On May 16, the Chinese version of Managing the Dragon was published by China Youth Press.  The book is now available at book stores throughout the country, as well as through China’s two major on-line booksellers, Dang Dang and Joyo Amazon.  The book has been well received by Chinese readers and China Youth Press has already gone into a second printing.

What are the Chinese readers saying about the book?  We have translated a few reviews for you here: 

“Managing the Dragon describes Jack Perkowski’s journey, experiences and feelings at different stages in his life–it is the essence of his life.  It is also a book about a very special company created and based in China, ASIMCO, which was founded by Jack and developed over the past 15 years, and closely relates to the same period of China’s reform and opening-up process.   It is a sound example of what many companies in China experienced.   Jack, like all the other entrepreneurs in this era, saw many opportunities but had to deal with many challenges.   The book not only showcases the spirit of an entrepreneur and wisdom of business, but also the relentless pursuit of a man with dreams.”
— Liu Wei, Publisher at China Youth Book., Inc., a division of China Youth Press

“It is a fairly recent phenomenon that foreigners think of China as an ideal market and attractive location to build a business.   Jack, however, was a pioneer.   Through his experiences described in detail in the book, he tells people willing to invest in China that you had better try your best to understand the country, people and culture.  Indiscreet action is very dangerous.”
— Hu Yong, Chief Editor of “Win in China”, CCTV

“Nowadays, the global automotive industry competes fiercely and China has fortunately become the main battlefront in this competition.  Through 15 years of effort which started from scratch, Jack has made an admirable business achievement in China.  No matter if you are a foreigner willing to build a business in China or are just interested in understanding the rules of business here,  or you are Chinese and looking to take your business into the global market,  Jack’s,  Managing The Dragon,  is the book you should read.”
— Yan Ping, Chairman of Yuchai
 
“As one of his Chinese Partners, I personally witnessed how Jack reformed a State Owned Enterprise (“SOE”) and helped them to become the globally competitive company.   All the difficulties and challenges he faced in China and how he overcame them are summarized in his book with clear explanations and insightful perspective.   It is a book worth reading.”
 — An Qingheng, Former Chairman of BAIC, President of Association of Beijing Auto Industry 
 
“The most estimable attribute of Managing the Dragon is that it speaks fairly about China’s positive and negative issues and problems during its “Reform”.  Furthermore, Jack took a very positive and active approach in analyzing all these problems and issues which will give all foreign investors a comprehensive knowledge and understanding of how China and China’s reforms.”
— Annonymous – Joyo Amazon

When I speak about doing business in China, I make a point of telling audiences that I arrived in China in 1992 “unencumbered by any prior knowledge of the country.” As I explain, “I knew absolutely nothing about the country. I was an American Studies major at Yale, not a Chinese Studies major. I did not speak the language then; I do not speak the language now; and I can safely predict that I will never speak Chinese.”

I do this for two reasons. First, it happens to be true, and I’m not going to pretend otherwise. Secondly, I want to demystify China and make it more approachable for everyone. For too long, individuals who have studied China and have devoted the considerable amount of time it takes to learn the language have tended to make the country seem so mysterious, so complicated and so difficult, that it becomes an impediment for any person or company that wants to do business here.

With China emerging as the largest market for any product or service, this is not productive— everyone needs to be more engaged with China, not less. China is for everyone, and everyone needs to have the confidence that they can figure China out for themselves, personally or for their company.

Most people, when they listen to what I have to say, understand where I’m coming from and gain confidence from my comments. Every once in a while, however, someone will take exception and argue that I am treating something as important as the language in too cavalier a fashion. Nothing could be further from the truth. In fact, I go out of my way in my book, Managing the Dragon, to explain that most of the mistakes that are made in China are made due to miscommunication. Quite simply, I don’t want to add to the confusion by speaking imperfect Chinese, and would prefer to leave accurately translating what my managers, customers and Chinese partners have to say to the professionals, the native Chinese speakers. I believe that’s the most responsible position to take.

In the interest of brevity, I could paraphrase all of the comments I made in my book about “The Language Barrier” in China, but why do that? Instead, please allow me to quote directly from Chapter 16 in Managing the Dragon:

Wouldn’t speaking the language make it that much easier for me to work in China and function as the head of ASIMCO? Sure it would. If I were proficient in Chinese, my life would be much easier–but that’s a big “if”.

What amount of effort would it take for me to get my Chinese up to a level where I could rely on it in business? The answer is, a great deal. Chinese is an extremely complicated language. You can learn it to a level that helps in daily life–directing a taxi driver, ordering in a Chinese restaurant, asking for directions–but mastering it to where you can use it in business is another story. The people I know who’ve done it have spent at least two years studying intensively.

I was 42 when I left Wall Street to set up a business in Asia, and the second career I started was making automotive components in China. That decision came with two inherent difficulties. First, I was an American Studies major at Yale and had never studied China or Chinese. Second, my first career was in finance, and I had no experience in manufacturing or in the auto industry. Because I had to learn both a new country and a new industry, I simply had no time to spend two years or more learning a new language. My value add is my knowledge of the way capital markets work, my experience gathering capital, management, and technology resources for growing companies, and the vision and broader perspective I gained from twenty years on Wall Street. It’s not my ability to speak Chinese.

Studying the language part-time isn’t a realistic option, at least not for me. It would help a bit in getting around China, but I’d never gain the level of proficiency necessary for a business context. And the idea of coming home from a busy day at work and hitting the language lesson plan isn’t terribly appealing, either.

Even if I did somehow manage to achieve proficiency, I’d still be concerned about what I might miss if I didn’t have an interpreter. Wilson [ASIMCO’s head of Sales and Marketing] speaks English as well as anybody in China. But he admitted to me that if he’s sitting in a roomful of Westerners, he only gets about seventy to eighty percent of what’s being said. How much would I miss in a comparable situation? And how much can anybody ever afford to miss? For this reason, we always do translations at our general managers meetings, even though most of our top managers speak both languages. With important information, it pays to take a bit more time and make sure that everyone understands.

I fully recognize that there is a bit of rationalization in all of this, but again, I am just being truthful. I also believe, however, that there are many misperceptions that need to be overcome.

Maybe this is all one big rationalization for not having taken the time to learn the language. That’s part of it: languages have never been my thing. But I do believe that too much emphasis is put on the language, and not enough emphasis is put on gaining a more substantive understanding of China and how it works. There’s this sense that if you don’t speak the language you can’t possibly understand China; there’s also the equally wrong notion that anybody who speaks the language does understand China. I’ve seen plenty of instances where this isn’t the case.

By no means, do I encourage others in different circumstances to follow my example. What worked for me may not work for others.

Having said all of that, I would advise any young person with a serious interest in doing business here to learn the language. Early in your career, you can devote time to doing it the right way. All three of my kids started taking Chinese in high school, continued through college, and took language courses in China. Carleen [my wife] has managed to learn enough so that she can get around pretty well. If you can do it the right way, like my kids, by all means do it. If you can’t, but you still want to learn it for your own personal gratification, like Carleen, then by all means go ahead if that’s important to you. But don’t let the language present your first insurmountable hurdle to getting started here. Strictly in terms of business, my advice is to spend the time learning how China works and leave the language to the linguists.

The Wall Street Journal recently ran an article regarding arbitration in China that described the pros and cons of Western companies submitting to arbitration in China or insisting on arbitration in more neutral venues such as Sweden. 

It’s an excellent article as far as it goes, but what it doesn’t emphasize is that arbitration is only the first step towards resolving legal conflicts in China. Whether a complaint is arbitrated in China or outside the country, the enforcement of any arbitral award that involves China will require a trip to a Chinese court, and that leads to the issue of enforcement.

For better or for worse, I have had a fair amount of experience dealing with the legal system here. Because it such an important issue, I devoted a section to it in my book, Managing the Dragon. Here is what I wrote:

Contrary to what most people think, China does in fact have a body of law and a legal system, including courts and arbitration panels where grievances can be brought.  On December 29, 1993, the National People’s Congress adopted a Company Law, which has been refined over the years and was last modified in 2006. The point is that China already has laws on its books. The difficulty lies in enforcement. 

There’s an International Arbitration Tribunal in Beijing, made up of both Chinese and Western judges, where a contractual dispute with a Chinese partner (or something of that nature) can be taken.  When I was researching the idea of setting up a business in China, I was told that a foreign investor or company could get a fair hearing in arbitration, and that foreign companies had actually prevailed in a majority of the cases.  I have found this to be true.

During the course of our history in China, we’ve had three cases that have gone to arbitration, two that we brought and one that was brought by one of our Chinese partners.  What we didn’t realize at first, but soon learned, is that prevailing in arbitration and getting an arbitral award is actually only the first–and the easier–step in the process.  Having the arbitral award enforced is the second and harder part. Because the job of enforcement reverts to the Chinese court system, the party with better relationships in the area in which the grievance occurred has a substantial advantage.

In the first case, we were new at the game and thought winning in arbitration was everything.  With the Tribunal’s ruling in our hand, we marched off to court in Harbin, the site of the complaint–only to find that our Chinese partner already had the system wired.  Despite several years’ worth of efforts, we got nowhere.

The second case was the one you read about in Chapter 8, where the general manager and our Chinese partner in Anhui had set up a competing factory in violation of a non-compete agreement that he’d signed only months earlier. Right was clearly on our side, and we won in arbitration.  But this time, we lined up support from the local government ahead of time. Armed with a favorable ruling, we asked them to help and got what we wanted in one meeting, presided over by the Party Secretary.  We never even had to go to court.

In the final case, a Chinese partner that we had bought out–with the blessing and encouragement of the local government–made claims against us and took us to arbitration.  (The local government was as frustrated as we were with the actions of the Chinese partner over the years, and believed we could better develop the business if it were wholly-owned.)  The case wasn’t credible and we won rather easily.  At all times, the local government was on our side, so enforcement wasn’t an issue.

My best advice on legal actions is to avoid them at all costs and use them only as a last resort.  The outcome is uncertain, and it’s going to take time–no matter what.  In all three arbitration cases, even though they were open and shut according to any objective legal advisor, it took a year to go through the arbitration process.  If you then have to go to court to enforce the award, you can easily add on a couple of years.  And that whole time, the business that’s the subject of the dispute will be in turmoil, with a cloud of uncertainty hanging over it.  Under these circumstances, given the competitiveness of the Chinese market, final victory will probably be pyrrhic, if it ever comes at all.

Maybe the best reason to avoid legal action in China is that once you go down that path, all other avenues for resolving a dispute are foreclosed.  We had this experience in each case.  Once we had filed arbitration, the local and provincial governments took the position that the matter was being resolved through the legal system, and they didn’t want to interfere.  Once the legal gauntlet is thrown down, you have no choice but to see it through to the end.  In my experience, negotiation is a better way to go.

All that said, the legal system is evolving and improving every day.  With government support and help from international legal experts, the body of law governing commercial transactions and contracts in China is becoming increasingly sophisticated.  It’s no longer so different from the legal frameworks that exist in the most developed countries.  But the key link remains enforcement through the judiciary system, and in this area personal relationships will continue to play an important role for some time to come. 

The article cites a case involving PepsiCo and a Chinese bottler. As part of their joint venture agreement, the parties agreed to resolve any disputes through arbitration in Stockholm. Subsequently, Pepsi took its partner to arbitration in two separate arbitration complaints, alleging several breaches of various contracts and seeking an order terminating the joint venture. The lead judge in the arbitration proceedings was Swedish, and along with the judge selected by Pepsi, sided with Pepsi. Both arbitrations were decided in Pepsi’s favor and were wrapped up in 2005.

Here is where the article makes my point. The last paragraph begins with: “Meanwhile, PepsiCo has yet to recover on the judgment…” Those final words say it all. Arbitration is only the first, and the easiest, of the two steps. Enforcement is where the rubber meets the road in China.

My recent interview with Laura Ramsey of Canada’s Financial Post focused on China’s two markets, one of my favorite topics. I devote an entire chapter to this subject in my book, Managing the Dragon, and believe that the way in which these two markets evolve in China in the coming years will have a profound impact on nearly every global industry.

Before China began its economic reform program in 1978, every market in the country was by definition purely local. Little, if any, foreign goods were imported into the country, and there were no foreign invested companies in China to produce the higher priced, higher technology products commonly found in developed economies. The trucks, industrial equipment, household fixtures and other products used in the Chinese economy were produced by local, Chinese companies that did not have access to more advanced technologies and had to keep prices low because income levels for the vast majority of China’s population were very low. Because both the consumers and the suppliers in this market were local, China had one market, an entirely local market, at the onset of its economic reform program.

As China’s economy developed and expanded under Deng’s reforms, it became “glorious to be rich” and more and more Chinese reached levels of affluence that enabled them to afford better, higher priced products. This dynamic created a new market, characterized by higher priced, higher technology products, which was layered on top of China’s purely local market and which I refer to as the “foreign/local market in China. In this higher end market, imports and products made by foreign invested enterprises in China compete head to head with the products from other foreign companies and the best of the local, Chinese companies.

One only has to look at the streets of any major city in China and see the vast number of modern, foreign made vehicles, or stroll through any one of the many new department stores in China, to understand that China’s foreign/local market alone has become one of the largest in the world. China’s annual demand for over 10 million trucks, buses and passenger cars, for example, is only second in the world to that of the United States. In product after product, China has already become one of the largest, if not the largest, market in the world.

But that’s not the end to the story. As the China economy, and its foreign/local market, has grown, so has its purely local market. That is because China’s economic growth has been distributed disproportionately across its 1.3 billion people. Although as many as 400 million people in China have average incomes of $7,000 per year, there are 900 million or so who have not benefited to nearly the same degree from China’s economic development and have annual incomes that average less than 10 percent of that amount. This vast number of people at the bottom of China’s income ladder keeps China’s local market alive—and growing. In this segment of the market, a company can sell any product, no matter how bad its quality or how low its technology, as long as it’s cheap enough. In this rough and tumble, purely local, price driven market, few foreign companies dare to tread.

China’s vast local market makes it a fertile breeding ground for future global competition. Companies that could not survive in a more uniformly developed, uniformly priced marketplace live to fight another day in China. While many of these companies will ultimately fall by the wayside, others will manage to survive, pull themselves up by the bootstraps, improve their quality and become battle hardened, low priced competitors to the foreign invested companies in China. With the glint of global domination in their eyes, the next step for China’s local companies as they successfully compete with the best of the foreign companies in China is the global market.

My advice: Pay attention to China’s purely local market. That’s where your next, and perhaps toughest, competitors will come from.

On my way back to China last month, I stopped by the news stand at Newark’s Liberty International Airport, as I often do, hoping to find a good read for the flights to Chicago and then Beijing. Always on the lookout for new authors, I spotted The Faithful Spy by Alex Berenson, a book which received the Edgar Award for best first novel. I was so enthralled by the time I landed in Chicago that I didn’t hesitate to buy Alex’s second book, The Ghost War, at the O’Hare bookstore. The Ghost War came out in February and opens with a daring rescue attempt in the waters off North Korea, and ends with a harrowing escape from China by sea. For those of you who regularly take the 13-hour flight to Beijing or Shanghai and want a good book to shorten the trip, I highly recommend both. Read them in order, though, because each features the adventures of CIA agent John Wells.

In the acknowledgments section of The Ghost War, I was impressed that Alex went out of his way to thank his readers. It’s a big undertaking to write a book, he said, but to know that people are reading it, and that some even take the time to pass along their comments, whether positive or negative, makes it all worthwhile. Having just come out with my own book, Alex’s comment struck a responsive chord and motivated me to do something I have never done before. I e-mailed him, even though we had never met, to tell him how much I enjoyed his writing.

Managing the Dragon has been out one week now. The book has been well received, and I am fortunate that all of the initial reviews, from both individuals and the media, have been positive. The Economist led off with a very positive review several weeks ago, followed by excellent reviews from Booklist and The Financial Times. In this first week of the launch, several more reviews came out.

Aaron Brown, an accomplished author, investment professional and educator in his own right, was the first to post on Amazon. Here is what he said:

This is a book about a life and business adventure. I’m not particularly interested in how to do business in China, but I was fascinated by the decisions the author made. This is a wonderful book for anyone considering innovation. It describes how a successful 40-year-old decided to take his life in an entirely new direction, building on what he knew, but also taking chances on things he knew little about. It’s people like this who change the world, learning how along the way. He has the insight and writing talent to relate his journey to his roots in impoverished coal country, as well as lessons learned playing football at Yale and working on Wall Street.

The title of Daniel Harris’ post on China Law Blog, “Managing the Dragon, The Best, Jerry. The best.” says it all. Dan went on:

This book is the best book I have read on how to do business in China. The best, Jerry! Businesspeople often ask me what book they should read to learn about China. From now on, I will tell them, Managing the Dragon. It is that good.

One of the reasons I liked it so much is because I agreed with just about every word of advice in there on how to conduct business in China. The book helped me to hone my speech, because my speech was pretty much tracking the book’s advice before I had even read it.

In addition to being a great primer on how to conduct business in China, parts of it were simply riveting. My favorite chapters were on how Perkowski managed to extricate his company from a couple of joint ventures, once peacefully and once by having to engage in “guerrilla warfare.” I absolutely loved the warfare chapter both because it was so exciting and because I went through pretty much the exact same thing (just add threatened violence and vodka) on behalf of a client in Russia.

Dan also took the time to post a review on Amazon, for which I am most grateful.

Alan Wheatley, the China economics editor for Reuters, wrote a review (as edited by Eddie Evans) which was picked up by guardian.co.uk and The Boston Globe over the weekend.

Alan made my day with his opening sentences:

“Per Ardua ad Astra” — “Through Struggle to the Stars” — is the motto of Britain’s Royal Air Force, but it could have been coined for Jack Perkowski’s car-parts company.

In “Managing the Dragon: How I’m Building a Billion-Dollar Business in China” (Crown Business, $27.50), Perkowski recounts his many setbacks as he developed his firm, ASIMCO Technologies, into a major player in China’s cut-throat automotive industry.

That the former Yale football scholar succeeded in the face of rampant fraud, obstructionism and incompetence entitles him to be heard.

Alan went on to summarize many of the points that I made about China and doing business in the country, accurately reflecting all that I wrote.

Finally, Christopher Gait, Oracle Infogram editor, topped off the week on Sunday with the following:

Business in China: The Art of Dragon Management

Jack Perkowski, a Wall Street wunderkind who started a Chinese company in 1990 (not an American company in China, mind you, a Chinese company in China), has come out with a book: Managing the Dragon. It’s already collected a rave review from the China Law Blog, one of the best authorities on Chinese business out there.

I am thankful to all who have read and enjoyed the book, but realize that all of the reviews may not be as positive as the ones I have received so far. There will be those who may take exception to what I say in the book and disagree with my observations and conclusions. On this one, I am with Alex Berenson. Knowing that Managing the Dragon is being read, and that readers are taking the time to comment on it, is its own reward.

There is an old Chinese proverb that says: “Before a man dies, he should have a child, plant a tree, and write a book.” I am very fortunate to have three wonderful children (and two grandchildren); I have planted countless trees on my farm in New Jersey; and as of today, March 18, I am officially an author.

I wasn’t sure this day would ever come, but my new book, Managing the Dragon, is now available. (Please click on “About the Book” for an overview.) When I delivered the complete manuscript to my editor at Crown Publishing in early 2007 and was told that the launch had been set for March 18, 2008, it seemed so far off into the future. The reality that it is finally here began to set in over this past day or so, as friends and relatives called or e-mailed to say that they had just received a shipping notice from Amazon. I have also learned that copies are now front and center at Garden Books in Shanghai. A Chinese version of Managing the Dragon, published by China Youth Press, will be available beginning May 16.

When I mention that I have written a book, I am always asked how long it took and how the process went. Before I went through it myself, the Chevy Chase movie, Funny Farm, always came to mind when I thought of what it might be like. Missed deadlines, a frustrated book agent chasing an author with writer’s block to all corners of the globe, trying to get at least one more chapter to appease the angry publisher. I was very fortunate. For me, the process was nothing like that.

From the moment Tom Friedman suggested that I write a book, everything seemed to fall easily into place. I had gotten to know Tom as he was writing The World is Flat, and we were both speaking at the Allen & Company Sun Valley Conference in July, 2004. As we walked to a reception after spending an hour or so going over his notes from our last conversation, Tom turned to me and said, “You know Jack, there is a book in you.” While many people over the years had made a similar suggestion, I never took it seriously until then.

It took me about a year to get my thoughts together, but in late 2005, I began the serious search for an agent. Fortunately, the head of the William Morris Agency, whom I had also met at that same Allen & Company Conference, introduced me to Grace Chen, head of the firm’s newly opened Shanghai office. (Like so many companies in industry after industry, William Morris understands how important the China market has become to its business.) Through Grace’s good efforts, and the support of the New York office, I had the honor of becoming William Morris’ second client in China. After completing the obligatory book proposal in July, 2006, William Morris approached several publishers and we selected Crown. By March, 2007, Crown had a complete draft of the manuscript which, after a relatively painless editing process, was finalized on June 30. I have been reviewing copy edits, correcting typos and waiting ever since.

Now the fun part begins. Before I left Beijing for the U.S. at the end of last week, I had an opportunity to discuss the book as the keynote speaker at The Economist Automotive Conference in Shanghai and to address the Rutgers EMBA Program and the Beijing Rotary Club. Over the next two weeks, I will be speaking at Columbia Business School, Yale, Duke, University of Pittsburgh, Carnegie Mellon and Eastern Michigan, among others, as well as at the Council on Foreign Relations in New York, the U.S. China Business Council, and the Philadelphia World Affairs Council. When I return to China, events have already been scheduled with AMCHAM, the Yale Club of Beijing, Tsinghua University and CKGSB (Cheung Kong Graduate School of Business). Other events will be added, particularly with the Olympics coming to Beijing in several months and interest in China at an all-time high.

I hope you will have a chance to read Managing the Dragon. If you do and have the time, please write a short review on Amazon. As you might suspect, Amazon has become a powerful force in the book industry, and reviews by readers are particularly important in this democratic, worldwide marketplace for ideas that has been created by the Internet. tragaperra internetcasinos descargas internetpremios pagina internetnet casinosvideo poker webcasino costa bravaruleta europea paginas internetla ruleta rusaapuestas onlinejuego online ruletafruit slotscasino slots downloadonline gewinn spielcasino net pokercasino spiele kostenlos spielen,casino spiele spielen,casino spielenroulette gewinnecasino no deposit bonusechtes kasinospielerfolgreich roulette spielen,roulette online spielen,roulette spielenbeste casino onlinenew casino onlineonline casino playinternet spielbankcasino club netdeutsche online casinoadvanced video pokeronline slots,eve online rig slots,online video slotseve online rig slotskeno downloadrealistisches internet casinoswiss casino onlineunbegrenztes freispielslotmaschine online spielenblack jack online spielencasino bonus codecasino on linebestes online casinoparty casino bonusfunny games roulette,games roulette,games roulette online spielenkasino spiele mit echtem geldspiel rauminternet roulettevirtual casinolasseters online casinofaires spielenroulette gamegames roulette spielestrip roulettecasino online texasbeste online kasinos

I was delighted to receive another book review, this time by Booklist. Published by the American Library Association, Booklist is a 100-year-old journal whose core mission is to provide public and private school librarians with reviews that help them decide what to buy. According to its Web site, Booklist in recent years has also become a valuable tool that helps librarians make reading recommendations.

Here is what Booklist had to say:

China has become the hot topic among investors as “the place to be” for the twenty-first century, yet few understand how to crack this market, where the cultural barriers to entry are high. While others have been touting China as the future, during the past 15 years Perkowski has actually built a solid business there, ASIMCO Technologies, a leading player in the burgeoning Chinese automotive industry. Perkowski describes the enormous challenges he has faced, including dealing with peculiar government oversight, ruthless competition, and cost perceptions that are very different from our own. Although China is the largest country on earth population-wise, Communist rule kept it in the dark for many years, so it is still an emerging economy with many decentralized local markets. Perkowski is among the first to convey what it’s like on the ground in China, and although it’s not always pretty, this serves as an excellent guide to others intending to tap into the potential of this waking giant.

Below is the transcript from an interview which I recently gave regarding the upcoming publication of Managing the Dragon. Since it provides answers to many questions which I am frequently asked, I thought that I would put it in a post:

What motivated you to move to China in 1991?

After spending close to 20 very enjoyable years in the investment banking business in New York, I decided that I wanted to do something completely different for my second career—something where I could create a “franchise.” My experience on Wall Street told me that if could identify a long-term trend, and then put together an organization to get ahead of that trend, I could be first at something and develop a franchise which would have lasting value. The trend that I got interested in, of course, was China.

What has been the biggest evolution that you’ve noticed in the Chinese economy since you’ve been living there?

By far, the biggest evolution in the Chinese economy since I’ve been here is the enormous amount of capital that is now available. As recently as 1994, China had less than $25 billion of foreign currency reserves and capital was very scarce. Since then, China has become the largest recipient of foreign direct investment in the world and the country has become an export machine. Every year, increasingly larger amounts of capital have flowed into China to the point where the country now has over $1.5 trillion of foreign currency reserves, the largest in the world. Capital is now plentiful in China.

What do you hope readers will take away from reading Managing the Dragon?

There are many lessons to be learned from the book. Above all, though, I hope that the book will demystify China for the readers. It is true– there is a shroud of mystery that surrounds China, and there is much about the country that is difficult to understand. A central theme of the book, however, is that China does have its own logic, and that if you take the time and use your experience, knowledge and common sense, you can figure it out. Once you do, doing business in China, or just making sense of the country, becomes a whole lot easier.

Why did you feel that now was the best time to write Managing the Dragon?

First of all, ASIMCO, the company that I founded, has now matured to the point where the principal issues that we face in doing business on a daily basis are not that much different than issues faced by any company in any part of the world. Over the course of the last 15 years, we have learned how to deal with and overcome most of the uniquely Chinese issues that have perplexed and frustrated foreign companies and investors trying to do business here. I believe that the lessons we have learned can be useful to individuals trying to understand how they fit into a new global order which includes a large and fast growing China, and to companies trying to establish or expand their operations here.

Secondly, China has now transitioned from being an interesting, developing economy to one that every individual and company in the world must come to grips with. It has never been more important to understand and become engaged with China. Today, if you’re not in China, you’re not in the game.

What do you think the biggest areas of growth in China will be in the future?

China’s development as the “workshop to the world” has been the principal driver of the country’s tremendous growth over the past 30 years. While there will continue to be opportunities in manufacturing, the development of China’s service sector will present some of the most interesting areas for growth in the coming years. Health care and education are two areas where Chinese will be spending more and more of their money. Also, the consolidation of wholesale and retail distribution, and the development of better logistics capabilities, to more efficiently get goods into the hands of consumers will be very attractive sectors in which to invest.

What piece of advice do you wish someone had given you before you started building your company in China?

As I reflect on my time in China, it is clear to me that every mistake I have made, I have made because I acted too quickly and did not listen hard enough and long enough. More often than not, I should have just slowed down and taken a deep breath, rather than giving in to my gut reactions and desire for short term results. Patience is definitely a virtue in China.

What was the single biggest challenge you faced when starting the company in China?

The biggest challenge I faced when starting ASIMCO was figuring out how to manage operations in China. After much trial and error, and near death for our company in 1997, we developed our “New China” management strategy. Essentially, we decided in that year that we were going to build our business around the new generation of Chinese managers who are open minded, have received some form of management training and education and who realize that China, and companies in China, must learn how to operate in a global world.

What are the biggest challenges today faced by people who wish to start a company in China?

The biggest challenge for anyone who wants to start a company in China is developing and empowering a strong local management team. Although there is a long list of problems that must be overcome when operating in China, dealing with them becomes a great deal easier if a good local management team is in place. Because China does not have the same legacy of treating management as a science that exists in more developed countries, there is a management gap in China. Filling that management gap will continue to be the major challenge in China for some years to come. That is why the book devotes so much time to this important issue.

As the March 18 publication date for Managing the Dragon approaches, I will update MTD followers on news relating to the book.

I was very pleased to open my e-mails this morning and find a very positive review from The Economist. In the “By the Book” section of its Jan 24, 2008 edition, The Economist commented on China books in general and had the following to say about Managing the Dragon:

Choose wisely from the torrent of books on doing business in China

BUSINESS books on China are published so frequently these days, it seems there is a secret factory churning them out. Too many read like the mass produced goods for which the country is famous—and too few are written from real experience of living in China.

Managing the Dragon (Crown; $27.50), Jack Perkowski’s story of his almost 13 years running Asimco, an automotive components maker, in China is therefore a rare treat—a first-hand account of the struggle to build a business there. Tim Clissold, Mr Perkowski’s former colleague, has already described how Asimco’s Chinese partners cheated it out of millions, in his riveting 2004 book, “Mr China”. But Mr Perkowski hung on, and his wise and ultimately optimistic account should be required reading for anyone starting a business in China. Mr Perkowski is sensible on every issue—from the need to nurture (and listen to) local managers to the relative importance of local over central government relations. Most of all, foreigners must not shun the impossibly cut-throat local market because the price paid for a product in China today will be its price globally tomorrow.

The Economist is one of the most respected publications in the world, and has followed the China story as long as anyone. Receiving such an endorsement on the first official review by an important member of the media is a great way to begin the launch.

Those of you who have been following MTD over these past several months have probably noticed the cover for my book, Managing the Dragon, which appears in the middle column of our site every day. The book is being published by Crown Publishing, a part of the Random House organization, and will be available on March 18. It will also be published in China and translated into Chinese by China Youth Press, publishers of the Chinese editions of The 7 Habits of Highly Effective People and First, Break All the Rules, among other titles. In addition to being available on amazon.com, Managing the Dragon may be pre-ordered on barnesandnoble.com, and borders.com

Although a number of people have suggested over the years that I write a book, I never took their suggestions seriously. Writing a book is a daunting task, particularly when it has to take second place to a full-time job, and done on weekends and plane trips. I finally changed my mind and decided to take the plunge, however, because I believe that now, more than ever, every company in the world has to engage China. The country is becoming such an important part of the global economy that any company that does not faces a very uncertain future. If I could in some way make China just a little more understandable to others by sharing my own experiences, I reasoned, writing a book would be a worthwhile effort.

Tom Friedman gave me the final push. I got to know Tom when he was writing The World is Flat. He was very interested in learning how China fit into the flat world he had discovered in India. After we finished reviewing what he planned to include in his book about me and ASIMCO at one of our meetings, Tom unexpectedly turned to me and said, “You know, Jack, there is a book in you.” That was all of the encouragement I needed.

What is Managing the Dragon all about? The book essentially is designed to answer the three categories of questions that I inevitably get from audiences when I speak about China. First, everyone is curious how to draw the line from my Pittsburgh upbringing, through my education at Yale and Harvard and my experience on Wall Street, to Asia and China. The line follows a fairly logical pattern until I moved to Hong Kong in December, 1991.

Secondly, audiences want me to distill over a dozen years of experience into a couple of sentences of wisdom. They want me to tell them the single most important thing that I have learned. There is only one answer to this question, and my answer is the same in each case. It is absolutely imperative to build and empower a strong local management team in China if a company wants to have any hope of long-term success in the country. While this is easy to say, it is very difficult to actually do because China does not have the same legacy of management as a country like the United States.

And finally, once the basics are covered, there is a veritable litany of questions which deal with how China works on a daily basis. How can the Chinese make things so cheaply? Why does China create overcapacity? Is China’s growth sustainable? How does one deal with the legal system and protecting intellectual property? What’s it like dealing with the government? What do the Chinese think of Westerners? How has the country changed since I’ve been in China? What’s it like to live there?

In order to address each of these questions, the 18 chapters of Managing The Dragon fall into three parts. The first traces my progression from Pittsburgh to Yale, Harvard, Wall Street, and then the big leap east to Hong Kong and China.

The second part of the book discusses the management issue. In these chapters, I explain how I had literally hit the wall in running our business in China by 1997, and had to come up with a different way of closing China’s management gap. In this section, I explain how we finally were able to develop strong, local management in the country by focusing on China’s new generation of managers, and I provide three case studies that describe how we implemented our New China strategy for management.

Finally, the chapters in the third part of the book address the key themes that I see in China, which taken together, can provide answers to many of the questions about how the country works. While different themes are discussed in each of the chapters, a common thread runs through all of them, and I show how they are connected.

Every company, every individual needs to develop their own strategy for China. Other books on China have been written, but this is the first that attempts to put in one place all of the lessons learned by someone who has experienced it first hand. If it helps the reader in some small way to develop his or her strategy, then I will consider the book to have been a great success.