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THE CHANGING FACE OF SPAIN

The new Chinese

Spain's Asian community has grown six-fold in the last decade, producing a new generation of confident citizens who are set on shaking up business culture

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Maodong Chen, one of the co-owners of Don Pin, pictured by the Fénix shopping mall. EL PAÍS

Reporting on Spain's Chinese community in August is no problem. While the rest of the country winds down during the long, hot days, Chinese-run businesses largely remain open. For example, Don Pin, which supplies a wide range of goods to more than 4,300 Chinese-run shops throughout Spain. Its August turnover is the same as any other month, and its annual revenue has grown 20 percent over the last four years of recession to reach 50 million euros.

The stereotype of a community dedicated to hard work and that shuns vacations remains largely true, but few of the other myths about Spain's Chinese population are valid.

The hard-working, low-profile Chinese who came here two decades ago are being replaced by a new generation that's much more representative of the increasingly confident economic and political giant that is the new China. Today's Chinese business community has both money and influence, and is prepared to use them. People like 32-year-old Maodong Chen, who came here at the age of 18, working his way up from running a small shop to become a co-owner of Don Pin, are the eyes and ears of China in Spain.

Maodong, who until recently shunned interviews, but who is increasingly becoming one of the leading voices on behalf of Spain's Chinese business community, has few illusions about the country he has made his home, and is prepared to confront his hosts with what he sees as their shortcomings. At a recent conference at the IESE business school in Madrid he told delegates that he doesn't look for Spanish customers. "Spaniards don't pay," he said. "I don't want them in my business. I will stick to the Chinese, who are serious people." That said, his business does not operate on the sidelines: "I put Spanish suppliers in touch with Chinese customers," he says. He is also highly critical of the country's healthcare system: "I had to go to China to sort out a knee problem that I have."

Few of the myths about Spain's Chinese population are valid any more

Around 60 percent of Don Pin's workforce is Spanish. Maodong says that his current business strategy is focused on creating work teams that will allow him to further diversify his business and expand. His energy is almost infectious. He answers questions directly and with disarming frankness, saying that what best defines the Chinese is a love of work, and a love of the rewards that hard work brings - particularly luxury goods and gambling. He adds that what his generation of ambitious, successful entrepreneurs finds most worrying about Spain is the education system, and what he sees as its failure to inculcate a proper work ethic in young people.

"We don't want our children becoming señoritos," he says, referring to the widely held belief among the Chinese that Spaniards are unambitious and prefer a job for life, or hope to make a quick killing rather than setting up and running their own businesses and then passing them on to their children. "We're worried, because parents and schools do not educate children to work hard - there is no culture of work and of making a go of things."

Joaquín Beltrán, a lecturer at the University of Barcelona, says that around 23 percent of the 178,000 Chinese registered in Spain were born here, while 13 percent are aged under 15.

Although the new generation of Chinese is integrating into Spanish society to a greater degree than its predecessors, Maodong says that Chinese people are individualist and wary of outsiders.

Spaniards don't pay," says Maodong. "I don't want them in my business"

Maodong could well be the model that Juan Roig, the owner of the Mercadona supermarket chain, was referring to when he said recently that for Spain to emerge from the current depression, Spaniards were going to have to work like the Chinese. Maodong would also probably fit the profile of teacher that Roig employs on the 15 por 15 MBA program at his EDEM business school - although he points out that it took him a year of work before a Spanish business school would accept him on a finance course, asking how many successful Spanish entrepreneurs would do the same.

Maodong belongs to the same generation as Lidan Qi, a 34-year-old lawyer, who, along with her sister Lilin Qi, runs a law firm in Barcelona that works for Spanish and Chinese companies. Lidan Qi has been in Spain for 22 years and made her way up running her family's businesses.

The sisters own a shopping mall, as well as running a business incubator in Badalona. Lidan Qi is aware of the differences between her generation and that of her parents. "Emigration to Spain from China is a relatively recent phenomenon, but we are already into the third generation. My nephews and nieces see themselves as Catalans. The young generation isn't going to follow the same rules as its parents. They want to be accepted as Spaniards. Many parents are fighting hard to make their children remember their roots," she says. Although she will be staying in Spain, she believes that the country has a poor reputation internationally: "Spain's image abroad is not positive," she says, speaking from the perspective of somebody with several years' experience helping Spanish companies to establish themselves in China, as well as having worked with many Chinese businesses that have entered the Spanish market.

Part of the Chinese community's success in business, aside from its work ethic, is the practice of borrowing money from friends and family. "There is a proverb in China: 'Give me a drop of water, and I will give you back a fountain'," explains Lidan Qi, adding: "It is a matter of honor: money is lent without interest and without contracts."

There is a belief among the Chinese that Spaniards are unambitious

Over the last decade, Spain's Chinese community has grown sixfold, far higher than any other group of immigrants. What's more, the profile of Chinese settling here has changed. Although around 70 percent still come from Qingtian and Wenzhou, two areas in the southeastern coastal province of Zhejiang, growing numbers of young professionals from other regions are making their way here, as well as students - some 6,000 are currently enrolled at Spanish universities. The entrepreneurial spirit of Spain's Chinese community is beyond question: in the last three years the number of Chinese registered as self-employed has more than doubled, significantly ahead of other non-Spanish groups. But Gladys Nieto, from Madrid's Autonomous University, says that while many of the second generation of Chinese in Spain - such as Maodong and Lidan Qi - have largely integrated into society, there is a bigger picture that is still unclear.

"We tend to assume that because they speak Spanish well, they know their rights, and they have moved up the social scale compared to their parents. However, I doubt that this is the case with all of the younger generation of Chinese in Spain. We are still not able to carry out much research into this, but what we know about the UK and Italy suggests that many young Chinese remain isolated from the rest of what is going on, at the social, cultural, and business levels, and that they are locked in to the business projects set up by their parents and families."

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Margaret Chen, who heads up Telefónica's Asia operations. EL PAÍS

Nevertheless, the growing spending power of the Chinese community has caught the attention of the country's banks and businesses. Bankia organized a "microevent" in July for some 20 wealthy Chinese clients in a bid to interest them in the troubled saving bank's extensive property portfolio, much of it acquired from bankrupt companies it had lent money to during the construction boom that suddenly collapse in 2008. "It was the first time we had done anything like this," said a spokesman for Bankia. "The Chinese are like the Spanish: they prefer to buy rather than rent." The presentation was made by a Chinese female employee of the bank.

Similarly, department store El Corte Inglés has hired Chinese sales staff for its luxury goods stores, while one resourceful Spanish construction company based in Madrid is offering apartments built according to the principles of Feng Shui, the Chinese system of geomancy that aims to harness positive energy in the home and workplace.

In China they say, 'Give me a drop of water, and I will give you back a fountain'"

Madrid's Chinese community will soon have its own shopping mall and leisure complex: the Fénix, complete with supermarket, travel agency, karaoke bar and casino, and presumably designed with Feng Shui in mind.

Among the Chinese community's highest profile business leaders in Spain is Margaret Chen, who heads Telefónica's Asia operations. Chen is typical of the internationally minded generation of Chinese business leaders: she was educated at the top business schools in China and the United States, and ended up in Spain two decades ago after marrying a Spaniard. She set up a consultancy and began working with Telefónica 16 years ago.

"In 2004, Telefónica decided to enter the Chinese market," she says. "At that point the senior management was not even aware that I was working for them. They wanted a translator that they could trust. Somebody told them about me, and they asked me if I wanted the job, but I told them that my specialty is telecommunications engineering. If they wanted a translator, pure and simple, I could find them one. Then they told me that the translator would be accompanying the company's president, César Alierta, so I decided to accept the offer," she explains.

But like Maodong, she is highly critical of Spain's business culture, and sees the country as a place with potential, but where things are still "not done properly and people have to work much harder."

Madrid's Chinese community will soon have its own shopping mall

She says that the new generation of Chinese coming to Spain will shake things up. "In four or five years this will all have changed. So far, the Chinese emigrants who have come here have done so with little idea of what to expect: most come from the same area, and they have been people with little to lose. These people didn't even speak Spanish when they arrived; neither did they speak Mandarin, but they are all very loyal to each other. They didn't bother to integrate in society. But my world is different."

Margaret's world is about establishing relationships at the highest level of business; it's about power and influence. Which explains why she is the president of the China Club Spain, which aims to bring Spanish and Chinese entrepreneurs together. "China sees Spain as a partner, we probably have a better relationship than with France right now, largely because of Sarkozy's mishandling of relations with Beijing and with the Chinese community in France. But our relationship with Spain is still fragile, and France will try to improve things because it has huge interests in China," she says.

Chen believes that Spain has to do much more if it is to improve its links with China. "We think that Spain is still lagging behind. Up until 15 years ago, it was a largely unknown entity, perhaps associated with soccer, but not much else. Spain has to understand that China is now a leading economy, and, like the Americans, we aren't really that interested in what is going on in the rest of the world, so Spain will have to work hard to raise its profile if it wants Chinese investment."

In short, Spain still has a lot of catching up to do. "Take tourism," says Chen. "Spain has done nothing to attract Chinese visitors. The average Chinese tourist spends between 3,000 and 4,000 euros when visiting foreign countries. Last year, 50 million Chinese took overseas holidays; this year there will be 70 million. Spain has not been capable of attracting even one million of those visitors. The tourist circuits in Europe that are organized for Chinese visitors do not even include Spain, and one of the reasons is safety. During one visit, a senior government official was beaten up during an attempted robbery. It's the same with the Japanese, who now take their own security teams."

Spain will have to work hard to raise its profile if it wants Chinese investment"

Pedro Nueno of the IESE business school agrees that Spain needs to do much more to attract Chinese investment, and Chinese tourists. He points out that the national carrier, Iberia, doesn't fly to Beijing or Shanghai, and that there are no daily flights to China from Madrid. The Casa de Asia, a state-run body aimed at fomenting business, educational, and cultural links with China and other Asian economies, is under-funded and its activities have virtually ground to a halt as a result. There is no government strategy to improve ties with China, says Nueno, adding that it is still very difficult for Chinese visitors to get a visa.

The Chinese community in Spain has changed, but Spain has largely failed to adapt to new global realities. The Chinese community here is playing an increasingly large role in business, and is ever-more influential. It could play a key role in strengthening the struggling economy. But if it finds the country's business culture restrictive, it may move on to greener pastures.