James McGregor is an American author, journalist and businessman who has lived in China for more than 20 years. He is a senior counselor for APCO Worldwide and a professional speaker and CNBC commentator who specializes in China's business, politics and society. In addition to his China books, he is also author of the 2010 report "China's Drive for 'Indigenous Innovation' - a Web of Industrial Policies."
From 1987 to 1990 McGregor served as The Wall Street Journal's bureau chief in Taiwan, and from 1990 to 1994 as the paper's bureau chief in Mainland China. From 1994 to 2000, he was chief executive of Dow Jones & Company in China, and he also became a vice-president in the Dow Jones International Group. After leaving Dow Jones, he was China managing partner for GIV Venture Partners, a $140 million venture capital fund specializing in the Chinese Internet and technology outsourcing.
In 1996, McGregor was elected as chairman of the American Chamber of Commerce in China. He also served for a decade as a governor of that organization. He is a member of the Atlantic Council, Council on Foreign Relations, National Committee on US-China Relations and International Council of the Asia Society. He serves on a variety of China-related advisory boards. For more information visit his Web site, www.jamesmcgregor-inc.com.
I bought this because the introductory price was so great. On balance, I would have to say that it was worth it. The whole book can be read through in about 3 hours (if it has the read of an extended broadside, that's because it is). In the index, it had a nice synopsis of what each chapter was about. The chapters could also be read out of order if you wanted to focus on some particular subject.
There's a lot of what you would already know if you read the newspaper every day (which was basically the source material for this book, plus a few books by China watchers):
1. Consumption as a percentage of GDP is too low, and the leaders of China know this. 2. The SOEs (less government subsidies) yield negative rates of return-- and yet they are the backbone of the economy. 3. The innovation strategy of China, Inc is emphatically NOT to innovate, but to find some way to trick their foreign partners out of their hard-developed technology through some variety of dishonest means. (Did you ever doubt this? "Co-innovation"? "Re-innovation"? "Assimilation of imported technologies"?) 4. It's not quite clear even what *is* an SOE nor how much they participate in the economy. But the (vague) answer is that they are "many" and participate "a lot." 5. The Chinese companies use the technology that they have stolen from foreign companies against those very same companies in the role of competitor. 6. Yes, the Chinese are in Africa. No, they are not popular there. 7. The strategy of the Chinese government is tit-for-tat and intimidation of the foreign companies that work for them. What McGregor included was a few more examples than what we might remember from reading the papers every day. 8. No, the WTO has no teeth to solve the problems put before it.Read more ›
Jim continues his recent pattern of ranting against China--often on topics that the government has opened itself to criticism. However, this book has little new information or revelations. He does little to explain why China's model has proven so resilient even as underlying factors like wage inflation, massive debt and weak demand abroad point to a potential serious slowdown. Instead, he clings to broad generalizations about the lack of legitimacy of the Party and its inherent troubles.
This effort seems to validate the rumor that most of his work these days--like the recent Indigenous Innovation Report--has been heavily outsourced to his research team. If that's not the case, it is unclear why such a skilled writer has made such a weak effort. He barely manages to scrape together 146 pages--and comes up with such brilliant revelations as China has helped out SOEs by providing free land and giving them loans at preferential interest rates (something mentioned in every housing bubble article since 2007).
If you're thinking about buying a book that provides insight in China's current economic and political challenges Red Capitalism, China's Superbank, or Capitalism with Chinese Characteristics are all better bets.
The book explains how the Communist Party owns and operates large companies in China. It also explains the clever ways which the Party uses to suppress foreign competition by operating within the letter, but not the spirit, of international trade agreements. From the title, I had expected a little more discussion of the philosophy behind this, but the focus was primarily a description of the mechanics. The book could use two more chapters: one explaining more reasons why the Party moved into owning business after Mao's death, and another discussing the future implications of this unique state-managed economy.
This book introduced me to James McGregor, whom I'm now following on Twitter. The thesis of the book is simple and well presented. By simple I do not mean "light-weight" - just uncomplicated and clearly presented. I enjoyed what I read and found it enlightening, but I had hoped for more. Still, this is worth reading for anyone who is interested in the development of China's economy, as any investor should be these days. McGregor presents his case clearly and supports it well. Following him on Twitter has proven to be worthwhile as well since he tweets about articles and news reports that supplement his book.
Those with deep background knowledge on the Chinese political economy, or anyone accustomed to rigorous research, will find this book wanting. Mr. McGregor reaches reasonable conclusions, and therefore offers a sensible treatment of the topic. However, there is little to no original research, and I was frustrated by the endless pages filled with material drawn from previous reporting. For example, three consecutive pages are consumed by the demise of one private Chinese firm, Cathay Biotech. The firm's abuse at the hands of state-owned enterprises and their supporters within the Chinese bureaucracy highlights the institutional obstacles that indigenous private enterprises face, but the anecdote is drawn entirely from a single report by the NY Times which I had already read. Such reliance on single sources to occupy large spaces of a very small book suggests an unwillingness to conduct thorough, independent research on the part of the author. As a consequence of the author's over-reliance on previous reporting, readers are unlikely to be introduced to original knowledge or unique perspectives. Instead, the book serves as a copy and paste job of mainstream business and political reporting from the past few years. This book is not the product of scholarship or investigative reporting. For a more original and insightful introduction to China's political economy, look elsewhere.