My friend K visited Beijing on a business trip last week. K is one of these guys in the company who can retire comfortably, but still pours himself dearly into the work, just for the love of the game. Born in Russian, he was trained to swim for the Olympic since he was a boy before. He moved to the US with his family and entered a good college, where he was the Captain of the swimming team. K is well built and fit, and  he walks and talks with an air of commanding charm and calm. K stands out in any crowd anywhere; and to the ladies, he is dangerously handsome.

His father is a physicist, and was a Visiting Scholar in Fudan a little over a decade ago, and K's daughter has the same birthday as mine, so K and I had a lot to talk. The place is at a night club of the “Russian district” (雅宝路), which I’ve never been to. The food is “more than agreeable” as K puts it, but the place would soon turn into a total chaos with an amazingly bad show. Later on, I would tell K my new definition of the word “international”: Cuba girls dressed very little dancing to the tune of Chinese pop songs in a Russian nightclub in the capital of Beijing.

Before that happens, though, K and I were debating the merits of the Space Elevator project that would shoot people into the Moon. This would be a boring 3-week trip, I believe. But as engineers both of us were intrigued. As the topic dries up, K turned to me and asked: “are there a lot of young people in Beijing want to practice English?”

I sort of guessed what had happened. So I asked him how many young girls had approached him so far. “A couple,” he said. And he produced a short script of what happened at the hotel lobby that morning.

                The girl: “Excuse me, are you European?”

                K: “No, I am American.”

                The girl: “Do you want to practice English?”

“Aha!” I looked at K seriously. “I think you missed a very nice girl, K.” K asked why. “Look, she’s being really considerate.” I said. “You have left US for two days already, you might have forgotten some English – you might really need some help!”

We laughed. “But will they really practice English?” K didn't give up just yet. “Of course they will,” I said. “But the question is, where?”

So our beautiful Beijing MMs are getting nicer and nicer, and their English are improving by the day. You gentlemen out there should take note. I ought to write this in Chinese but, alas, I guess I need to practice my English as well.

The high game is indeed all about capital. No doubt, the injection of billions after billions of dollars kicked the wheel of fortune in China and has kept it spinning. When the capital hit the ground, however, the game is all about people. If China has been a Vietnam slaughterhouse of early Wall Street risk takers , it must be that the dollars married the wrong people. The joint venture seems to prove just this point: 15 out of the original 17 factory directors were replaced.  But that’s too simplified a viewpoint. People are not statistics, not numbers. Their warm bodies are products of history, and the history of China is long and complex. A more comprehensive perspective arises not from B-school case studies, not even from history books, but from day-to-day embraces of and clashes with the people in that land. That’s what Tim has recorded for us in this book.

Where Tim concludes his lessons is where I begin to solve my puzzles: who should we really attribute to for the spectacle of the 90’s growth? In retrospect, there were so many odds against it. The history of China and its culture has never been kind to entrepreneurship.  “All businessmen are crooks” (无商不奸) is the teaching in the folklore, and the respectful life is the one of the intellectuals. An intellectual is romantic poet, masterful artist and devoted patriot rolled into one. His full disconnect to the money is the testimony of his complete freedom from any moral corruption and sign of pure integrity. Kingdoms rise and fall, yet this value system has stood the wash of time. Shifting our focus from history burden to reality, at the infrastructure level the system is laden with bureaucracies, and the business landscape is taken up entirely by inefficient and poorly motivated state-owned factories. To decipher this sea change of unprecedented  scale we need to look deeper and beyond short-term artifacts.

The first force at play, I think, is the rapid information exchange and the tools and moments that helped that to happen. That thing called culture is a shameless thing,  as Steven Pinker succinctly puts it. Far from what many people believe or like to believe, in general when they see a different culture offers better life quality, they will copy and steal. Indeed, the country owes a lot to Deng, who outmaneuvered the party hardliners with his wisdom and pragmatic reforms. But in no smaller ways the country also owes a huge debt to another Deng, the Taiwanese singer Patricia Deng whose songs  swept the land of  “the middle-kingdom” like a stubborn fire.  The melodies are slow, soft and moody, and the lyrics too romantic and “corrupted” comparing against years of cold propaganda “arts”. They didn’t give people the hope, let alone telling them how to get there, they simply said that life can be filled with love, instead of hatred, and that sorrow and grief are not only reserved for the heroes and heroines who lost their lives to revolutions but instead part of our everyday experience. They stirred the ears. Yes, flooding the university campuses were Western philosophies and other “thought products”, but we are talking about grass root reform of the ordinary people here. To its credit, the government mounted a respectable fight, flexing all its propaganda muscles. Yet, tape cassettes and boom boxes are everywhere on the street. We now think of these devices as dinosaur technologies, but they were instrumental for the sea change that followed.

Talking about “moments,” the highlight has to be the 89 event. The bloodshed at Tiananman Square defined a pivotal point of historical importance. All but the hardest party hardliners will think of it in any positive light. It would seem that this huge reset would stop cold any kind of information flow in either directions. Yet, if we step back and take a sufficiently long view, the contrary is more true. Human nature has this peculiar cool trait that the desire peaks up for things that are taken away. After the 89, many more students who saw their hopes turned into ashes wanted to go abroad to study (I left in January 1990). Officials and teachers in the universities became much more sympathetic to these students than before;  I have friends whose advisors wanted them to leave, thinking that this country is not worthy of their brightest students to stay. There are little bureaucracies both in the university offices and in visa desks to approve and process the applications. If we are talking about the most efficient carrier of information exchange, nothing beats the warm body. These warm bodies will play critical roles in the decades to come, back to where they were uprooted. In the other direction, the Western countries did keep its face straight for a while. But business has no long lasting conscience. At the slightest hint that the next big game may be in the making, the inflow of capital gushed into the country, as Tim’s book can testify.

But the growth miracle of the 90’s was not made by the brightest students returning home. The high profile expat-wave happens much later. When these people do return, you can hear the bursts of sour grapes in many of their conversations: how can they make so much money? “They” being the exact entrepreneur types described in Tim’s book – they have little education,  know nothing about Six Sigma, know fewer English words than a Beijing taxi driver does, and generally have no manner whatsoever . Etc. etc.. The homecoming elites are convinced that their ivy-league PhD/MBA degrees should be the licenses to get rich and powerful, and that their being late is the only reason for missing the boat. They believe that they represent the best practices. They truly are except that, if you read Tim’s book carefully, best practices are not only unwarranted but can be self-defeating. Strange? No, I think this is just what supposed to have happened.

In the long evolution history of human race, the fitness of any skills are always defined within a context. The business environment of the 90’s China is atypical, if judged from the parallel universes of any developed Western societies which produce these “best practices.”  The obsession with these best practices makes a weaker competitor in China, especially if you refuse to adapt. Those that did zoom ahead are wired with “genes” that only they know how to function. They know the system inside out, exploit all its loopholes ruthlessly, extremely fast on feet but focuses almost exclusively on short-term goals, loop in the Wall Street capital but only play the game in their own ways. Their actions do not fit in any traditional moral framework, and can be irresponsible in that disasters can be lurking at the next corner.  They couldn’t care less, they will just let the chips fall. Along the way, however, at a macro scope they did indeed invent the spectacular growth. These feasts are impossible for the educated elites to copy and emulate, even if they want to. Their education is a burden, and high degree a liability. They cannot move fast enough, cannot cut ruthlessly enough. In short, their “genes” do not fit.

The truth lies in simple mathematics: China is big. Statistically speaking, a large quantity of slightly different “items” produces appreciable diversities and can fill any particular category of interest. Throw a stone into ten empty buckets a thousand times, every time one lucky bucket get the hit. Do that with thousand stones at once, all buckets will be full. With 1.3 billions of people, given any slight crack of opportunity, there are enough “the right genes” to fit in and thrive and make the story. Shall the opportunity shifts, another bulk of genes will make the bucks, possibly in entirely different ways. This is in sharp contrast to small nations, who are forced to specialize. At the same time, China is big as a market of itself, and yet not so big to hurt agility.

This is the story today, what about tomorrow? Making prediction is not as important as to fixing some intriguing points. First, being agile with the blessing of large number does not mean that the success is sustainable. To keep it up, best practice must set in, round and square. All practices follow some law, and best practices are the fittest child out of evolution war once the framework is settled. I have seen many designs of large scale internet services, they look eerily alike despite the fact that they are developed by different teams in different companies/universities. The law of physics rules and all designs have to follow. Business is no different. So, for the elites, the better time will come. The bad news is that they will not be the leaders even for the next turning points; their genes are less prepared. Yes there will be wrinkles and bloodshed on the stock market from time to time, for a country moves with blazing speed it will be strange if there is none. But the response and fix will be much more swift than a gigantic elephant can manage if you believe this is what China is. The big reservoir of different “genes” means that the wolf criers are to be disappointed most of the time. Some risk takers will lead the way, and the elites with best practices will move in and slave away. This, I think, will be a recurring pattern. Last but not the least, the country needs to keep pushing its budding  IT segment, from cellphones to PCs to internet services, and that’s not because it happens to be the industry that I work. It is said that China already has the largest cellphone users than any other nation, and soon this will be true for internet users as well. But the potential of growth is even larger. I do fret about the fact that Internet games are so popular among the Chinese youth, and that people waste away in Internet chatroom all night long. But, again, from a broader perspective, there is no question that what we can do depends on how much we know and how fast we learn. This is Mr. Human, 2.0.

(Beijing-Seattle-Shanghai-Beijing)

Is driving in China any different than in the rest of the world? Not an ounce. You move from point A to point B as fast as you can, expensing as little gasoline as possible. And, yes, avoid running into any body please, warm or dead. Time, energy, safety. 

Or so that’s what you think. I was once on a taxi in the city of Wuhan with a colleague from US, who became unusually chatty. “I have to keep talking to you,” he later explained, “looking at how this guy (our driver) takes up the road just wrecks my nerve.” For my first two weeks in Beijing, it was a genuine adventure to cross any street; and I was becoming a “qualified” Beijing driver only after many months of heart-wrenching near-misses, even though I have logged more than ten years onto my US driver license. Once I get myself honed into it, however, I would become a road hazard when tripping back to US: unconsciously I would slow down every time a car pulled up on the side even when I had the right of way – in Beijing the chance is high that it will jerk ahead without a shred of warning; and unconsciously I jay-walked, too.

Scales and complexities do differ, yet driving a vehicle and driving a business in a foreign land aren’t that different. Things will work, but the protocol will need to adapt – sometimes dramatically – depending on the context. This line of wisdom is nothingness unless your experience is personal, direct and real-time. These three elements, conveniently missing from many of B-schools books, are what make “Mr. China” interesting.  If you plan to be or already are a road hazard in China or elsewhere, go pick it up.

I have run into many foreign expats in China. Among them there is a group, just like Tim Clissold, who genuinely regard China as their adopted home. Their stories are similar, and the stories start early, too. As young students they troop into this vast “middle-land”, lulled by and looking for marks left by the invisible hand of history. For months they would roam around with their backpacks, to so many places that most of us native Chinese would have to work really hard to match. Some of them will follow through with a couple of years of schooling on Mandarin. Liberal and more open minded to begin with, getting affluent in Chinese now expose them to the everyday culture fabric. From then on they are hooked, and their life will never be the same.

One thing sets Tim apart – more by fate than by choice – his enrollment in a Chinese university cannot happen at a worse time: it was right after the 89 event that sent the entire country to an icy edge, and it was, for a while at least, “China versus the world” again. The physical environment was strenuous , and more depressing is the psychological mind game the authorities reined over them. There must have been moments when one would feel like being trapped at the bottom of a deep and dark well. To be sure, it was also difficult for those of us who left the country and studied abroad, especially in the first year or two. But I have to be honest and say that the setting for Tim was much more challenging. Yet, Tim plowed on and survived and made friends and he accounted all these with a dry sense of humor. For that and not that alone, he has earned my respect.

Does the country, and the people, respond in kind? As a minimum, Tim earned himself a ringside seat to witness the mindboggling expansion of China in the 90’s. In fact, he was in the thick of the game. His entire experience is divided into three episodes. First, as fate has it, he became the wingman of a larger-than-life Wall Streeter (Pat). The two of them were up and down the hills and in and out of the valleys of China inlands, hunting out those “third-frontier” factories built in the fallacies of an impending cold war. They composed a “China story” and raised 400 million US dollars in Wall Street. There, Tim learned his lessons that the high game is “all about capital” and to succeed is to be quick and to “take out your opponents.” They were the first and the largest fund to venture into China at the time, focusing primarily on the auto component business. The model is joint venture, where their money bought them the majority of share in previously state-owned factories, which contribute with assets, labors and everything else. The idea is to build a vast network of their own, leveraging all the factories that they have bought and zigzagging across the entire auto industry in the booming Chinese economy after Deng’s reform. 400 million is a huge sum. Money talks, and so begins the honeymoon.

(to be continued)