‘Guanxi’ tells story of business, China, Bill Gates

The talent is in China. It’s raw and untrained but brilliant and the potential is unlimited.

That’s how Bill Gates thinks about China, according to one of the authors of “Guanxi: Microsoft, China and Bill Gates’ Plan to Win the Road Ahead” (Simon & Schuster, 2006) who spoke in Davis in May 2006.

Guanxi (gwan-shee) is the Chinese term for mutually beneficial relationships.

The book by Robert Buderi and Gregory T. Huang tells the story of the Microsoft lab in Beijing, China in 2004-2005.

The innovative lab is described in the book as “the epicenter of Microsoft’s intensifying battles against Google in the search wars, Nokia in the wireless arena and Sony in graphics and entertainment.”

Gates has invested well over $100 million in the lab, said Buderi, and hired more than 400 of the brightest computer scientists, fueled by hundred of collaborations at universities and training centers, aided by thousands of interns.

Buderi of Cambridge, Mass., came to Davis on his publicity tour for two reasons. First, his brother, Fred, lives here. Second, because Robert Buderi graduated from UC Davis in 1977 and wanted to visit again however briefly. Robert Buderi’s first newspaper job was at the Fairfield Daily Republic.

“I’m a journalist,” said Buderi. “I write about technology and business for Newsweek and I’m the former editor of Technology Review.”

Buderi just missed the International House – Davis conference on China, which took place on May 6, but his book like the conference focuses on the country and issues that fascinate so many people.

“The Chinese market is pioneering the technological applications that we will use here,” said Buderi when he spoke to a small group at the Avid Reader bookstore downtown.

Buderi said he and his co-author traveled to China many times in order to meet the people at the lab and write the book.

“But we had no deals with Microsoft,” he said. “We paid our own way for everything.”

“I tried to tell an on-the-ground story,” Buderi added. Microsoft started a business office in China in 1992 but it was not particularly successful. In 1998, Microsoft decided to open a research lab in Beijing – a daring move at a time when every other American computer business was headed to Japan.

Buderi said Gates was willing to spend $100 million in China “just to get the talent.” With 400 million cell phone users in China and that country being the No. 2 Internet user in the world behind the United States, Gates said that Microsoft had to be a presence in China.

“That’s what this book is about,” Buderi said. “We tried to tell the stories of Microsoft innovating in China.”

Buderi said he has followed and reported on Microsoft for more than 10 years but the actual time spent traveling and writing the book was 15 months.

He added that the fierce in-sourcing of talent in Beijing is going to benefit everyone eventually as innovations come to market.

“China is moving up the innovation chain – it will create intellectual property and will have a stake in protecting it,” he added.

Buderi said the best universities in China are still a generation behind the United States and its students still lack the freedom to innovate. But that is changing.

“There has been a change in Chinese graduate students who come here,” he said. “They are better trained and not as hungry and are not as willing to kill themselves as they have been in the past because they know they can got back to China and get a good job.”

But Buderi said Chinese students and Chinese business managers early in their careers are still accustomed to following specific instructions – a mindset that does not translate well in the free-wheeling business of innovation.

Microsoft had to give its Chinese opposite numbers mentoring and more time to adapt to an innovation culture, said Buderi. But the people are willing to do this because Bill Gates is very popular in China, he added.

“He is more popular in China than he is here,” Buderi said. “China has great reverence for the self-made man.”

The Microsoft lab in Beijing called Microsoft Research Asia receives 10,000 resumes a month, he added.

And Buderi said he met Chinese employees of Microsoft in the United States who burn to go back to China and help lift the country up.

“Their secondary allegiance is to Microsoft,” he said.

Buderi said he autographed a copy of his book for Gates but doesn’t know if the Microsoft chief has read it or not.

“They don’t like the book entirely, it describes some mistakes,” he said. “But the story isn’t over. The essence of guanxi is that it never ends.”

-- Reach Elisabeth Sherwin at gizmo@dcn.org and watch for more local writers to be featured biweekly at this web site.

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