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2025-06-23-china-education-partnership-financial-structuring-discussion

id: "2025-06-23-china-education-partnership-financial-structuring-discussion"​

date: "2025-06-23" participants: ["Gary Sheng", "Dr. Lael Alexander", "Sherman Taylor", "James King"] topic: "China Education Partnership Financial Structuring & Strategic Positioning" related_people: ["lael-alexander", "sherman-taylor", "james-king"] type: "Strategic Business Discussion"​

China Education Partnership Financial Structuring Discussion

Date: June 23, 2025
Participants: Gary Sheng, Dr. Lael Alexander, Sherman Taylor (Allen Zhou), James King
Duration: Extended strategic business meeting
Focus: Financial requirements, government approval processes, and educational philosophy alignment

Meeting Context​

Four-way strategic discussion to clarify expectations and financial commitments for the China education initiative. James King provided updates from recent discussions with Chinese government officials and investors, while the team worked to align on practical next steps.

Key Financial Structure Proposals​

Matching Investment Requirement​

James King's Proposal:

"Both the American side and the Chinese side can deposit one million RMB each into the Macau company. A start-up fund to allow us to map out the detailed strategy, the methodology for the future."

Sherman Taylor's Clarification:

"The Chinese side has already made the pledge. But Pudong wants the American side to match. Initially, just to show that we are a joint venture between the United States and China."

Revised Amount:

"The local investor suggested to me that to create the business we are looking for... any small wager we can input to gain the trust from each other... The local investor is not aggressive. So actually, as he asked about if it's possible for both sides to pour in one million US."

Final proposal settled at $150,000 USD from each side as proof-of-concept investment.

Government Approval Process​

James King on Third-Party Auditing:

"Actually, the government, yes, they have to certify we are a serious business approaching them. So they actually asked us to hire a third party, an audition company like a KPMG, like a PwC to supervise the program."

Dr. Alexander's Confirmation:

"That's the way it works. They absolutely will have an intermediary that manages it. And China Merchants was that intermediary in Shenzhen. They managed everything. They were in between the government and us carrying out the activities."

Sherman on Proof of Life:

"The government wants to see that we're real. And I'll just tell you directly, they've already started doing research on both of you. I already know it... It's just proof of life. The concept of proof of life."

Educational Philosophy and Strategic Positioning​

Beyond Traditional Tuition Models​

Dr. Alexander's Vision:

"I just felt like a school should not be built primarily to generate revenue. It should be structured to generate knowledge that solves real world problems."

Technology Commercialization Strategy:

"The commercialization of knowledge that I was talking about from those libraries is far greater than the tuition... So investments will actually be taken care of out of the for profit side of this business period. Without education whatsoever."

Industrial Integration Approach:

"When I see the school, I see the school as a four-year course that's going to actually provide me an agent that's going to be working in a facility that's actually going to be solving a bigger problem that I could tax mankind to pay back that investment for."

"Soft Diplomacy" Educational Model​

Sherman Taylor's Framework:

"We're going to do soft diplomacy... The school is in essence, it's soft diplomacy that we are creating specialists that can be used by companies or the Chinese government in soft diplomacy."

Historical Precedent:

"It's like kind of what the Romans did. They actually did soft diplomacy. Their soldiers married locals and they integrated into society. Therefore the Romans were very successful under Alexander to colonize in a very soft way."

Dr. Alexander's Strategic Context:

"America has an NGO called USAID... Those were pseudo American installations or entities that went across the globe supposedly fixing things... China can actually look at now, because of their place in the world, creating similar NGOs that actually do the right things."

Cultural and Political Challenges​

Critical Thinking Adaptation​

James King's Warning:

"Critical thinking is not allowed or not encouraged in China. Because the government, the authority is not willing to be questioned, not willing to be challenged."

Dr. Alexander's Reframing:

"Critical thinking here in America is really a poison pill, because it literally teaches anticity and it teaches people how to break down structure. That's not what we're teaching at all. We're literally teaching critical path."

Sherman's Curriculum Translation:

"It's not critical thinking, it's program management, it's initiative thinking... You can't use those words, because if you do, you're politicized."

Dual Campus Strategy​

James King's Practical Solution:

"That's the reason we got to have two campuses. One is in China, one is somewhere in Asia, out of China... 30% they study in the mainland China and the majority of the curriculum will be executed in Singapore or Malaysia."

Revenue Structure Benefits:

"The major of our revenue will be in Malaysia or Singapore, which we don't have to deal with the devils, I mean the China government."

Capital Exit Strategy for Chinese Investors​

Educational Investment as Capital Movement​

Sherman Taylor's Insight:

"There are three ways you can exit capital. One of the easiest is through educational investment. There is no cap... If you decided to invest in education, for example, in Singapore, there is no cap on your exit strategy."

James King's Reality:

"I can tell you there are many, many wealthy Chinese investors. They would like to invest their money in Singapore, in Malaysia. They just don't know. They just don't have a project... They don't have a vessel to carry their money out of China."

Dr. Alexander's Personal Context:

"Because I have to leave 80% of my wealth in China."

WeChat Surveillance Warning​

James King's Personal Experience​

COVID-19 Volunteer Incident:

"I was a volunteer of my community as a member of the CCP... I just speak one word in the group... One simple word. The government shut up my WeChat. Shut up my WeChat. I have to open a new one. The police station called me."

Communication Security Advice:

"Be careful of using WeChat... We should talk separately. We do not bother others."

Master-Student Cultural Dynamics​

Dr. Alexander on Asian Educational Culture​

Shifu Relationship Model:

"The culture of student and master is unrivaled in Asia... If you build a proper master, all students want to be under that master... The fact that they would have had tutelage under said master is a badge of honor that they will carry across the planet."

Educational Seeking Behavior:

"So the kids will seek this if they understand what this means to them. And we're talking about the window of the world that this opportunity offers them."

Financial Scale and Market Opportunity​

Existing International School Models​

James King's Market Analysis:

"They charge the students for a 300,000 RMB, 300,000 RMB averagely... per year. So they have a thousand students... the tuition fee income, turn over a year, is already 300 million RMB."

Wellington College Example:

"The school I built, the Wellington school I started up, the school is designed for 1,500 students' capacity... there's just one school that turned over in a year. I would say it's more than 500 million renminbi."

Government Infrastructure Investment​

AI Infrastructure Fund:

"China government just released an infrastructure investment fund. Yeah, 500 billion just for AI infrastructure... So that money could be applied by us."

Partnership Philosophy and Decision Framework​

Dr. Alexander's Collaboration Approach​

Spiritual Basis for Partnership:

"When people are brought together in the spirit that we were brought together, I didn't question it because I knew spiritually it was a lot bigger than I was asking for."

Weapon Metaphor:

"I know that the other individuals that brought me to the table, they brought me to the table because I'm a weapon. I'm a weapon of a true north sword."

Sherman's Humble Leadership Style​

Partnership Humility:

"James and I are just humble guys... You have connections to China and why would you choose to work with two humble guys that were successful in our industry, but you could work with anybody."

Family-First Values:

"I understand. And I think you would choose your family over a meeting as well... I'm about my family, my dog and my cat."

Next Steps and Decision Points​

Immediate Requirements​

Sherman's Framework:

"The two of you just need to decide if you believe in what we four have been discussing. If you are willing to match it... No money is spent without a collective decision."

Third-Party Verification Costs:

"We are probably going to have to pay the third party about $30,000 just to verify who, what, when, why and where. They report back to the government."

Strategic Planning Timeline​

James King's Detailed Mapping Request:

"I still strongly suggest that Gary and I, we got to work out a very elaborated, a detailed map for the both sides... We are not going to ask someone to pour in tons of money. We can, but we must have a solid, solidified program."

Target Milestone Structure:

"Year let's say in 2027, we open our Shanghai. 2029, we are in Shenzhen. 2029 we are in Malaysia."

Key Outcomes and Agreements​

Decision Timeline​

  • Gary and Dr. Alexander to discuss partnership privately after the call
  • Aim for decision clarity by end of week (June 27, 2025)
  • James and Gary to work on detailed business mapping independently
  • Sherman and Dr. Alexander to focus on educational philosophy alignment

Communication Structure​

  • Separate individual conversations rather than group WeChat due to surveillance concerns
  • Transparent sharing of all business planning conclusions with full group
  • Regular check-ins on both educational vision and financial structuring

Investment Framework​

  • $150,000 USD commitment from each side for proof-of-concept
  • Macau-based joint venture company structure
  • Third-party government verification process (~$30,000 cost)
  • Access to Chinese government $500 billion AI infrastructure fund upon approval

Strategic Significance​

This meeting represented a critical transition from visionary discussions to practical implementation planning. The conversation revealed the complex intersection of educational innovation, geopolitical positioning, capital movement strategies, and cultural adaptation required for successful US-China educational collaboration.

James King's frank discussion of Chinese government oversight, surveillance concerns, and investor motivations provided essential reality-checking for the idealistic educational vision, while Dr. Alexander's technology commercialization framework offered a pathway to financial sustainability beyond traditional tuition models.

The "soft diplomacy" positioning emerged as a sophisticated approach to creating graduates who could serve Chinese global interests through relationship-building rather than military or economic coercion, potentially representing a new model for international education partnerships.

Meeting Conclusion​

The session ended with commitment to individual follow-up conversations and a week-long timeline for final partnership decisions, acknowledging both the significant opportunity and substantial complexity of creating an innovative educational institution within Chinese regulatory and cultural constraints.