The Asian Reporter's
BOOK REVIEWS

From The Asian Reporter, V15, #43 (October 25, 2005), page 15.

By Tim Clissold

HarperBusiness, 2005

Hardcover, 252 pages, $24.95

By Andrew J. Weber

There’s an old saying that the only business that looks easy is the one you don’t understand. To Tim Clissold, investing in China must have looked easy indeed.

Poised on the brink of leveraging its "billion-three market" to become an economic superpower, China represents the world’s greatest financial opportunity in the globalization era. Anyone who can get in on the ground floor is assured of wild success, the kind Wall Street dreams are made of. Yet government corruption, bank failure, and a host of other structural problems are all integral to the Chinese economic landscape, possibly stalling or derailing the giant growth foretold for the next century. An unsuspecting optimist could easily get drawn in and taken for all he’s worth.

Enter Tim Clissold.

Filled with fantasies of becoming the next "Mr. China" ("Like Marco Polo roaming China as the emissary of the Kublai Khan," as he puts it), Clissold helped run the largest western venture capital firm investing in the People’s Republic during the 1990s. He arrived with $400 million and an idealistic view of the emerging Chinese market, but his illusions were soon shattered and he eventually managed to escape with little more than some tough lessons and a very entertaining story.

Thanks to several years’ experience at Arthur Andersen, a fascination with China, and two years studying Mandarin in Hong Kong, Clissold thought he knew what he was getting into. China was already an economic success, with more than 250 million people rising out of poverty in the 1980s alone. Hundreds of millions of Chinese were still on the march for a better life, and Clissold could help make it happen. It was a win-win economic situation, bringing prosperity to the Chinese and spectacular returns to his investors, requiring only an infusion of free-market expertise and capital from the West. Clissold was armed with plenty of both — especially the capital.

However, that common belief proved to be only half right, much to Clissold’s eventual chagrin. Although the cash-strapped Chinese were grateful for the investment, they certainly didn’t lack for market savvy. Whether or not they had the general management skills necessary to operate a business is hard to tell, but they certainly knew how to run one of the oldest money-making schemes in the book: the confidence scam.

At a hilarious launch party, the unsuspecting Westerners are plied with bizarre meals of steamed rabbit ears, cow’s lung soaked in chili sauce, fish lips with celery, and even the unspeakable "Deer’s whip." Suffice it to say, the local mayor reveals that, "The tip is the best part." Each course is topped by a round of ever-more grandiose toasts and a shot of baijiu, a particularly powerful and unpalatable hard liquor.

Through all his time in China, Clissold never seems to recover from the potent baijiu, dazed by continual setbacks and unsure of what he will be hit with next. The Chinese are always one step ahead, disappearing with huge sums of cash, launching competing firms next door, or leveraging the Byzantine legal system to their advantage by greasing corrupt local bureaucrats and party members.

Clissold’s illuminating account manages to reveal the deep absurdities of life in China without ever losing its boundless good humor. Equal parts tragedy and comedy, this is the China that Clissold truly loves but never masters, where a car repair shop occupies an office building in the middle of a rice paddy, where cabbages cover miles of city streets thanks to a planned-economy error, and the official anti-corruption bureau demands a car and a bag of cash to start an investigation into government bribes.

The reader is the ultimate winner here, able to absorb Clissold’s wisdom and laugh at his failures with no real involvement. Whatever luxuries Clissold’s millionaire investors are able to buy for themselves, this book gives us one luxury they cannot have: We get to watch from a safe distance as much of their wealth evaporates along with Clissold’s "Mr. China" dreams. It’s funny because it’s somebody else’s money.