Speaking as part of the 2009 Bookworm Literary Festival, Tim Clissold was engaging, knowledgeable, an excellent public speaker and whose quite confidence and liking for deprecating humour made him one of the most successful speakers at this year’s Chengdu events.
The Sichuan leg of the Beijing – Suzhou – Chengdu triangular tour gives the writers a chance to escape from the ‘coastal’ towns and enjoy the more intimate and relaxed location. Small audiences (20-30 people is typical) get the chance to chat with the authors in the Q and A sessions and afterwards in the restaurant/bar area.
Tim Clissold’s ‘Mr China’ (Asian Review of Books review) (info on Harper Collins website) is considered essential reading for any western investors thinking of coming to China. It tells the story of a company which invested about 400 million USD in 7 different companies in China between 1995 and 2002 and how they sought to make money out of their controlling stakes in these companies, mostly in the automotive industry.

Tim Clissold's 'Mr China,' hardback cover
Clissold spoke for 25 minutes about the book, summarising the story, before contemplating the relevance of the story told by it.
A summary of Tim Clissold’s summary: Tim used to work for Arthur Anderson, then travelled around China (from Pakistan border, down along Silk Road, to Chengdu, then Beijing, then train through Russia back home), then studied Mandarin in London, then for 2 years in Beijing. Whilst there, he met a Wall Street money man looking to invest in Chinese companies. The money man quickly raises about 100 million USD for investment, which they invest in businesses around the country, and a further 2 or 3 similar tranches of investment are secured and invested. With over 400 million US dollars invested, their task now is to make sure that the companies are in a fit state to make profits. Given that most of the businesses, although they now have a foreign company as their controlling stake holder, are state-owned companies or former state-owned companies, many changes are required if profits are to be generated. The issues include poorly motivated staff and management; factory managers who are not mere business managers, but almost mayors of their factory towns, and therefore are not fully focused on revenue creation; factory managers building new factories to manufacture different products (in one case gearboxes) without asking for investor permission; factory managers building new factories to compete with the foreign investors’ factory; USD 3 million of cash from a business being flown to the USA by one manager with an HK bank manager who issued 4 compulsory letters of credit, having gone missing for days previously; investors outside China who demanded quick results; a resulting near nervous breakdown for Tim Clissold, due to the stress of the possibility of 25000 people losing their jobs, the difficulty of managing the investment and coping with the other challenges; the list is as fascinating as it is wide-ranging.
Points raised by the author during this part of the talk are the need to understand the different role of a factory manager in a village/town factory, the differing motivation for management in China and Wall Street, the need for patience, diligence and a constantly open eye for detail and potential pitfalls, and persistence.
Clissold then went on to ask why, given all of the difficulties outlined in his book, investors wanted to come to China, and, more pertinently, why western investors and business men often behave in business in China in a whay that they would never do in their home country. The magical temptation of the 1.3 billion customers is part of the charm, as is the entrepreneurial spirit of so many Chinese, something which Clissold said his impression of the Russian enterpreneeurial spirit was nowhere near as positive as that in China. (“Even the way they sell vegetables on the street shows the entrepreneurial spirit.”) Now that China is a huge part of the global economy, Clissold said that western companies cannot ignore China just because of the challenges it poses for incomers. What China now does with its 2 trillion dollars in cash/bonds will be crucial to the world’s (non-)recovery.
Clissold stressed that although ‘Mr China’ gives the impression that business is difficult and/or impossible in China, they did get the businesses back on track and that they did not have the benefit of being able to ask other western investors for their experience in China, given that they were pioneers in trying to control investments and companies.
The author does not want people to be put off from investing in China, since the west must continue to engage in business in the world’s largest market.
Clissold said there were 4 possible responses to the story:
1. Decide never to do business in China because it is too hard
2. Ask why the company was so stupid that it was duped so many times
3. Sue everyone possible
4. Engage with the country very flexibly, with an open approach and a willingness to understand and look at what is actually possible (particularly with a younger generation of consumers and managers coming through).
The 4th (a very brief summary) is his choice.
Tim Clissold is now involved in setting up carbon trading systems in China, not, he stresses, just to ‘offset a tonne of carbon emitted in Australia against one in China’ but to influence energy and infrastructure investment choices to encourage the uptake of greener technology in the world’s leading carbon emitting country.
Tim Clissold also chatted with Steven Fan, who is mentioned on page 50 in the paperback as a keen interpreter. It is the first time they have met again since they first worked together.
Click here for photos of Tim and Steven as they chat at the Lit Fest