February 29, 2008 -- Beijing-based ASIMCO is a foreign-invested company established in 1994 specifically to serve the Chinese automotive components market. ASIMCO has 17 factories in eight provinces around China, and has a strong reputation for training managers and being a good place to work.

Before coming to China in 1991, Perkowski spent twenty years on Wall Street. He was a partner at a leveraged buyout firm, and the head of investment banking at Paine Webber (now part of UBS). Perkowski lives in Beijing with his wife. He also has three children and a grandson.

This is the second part of my interview with Jack Perkowski. Readers have requested that I ask him about the book "Mr. China," which chronicled his early experiences in China from a not-always-flattering point of view.

Emerging China: The book Mr. China didn't paint your experience in China in a good light. According to that book, you made some mistakes when you first came to China. Can you talk about this?

Jack Perkowski: China remains one of the most difficult countries in the world to operate a business, and anyone trying to do business here will inevitably make mistakes. I certainly admit to making my fair share when I first came here, and can tell you that I still make them today. Though not as many.

In the 1994 to 1997 period when I was putting together the core of the company, China was at a much earlier stage of development, and I was pushing the envelope as far as firsts. ASIMCO was the first attempt to put together, through acquisition and consolidation, a company in any industry capable of doing business across the whole of China and internationally. We were among the first to insist upon majority ownership and to take an active role in management. We were among the first of the foreign invested enterprises to rely on local managers to build the company.

Unfortunately, I had to rely on a team of people who were supposed to know something about doing business in China to help me do all of this, but found that they were generally not up to the task. That forced me to re-think my people strategy and led to the development of what I call our "New China" management strategy. The team that I have working with me today is vastly superior to the team that surrounded me then.

EC: What did you learn from that experience?

JP: Needless to say, the lessons I have learned could fill volumes. Let me summarize a few of the key ones.

First of all, I learned that you have to get your strategy—the big picture---right. The fact that I had (a) identified the right industry (auto components); (b) had correctly forecasted that China's auto industry would become among the world's largest; (c) believed that a strategy of putting together a multi-product components company that could meet increasingly higher quality standards and do business across the country and internationally would resonate with assemblers; and (d) insisted on majority ownership so that we could exercise management control got us through the hard times.

Secondly, I learned that the key to success in China is developing and empowering a good local management team.

Third, I learned that patience is a virtue in China. As I reflect on my experiences in this country, I can say that nearly every mistake I made was due to the fact that I acted too quickly and did not listen hard enough.

Finally, I have learned that persistence pays off in China, and how you start is not nearly as important as how you finish. It is impossible to avoid making mistakes in China. What matters is how you correct them; what you learn from them; and what measures you take to ensure that they don't happen again.

EC: Do the problems you faced then still happen now, or has the country changed? (Or have you changed?)

JP: A business traveler to Beijing or Shanghai in 2008 will land in a modern airport; be whisked away to a Five Star hotel in a late model sedan; visit a clean, modern industrial park where he or she will be told of all the advantages of locating a factory in the development zone by a very urbane, well spoken government official. I call this "China Light."

When visitors are exposed to China Light, it is easy to assume that none of the problems that I encountered when I first came to China still exist. The opposite is, in fact, true. The country has changed, and many things are better---the infrastructure has been vastly improved; capital is more available; the economy is more developed and there are less regulations in many industries---but many of the same issues remain. The difficulties inherent in creating world class, transparent companies that can do business anywhere globally will remain a challenge in China for some time to come.

And it is true that I have changed. I am more patient and have learned to listen longer and harder to the trusted and very capable group of individuals who now form our management team.