Jack Perkowski is the chairman and chief executive officer of ASIMCO Technologies, one of the most important players in China's automotive components industry. He founded the company in February 1994, after spending three years investigating opportunities in Asia and China and before others recognized the significant role that China would play in the global economy. With seventeen factories in eight provinces and fifty-two sales offices located in every corner of the country, ASIMCO Technologies is unique because it functions as a foreign-invested company built to specifically to serve the Chinese market. Under Perkowski's leadership, ASIMCO has gained a reputation for developing local management and integrating a broad-based China operation into the global economy. In 2005, ASIMCO was named one of the "Ten Best Employers in China," ranking third in a survey conducted by Hewitt Associates and 21st-Century Business Herald.
Jack’s new book Managing the Dragon: How I’m Building a Billion Dollar Business in China (Crown Business; March 18, 2008) discusses Jack’s experiences building ASIMCO from the ground up and the lessons he learned in developing the company’s local management team. The book also covers a wide range of topics such as decentralization; China’s different cost perspective and how it creates two markets for any product; intellectual property concerns; and practical advice on how to start a business in the country.
Jack Perkowski: Well, China celebrates its 30 years of reform. So 1978, Deng Xiaoping opened up the economy and this is the 30th year anniversary. It’s a very, very big year in China.
And everybody in China, from the lowliest worker to the top entrepreneur or manager has seen what China has done over 30 years where literally hundreds of millions of people have been lifted out of poverty and now there are just very visible signs of wealth all over the country.
And probably in the last 5 years, that’s probably been the single biggest change as how much wealth has been created in the country, so everybody sees it. Everybody wants to participate. Everybody is, first of all, they’re very proud of what their country has done, very optimistic about the future and they all want to participate in it. And, if they’re far enough along in life that maybe they never going to really participate, they want their son or their daughter to participate. So there’s tremendous emphasis.
If you’re a manager in China constantly benchmarking your classmates and say, okay am I getting the same opportunities that they are? And if you’re not, then they kind of going to look for the employer that’s going to give it to them. If you’re a worker, it’s basically, okay, I’m working. I probably got a much sounder, safer, more stable life today, probably living better than my parents did, but I sure want my son or my daughter to also participate. So the emphasis for all of that is on hard work, really getting ahead, focusing on the opportunities and education. And I can’t tell you how strong every Chinese parent, I don’t care what they’re doing, they emphasize the importance of education.
Question: What will Chinese capitalism look like in 10 years?
Jack Perkowski: I don’t think people should be concerned with the rise of China. China is not imperialistic in the sense. They’re not looking to go out and take over other countries. They want to hold on to what they have. That’s why they talk about Tibet or Taiwan; they’re just not going to give up what they already have kind of under their umbrella. Obviously, they’re very concerned about getting enough natural resources to fuel their economy. So they’re now kind of doing partnerships around the world, in countries, or maybe countries like the United States wouldn’t want them to be, but they’re doing this out of a sense of survival. They need those resources.
But other than that, China is really more concerned about getting that 900 million people and getting them up the income ladder, so you don’t have such a big income to spare, because that’s kind of the one thing that the leadership worries about, is this big income disparity between those 400 million and those 900 million. So for China to understand that’s a very difficult task to have ahead of them, and so that’s what they pay attention to and that’s what they’re focused on.
So in that sense, I wouldn’t be worried as a sovereign nation about what’s going on in China, because I think that they got more than enough to do with their own population.
I think, from the business point of view, you have to look at China as a huge opportunity. If you don’t do the right things, I won’t deny the fact that it’s going to be a huge threat to your business. But that doesn’t take away from the fact that for every company that’s got products and so forth and establish business practices, this is the biggest market coming on stream and it’s got to be a big, big opportunity. I don’t see one of the issues with China is there is no separation of power between the party, the government, the banking system, the legal system and everything else.
The party controls everything. I don’t really see that changing in my lifetime. So in the next 10 years, I would still see that as being the way in which the governments run.
But, look, China is capitalistic really as almost in any country in the world. In my business components, it’s not a strategic industry in that sense, and there’s literally, probably less government regulation and control in our industry than there is in the copper industry in the United States.
Recorded on: September 22, 2008