Making It in China

American entrepreneurs are overcoming cultural, regulatory, and other barriers to build fortunes in one of the greatest booms in history. Here's how they've done it, and how you can do it too.

By G. Pascal Zachary, August 2005 Issue

(Below are exerts from "Making It in China")

The Fung brothers likewise believe in patience as a business strategy. Micky Fung, a Chinese American whose home base is Brooklyn, N.Y., has been doing business in China since the 1980s, moving from one niche to another. These days he's leading a pioneering effort to supply every taxicab in the country with a flat-panel TV screen that, controlled by a computer under the front seat, will broadcast advertisements (and potentially other content) to its captive audience of passengers. Shanghai has been chosen for a large-scale trial of the technology. Fung has signed up 10,000 Shanghai taxis and will roll out the system later this year. Heineken, Nokia, and Virgin are already on board as advertisers. Fung's brother has bought an entire fleet of taxis to help exploit the opportunity. "It's a landgrab, pure and simple," says Adam Bornstein, an American financier in China and one of Fung's backers.

Fung says he's never seen as many foreigners looking to get rich quick as there are in China today. But that's the wrong play, he says; he's looking for lasting relationships. "A common mistake made by outsiders is to avoid long-term deals," Fung explains from his Shanghai office. "Then they have a hit product or service that they can't capitalize on because they are vulnerable to simply being replaced." Long-term deals offer a way around this problem. Fung, for instance, is signing 10-year deals with his taxi owners.

"In 10 years, a whole lot can change," including the basic technology behind his company, he says. "But by then I'll have made my money, and I'll have a position worth defending."

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