Investor’s Bookshelf: Mr. China’s guide to the No. 2 economy
For British author and investor Tim Clissold, China is not a foreign place: since 1987, he has spent two decades in Beijing as an investor and social observer.
One of the things he is still struck by -- and believes the Western world doesn't understand -- is how easy it is to relate to the Chinese.
“The basic thing is that Chinese people are absolutely relatable. The similarities are much, much bigger, and much, much more important than the differences,” he told AsianInvestor.
“I personally think Chinese is supremely pragmatic, and actually quite unpolitical in a lot of ways,” he said, although he noted that "there are some historical and cultural things that are not quite the same.”
A fluent Mandarin speaker, Clissold is the author of Mr. China, a book published in 2004 and translated into 15 languages.
Several institutional investors AsianInvestor talked to recommend the book as a guide for foreign investors seeking to understand the Asian nation.
After completing his Mandarin studies at renowned university in Bejing in the early 1990s, he co-founded one of the first private equity groups in China with an experienced Wall Street banker.
The duo invested $420 million of institutional capital in 20 joint ventures, without fully understanding the social situation of China during the early days of the reforms.
It didn't work out as planned at the start.
“It all got terribly out of control. So basically, the story of Mr. China is how we managed to get back control and found a balancing point between the Chinese side and the Western side,” he said.
HOW IT BEGAN
The idea of his first book, Mr. China, was originally aimed at helping himself organise his thoughts and understand why things happened to him the way they did.
“I never wrote anything before. I started writing to try and make sense out of everything that happened.”
His experiences taught him a lot of lessons about humanity, understanding people from different backgrounds, and most importantly, to not assume that "the way you're used to doing things is the universal way of dealing with things. That was the main lesson”, he said.
One point he highlights in the book is the complicated political landscape in China.
While China can often be viewed as 'direct and authoritarian', he said the one thing investors could count on was consistency of Chinese policy.
China, he said, is unlikely to see the type of massive policy and political shifts that are seen in Europe and the US these days.
“So actually, [it is] the geopolitical uncertainties outside China, not inside China, for an investor [to be mindful of],” he said.
EAST VS WEST
After Mr China, Clissold developed a taste for writing.
His second book, Chinese Rules, was published in 2014, while a third book, Cloud Chamber, was publishe in 2022.
He's currently working on a new book to help people understand why Chinese know “much more” about Westerners than the West knows about China.
Nonetheless, times have changed and China is very different today compared to when Clissold wrote the book.
The economy is going through a painful transition with structural issues in its economy and a demographic shift that is not in its favour.
As the Chinese economy rises to the second-biggest by GDP in the world, “It's totally natural that the incumbent number one power will be very nervous about that…So, the truth is that America will do anything to thwart China's rise.”
“China is quite united from a policy perspective, and it has very little external debt, and it's extremely resourceful,” he said.
TODAY'S CHINA
He believes China will continue to “generate huge returns for investors”, highlighting in particular the country's energy transition and consistent state policy.
"For an investor… if your business dovetails with what the Chinese state wants to achieve, then you can go to China and have a lot of success. If you want to make designer handbags and sell them to Chinese consumers, those days are gone,” he said.
He believes the "only logical way forward" for China is to move up the value chain in the global economy, which it is doing.
Clissold continues to spends much of his time in China, helping mostly with dispute resolution between Chinese and foreign investors.
For him, the key to being successful in China is trying to understand the country and the people, which is always important regardless of the era we live in.