Expatriate Entrepreneurs : Well-Educated Chinese Pour Their Energy Into Businesses
Andrew Cherng started out modestly 20 years ago with the original Panda Inn, a tiny family restaurant in a converted trailer in Pasadena. Now he’s the king of Chinese fast food, with a chain of more than 100 Panda Express outlets nationwide and sales expected to top $100 million this year.
The secret to his success? Not ambitious planning, nor a grand vision, he maintains--not even a special Szechuan sauce. Rather, he says, he’s expanded and prospered through efficiency.
Shanghai-born Cherng, who grew up in Japan, may not be your typical Chinese immigrant. But his passion for business illustrates an entrepreneurial spirit that runs deep in the Chinese expatriate experience.
That spirit is making itself felt in Southern California today, exuded by an energetic wave of recent immigrants from Taiwan, Hong Kong and the overseas Chinese enclaves in Southeast Asia. Its resilience is evident in a new breed of entrepreneurs from mainland China, testing their wings abroad after four decades of communist rule.
Chinese entrepreneurship isn’t something that can be easily defined, but it can be described. To that end, here are three portraits from the Chinese community in Los Angeles--tales that offer important clues to understanding how ethnic Chinese business in Southern California manages to thrive despite the recession afflicting the regional economy.
Feeding the Masses
The original Panda Inn didn’t attract its devoted throngs of customers with high-concept, authentic Chinese cuisine. For that, people could go to Chinatown or Monterey Park and eat at restaurants with funny English on the menu, patronized almost entirely by native Chinese.
But in Pasadena, restaurateur Andrew J.C. Cherng hit on a formula of reliably good Chinese food that was seasoned for suburban palates and dished out quickly and efficiently in a nice family atmosphere. Soon folks were filling his 130 seats and queuing up at the door.
When the long lines intimidated hungry diners, Cherng would chase them into the parking lot and talk them into coming back, insisting that the wait would be brief. And it usually was.
“We had a new guest sitting at a table by the time the previous customer had paid his bill and reached the door,” he said. “The food was good, and it came out on time. We executed well.”
Cherng’s father was the cook, and a highly qualified one. Ming-tsai Cherng had been a professional chef in Shanghai before taking his family to Hong Kong and then to Taiwan, where he ran the kitchen at the Taipei Grand Hotel. A lucrative job offer in Yokohama brought them to Japan, where the younger Cherng spent his formative years.
Andrew Cherng says he had no idea what to do with his life when he graduated from an international high school in Yokohoma and decided to study at Baker University, a small liberal arts college in Baldwin, Kan.
“These days Chinese kids come over looking to do something, but I think I came over looking to get away from something,” the 45-year-old businessman said during an interview in the lounge of his new Panda Inn in Pasadena, erected next to the site of the original trailer.
For lack of a better plan, Cherng majored in mathematics. He went on to earn a master’s degree in math at the University of Missouri before a cousin lifted him out of his academic reverie in 1972, offering him a job managing a restaurant in Hollywood.
Within a year, he had opened the first Panda Inn, which, like many Chinese restaurants and small businesses across America, was a low-capital family affair. With tactical help from his parents and younger siblings, Cherng honed his management skills and saved for a decade before duplicating his formula with a branch of the restaurant in Glendale.
Later, in 1983, he opened the first Panda Express fast-food outlet at the Glendale Galleria, and started building his empire, brick by brick.
At last count, Cherng owns and operates 103 Panda Express outlets, seven Panda Inns and five Hibachi-San Japanese restaurants, employing about 2,600 people.
“I didn’t think I was going to be assertive enough. I didn’t think I really wanted to do anything,” he said, reflecting back on his student days. “But once I started doing business, I found myself becoming very assertive--and pretty comfortable about it too.”
Big Play With Toys
Charlie Woo, the brainy impresario behind downtown Los Angeles’ Toytown,’ also found his entrepreneurial calling by following his instincts.
Woo was close to finishing a Ph.D program in physics at UCLA 14 years ago when he decided to take time off to help his family start a new business.
His father had shuttered his warehousing company in Hong Kong and followed his sons to Southern California, where he was struggling with a restaurant in Redondo Beach. The elder Woo, shopping around for a more promising enterprise, was thinking about trading in Chinese arts and crafts.
But the would-be physicist son suggested toys--importing them from factories in Hong Kong and China.
“Toys seemed to me to be the perfect commodity. They turn over rapidly, and people buy them even when the economy is bad,” said Woo, 42. “I was just going to take a summer off to help get the business off the ground, but it kept growing bigger and bigger, until there was no going back.”
Joined by Charlie’s three brothers, the Woo family set up shop in 1979 in a seedy warehouse district in downtown Los Angeles, near the wholesale produce markets. Using a $40,000 line of credit from a Chinatown bank owned by distant relatives, they started selling inexpensive toys to flea market vendors and swap meet retailers.
Gradually, ABC Toys began selling wholesale to major distributors with networks of small mom-and-pop toy shops around the country. Then it went directly to the factories, designing its own product lines. Among ABC’s hit items: an electric Santa Claus and a stuffed doll shaped like an ice cream cone.
As business boomed, the Woos bought a passel of real estate around 4th and Wall streets. They filled the buildings with tenants by luring their best customers--mostly Chinese or Sino-Vietnamese retailers--into toy wholesaling. Others followed, including some Latino entrepreneurs.
Toytown was born.
The family business has thrived on the competition, Woo said, because the critical mass of Toytown generates greater business opportunities in an expanding pie. Today people walk in off the street with big orders.
“You recognize successful entrepreneurs,” said Woo. “If they can succeed at swap meets, they can go into wholesaling and get their friends into swap meets. It’s like a legal pyramid scheme that actually works.”
These toy pyramids have coalesced into a local industry that Woo estimates has sales of about $1 billion, enhancing Los Angeles’ position as the nation’s hub for transpacific trade.
“I don’t think many people realize the importance of the city’s ethnic minorities in international trade,” Woo said. “We’re the great middlemen.
“When I pay a guy $6 an hour to load a truck, I’m also supporting the Teamster behind the wheel and the crane operator down at the port. It’s a humongous trickle-down effect. When a Mexican retailer wants to buy toys from China, we create jobs in Los Angeles.”
In 1989, Wood and his older brother Peter--a former Hong Kong stockbroker--spun off a second enterprise, Megatoys, with the aim of taking greater risks in a more aggressive business plan. Within a year, they doubled the family’s sales to $30 million, and the figure continues to rise.
The Woo brothers (including younger siblings Shu and Jack) aren’t the first in the family to find opportunity in America. Their great-grandfather came to California with his brothers during the Gold Rush and opened a shop in Marysville to buy gold from the miners--a middleman even then. He returned wealthy to his village in Guangdong Province, where he took a bride and settled down.
The next generation wasn’t as lucky. Charlie’s grandfather got as far as Mexico, but couldn’t cross the border north because of the Chinese Exclusion Act of 1882, a product of the nation’s first backlash against immigrants. He went home destitute.
“You immigrate to a new country to be successful. Nobody wants to fail or become a burden,” said Pak Wah Woo, Charlie’s 78-year-old father, a dignified patriarch who presided over a recent family lunch at a Chinatown restaurant, his sons interpreting his Cantonese. “But there’s a lot of hope. The economy may be bad now, but this is still the land of dreams.”
Bullish Jewelry Maker
Xin-rui (Shirly) Hong was a research pharmacist in Nanjing, China, two years ago when her husband decided to come to Los Angeles and study civil engineering at UCLA. Reluctantly, she followed last year, along with their 5-year-old son.
On her second day in the country, she took the boy to Disneyland. Then she started looking for a job.
Hong quickly discovered that jobs were hard to find. Despite her advanced education and 10 years of experience in pharmacology, she was hampered by limited English skills. And her training in China wasn’t necessarily transferable to the American sciences.
So Hong took a job assembling jewelry, earning low wages and working a lot of overtime at a factory in downtown Los Angeles. She doesn’t seem to mind the manual labor. And the way things have been going, she won’t stay on the assembly line much longer.
After working a month at Pace Enterprise--a manufacturer that employs a mixed ethnic work force of about 300, mostly Latinos--she found herself being groomed as a quality inspector for the wax mold line.
Then Hong’s boss asked her to take a one-hour exam, apparently an IQ test, which she finished in 20 minutes. Soon she was being trained to use computers. She expects a promotion to an office job in a few months.
Although Hong still earns less than $6 an hour, she’s bullish about her future in jewelry making. She plans to start her own business someday and doubts she’ll ever work as a pharmacist again.
“I think maybe I can help develop the jewelry industry in China by training people and starting new factories there,” Hong said, speaking through an interpreter at the Chinatown Service Center, where she received job counseling after her arrival last year.
Hong, 36, comes from a family of scholars and professionals. Her father is a botanist, her mother was a schoolteacher and her siblings include a professor of classical Chinese, a mathematician and a physician.
“We have a high education level,” she said, “but economically we’re at the low end.”
Still, Hong doesn’t think anyone else in her family is interested in coming to America. She herself has mixed feelings about where her future lies, despite her newfound entrepreneurial zeal.
Although tens of thousands of mainland Chinese in this country on student visas have sought immigrant status and stayed, she wonders whether the better opportunities lie in China. Her Chinese friends at UCLA are struggling with the same question, she said, and many are deciding to go home.
“In terms of making a lot of money right away, staying in America would be my priority,” Hong said. “But in terms of my future, maybe I would do better if I go back to China. In this country, I’d have many limitations, and maybe I can’t development my potential.”
Such logic reverses the immigrant’s credo of escaping the shackles of the old country and yearning to be free in the land of opportunity.
But Hong hasn’t turned her back on America yet. She’s planning to learn all she can about the jewelry business while on the job, then she wants to study here--”maybe an MBA course”--to prepare for a future as an entrepreneur.
China, after all, will be there when she’s ready.
