The China Venture

Krebs decided that he should perhaps venture into China and offered Mr. Zheng the
opportunity to head-up a new venture in China. Mr. Zheng readily agreed and set-up a
successful venture for Paul in Shanghai.
Three months ago, Mr. Zheng told Paul that he had been offered the job of General Manager
by an American company in China to take overall responsibility for its operations there. He
was offered a pay package worth 3 times his salary working for Paul’s firm. It was an
opportunity too good to miss for Mr. Zheng. Paul did not think Mr. Zheng was worth that
money at that point in time. It is not that the venture in China could not generate the kind of
money Mr. Zheng asked for. He could have paid Mr. Zheng more than what the competitor
offered. He just felt that the amount was too high and that the company could replace Mr.
Zheng with some other person at a c heaper salary, or he can just do the job himself. After all,
the past deals involved importing Chinese products and exporting European products to
China. There is nothing so complicated about that, and most times, deals are repeated anyway.
He therefore wished Mr. Zheng “Good luck” and let him go, not realising that following Mr.
Zheng’s departure, there would be no more deals, not even the renewal of the repetitious deals
of the past. There is nothing sinister about this. Mr. Zheng has acted correctly in this matter,
as Paul has realised during his recent trip to China. He did not take any of the past deals with
him to his new company.
Returning to Zurich in Switzerland, Paul’s mind continued to be occupied with his China
Venture. True, he has already closed down his small assembly and warehousing operation in
China. There is also no hope of ever reviving the highly successful and profitable trading
operations he had under Mr. Zheng's management. He should not be wasting his time there,
neither should he be wasting his thoughts now, by thinking about something which is
essentially over. But he just could not get his mind off his China venture.
In a recent family reunion with his brother’s family, he learnt from his niece who studied at
the University of St. Gallen (HSG) that she had been to China with her Management in Asia
class. He was impressed with his niece’s knowledge of China and wished he had a discussion
with her earlier. He managed to get a copy of her class report and started to read about
“Business Environment and Opportunities in China: Shanghai and its Surrounding Regions" 1 .
Thereafter, he decided to contact the Asia Research Centre at the Research Institute for
International Management at the University of St. Gallen.
2