Managing the Dragon: How I'm Building a Billion-Dollar Business in China [Hardcover]

Jack Perkowski (Author)

Book Description

Publication Date: March 18, 2008

The first book by a westerner who built a company in China from scratch

The emergence of China as a world economic power is one of the biggest stories of our time. Every business that intends to be an important part of the fast-changing global economy needs to know how to play the game in China. Who better to be your guide than Jack Perkowski, the pioneer who went to China in the early 1990s. Equipped with just a concept, he built a company step-by-step from the ground up–ASIMCO Technologies–that became a major player in China’s fast-growing automotive business.

Perkowski’s story is as rich, involving, and improbable as those of nineteenth-century titans such as Rockefeller and Carnegie or of twentieth-century ones like Michael Dell and Bill Gates, but with one obvious difference: They and others built their companies when America was emerging or dominant. Perkowski built his at the dawn of the Chinese century.

Perkowski’s insights about the challenges and potential of western involvement in today’s great Chinese expansion–gained on the ground in China itself over the past fifteen years–are of inestimable value and relevance to us all. For instance:

• The good news about China: Everything is possible. The bad news: Nothing is easy.
• To build a business in China, you must develop a local management team–avoiding both former bureaucrats of the state-run enterprises and the country’s new breed of wildcat entrepreneurs.
• You must learn the real reason why China is able to produce goods so cheaply.
• Forget your notions about the Chinese economy being rigidly controlled by Beijing–it is, in fact, highly decentralized and locally driven. As the Chinese say, “The mountains are high and the emperor is far away.”

Perkowski tells his story with clarity, lots of humor, and a gripping sense of adventure. He takes us along on his own version of the Long March, when he visited two factories a day for nine months, hitting every province, going through endless rounds of dinners and the inevitable drinking games, and eating what seemed like every part of every animal. He vividly describes what it’s like to be a westerner living and working in China and the dramatic transformation he’s seen in the country, from a place left behind by the modern world to a place where a new world is being born.

Filled with hard-nosed lessons for anyone with ambitions of breaking into the Chinese market, and a rich source of practical wisdom about the realities of China today, Managing the Dragon answers the questions people ask Perkowski most often about his unique experience, as well as those they never think of asking–but should.

Editorial Reviews

From Publishers Weekly

In 1990, the author left a successful Wall Street career at PaineWebber to take advantage of business opportunities in Asia. He had big-picture reasons: a desire for a new career direction and a general "Go East young man" sense, but little detailed knowledge and few plans. By 1994, he had moved to China and begun building an automobile components business, using capital raised privately in New York to buy majority stakes in existing Chinese factories and later to build his own. Today, his ASIMCO Technologies is a $500 million dollar company with a leading position in China and a growing global presence. At times it seems as if the author has little more than a can-do attitude and strong personal relationships with Chinese partners to surmount the many problems of a cross-cultural organization in a rapidly changing country with many impediments to modern business. In the end, more than any specific strategy it is mutual trust that makes things work,. This book can be read as an inspiring story of business success, a personal journey or a case study in building a business that combines the best features of global management and finance with Chinese entrepreneurial energy and talent. It's a good story with some valuable morals about making money and friends.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

“If you want to do business in China, Jack Perkowski is your man. In Managing the Dragon he takes you into the heart of the Middle Kingdom and shows you the way with insight, humor, and the kind of practical advice an entrepreneur or a down-home tourist needs to navigate this fascinating and often bewildering colossus of a country.”
—Tom Brokaw

“I’ve just finished Managing the Dragon, which I thought was fantastic. I was riveted by it. I cannot believe what Jack Perkowski has accomplished and what an adventure he’s had, how he lived through it, how he’s succeeded, and how well written his book is. It reads somewhere between a novel, a how-to book, and a primer on a second business life in a developing country.”
—Michael Eisner

“I love Jack Perkowski’s book. It tells, with some bravado and lots of humility, the firsthand story of a man who dared himself to move to China to seize upon the greatest economic boom of our age. Perkowski invites us into his world, into the blur of business meetings and friendships, hirings, firings, and onto China’s shop floors. He reveals what it took to build a world-class manufacturing company in a country where you need to set firm goals but reach them in an environment where the rules and circles of influence shift daily. Managing the Dragon is more than a manual, more than a memoir; it is a gift from a seasoned friend offering the keys to his wisdom and experience.”
—Ted C. Fishman, author of China, Inc.: How the Rise of the Next Superpower Challenges America and the World

“Managing the Dragon is more than a great story about Jack Perkowski and his courage to move to the new frontier; it is a graduate degree in the trials, tribulations, and successes of starting from scratch in China. Jack captures the essence of doing business in China and turns it into a very compelling ‘how-to’ guide.”
—Timothy Manganello, CEO of BorgWarner, Inc.

See all Editorial Reviews

Product Details

• Hardcover: 336 pages
• Publisher: Crown Business; 1 edition (March 18, 2008)
• Language: English
• ISBN-10: 0307393534
• ISBN-13: 978-0307393531
• Product Dimensions: 6.4 x 1.3 x 9.5 inches
• Shipping Weight: 1.5 pounds
• Average Customer Review: 4.6 out of 5 stars  See all reviews (18 customer reviews)
• Amazon Best Sellers Rank: #213,261 in Books (See Top 100 in Books)
  • #56 in Books > Business & Investing > Industries & Professions > Transportation

More About the Author

After a twenty year career on Wall Street, I began my second career in Asia and China in 1990. Managing The Dragon is my first book and it describes the thought process which took me from Wall Street to the Great Wall; the logic which lead to the founding in 1994 of ASIMCO Technologies, one of the most important companies in China's rapidly growing automotive industry; the trials and tribulations of establishing a major business in China; and all that I have learned about China and doing business here over the past fifteen years. My on the ground experience in China over a long period of time, combined with my Wall Street background, gives me a somewhat unique take on what is happening in this rapidly developing superpower and how it is impacting the rest of the world. My website provides a running commentary on events as they unfold in China.

I grew up in Pittsburgh, Pennsylvania and went to Yale where I blocked for Calvin Hill on one of the best teams in Yale football history. (In fact, our 29-29 tie with Harvard at the end of the 1968 season was listed by Sports Illustrated as one of the five most memorable games in the history of college football.) After Yale, I graduated from the Harvard Business School where I was named a Baker Scholar, and then began my career in investment banking in New York. Most of the time I spent on Wall Street was with Paine Webber (now part of UBS) where I ended up running the Investment Banking Division, but I also started an LBO fund with John Kluge, the legendary telecommunications mogul and founder of Metromedia, before setting off for China.

Customer Reviews

Most Helpful Customer Reviews

11 of 11 people found the following review helpful:

5.0 out of 5 stars Admiring effort but not quite great book, March 23, 2008

By 

An expat based in Beijing (US and China) - See all my reviews

This review is from: Managing the Dragon: How I'm Building a Billion-Dollar Business in China (Hardcover)

This is an admiring effort by an American entrepreneur, as fairly reviewed by Victor Mallet for the Financial Times:

"Brash optimism of an American in China

You have to hand it to Jack Perkowski. The working-class Pittsburgh kid who won a football scholarship to Yale, spent 20 years on Wall Street and became head of investment banking at PaineWebber could have rested on his laurels and enjoyed his personal wealth.

Instead he chose in the 1990s to set up a new business in a difficult country and in a difficult industry he knew nothing about. This book is the story of how Perkowski went to China and established a Chinese motor components group called Asian Strategic Investments Corporation, now Asimco Technologies.

Managing the Dragon is not a great work of literature. The memoir Mr China by Tim Clissold, a Chinese-speaking accountant who helped Perkowski build Asimco, covered some of the same ground with more eloquence and wit four years ago. But Perkowski's book is worth reading, both for its insights into business in China and for its self-portrait of a relentlessly optimistic American entrepreneur who has persevered in spite of disasters and disappointments.

From a new vantage point - he spoke no Chinese but understood Wall Street and raised the money - Perkowski describes the horrors that also featured in Clissold's book: bureaucracy, fraud, corruption, competition from Asimco's Chinese joint venture partners, an inadequate legal system and invoices paid with trucks rather than cash.

As Perkowski admits, China is changing extraordinarily fast and most of these events happened a decade ago. But the book's central section - including a blow-by-blow account of how Asimco removed the awkward boss of a rubber products joint venture in Anhui province - make gripping reading for any industrial investor contemplating a move to China.

Clissold wrote that he was "confused" by the optimism of Perkowski - whom he described as "an enormous personality" and an "archetypal Wall Street adventurer" - and it is true that the American, even in his own writing, comes across as guileless and naive. Perkowski seems to crave recognition and at first appears surprised by how different Chinese habits are from American ones. Occasionally he draws lessons so obvious as to be useless, such as: "I have learnt that getting the strategy right is one of the most important things that a company can do."

Yet there is wisdom, too, on dealmaking and management in the world's most populous nation.

Perkowski chose the almost virgin business territory of China when he learnt that other Asian economies were in the grip of a few powerful business families (the subject of Joe Studwell's Asian Godfathers). He sensibly lays to rest the absurd myth that guanxi or connections are unique to Chinese dealmaking, pointing to his own use of guanxi as a graduate of Yale. And, half in jest, he recommends giving a new company eager for recognition a name beginning with A.

The core of Perkowski's argument is that investors in China face a "management gap" between bureaucratic managers reared in state-owned companies and managers so entrepreneurial that they "concocted deals with criminal elements or tried to set themselves up in competition with us".

Through painful years of trial and error, Perkowski and Asimco struggled to bridge this gap. They started with expatriate managers, but that did not work and Perkowski admits he made his biggest mistakes in the early days "when I discounted the views of my Chinese managers". Next, they tried converting the unsuitable "bureaucratic" and "entrepreneurial" Chinese managers they already had into the kind they wanted, but by and large that failed too.

Finally, they decided to find and empower Asimco's own "New China managers", open-minded mainlanders with some management experience, some exposure to modern management concepts and, typically, an engineering background. In retrospect this was as obvious as the need for a strategy, but it was evidently effective.

The question remains as to whether Perkowski needed to go through such agonies to build a company that now has 17 factories in eight provinces in China.

Clissold could not understand why Perkowski did not learn Chinese. This is a sore point for Perkowski. Although he writes that 90 per cent of the mistakes made in China are due to "misunderstanding and miscommunication", he spends nearly three pages justifying his reluctance to try to learn to speak Chinese.

Reading the two books together, one of the most valuable lessons to emerge is that if you want to build a billion-dollar business, it pays to learn the local language."

For more wisdom, I also recommend The Chine Executive by Wei Wang - a great thinker on this topic, in my view.

11 of 11 people found the following review helpful:

5.0 out of 5 stars A Great Adventure, March 22, 2008

By 

Paul Denlinger "China Internet Hand" (Beijing) - See all my reviews
(REAL NAME)   

This review is from: Managing the Dragon: How I'm Building a Billion-Dollar Business in China (Hardcover)

Managing the Dragon provides very good insights into what was needed in the 90s to bring a successful fund into China to build a world-class Chinese automotive components company.

The author, Jack Perkowski, started out as a successful Wall Street investment banker. After twenty years, he took an interest in China, and moved his family to China, where he focused on raising funds to build a Chinese automotive components manufacturer, ASIMCO. When he went to China in the early 90s, the Chinese government was having trouble finding foreign investors for the auto parts industry, and was willing to give away foreign majority ownership. Seeing the potential of the industry, and Chinese government support, he decided to make his move, raising Wall Street capital while negotiating with Chinese partners to get started. Together with his team, he was able to make things happen, and now has a successful auto components company in China.

Aside from Perkowski being generally very smart, several things come through in the book:
-- He was keenly aware that there were different ways to do things in China, and he did not try to force down only one vision "because that's the way that it's done in America"
-- He did not try to negotiate from a superior position, but instead negotiated as an equal partner committed to China's long-term growth
-- He has a curious mind and is always willing to learn
-- He and his family now live happily in China, which in the eyes of many Chinese, shows his commitment to the country

Perkowski shows that China is really not that mysterious, but it takes time to learn and understand how it works. If one is willing to make that investment, then one day, you will get a good return on your investment.

To get a good view of what it was like doing the deals on the ground for Perkowski, you would be well-advised to read Mr. China: A Memoir.

If there is only one warning I would make, it is that many of the strategies and scenarios Perkowski outlines work well with highly capitalized manufacturing businesses. He had an advantage in dealing with Chinese officials because he had $150 million to invest. For smaller investors say, in the service sector, it would be quite different. Also, after joining the WTO in 2001, Chinese regulations have opened up considerably for non-Chinese investors. As for joint ventures, very few companies consider them anymore, so they are mostly off the table.

7 of 8 people found the following review helpful:

5.0 out of 5 stars The Best Primer for Doing Business in China, March 19, 2008

By 

Daniel Harris "of China Law Blog" (USA/China) - See all my reviews
(REAL NAME)   

This review is from: Managing the Dragon: How I'm Building a Billion-Dollar Business in China (Hardcover)

This book is the best book I have read on how to do business in China. As a China business lawyer and the editor of the China Law Blog (www.chinalawblog.com), I am often asked what book to read to learn how to do business in 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. 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 "guerilla warfare."

The Economist Magazine rightfully calls Managing the Dragon a must read:

Managing the Dragon, 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.

Buy it. Read it. You will not be disappointed.