Taking on the Dragon

(Original source Business Today) 

“Is there a template for ‘dealing’ with China? If yes, there are few better qualified to write it than the author who served as the CEO of Goldman Sachs (1996 to 2006) and thereafter as the US Treasury Secretary in the twilight years of the Bush administration. Henry M. Paulson, Jr has been engaged with the Chinese market for over two decades during which he came to know and work with leaders like Jiang Zemin, Xi Jinping, Zhu Rongji, Li Keqiang, among others, and also leading Chinese businessmen.

The Communist Party of China (CCP) controls Chinese businesses, functioning like a revolving door: access to one gives, and reinforces, access to the other. Paulson details the many deals that came Goldman’s way, making both sides richer. What comes through is that China perceptively exploited the competition among top US companies to be a part of the modern equivalent of the 19th century “cutting of the Chinese melon”. “US companies were falling over themselves to get a seat at the table,” writes Paulson. Even high flying CEOs like Paulson himself were not beyond pandering to the Chinese when required, including, in one instance, getting out of the car in a traffic jam and running, yes running, not to be late for a meeting with the leadership. Champions of free-market created wholly-owned business subsidiaries of the CCP. Time and again, allowances were made to win business which would not have been made in other countries.”

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