by Dalton Karwacki
You don’t have to know Mandarin to start a billion dollar business in China, according to an Ivy League graduate and former Wall Street investment banker who spoke on Wednesday, Sept. 16, in the Bart Luedeke Center Theater.
Jack Perkowski explained how he decided to found a company in China and why he settled on a country with a market so distinctly different from that in the United States.
Perkowski graduated from Yale and Harvard Business School. In 1994, he started ASIMCO Technologies, a company that manufactures automotive components. During his 15 years there, Perkowski raised the company’s value to about $500 million. He published a book, Managing the Dragon, How I’m Building a Billion-Dollar Business in China, in March 2008.
Perkowski said when he decided to start a business in China, he did so with little to no knowledge of the country beforehand.
He maintained, though, that this was a good way to approach China — “as a complete blank sheet of paper. The reason for that is that China changes so quickly.”
Perkowski explained how he settled on the automotive components industry, which he admitted he knew nothing about when he started. He said that even an industry as established as the automotive one can be exciting in a rapidly changing country.
“China, this year, will make 11 million vehicles, surpassing the United States,” he said.
He described what he saw as the key to his achievement. In order “to be successful in China, managers must have the same cost perspective as customers and competitors.”
To clarify this, Perkowski explained that 100 yuan, the basic unit of money in China, is treated like $100 is in the United States, even though the exchange rates hold the yuan at a fraction of the dollar’s level.
Perkowski mentioned that many opportunities for foreign investors in China exist. This is because there are many “service gaps,” or places where there is demand, but the industries have not caught up. These include high-tech equipment manufacturing, wholesale and retail distribution, renewable resources, health care and financial services.
This last gap led Perkowski to explain his new company, JFP Holdings Ltd., or, as the company slogan says, “A Merchant Bank for China.”
The company provides financial capital for new companies around the world, most of them located in China.
Perkowski ended his lecture by emphasizing that China presents an opportunity to investors, stating that there has never been a country as large as China undergoing such radical economic development.
He also said that Chinese markets “level the playing field,” while affording everyone “the same chance to get it right,” and that it’s not too late to invest.
After the lecture, Perkowski was asked about the challenges of starting a business in a communist country like China. Perkowski said even though China is communist, the economy is more capitalistic since the government loosened restrictions on foreign investment.
Response to Perkowski’s lecture was generally positive.
“I thought it was very informative and interesting,” said sophomore Christopher Splaine. “His explanation of how the Chinese people view their currency in relation to ours was surprising. I also was impressed by how he managed to build such a successful company in a country he knew nothing about.”