U.S.-China film co-production: an expected path proving bumpy?

paramount-studios-logoFirst time in its 102-year history, Hollywood tycoon Paramount has partnered with China Film Corporation, the country’s largest state-funded film group, to produce a movie about the legends of Marco Polo. The movie will mostly be shot in China, directed by Rob Cohen from Fast and Furious, with Chinese supporting characters speaking Mandarin on set.

What Paramount has been involved now, is the U.S. – China co-production, which is officially recognised by the Chinese government. The co-production projects has been backed up by the Chinese government in the early 2000s, but really gained its popularity after 2011.


Nevertheless, Xiaotian Mao, who represented the Chinese government at the 2014 U.S.- China Film Summit held in Los Angeles, thought the co-production business was far from success.

“So far, I would say I haven’t noticed any successful U.S.- China co-production film,” Mao said in Chinese while giving a speech at the summit.

Despite the discouraged feedback from Chinese official, the ticket to the co-production is already hard to get. To gain the co-production status, films must be licensed by China’s media regulator, which sets rules on the film’s finances. The movie must have a fair amount of filming location in China, and a percentage of Chinese stars in the cast approved by the government. The government also has the right to rip off the co-production label anytime when they find the project is no longer qualified.

Under the tedious rules, the co-production still seems booming with more and more Hollywood studios and investment coming in. Paramount is the fifth oldest surviving film studio in the world, yet the latest newcomer to the co-production game.

“Sometimes I woke up in a cold sweat, picturing myself 20 years ago and asking: why would we do that?” said Mark Badagliacca, Paramount’s executive Vice President and CFO. Badgliacca has served the company for more than 30 years and recently just got back from China, where the details of this co-production project has been finalized. “But they (the Chinese filmmakers) are willing to learn from us and we also need the access to the Chinese market.”


The tricky land of profit

Hollywood may have found another treasure land more than six thousand miles away in China. It was only from January to November 2014 that 11 Hollywood movies have made to the top 20 China box office list, with a total accumulative record of RMB 7.9 billion ($1.28 billion U.S. dollars).

The latest movie from the Transformers franchises, Transformers: Age of Extinction, is the most successful Hollywood blockbuster in China this year. From its world premiere in Hong Kong, which was also a first for Hollywood, it has swept the China silver screen. The movie has topped both annual and opening week box office record in China. Despite its flat performance in north America, Transformers: Age of Extinction still became the 19th movie that has a billion dollar box office sales in the history. According to China’s film consultant Entgroup, over 30% of the ticket sales came from China.




According to the statistics from the Motion Picture Association of America (MPAA), the North America theatrical market has experienced nearly zero growth last decade. Meanwhile, China has become the world’s second largest movie market with a steady and rapid annual increase. In 2013, China’s box offices pulled in RMB 21.6 billion ($3.17 billion), a 27% increase from 2012. In China, there are 13 new cinemas opening in China each day according to MPAA, which in recent years has helped boost box office sales.


Still, China remains a tricky place for the Hollywood filmmakers to do business.

The success of Transformers: Age of Extinction is rare. A number of productions coming from Hollywood never made it to release in China, due to the government’s strict control. The government keeps a tight grip on foreign films that are shown in the country, requiring everything from preliminary script approval to sign off on the final cut. Foreign film releases are limited to 34 per year.


A path to the triple-win?

Despite how tedious the process of a co-production could be, the benefits, however, may be worth the pain. A co-production gets to keep 47 percent of box office receipts, while the imported films only get as little as 13.5 percent. Most importantly, the co-production doesn’t need to go through the release quota control set for the foreign movies by the Chinese government.

Chinese investors, on the other hand, have noticed the profit margin and eager to join the co-production game. Early 2014, Dalian Wanda Group said it is in talks to acquire a stake in Lions Gate Entertainment Corp. Alibaba Group’s Chairman Jack Ma paid a visit to Hollywood in October 2014, seeking alliances.

In recent years, Chinese government has vowed to grow the nation’s “soft power”. “The stories of China should be well told, voices of China well spread, and characteristics of China well explained”, said China’s President Xi Jinping in the 2014 new-year speech. According to Bloomberg Businessweek, scholars interpreted the new-year speech as a signal of political purpose for the government’s willingness to promote China’s culture and systems with Hollywood’s competence.

The propaganda mission of Chinese government, the eagerness of Hollywood studios to get access to the Chinese market, the desire of Chinese learning the Hollywood expertise in film and making profit… Co-production seems able to simultaneously work in line with all the agendas.

In 2014, there are more than 60 co-production applications sending to the media regulation department in China. But judging from the previous performance of co-production out in the real market, a strong possibility for disappointment remains.


The dilemma

The frequent box office failure of the U.S.- China co-production have brought the first wave of disappointment.

China’s web content provider Sina.com has put a collection of the co-production movies that bombed at the box office. Man of Tai Chi, which is Hollywood star Keanu Reeve’s directorial debut, ranked No.9 at the list. The movie made ¥ 27 million RMB ($4.3 million) in China and only $0.1 million in North America, leaving a huge loss of more than $ 20 million uncovered.

In the co-production business, some stories have utilized the benefits of the Chinese partner’s involvement with a story appealing to both the Chinese and North American audience, such as the Karate Kid (2010), made by Columbia Pictures and China Film Group in 2010, grossed $358 million in ticket sales worldwide. By contrast, the Chinese version of High School Musical, made by Huayi with Walt Disney the same year, earned less than $155,000. It is not an easy job to anticipate the audience’s preference and get the formula right.

“By far the biggest challenge for the co-production is finding the right story to tell,” said Robert Cain, who runs Chinafilmbiz.com and is a consultant to producers and others doing business in China. “Mostly they film stories that has been suitable for either the Chinese audience, or for the international audience, but not for both.”


Chinese authorities’ vague regulation has become another major challenge for the practice of co-production. There are no specific rules of the percentage for either the investment or the casting coming from China written in paper. The application may get approved smoothly; but the authorities can take the co-production title away in the milddle, or disapprove the final work after censorship and put the movie back to the “imported” category.

In response to the vague regulation, Hollywood blockbusters like Iron Man 3 chose to ignore the official co-production process. Instead of waiting in the line for co-production approval, “the film is challenging conventional wisdom about how best to tap China’s lucrative but tightly controlled film market”, quoted from the report by the Wall Street Journal.

“Generally speaking, the U.S.- China co-production is not a success,” said Stanley Rosen, political professor at University of Southern California specializing in Chinese politics and society. Rosen thinks there are two major reasons that lead to this failure; one is the tighter co-production policy from Chinese government; the other is that U.S. and China actually join the co-production with different purposes- China wants propaganda and experience, while Hollywood simply just wants to make profit.


A future of uncertainty

After years’ of development, the U.S.- China co-production has encountered with the bottleneck.

Robert Cain thinks it is possible to find better co-production story ideas through increasing the Chinese team’s film literacy and enhancing the quality of communication. After better stories ideas being made, the Chinese government censorship will become the next biggest obstacle on the way.

“If the censorship rules stay the same, it will be always hard to do co-productions,” said Cain. “The creative people in China don’t like the rules either. I think a government as strong don’t really need that kind of protection; but I don’t know if the censorship rules going to change in the future.”

Meanwhile, rumor goes on and off about the possible quota increase by the Chinese authorities to let more foreign productions in. China signed an agreement on its current quota system with the World Trade Organization in 2012, valid for five years. This means the second round of negotiations will start around Feb. 17, 2017.

It is uncertain for either the change for the co-production rules or an increase on the film import quota. The only thing people may know for sure, is that China has a huge film market with great potential.

According to an Ernst & Young report on China’s media and entertainment industry in 2013, China, which now stands as the second-largest film market in the world after Japan, will surpass the U.S. and become the biggest film market by 2020.


 Data retrieved from Ernst & Young

Facing China, the under-developed huge market with uncertainty, there are several options opening for the Hollywood filmmakers. It may be a good idea for the Hollywood studios to get a better understanding is role and keep involving in the co-production; it may also be a wise choice for the filmmakers to work with the storylines, avoiding sensitive elements, in order to get a bigger chance to release the works in China when the door opens up a little bit more.

For Paramount, the choice is doing whatever they can to get the access to the Chinese market, according to Mark Badagliacca.

“I think it is best for us to do everything we could; we are even going to make films in China for the Chinese audience only,” said Badagliacca. “China is a giant market; and it is something really have an impact on us.”

What does the 10-year visa for China mean to the Americans?

A policy change that will enable U.S. and Chinese citizens to visit each other’s countries repeatedly within 10 years has been announced at the conference of world leaders in Beijing; and it has been already gone into effect. Business and short-term visit visas, which used to expire after one year, will be valid for 1o years and allow a larger number of population travel back and forth between the U.S. and China.

In 2013, 1.8-million Chinese visitors came to the United States and brought an estimated $21.1 billion to the economy.  The Federal government predicts the economic impact of the loosened visa restrictions could be $85 billion by 2021, according a white house statement reported by the Los Angeles Times.

ChineseTouristinUSMajority of the media coverages focused on the economic spur the incoming Chinese tourists may bring to the States. Nevertheless, few wrote about the other side of the story: the policy change will also have an effect on the U.S. citizens’ visa for China. The new 10-year visas available to US passport holders will make travel to China easier for those who qualify.

A policy making process sometimes is the joint-consideration of both international relations and market demand. In the case of the 10-year valid visa, it seems like the policy shift may have something to do to with China’s inbound tourism industry. Unlike the large surplus on manufacturing, China’s tourism industry has been suffering deficit ever after 2009. The deficit pushed the local travel agencies and accommodation providers to price their service lower, sometimes even lower than the cost, to keep the business running.


It may not be just a stereotype for Chinese to picture the U.S. visitor as spenders. According to a report from BBC, the travellers from the United States were actually the No.2 travel spenders in Asia, closely followed by Germans.


At the same time, foreign tourists have slowed down their adventures in China. In the year of the 2008 Beijing Olympic Games, the number of the foreign tourists in China reached its peak at 6.15 million. Since then, the number has been shrinking, though it did bounce up a little bit in the year of 2010. The United States of America-China Chamber of Commerce (USCCC) said in a statement that the relatively high standards for L visas are one reason Beijing has seen declining tourism numbers. Programs such as 72-hour, visa-free travel to Beijing have not been sufficiently easy or welcome to make the city attractive as a destination.


The USCCC also clarified some requirements in order to obtain the new 10-year visa. In order to qualify for 10-year visas, US passport holders must have more than one-year validity remaining on their passport. And, each entry will only be good for 60 days.

“As international relations can change quickly without advanced notice, we urge you to take advantage of this new policy and apply for your China visa at your earliest convenience. In addition, if your passport expires in less than one year, we encourage you to consider renewing your passport,” said the USCCC in their website post.

It is uncertain, but worth expecting a growing number of tourists from the States coming to China for visits. As predicted by Huffington Post blogger Kathleen Peddicord, “the boom will bring more and more higher-end choices.”

However, according to Peddicord, “the biggest challenge to travel in this region is language”. It is normal that desk clerks in local small hotels, cab drivers, bus drivers, waiters, and sales speak no English at all. And it could remain a long-term challenge for the Chinese tourism industry to equip with the level of service to satisfy the international travellers.

The China-specific content on the AMAs: a way to open the Chinese market for the U.S. entertainment content?

It seemed like a big year for Chinese pop music’s international performance. In the American Music Awards (AMAs) 2014, two international awards went to Chinese recipients. China’s talent show-grown pop singer Zhang Jie was presented with the International Artist Award; while the Chopstick Brothers, an immensely popular Chinese boy group, snatched the Best International Song award with their song “Little Apple”.ChopstickBrotheronAMAs

The outrage and laughter on Chinese social media began when the audience found out that the performance was only taped during a commercial break and then released online on Chinese video-sharing websites. The local audience in the States never got the chance to see the Chopstick Brothers Xiao Yang and Wang Taili danced and lip-synched on the state of AMAs. It was also found out later that these two categories of International Artist and Best International Song did not exist in past editions of the AMAs.

Speculations started both in China and on some of the U.S. entertainment news media. China’s state-run CCTV called it a “Mixed reactions to Chopsticks Brothers performance and win at AMA”. The Rolling Stone questioned: “Do the American Music Awards have a deal in China that requires goosing the broadcast with the Chinese-related content?” Rumour circulated on China’s Sina Weibo, saying the Chinese artists paid 6 million RMB (roughly equals to 0.95 million U.S. dollars) to let AMA to establish these two awards for the Chinese artists exclusively.

The speculations and rumours accumulated. Mark Rafalowski, AMA’s organiser Dick Clark Productions’ vice president of the International Division, later cleared out the rumours in an interview with Xinhua News Agency. “The AMAs have a decent history of 40 years, do you think that is what we will do? It doesn’t fit our tastes and status,” said Rafalowski.

Nevertheless, Rafalowski admitted these two exclusive awards were for certain marketing consideration: “We are glad to promote the brand of Dick Clark Productions internationally and feel proud to bring outstanding international singers like Zhang to the stage.”

The AMA Chinese content remind people of what happened earlier this year when Chinese actress Jing Tian won the Hollywood International Award from the Hollywood Film Awards. Jing was the “first-ever recipient of the Hollywood International Award”, according to  Hollywood Reporter.


Just like decades ago when the Chinese magazine People’s Movie has introduced the Oscars to the Chinese readers, the prominent awards in the industry, such as the Academy Awards, the Golden Globe Awards and the Grammy Awards still play big roles among Chinese audience. The major difference nowadays, however, would be the audience’s judgmental capability to tell the credibility of the awards that been presented to the Chinese singers and celebrities.

According to a social media poll on Sina Weibo about the AMA 2014 scandal, 64 percents of the Chinese social media users claimed that they would like to see real recognition, not just the gesture to show the interest to the Chinese market.

China has a huge entertainment content market with great potential. Last but not at least, many of the Chinese media hold strong investment capability and purchasing power.



So, despite the efforts that singers like the Chopsticks Brothers and Zhang Jie have put, China’s music industry is still looking for its first truly global hit. And it might be hard for any of the global awards to win the Chinese market just by adding one-time, exclusive items for the Chinese.

The cocoa crisis and the chocolate deficit

One of the world’s favourite treat- chocolate, could face a critical shortage in the next 20 years; two leading chocolate makers Mars, Inc. and Barry Callebaut say.

Switzerland-based Barry Callebaut, which describes itself as the world’s leading manufacturer of high-quality chocolate and cocoa products, said it had concerns about future cocoa supply in its annual report published earlier this month. Barry Callebaut was repeating the concerns of Mars in the US, which has been warning for some years that cocoa production could be 1 million tonnes short of demand by 2020.

Simply put from the manufacture perspective, it seems like people are eating too much chocolate therefore leads to this not-so-sweet deficit in the future.



Image Source: thestar.com

Nevertheless, people’s exceeding consumption power is not the only reason for the deficit.

On the other side of the supply-demand chain, the market supply of chocolate has already been affected by the lower cocoa productivity worldwide in recent years.

Cocoa is the main ingredient in chocolate, without it there is no tasty chocolate. Last year, the world ate roughly 70,000 metric tons more cocoa than it produced. Bloomberg reports that from 1993 to 2007, the price of cocoa averaged about $1,400 a ton; the past six years had an average of little more than $2,700 – an 87 percent increase. According to Bloomberg, the lack of supply is reportedly due to drought, disease, higher demand of more-productive crops like corn, and last but not least, the rising popularity of dark chocolate – which calls for more cocoa.



Source: Groupe Sucres et Denrées (SUCDEN)

At the same time, people in the developing economies of Asia and Latin America are acquiring a taste for chocolate. While North America and Western Europe still account for more than half of global chocolate sales, demand is growing faster in emerging markets. That’s raising concerns that demand for cocoa beans, the key ingredient in chocolate bars, will outstrip supply.

Chocolate sales in Asia are forecast to grow by 23 per cent over the next five years and by almost 31 per cent in Latin America, according to London-based research firm Euromonitor International. That compares with growth of 8.3 per cent in North America and 4.7 per cent in Western Europe over the same period.



Source: the Wall Street Journal 

To confront the natural disadvantages as drought and diseases, a much faster growing strains of cocoa were being developed, mostly in Africa and south America. But according to the article by Bloomberg, many of them didn’t taste good.
It was not likely for the cocoa production and chocolate market to turn around shortly; so the chocolate lovers have came up with their conduct of code under the dark clouds of chocolate deficit, according to the Guardian these codes are:

It’s a treat, not a food group: Enjoy it and don’t eat it in two seconds.

Ration chocolate in cakes and other dishes: when it comes to bought products like chocolate, it makes  the triple chocolate cake you’re making need the choc buttercream, the dark chocolate ganache and the white chocolate curls all seem luxurious and somehow unnecessary.

Be prepared to pay more. A lot more: That would be bad news for consumers, but there is an upside to the looming shortage – it could finally spell good news for cocoa growers, many of whom receive a “paltry amount” for their product, says Harcourt-Cooze: “If a shortage meant cocoa farmers got high prices, it would make me smile.”

Stop abusing chocolate: For ChocoChicken – the LA restaurant that serves chocolate fried chicken with chocolate ketchup and white choc-fried potatoes, their behaviour has been seen has a conduct of chocolate abusing, and according to Guardian piece, “will not be tolerated”.

Chinese EB-5: the chance, the risk, and the unstoppable investment flow

Sitting in a modest dining room of a cozy house suburban in Irvine, California, Michael Kwok looked worried while typing his personal information to book a ticket from Los Angeles to Guangzhou, China.

This 67-year-old emigrated from Hong Kong to the United States four decades ago. This time his visiting China, however, was not a simple homecoming. He was going to take care of the business he has been developing for three years: helping the wealthy Chinese people to obtain permanent U.S. residency.

Kwok’s business went well for the past three years. Bad news came the August 2014: the U.S. Department of State shut down the access for Chinese to apply the permanent residency through making investment. Terrified and flurried, Kwok’s potential customers urged him to go China to work on a strategy.

“I don’t worry about losing new customers; there are always rich people who want the U.S. Green Cards,” said Kwok. “The thing I worry about is I don’t know what time the application will re-open and when I can get my business back going.”

The Employment-Based Fifth preference, also known as EB-5, is the way Kwok helps his rich Chinese customers get U.S. green cards. It is a federal program that allows foreigners to speed through the complicated immigration process, for a price. With an investment of $500,000 in a U.S.-based enterprise that creates at least 10 jobs in a rural area or a community with a high unemployment rate, applicants are eligible to get special visas that put them on a faster track to becoming permanent residents of the States.

EB-5 illustration

The EB-5 visa remains a niche program within the U.S’s massive immigration system: only about 10,000 visas are issues annually. But applications have significantly increased since 2006 as financial challenged towns and organizations have begun to aggressively promote different programs to attract wealthy foreigners.

China, as the fastest developing capital source, featured with a skyrocketed number as EB-5 applicants. According to the statistics from the U.S. Department of State, as of fiscal year 2012, the number of Mainland born Chinese EB-5 applicants was 6,124, making nearly 80 percent of the total.

EB5 Visa Stats 6-2012

The investment doesn’t make the tedious application process easier. A large number of applications and the confusions of applying create the demand for the specialized agents. Kwok, as many others who see the advantages of the EB-5 application business, jumps in with full service provided. Agents work with immigration attorneys, local realtors and even travel agencies to make an easier process for their clients. The charge for this service is not small: agent usually takes about an extra 10 percent of the investment, roughly $50,000, as a service fee.

In the niche yet profitable business, Kwok has found his competing strategy. This retired businessman has more than 30 years’ of experience dealing with U.S. – China tile trade; and he has the list of the rich names in the towns of Guangdong Province of China. Each year, he dealt with an average of 20 clients.

More and more people heard about Kwok from friends and join in the EB-5 applications; nevertheless, the amount of visas being issued stays the same. The Mainland Chinese application number increased so dramatically that on August 24, 2014, the U.S. Dept. of State blocked any addition Chinese from applying EB-5 visas for the reminder of the fiscal year 2014; this is the first time ever in EB-5’s 24-year history.

Launched in 1990, EB-5 is designed as a way to boost the economy and create job opportunities. In 2002, the EB-5 Regional Center Program came up. The regional centers are designed be boost the local economy by partially or completely using the EB-5 investors’ money.


Starting with only a handful in 2003, the number of Regional Centers grew to approximately 30 as of January 2009. As of Oct. 2014, there are 768 designated regional centers, with California ranking the No.1 with 146 projects existing, according to the data from U.S. citizenship and Immigration Service.


The EB-5 money has sponsored projects across California. In Pomona, EB-5 funds are here you need a past tense verb used to build the Ranch Plaza, a 350,000 square feet of retail space and 350,000 square feet of office space. In San Bernardino, the city is tapping EB-5 funds to redevelop its downtown theater district. The new construction around L.A. Live, the Marriot Courtyard and Residence Inn, were also partially sponsored by the EB-5 funds.

The success of EB-5 regional centers is not only relying on the investment; the local economy plays a bigger role. Sometimes even worse, some poorly designed centers will fail and be kicked out from the EB-5 programs, with no green cards and no investment return for the investors. The regional centers in El Monte, California was expelled from the U.S. Immigration Service list in 2010 because it was not able to provide the kind of economy development the center was certified to do at the beginning.

Nevertheless, the risk of the project failure will always remain. According to USCIS, 42 percent of past investors received permanent visas. As Bloomberg reported, fewer than 10 percent of EB-5 pools seeking money today may succeed in getting participants both green cards and their cash back.

Alejandro Mayorkas, director of USCIS, said to Bloomberg that: “Our approval of a particular petition doesn’t mean that their investment is a good one; we don’t really get into the business models.”

On the other hand, some EB-5 applicants even don’t know what kind of EB-5 regional centers they are directly involved; they will let a company to take care of their investment. The 45-year-old Mr. Hu, one of the Kwok’s clients who lives in Arcadia, California with his family now, was been told that a company named OMB Regional Center LLC was taking care of the his $500,000 EB-5 investment. He never knew the OMB was actually based in Chicago, Illinois, and neither did he know where his EB-5 investment money went.

“I don’t speak English, so it is really a challenge for me to step out of the Asian community in the U.S.” Hu said in Chinese. “My agent Mr. Kwok told me the money is safe and I trust him.”

For Kwok, EB-5 investors are different. They are not the old kind of Chinese immigrants who get help from their family members and stuck in Chinatown.

“Some of my clients bought some small pieces of lands to build houses and make money. Some of them just don’t want to do anything,” he continued, describing his clients: “they just stay in California and enjoy life.”

A latest research conducted by Hurun Research Center pointed out that 64 percent of the Chinese millionaires have been migrated or preparing to change nationalities to other countries. The United States has been the most popular immigration destination over the past 5 years.

At the first day of October 2014, a new 10,000 quotas for the fiscal year 2015’s EB-5 applications opened. Mainland Chinese were still on the qualified list, with no further restrictions.

Kwok received a phone call from Chongqing, China almost the midnight of the same day: a new client was asking about the new round of EB-5 application and thinking about hiring his as the agent.

For people who apply the U.S. permanent residency under EB-5, the tensions around this niche program will never disappear: the fear of getting involved of fraud; the anxiety of no access to apply; and so forth. But the investment flow and the desire to migrate to the U.S. are hard to stop.

“The government should expand the numbers for application and assist the applicants with a smooth application process,” said Kwok. “No matter what, it is a good thing to the U.S. with more investment coming in and a lower unemployment rate.”

The Makeover of downtown Los Angeles Through Small Business

Gary Russell stood behind his counter in the Grand Central Market in downtown Los Angeles. Surrounded by those old-fashioned, bold-colored vendor signs, Russell in a casual red shirt and his clean-designed counter felt like an invader to the atmosphere of nostalgia.


Photo credit: Peiwen Jing

Nevertheless, the crowd walking inside of the market in their sportswear  brought the sense of modern to this over-100-year-old marketplace, just like what Russell did with his kombucha tea bar in the past eight months.

CustomersIt was Saturday noon, one of the market’s busiest hours throughout the week. Two customers grabbed several traditional pork carnitas tacos, stopped by Russell’s counter, tasted different flavors of the kombucha teas they produced, and got two bottles of “midnight rose” as their drinks.

“The market has been there since 1917 and I don’t know some other place in LA quite like this,” said Russell. “The dynamic, the atmosphere, and also for the new organic and healthy choices coming in.”

Photo Credit: Peiwen Jing

Russell works for the Better Booch, a small business manufacturing kombucha tea in downtown Los Angeles. They get the organic tea leaf supply from the Art of Tea in Beverly Hills, brew the teas, and then add bacteria and yeast to let the mixture to ferment for a couple of weeks.


Better Booch has been in the business for more than two years. The small crafted kombucha tea brewery now has five employees, including their husband and wife duo co-founders Trey and Ashleigh Lockerbie. All of the five people working with Better Booch began their career in the show biz as touring musicians, mainly backing up popular international artists. “After years of exhausting travel and inconsistent schedules, we decided to make a change,” said the founder Trey Lockerbie.

The tiredness of inconsistent traveling around the world was one of the personal stimulators for the Lockerbie couple to switch their gears into the small business of cottage product. Meanwhile, the policy makers also sent their encouragement, by passing the bill to support the movement.

California passed the Homemade Food Act, which went into effect in January of 2013. Since then, the cottage food industry has been booming, bringing more and more food artisans to farmer’s markets and craft shows. Food artisans crafting everything from bread, candy and cupcakes to dried pasta and nut butters were legally allowed to sell their wares to the public.

The policy benefited to the Lockerbie couple. They started to sell their products in the famers’ markets across LA, and had no idea that the Booch is selling through 40 different locations. The spot in the Grand Central Market is their only retail revenue so far.

“Through our experiences with Better Booch, we’ve seen our highest highs and our lowest lows,” Ashleigh Lockerbie described their experience of running this handcrafted small business in this way. “You don’t get very far if you don’t work as a team and whether it’s music, a tea business or navigating life’s domestic challenges.”

Photo Sep 13, 12 23 20The Booch promises only use organic loose-leaf teas from a local supplier, with no added sugar in the way of juices, purees, syrups or powders. According to Russell, The cost for Booch’s manufacturing is generally higher than the similar kind of product, even higher than a national standard.

“You earn a little bit less but you are making a better product,” Russell thought the higher cost was hard to afford, but worth it. “We want the quality of the product.”

The business keeps going up, in Russell’s word, “each week is getting busier and busier.” Nevertheless, in Russell’s opinion, the larger the sales didn’t mean the larger the profit from running the small business. Some things have made the small business running a major challenge: the cost to produce, the high rent in downtown’s commercial zone, and now the possibility of a minimum wage hike in the following years.

“I think these guys who are governing have studied economy are just making a rough guess that you are making enough to pay people,” said Russell. “If we get more small business going, they can hire more people; that is better than a lot of people don’t have work, I think that is what they need to know.”

Nevertheless, as a employee, Russell’s income has been effected by the minimum wage level. “It could be a good thing but nobody can afford to pay that. They make the small business owners pay more, but somebody will get fired,” he said.

A Higher Heel to Combat the Economy Downturn? – the High Heels Economic Indicator

HighHeel As the world-class luxury shoes designer Jimmy Choo said: “the right shoe can make everything different”.  It seems the high heels now are not just women’s “last touch of elegance” (quoted of legend designer Coco Chanel), but also the weapons women are using to fight against the economy recessions.

IBM conducted a computer-based analysis project on billions of social media posts about about shoe trends, heels are about to go down. The report came out at 2011. In the report, the researchers claimed that the higher the heels, the worse off the Economy would be.

“Usually, in an economic downturn, heels go up and stay up – as consumers turn to more flamboyant fashions as a means of fantasy and escape,” said Dr. Trevor Davis, a consumer products expert with IBM Global Business Services. “This time, something different is happening — perhaps a mood of long term austerity is evolving among consumers sparking a desire to reduce ostentation in everyday settings.”

According to an article published by the Christian Science Monitor from CNBC wire, the several big recessions of the U.S. Economy in history have shown the correlation between the economy status and the height of the heels.

In the 1920s, women were wearing high-heel pumps and platforms to get their confidence back during the Great Depression. In the 1970s oil crisis, platforms came back en vogue as the low-heeled sandals of the late 1960s were cast aside. In the 1990s, the low, thick heels of the “grunge” period were replaced by “Sex and the City”-inspired stilettos just as the dot-com bubble burst.


From left to right: wall deco in 1920s; the popular platform shoes in 1970s; vintage stilettos from 1990s. 

From the report published in 2011, an analysis of the four years (from 2008 to 2011) of social media showed that discussions of increasing heel height peaked towards the end of 2009, and declined after that. For example, key trend-watching bloggers between 2008 and 2009 wrote consistently about heels from five to eight inches, but by mid 2011 they were writing about the return of the “the perfect flat”. The sky-high heels were not gone yet; rather that, as the economy has bounced back a little, the bloggers were discussing as glamwear and not for the office or shopping trip.


Source: IBM

As the statistic from the U.S. Bureau of Economic Analysis indicated , from the year of 2009 the U.S. economy slowly stepped into a recovery session. The GDP grew at an annual 2.2% rate in the first three months of 2012, considerably slower than the 3.0% increase in 2011’s fourth quarter.


From the comparison and analysis for these two groups of statistics, there seems to be a kind of correlation between the economy growth and the change of women’s heel heights. Nevertheless, according to the Huffington Post, there could be other possible reasons for the dropping of heel heights.”Women may simply be ditching their heels in favor of a more pain-free walking experience, or, for once, low heels may actually indicate longer-term economic woes,” quoted from the Huffington Post’s article.

The Times Magazine responded to the newly-born High Heel Economic Index with a multimedia project: The Hazards (and Power) of Higher Heels, where the magazine tried to analyze the societal and economy reasons behind the changes of high heels.

Fashion trends have become popular economy indicators these days. Dated back to 1926, economist George Taylor came up with the Hemline Theory, which himself explained as when women wore shorter skirts to show off their expensive silk stockings during good economic times, but longer hemlines were more preferable to cover bare legs during a recession. In the 2000s, Leonard Lauder, the chairman of Estee Lauder companies, introduced the idea after noticing that lipstick sales jumped in the aftermath of 2001 terrorist attacks, according to The New York Times. He developed the scenario as the Lipstick Index, which indicated that women turn to less expensive indulgences, like lipstick, when they felt less confident about the future.

When talking about economy, people relate to numbers, analysis reports and charts. Nevertheless, something that seems not related  to economy actually has its significance for the economy prediction. And wen it comes to shoes, perhaps they will be able to tell a lot.