As Easy As ABC? Not Exactly.
Kathleen Lau quickly learned that Chinese roots don't guarantee success in China.
By G. Pascal Zachary

(Business 2.0) – In China, they call people like Kathleen Lau "ABCs"--American-born Chinese. In 1995, with China's economy beginning to open, Lau moved to Guangzhou, the capital of Guangdong province, hoping to explore her heritage. "It was the worst time of my life," she recalls. Lau was raised in the States by Chinese parents and speaks Mandarin, but in Guangzhou, people were brusque and always expected her to sound like a native. "When I spoke to strangers," she says, "they turned away."

Six months later Lau opened a restaurant in the city. Americans were showing up in growing numbers, and Lau thought she could profit from serving them. But government inspectors repeatedly descended on her, imposing one incomprehensible fine after another. Then there was the matter of her Chinese suppliers. "Everyone cheated me," she recalls.

After two years of struggle, Lau's restaurant caught on--in time for her to realize that real opportunity lay in Shanghai. She moved there in 1998, opening two restaurants. In 2001 she sold both and moved to Paris, but China lured her back. Her latest restaurant, Kathleen's 5, sits on the roof of the Shanghai Art Museum and seats 400 people. Lau negotiated a 10-year lease with the Chinese government, which runs the museum, and has managed to retain sole ownership. With business booming and guidebooks raving about her food, Lau has settled into her identity and no longer frets about being an ABC. She recently wrote a book, Riding the Dragon, for foreigners doing business in Shanghai. "My personal growth," Lau writes, "has mirrored that of Shanghai." -- G.P.Z.