A few months ago, Damjan DeNoble of the China HB, wrote me, asking me to review his “personal statement” for his law school application to University of Michigan. I reviewed it and liked it so much I asked him if I could run it on the blog. He said yes, but wanted to hear back on his application to Michigan first. Damjan was (to no surprise by me) accepted to University of Michigan Law, which he will be attending in the fall. This means I can now run his personal statement.
I am running Damjan’s personal statement because it very nicely (and personally) sets forth what it can be like to try for a small foreign business to operate in China and deal with its laws.
Here goes.
Commitment Negotiations, by Damjan DeNoble.

After receiving my college degree, I went to China and enrolled in a four month business and Chinese language program at Beijing University. I stayed in Beijing for the next two years, working as a pizzeria restauranteur, dabbling as an importer of Croatian canned food into China, and founding an Asia-based healthcare consulting business. Accompanying this last venture, I started Asia Health Care Blog which has become popular in its own right. By far the most important thing I did, however, was propose to my girlfriend with a carved wooden ring bought from a Tibetan street vendor.
Steadily throughout this two-year sojourn, notions I held of legality were challenged by a system of law enforcement which demanded I not only know what is legal, but also what is ‘negotiable’. My social acumen, on the other hand, was constantly challenged by shifting cultural terrain. Daily, during my first year in-country – what veteran travelers call the ‘adjustment period’ – I wanted to pull my hair out due to all the negotiating I had to do with straightforward issues like getting salary on time, retrieving deposits on untarnished apartments, or convincing contracted business partners to respect the terms of signed agreements. But, as my understandings of guarantees in China matured, I learned how, in most cases, one’s negotiating position was largely a matter of perception, and that negotiating away from a guarantee often works better than negotiating towards one.
In the Beijing restaurant industry knowing a few key police inspectors is the difference between long term profit and loss. Because Chinese regulations are selectively enforced and because they change faster than one can retrieve them at the ministries, business owners must, instead, entrust their future to the regulators themselves. It is the regulators who enforce the law and it is up to them to define laws’ negotiable areas. By the time I was a staked member of The Kro’s Nest restaurant, and after we had opened a flagship seven hundred square meter pizza bistro inside Worker Stadium Park, dinners with the police had already become a predictable, Friday night ritual. Dressed in after-work plain clothes, officers of the SanLiTun Police Department would sit down on our terrace rocking chairs. Compliments would be made all around, and inevitably Kro and I, the only two foreigners, would be complimented on our Chinese language skills.
We took this time to get the low down on any new regulations, negotiate away from our need to strictly adhere to some of the less sensible ones, and, of course, negotiate down on any upcoming fines we were bound to face. For their part, the policemen developed a good sense of the people they were dealing with in their area of jurisdiction and received a nice meal or two on the house. Considering that 1) our business was unlicensed through June of 2008 and 2) neither Kro nor I ever had work visas, this whole situation is rather remarkable. The way Yuenjie, the principal Chinese owner of Kro’s Nest partnership, explained it, “This isn’t corruption. It’s cooperation.” We were demonstrating an adherence to the men carrying out and defining the law, and, in so doing, we committed to being ‘harmonious’ citizens of the Sanlitun police district. Whether or not any laws were being broken was entirely dependent on our continued good behavior – defined as any behavior that did not have the potential to embarrass the police office.
In stark contrast to the long process of scrutiny I was used to with Beijing businesses, I learned that the criteria for entry into the Croatian market was much less strict; to operate one simply had to show up and be Croatian. On my first night out to dinner with the Croatian embassy staff, I learned that due the rareness of my particular profession – out of fifty Croatians in China, I was the only businessman – the ambassador’s office had, “on my reputation alone,” designated me as the China ‘go-to guy’ for an Adriatic sardine manufacturer. I was reminded that my ethnic identity, even with an American passport, was non-negotiable and that the greatness of Croatia had peaked with the initial waves of euphoria after an all too misguided war in 1991. What else could explain the sudden advent of a “go-to guy” reputation for a twenty-three year old with a business resume that goes as far as “he runs pizza restaurants in Beijing”? It turns out that the embassy sensed it was being pushed around by Chinese business interests and wanted help. I somewhat jokingly suggested they expand their entertainment budget and lobby for increased funds to struggling Croatian universities.
My now-fiancée came to visit after I had already been negotiating my way around China for fourteen months. By this point I was wrapping up my involvement with the food industry and starting to look into various healthcare research gaps in Asia. While still in the cab from the airport, she commented on how remarkably patient I had become with life and with people. At the time, I thought the comment quite queer. Now, looking back, I realize that my perspective on time and my beliefs about what degree of mental toughness constitutes patience had become almost antipodal to hers. I had adjusted to new circumstances where moments and promises like ‘get back to you soon’, and ‘sure, no problem’ operated on a unique plane of space-time parallel to, but different from, the one she was familiar with in America. The fact that I moved back to America this past September, and left much of China behind in order to support her through medical school might, therefore, appear to be a rash decision. But, if China taught me anything it is that commitment to relationships is non-negotiable.

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.

  • Dan, thank you for publishing this. I would only add that getting into Michigan was a BIG surprise, on account of my sub par GPA (and based on my long list of rejections at other schools), and so I’d like to add one other thing that potential law students reading this blog could take away from my experience:
    If you’re applying to a Tier 1 law school with, let’s say, no better than a 3.08 GPA, then try to put yourself in a post-graduate situation that you can’t find at a job recruitment fair. When you eventually settle into a situation (whether it be transient or in a static location), work as hard as you can at it. CRUSH it. Even if ‘it’ means busting tables in a restaurant overseas, a crushed ‘It’ will give you character, and make great fodder for an interesting story when you decide to apply for school, or a job. I definitely couldn’t have hoped for as much (in terms of getting into a school) three years ago.

  • AT

    Damjan,
    Agreed. As a law student myself, and having been through the application process with a not-so-stellar GPA or LSAT score, I can definitely relate.
    Great essay, by the way. I went to Kro’s Nest a couple of times back when I was living in China, and I actually worked with a former Kro’s Nest employee last summer in DC. As a lowly English teacher living in Xi’an, I admired the way you guys handled your business in the big city. Congrats on Michigan, and good luck!

  • @AT
    Glad you enjoyed the pizza at the Kro’s Nest! Handling a small business is tough and we did the best we could. But, for me at least, it was not an effort that could be sustained over the long term. It is difficult enough to run multiple restaurants in the best of environments, but in Beijing it was pretty much a seven day a week, all day commitment.
    You’ve lived in China, so you know that business things there are slower than in the states. It is definitely good training for law school, that’s for sure.
    Good luck to you, as well!

  • Joel

    Is the Kro’s Nest going to stay? I really like that place.

  • Awesome essay. I like how you weave together the personal and professional, Chinese and Croatian, legal and negotiable. Congratulations on your acceptance to Michigan!

  • Kro’s Nest in Gongti might have seen its last days. BeiDa will likely stay open. The other locations are day to day.
    This is all because the partnership between American and Chinese ownership has broken down

  • The Kro’s Nest. Just Another Day In China.

    “Steal a little and they throw you in jail. Steal a lot and they make you king.” Bob Dylan “Guanxi either retires or goes to jail.” Rich Brubaker Just read an absolutely fantastic china/dvide post, written by Damjan DeNoble. The post is entitled, “Kro’…

  • What a well-written essay! I thought I wouldn’t make it past the first few words, just based on the fact that it was an essay for an application to law school, but I was riveted until the end. I hope Damjan writes a book one day about his adventures with the Kro’s Nest.

  • If you’re applying to a Tier 1 law school with, let’s say, no better than a 3.08 GPA, then try to put yourself in a post-graduate situation that you can’t find at a job recruitment fair.
    Great essay, by the way. I went to Kro’s Nest a couple of times back when I was living in China, and I actually worked with a former Kro’s Nest employee last summer in DC. As a lowly English teacher living in Xi’an, I admired the way you guys handled your business in the big city. Congrats on Michigan, and good luck!
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    Whiteblack