrepreneurship in the Global Marketplace was clear: the way to succeed in a rapidly changing world is to react promptly—and creatively—to global trends. And, as Shriftman suggested, it is possible to "do well by doing good," and change the world in a positive way.