In an era where global business dynamics are constantly evolving, understanding the intricacies of international markets has never been more crucial. Mark Atkeson, with his profound experience and unique journey in China, offers invaluable insights into one of the world’s most challenging yet rewarding economies. His book, “Risky Business in Rising China,” not only chronicles his personal and professional endeavors but also serves as a guide for navigating the complex landscape of Chinese business practices. We sat down with Mark to delve deeper into his career, life, and the lessons encapsulated in his writing, aiming to uncover the essence of success and perseverance in a surging superpower. Through these questions, we hope to offer readers a glimpse into the mind of an individual who dared to venture where few had tread before, revealing the realities of making business deals in a land of endless possibilities and stark contrasts.
But First, Who is Mark Atkeson?
Mark Atkeson is an international business leader, investor, entrepreneur, and author. A foremost expert on doing business in China, Mark managed, partnered in or provided services to Chinese-based companies for more than three decades in industries ranging from machine tools to aircraft engines, automotive manufacturing, mobile technology, startup venture investing, and aviation asset trading. Most recently, Mark wrote and released Risky Business in Rising China: Deals, Ordeals and Lessons Learned as an American Entrepreneur in a Surging Superpower Grappling with Growing Pains, chronicling his real-life experiences managing joint ventures and startup companies in China. Now living in California, Mark continues participating in the Chinese economy as founder and managing partner of China Aviation Partners LLC, which provides software services, market research and other consulting for China-related businesses. Mark is a graduate of Yale University and the Massachusetts Institute of Technology with master’s degrees in Electrical Engineering and Business Administration.
Mark Atkeson’s Books
- What initially drew you to pursue a career and life in China, despite the apparent risks and challenges at the time?
A trip to China with my parents and siblings in winter 1982, as a college freshman, revealed a destitute world of stoic Chinese dressed in threadbare Mao suits riding black bicycles in desolate low-rise Beijing devoid of cars and neon, with only occasional sightings of budding entrepreneurs vending goods on the streets. In America the media highlighted Fortune 500 companies like Coca Cola, P&G, and Boeing making moves into China. China was seen as a new frontier for business. Excitement about foreign opportunities combined with youthful wanderlust convinced me to go to China after college. My career in China over 3 decades coincided with an extraordinary reform period in which China turned away from central planning and implemented market-oriented reforms. During this period, over 800 million people were lifted out of poverty – this is the greatest event in our lives of the last 40 years! I would never have missed it.
- Can you share a pivotal moment in your career in China that significantly influenced your perspective or approach to business?
As I was nearing age 40, I could see the younger Chinese generation rising as capable managers of industry. These people born in the post-Mao era rapidly absorbed factory and enterprise management knowledge. It was time for me to get out of manufacturing. The problem for a “manufacturing guy” — as I’d become — was how to redefine myself into some new sector. I wanted to get into investing in new ventures in China, but I lacked the pedigree to be hired by VC Firms. What I realized about re-inventing myself is that sometimes I needed to create my own opportunities. I knew that China was the world’s biggest mobile market, and its 1 billion users were upgrading to more sophisticated phones with greater capabilities for m-commerce. I joined two other partners to re-invent ourselves as venture capitalists investing in Chinese entrepreneurial teams importing successful mobile technologies and services into China, to customize them for China’s rapidly growing mobile-subscriber population.
- How did your experiences in China shape your understanding of cultural and business practices differently from what you learned in the West?
In America we view contracts as paramount in dictating the terms of our business dealings with other parties. We dedicate a lot of energy to drafting detailed legal documents to referee all the possible outcomes in our business transactions. In China the focus is less on legal contracts and more on creating operational leverage to guide business. Who controls the money? Who controls the products? While we in America want clarity and black and white standpoints, the Chinese prefer the flexibility and adaptability derived from ambiguous and often many shades-of-grey positions.
- What were some of the most significant barriers you faced when first starting out in China, and how did you overcome them?
When I first started out in China, almost nobody I dealt with spoke English – in stark contrast to today when most of the younger generation in cities speak passable English. At first, I worried that my rudimentary Chinese would hinder effective communication. However, I learned that the slow pace of life back then – no cell phones, no computers, train travel, etc. – allowed me to find time to practice and get up to speed in Chinese very quickly. Furthermore, the Chinese welcomed an opportunity to converse with a rare foreigner back then. In addition, I worried that my youth and inexperience would prevent me from doing business directly with senior Chinese management. I learned that being a lone pioneer in a frontier environment like China allowed me to gain access to all the Chinese decision makers I needed to progress in my businesses.
- Throughout your book, you detail various personal and professional challenges. Which of these challenges was the most difficult for you, and why?
China’s dramatic modernization over the last 40 years involved rapid changes in the economy, markets, education and business opportunities. Staying ahead of these changes and timing and exploiting new opportunities was my greatest challenge. A great example is my final chapter on doing business in China. Waking up to the realization that foreigners were getting squeezed out of China by local talent, I re-invented myself as an aviation asset trader acquiring mature commercial aircraft introduced into the China fleet at the start of my career, and ready for end-of-life salvage.
- In your book, you highlight the importance of understanding Chinese society and economy. What do you believe is the biggest misconception Westerners have about doing business in China?
The notion of a monolithic China Inc. to characterize China’s economy does not capture the actual complexity and diversity of China’s people, enterprises and markets. Outside of sectors reserved for China’s state-owned-enterprises such as utilities, telecoms and banking, the private sector is a diverse, changeable and adaptable hive of activity of millions of firms run by smart and innovative entrepreneurs. The private sector generates 60% of China’s GDP and 80% of new jobs. China’s entrepreneurs are free agents in most cases. You can work with them creatively to structure partnerships and exploit market opportunities. Be careful to design leverage in your favor in your dealings with them.
- How has the Chinese business landscape changed from when you first arrived to now, and what implications do these changes have for new entrepreneurs entering the market?
In 2021, China launched a regulatory crackdown on formerly high-flying sectors dominated by private companies that previously attracted ambitious young people. Internet companies were hit with fines for monopolistic behavior, real-estate businesses were starved of financing, and the private-tutoring sector was almost entirely shuttered. Employment in these sectors has dropped. China’s central government does not want private firms to get large enough to challenge the power of the state, and therefore has caused them to be reined in. China’s private sector, the biggest source of jobs for its 1.4 billion people, continues to struggle — partly explaining record-high youth unemployment and calls for more action to boost investor confidence. The younger generations are increasingly disillusioned, losing faith in private companies, and more willing to accept lower pay in the state sector. The state sector cannot absorb all the unemployed youth. Foreign investors are growing wary of China, and foreign investment is drying up. Lower income expectations, and talented employees and foreign capital shunning the private sector, are likely to lower economic growth in the long term.
- Reflecting on your journey, is there anything you would have done differently with the benefit of hindsight?
I have been very fortunate to have directly experienced the dramatic modernization of China and the extraordinary rise in living standards for its people. Most Chinese are no longer destitute and have soaring aspirations and satisfactory control over their lives unimaginable only 30 years ago. I do not have regrets about the path I took over that period. In retrospect, it was risky business for me to place my faith in forging a career in rising China. But it was more than worth it. The gamble paid off.
- Writing a memoir involves selecting which stories to share and which to omit. Was there any story or lesson you wished to include in the book but ultimately left out? If so, could you share it with us now?
I could have broadened the scope of my memoir to include war stories from my spouse’s career in China where she oversaw investment projects for the International Finance Corporation. That might become the subject of another book!
- Finally, what advice do you have for aspiring entrepreneurs who are considering pursuing business opportunities in China or other challenging markets?
For young people seeking to get exposure to China, take risks and learn how to re-invent yourself. Make opportunities for yourself. I learned to move from machine tools to aircraft engine maintenance, mobile technology to venture capital, and electric vehicles to asset trading.
For entrepreneurs sourcing from China, be smart and approach the private sector firms. Now is a great time to shop around for the best deals.
For entrepreneurs selling to China, be aware that younger consumers with more cash to spend than older generations have local tastes and sophisticated adoption of technology like mobile payments and social media.
For entrepreneurs seeking new business opportunities, anticipate that the private sector in China will adapt to restrictive regulations at home and drive a major move to localize production in America. This is happening in solar panels, batteries, and eventually electric vehicles among many sectors. Be a bridge to land them here in America.
We extend our deepest gratitude to Mark Atkeson for sharing his rich experiences and invaluable insights with us. His openness and the depth of his reflections have not only illuminated the complexities of navigating China’s business landscape but have also provided guidance and inspiration for those looking to embark on their own entrepreneurial journeys. Mark’s journey is a testament to the power of perseverance, adaptability, and the importance of embracing change. We thank him for taking the time to engage with our questions and for offering a glimpse into the remarkable journey detailed in his book, “Risky Business in Rising China.” which we have reviewed here on Book Nerdection. His contributions are a valuable addition to our understanding of global business dynamics and a source of inspiration for future leaders and entrepreneurs.
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