The Starbucks coffee company views China as the fastest growing market for its products outside of the United States. The company already has more than 140 stores in China. As part of this week's series on U.S. relations with China, Steve Inskeep speaks with Starbucks chairman Howard Schultz.
STEVE INSKEEP, host: The business report continues our look at the United States and China.</s>STEVE INSKEEP, host: If your town seems to have a Starbucks on every corner, you would feel at      home in some parts of China.  Starbucks has 140 Chinese stores, designed      much like their American counterparts.  The coffee company's efforts show      some of the ways that Americans are competing for a share of China's new      wealth.  We contacted Starbucks Chairman Howard Schultz just after he      took a trip to China.</s>Mr. HOWARD SCHULTZ (Chairman, Starbucks): The stores that we've opened      in China are larger in size than the dwellings in which people live, so      our stores have taken on a life of their own in terms of an extension of      people's home and office.  About 80 percent of our customers in the US      take our coffee to go, and over 80 percent of the Chinese customers have      our coffee in the store and stay very long, enjoying the environment, and      we're happy with that.</s>STEVE INSKEEP, host: When you say that a lot of your stores are bigger than a lot of      people's houses, it just underlines that this is a place with very modest      living standards.  How do you get people that are making $100 a week to      spend $5 on a drink?</s>Mr. HOWARD SCHULTZ (Chairman, Starbucks): Yeah.  Well, there--you know, the customers that are coming      in the Starbucks are making more than that.  But let me put it in      perspective for you that I think is interesting.  I'm told that over 300      million Chinese people every day are using a cell phone, and when you      think about the fact that they have leapfrogged traditional technology,      and many of those people never had access to a telephone at home, it      demonstrates the adoption that they have to new technology and      Western-type opportunities.  So there is a large, large group of people      with disposable income.</s>STEVE INSKEEP, host: What are the major challenges of doing business in China?</s>Mr. HOWARD SCHULTZ (Chairman, Starbucks): Well, the major challenges are you don't see any `For Rent'      signs.  So you really need to establish very strong relationships with      government officials in order to build stores and open up stores and      create distrib--channels of distribution.  And we wanted to make sure      that in order to build a very large company in Asia and China, we      invested heavily ahead of the growth.</s>STEVE INSKEEP, host: Given that you've got a company that prides itself on an image      of being ecologically friendly, environmentally friendly, employee      friendly, how do you do business in a Communist dictatorship without      losing your soul?</s>Mr. HOWARD SCHULTZ (Chairman, Starbucks): I think that is a very important and right question.  What      I saw and in the meetings I had with government officials was a very      strong level of openness and understanding that a business like      Starbucks, which has built itself on this balance between profitability      and benevolence, is the kind of business that they would like to see      succeed in China.  And what I mean by that specifically is that the      Chinese government is very interested, I think, in opening up their doors      to Western companies and Western brands and especially those companies      that can come and be very respectful of the heritage and the tradition of      how that country was built.</s>STEVE INSKEEP, host: Do you ever talk to an official, and he's quite friendly to you      and quite receptive to what you want to do, but, well, you get an uneasy      feeling about it?</s>Mr. HOWARD SCHULTZ (Chairman, Starbucks): No.  I have had--I think when you enter a country like      China or, for that matter, any other country, you really have to come hat      in hand and demonstrate a willingness to understand their way of thinking      and their way of life.  And I think what we're most proud of is the      foundation that we built in China is very, very strong because the values      and guiding principles of our company are the same that they are in      America, despite the fact that we're doing business in China.</s>STEVE INSKEEP, host: Howard Schultz of Starbucks, thanks very much.</s>Mr. HOWARD SCHULTZ (Chairman, Starbucks): Thank you for having me on.