Costly case of Chinese whispers

Tim Clissold met with a Wall Street banker in Shanghai in the early 1990s. The banker was convinced that this young Mandarin-speaking Englishman could be useful to him in his plan to bring US investment to China. The two teamed up with a Chinese friend and toured the country seeking investment opportunities. The banker then raised more than $4 million on Wall Street. This book tells the story of the factories they bought, the contracts that came apart, the money that was embezzled from them and the battles they fought with stubborn Chinese managers who played by different rules.

Terrible things happened. Chinese partners in joint ventures secretly set up rival plants and diverted profits and investment into them.

A local accountant made off to the US with a case full of money for investment. Clissold and his associates learnt that if ever they were in dispute with Chinese managers, they had to ensure the chops (stamp seals) for the company business accounts were safe or the bank accounts might be emptied.

Clissold was optimistic that he was on to a winner when the company bought the Five Star beer company in Beijing because demand for beer in China's newly prosperous towns was soaring. But a poor manager was forced on them by the Ministry of Light Industry, quality control fell and they again lost money. Bottles in China are always recycled. The bottles leaving this brewery were not always washed properly. Bits of pickled garlic, leaves and other foreign items were found in the beer on the market. Bottles were sold with the remains of soy sauce labels still on them or were only half full. The beer was often flat.

Clissold's accounts of mishaps and disaster in his business adventures in China are in the style of travel books that hold up the comical behaviour of foreigners for our amusement. The doings of the "natives" are described with humour and even affection but little empathy. Clissold is undoubtedly knowledgeable about China, yet the view he offers of the culture is superficial.

Finally, I could not help wondering how, in a decade in which China achieved unprecedented growth rates and great fortunes were made in the country, Clissold and his associates had managed to lose so much, suffering one calamity after another. Perhaps we have to question their competence as businessmen and judges of character.

Delia Davin is professor of Chinese social studies, Leeds University.