Business Links and Expansion in China

If Jin Hong 'Dracky' Zhang had a public profile in China, he would probably be known as one of New Zealand's most enthusiastic ambassadors.

Actively engaged in promoting all things Kiwi in the country of his birth on behalf of the country he has taken to his heart, Dracky Zhang is sincere, passionate and a genuine bonus for New Zealand. Without support or funding from the likes of New Zealand Trade and Enterprise or Tourism New Zealand, Dracky Zhang has nonetheless become an ardent proponent of New Zealand and taken on an unofficial advocacy role for his adopted country in South-East China.

It is not surprising to discover Dracky Zhang feels passionate about New Zealand and Rotorua, and what they have to offer. He came to New Zealand on a visit in 1990 and fell in love with the place. Returning to live later the same year, Dracky and his wife settled in Auckland prior to shifting to Rotorua in 1993. Although the couple are New Zealand citizens (and their two children hold New Zealand passports), the family returned to China "temporarily" in 2007 to explore further business opportunities for the New Zealand company, operating as Jade Factory and Mountain Jade, that Dracky owns and operates in partnership with John Sheehan.

It was a shared passion for jade that lead the former medical technologist into a business partnership with the self-taught New Zealand jade carver in 1993, and it proved to be a turning point for both men. Linked by their love of jade, John and Dracky's partnership has, over time, become a parallel for what their New Zealand company has – and is - achieving in China. Coming from a centuries-old jade culture, the Chinese have a deep appreciation of quality jade and quality design across all cultures. Therefore it is not completely unexpected to discover that the Chinese have taken the innovative Jade Factory/Mountain Jade designs, using jade from all parts of the globe, to their heart and thus China and New Zealand have also become linked by a shared admiration for jade.

An ardent aficionado of jade, John Sheehan operated a small Rotorua-based retail jade business for seven years prior to meeting Dracky Zhang. He immediately saw the potential in linking up with a man who came from a family with a long tradition of involvement with the jade industry in China and an intimate knowledge of Chinese jade carving techniques and processes.

The resultant partnership meant the company was able to access new forms of international jade carving, and within two years they were able to expand the Rotorua-based business into larger premises and rebrand as the Jade Factory. Following initial success utilising the skills of Dracky's jade master carver brother Sen Cai 'Jackson' Zhang on a part-time basis, the partners were also able to set up a factory in China to manufacture jade jewellery which became the basis of the company's wholesale operation in New Zealand. Operated by Jackson Zhang, the current Sihui factory near Guangdong provides employment, accommodation, meals and medical care for the more than 100 workers, around 20% of who are handicapped.

Today the company employs more than 200 people, has six Mountain Jade retail outlets in New Zealand, is increasing its share of the international wholesale market under the Jade Factory brand, and has embarked on a whole new phase of expansion; an international standard complex on a 3-hectare site in Sihui, South-East China, to replace the current factory. Stage l of the ambitious project, 80,000 sq. ft. of floor space spread over four buildings, began earlier this year.

Sihui is considered one of China's foremost jade cities with around a third of the city's 250,000 residents involved in the jade industry. More than a million professional jade buyers visit Sihui annually to source jade carvings that account for more than one third of China's wholesale market.

On his return to China, Dracky Zhang spent two years researching and investigating opportunities for the New Zealand-based company before the partners purchased the three-hectare site. He believes the position of the new international standard complex will be critical to their success because the Chinese government has already started construction of an expressway system. Linking Guangzhou to Zhaoqing, the new express train service is due for completion in October 2012. Once operational, it will provide buyers and visitors with swift access from Guangzhou (the 50km journey will take a mere 20 minutes) and Hong Kong (a 60-90 minute ride).

The impressive architecturally-designed, multi-purpose jade facility will initially open with a carving display workshop, exhibition space to showcase jade and jade artists at work, educational/cultural exchange centre for visiting jade carvers as well as manufacturing premises. An exhibition space to promote New Zealand to the Chinese through a range of New Zealand - and Rotorua - products will also be a key feature of the new complex.

Completion of Stage l is scheduled for December this year to coincide with Sihui's annual jade fair. The next step, an international standard jade museum, is expected to be completed in 2012 whilst Stage lll of the project, scheduled for completion in 2016, will include on-site accommodation for workers, apartments for visiting jade artists on cultural exchanges, and hotel rooms for visitors. Setting up an internationally recognised jade carving competition, that has the potential to attain global status over time, is also part of the dream for the business partners.

Some two million visitors are expected to be passing through the complex annually by 2012 rising to five million within 10 years.

The theme of the centrepiece building is based on Rotorua's visitor information centre. Buildings in the new Sihui complex will reflect the terracotta and cream heritage colours that are a feature of the historic Rotorua building while a tower reminiscent of the tourism centre's iconic clock tower will be an important design element of Stage l.

Two of Mountain Jade's in-house artists from Rotorua, John Sheehan's sons John Junior and Jacob, will travel to Sihui this spring to continue their training and to assist in developing the new complex. Key English-speaking staff from the new complex will also be sent to New Zealand for training prior to the opening.

Several members of the New Zealand management team will be in Sihui in December for the opening of Stage l of the Jade City project. The trip, part of regular annual visits undertaken to ensure strong links are forged with the Chinese workforce, will also serve to underpin the company's long-term commitment to doing business in China and their strong business ethic that not only encompasses family values but also includes honouring their social and environmental responsibilities.

As part of the bigger picture, the New Zealand management team (plus other interested staff and their children) have begun learning Mandarin partially in response to New Zealand Prime Minister John Key's recent comments during a visit to China in early July about the need to "understand the language to understand the market". New Zealand's second biggest trading partner, China is expected to become number one within five years. Mr Key was also quoted as saying New Zealand's commercial relationship with China already had some strong links in place. People like Dracky and Jackson Zhang, who have both lived and worked in New Zealand for many years and whose New Zealand influences have been taken back to China, are part of the already strong Jade Factory/Mountain Jade linkages.

Described as "a one-man promotional dynamo for New Zealand" by his colleagues in New Zealand, Dracky Zhang believes that official local government support of the company's Jade City project in Sihui means it has the potential to achieve many things. Some of the key benefits he sees are to promote New Zealand as a fresh, young country not only through the company's innovative, contemporary jade carving designs but also by showcasing of New Zealand products; to re-introduce nephrite jade to Chinese buyers whose cultural love affair with jade traditionally saw them seek out Burmese jade-ite; to undertake significant cultural exchanges with artists from the jade-producing countries of the world thus exposing Chinese jade carvers to international influences; and to use the company's international-standard practices and facilities to lift the benchmark for other Chinese businesses.

Dracky Zhang is so enthusiastic about his adopted country that he is more than happy to act as an intermediary (in either a consultancy or more informal role) for other New Zealanders keen to take up business opportunities in China. He says Chinese people have a prescribed approach to doing business, and formal relationships and associations are important to them. Relationships are particularly significant as the Chinese tend to do business with those they know. They also have an expectation that anyone wanting to do business with them will come well prepared and have done their homework prior to attempting to enter the market. He suggests the first step for New Zealand businesses keen to gain a toehold in China is to join some type of business association and, through that, find a trustworthy go-between.

Jade Factory/Mountain Jade set up the New Zealand International Culture and Trading Association (NZCTA) in 2008 to help smooth the way with their expansion process in Sihui. Other Kiwi businesses have now joined NZCTA as members and used the Association as a springboard for doing business in China.

With so many Rotorua connections and a quarter century of knowledge, infrastructure and processes providing a good solid foundation, the partners believe their company's new international Jade City complex has huge potential and, if Dracky Zhang has his way, that Sihui could easily develop into Rotorua's unofficial sister city.

 

Key events timeline in New Zealand's leading jade company history

• 1969: New Yorker John Sheehan encounters an Inuit carver whilst studying for an arts degree at the University of Alaska.
• 1971:  John Sheehan moves to New Zealand to pursue further study at Canterbury University.
• Late 1970s: John Sheehan encounters jade carver Bill Matheson Senior, of Hokitika, in Nelson.
• Late 1970s:  John Sheehan so taken by jade carving he decides to teach himself the craft.
• Early 1980s:  John Sheehan moves to Auckland and achieves success with a home-based jade carving business.
• 1986:  John Sheehan goes into a retail jade carving business with brother-in-law in Rotorua.
• 1988:  John Sheehan becomes sole owner/operator after buying out partner.
• 1990:  Jin Hong 'Dracky' Zhang moves to New Zealand from China.
• 1993:  Dracky Zhang moves from Auckland to Rotorua.
• 1993:  John Sheehan goes into partnership with Dracky Zhang.
• 1994:  John Sheehan takes first raw jade buying visit to British Columbia, Canada.
• 1995:  Partners expand business, rebranding as Jade Factory as well as moving into wholesaling.
• 1995:  Partners establish links to manufacture jade jewellery in China, setting up a factory at Sihui run by Jackson Zhang.
• 1996:  Dracky Zhang becomes New Zealand citizen.
• 2007:  Dracky Zhang returns to China to oversee major expansion plans for Jade Factory.
• 2010:  John's son Jacob Sheehan joins company as in-house carver
• 2010:  Company splits retail from wholesale division, rebranding retail as Mountain Jade.
• 2010:  Company's new Jade City complex scheduled to open in China in December.

 

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