In the following interview, he recalls some of the lows that inspired him to keep going, as well as some of the highs that made the job rewarding. He also talks about the importance of media engagement, his love of jazz and how he once subjected a Chinese official to a 45-minute speech in order to make a point.
What moved you to become a founding member of the European Chamber in 2000, particularly as you were then on the board of the German Chamber?
In 1999, when China was negotiating its WTO accession with Europe, Pascal Lamy, who was EU Trade Commissioner, attended a meeting at the EU Delegation and said something along the lines of, “I don’t want to meet Germans or Italians or French, I want to meet insurance, I want to meet chemicals and I want to meet banking.” I and others felt that this approach made a lot of sense, and that we should try to establish a something along those lines. So 51 of us determined Europeans founded the European Chamber, which then was agreed to be complementary with the national chambers. As you say, I was then on the German Chamber board, and I could feel some resistance from the bilateral chambers, in the sense of why do we want a new kid on the block?
With people like Peter Batey and Ernst Behrens, we felt the proposition we had was something that the bilateral chambers could not cover. The conditions under which this was accepted was that companies had to have membership of their national chamber in order to become a member of the European Chamber. With this straight jacket we started our show in 2000.
How does your first presidency compare with your second?
The first term was much more chaotic. We had an outgoing secretary general in early 2007, though we had a great substitute in his predecessor Ian Kay (who served the Chamber as executive general manager from 2002 to 2004) who supported us through the transition. I worked with four secretary generals in three years! And then we had the global financial crisis. Many members dropped out and we had real financial challenges. I remember we had an emergency meeting on 29th December, 2008, with the Executive Committee, and when we looked into our finances we realised if we continued that way we were going to be bankrupt. We had to lay off 10 per cent of Chamber staff. So the first presidency was very tough on that front. But I would say it was much easier in terms of the topics we were dealing with. We had just come out of the implementation phase of WTO, and there was a palpable belief then that China was changing, and more accommodating to our members’ wishes than it is now.
This second term, with respect to finances and the management team at the Chamber, was far smoother. There was more maturity to the setup so I felt that I could challenge the Chamber more in terms of substance, to take it to the next level.
Do you think your first term gave you a different perspective on how to run the Chamber the second time around?
I always felt that the worst thing that could happen to the Chamber is that it could become complacent. I like to push the envelope. For example, in 2007/2008, I first started trying to incorporate local position papers into the main position paper. The first year was so miserable, that we just had stop it – it was painful to read. For 2009/2010, in the last position paper of my first term, we did have a bit about Shanghai and other chapters in there, but I felt like possibly the Chamber wasn’t ready for it, I felt that it needed more member input and needed to be done differently. So I left with a sense of unfinished business, but also a strong feeling that people don’t want to venture into unknown territory. That’s where leadership kicks in. As Henry Kissinger told me here in Beijing in October 1989, “The task of the leader is to get his people from where they are to where they have not been.”
The first term had also been a struggle trying to deliver the first overcapacity study in 2009 – that was an unusual product for us, and it was very painful for Chamber staff member Alex Bell and myself to get it out. Members wanted it, but they did not want to contribute – it was just not in the DNA of the Chamber at that time.
Was it a lack of understanding of the benefits that a study like that could bring?
Yes, I guess it was a lack of understanding as to why the Chamber had to take a stance on a topic that fell outside the normal messaging. But I had started to pick up signals from within the Chinese system, where I could see that the reformers wanted something like this, and I could foresee that if we got it right we could have a major impact. But members were reluctant to share data and we had a real issue getting the narrative right. So Alex and I spent the October holidays in the office to get it out in time for the EU-China Summit in November 2009, in Nanjing.
I remember that I was very close to just killing the project, because I couldn’t see how it would be possible bring it all together. But then all of a sudden the narrative fell into place. It even became something we could re-use for the updated overcapacity study in 2016. So sometimes you just need steely determination – when you get to a certain stage, don’t look over your shoulder, and move on. That’s basically what kept it alive. I took away the sense that while the Chamber benefits vastly from these additional reports, it is not naturally geared towards producing them.
Do you find the access that you have to the Chinese authorities now is different to when you were first in office?
I think in my first term the access we had was in many ways easier. China was not as big and complex—and content—as it is now. Really, after the 2008 Olympics, the 2010 Shanghai Expo and the financial collapse of the West in 2009 and the rise of China, perceptions changed. Before, there was far more openness to Western ideas, the Washington Consensus. Now the West has possibly discredited its own economic and political system, and hence I find making my points far more difficult because China believes it has a better scheme, so what am I now selling to them? I think China now feels to an extent that it is getting away with this rhetoric about free trade, when actually it is closing up.
After having launched six position papers, did they really make any difference?
I think that they have made little difference to the Chinese authorities when you really look into what’s been implemented. But they have had a huge impact on the Chamber’s self-confidence and pride, and we speak the truth. I think that’s where we make a difference, because it is a much sought after and well-read document by Chinese officials. We produce a huge amount of content, the language we use is technocratic, and it is an unbiased, bottom-up assessment from industry. So from the Chinese side, they clearly have great respect for us, but it doesn’t mean they’re going to give us anything free of charge.
What it also does, is that it puts us on the map when it comes to Member States, Washington and Tokyo – we really set the benchmark right now. So I would say it makes a difference with our governments, it makes a difference in that it really promotes awareness of our Chamber and it promotes self-awareness among our members. It is our dignity card, but it hardly moves the needle in terms of change. China may need a crisis to arrive at the point where it recognises the need to change, and when it does we have the recommendations ready.
So it represents a solid and consistent approach from European industry?
I think it really shows that we care about China, we know what we are talking about and that we really see the potential for China to change, even if the Chinese leadership presently doesn’t have the political clout to follow through on reforms.
What kind of reception did you receive from the various Chinese authorities over the years?
I guess it has been quite apparent those who are reformers and those who are not. The CBRC [China Banking Regulatory Commission], in particular chairman Liu Mingkang, was always stellar in inviting us to visit him, so he could learn about the financial sector reforms that we were proposing. Others were polite – our normal docking station, MOFCOM [Ministry of Commerce], has always had a gracious attitude towards us. We have not always been easy on them, but they have always received us and listened to us. Unfortunately we never got any traction with the Ministry of Environmental Protection. It’s strange, we thought that they would be our ally, yet they never graced us with a meeting, it’s something I could never figure out. So it varies greatly. Where I really feel that we have really had an impact, and where I felt we are a real part of this, is among the reformers, the Leading Group of the Party, and the State Council DRC [Development Research Council], who are inspiring in their demands for us to speak up.
I must say, that whoever I met were polite and extremely well briefed. Rarely did I have a meeting like the one in 2009 where a minister decided he would speak for 55 minutes, assuming that he would leave me just five to respond. So I deliberately spoke for 45 minutes, to make a point. I found his approach offensive, that for nearly the entire hour he wanted to take the propaganda line. So I felt for the dignity of our organisation, and the dignity of the office of the president, I wanted to make him realise that he cannot deal with us this way. We were never invited back.
Were there any meetings that took you by surprise?
I had a big run-in with the NDRC [National Development and Reform Commission] in late 2014 on the Anti-monopoly Law. Director General Xu Kunlin—known as ‘the enforcer’—of the NDRC’s price supervision and anti-monopoly bureau was livid about us going public on NDRC’s way of dealing with Anti-monopoly Law investigations. The first part of the meeting resembled what I can only imagine people went through during the Cultural Revolution. But then I realised that actually he was trying to accommodate us. Although he was really blasting us, he was listening very carefully and took in the messaging. So he was not just enraged, he wanted to make a point. Suddenly things changed in the final 10 minutes of the meeting and we managed to part on amicable terms. So he had to do his spiel, but we ended up establishing a conference together in early 2015. It went from rough to really professional and accommodating.
The one who really touched me with his earnestness, and the promptness of his responses, was Mr Pan Gongsheng, Administrator of the SAFE [State Administration of Foreign Exchange], over the recent issue with capital outflow. I went public on the issue and we caught the Financial Times headlines on 7th December. SAFE were not happy about this, but he was genuinely keen to understand why we went public in this way. He understood the implications. I knew that we were just collateral damage in this issue and we were not being targeted. So this reaching out by Mr Pan, and the seriousness with which he wanted to help us, not only was his professionalism exemplary, but also it was actually touching. Looking back over the last three years, the most productive and rewarding government engagement was with SAFE.
Why did you decide to try again to establish local position papers in your second term after not managing to do so in your first term?
We had a new Exco [Executive Committee] and there was a strong feeling emerging from the Shanghai Chapter that they wanted to have a greater say in things, in that they wanted greater representation on Exco. However, I thought that it wouldn’t really change things in a significant way, it would just reshuffle the furniture, and it wouldn’t add value. I felt that if they genuinely wanted to have a bigger say, they needed to develop something that would be really worth speaking about. I thought it would good for them to combine local results from the Business Confidence Survey with the concerns of the local business community. It was a mighty struggle for them to put it together, and I guess that there was then a realisation that it is not just about wanting to have a greater say, you actually have to bring quality content, and doing so is not easy.
They finally came up with their first local position paper in early 2015, which was decent quality and went on to inspire the other chapters. So I felt like having greater representation in terms of Chamber governance isn’t enough – you actually have to put something out for people to chew on. After a while, the members and the local government realised that Shanghai has a different voice. Bringing about this change took a lot of nerve and a lot of communication and understanding with the local chair Stefan Sack– it was not easy in the beginning but we became real friends over this.
Do you feel that local papers will be an initiative that continues into the future?
The chapters need to come up with these papers on a needs-analysis basis. Whenever they feel that they actually have something worth saying, something different, then they have to speak up. Maybe a gap of up to three years between papers makes this possible. I think each local board should at least attempt to produce one over its duration, though, to put its personal stamp on the local Chamber chapter.
I think the chapters have come to understand the kind of influence these papers can have on local governments, from the push-back they received and the kind of communication that these papers have generated, the kind of creative tension that came out of this process. Generally speaking, a lot of members are very reluctant to engage with local government in a level-playing-field discussion, and make demands. But these papers have shown that it can be done, we pay taxes, we employ people, we add value and we have something to offer. It’s better than just staring at the gates of the city hall and hoping something happens.
Why did ExCo decide in 2014 that less members would be ok – we now have 200 less than in 2013?
When I took my second office in 2014, I realised that the management and staff were chasing members. It was like Sisyphus pushing that huge stone up the hill, and one year later the stone was back down in the valley. I could sense huge frustration and also resources were bring wasted. I was keen to have a strategy that Exco could agree upon, and communicate that it’s okay to have less members because it is the membership quality and the engagement level that really matters. I was particularly concerned in South China that all of a sudden we had European Chamber ambassadors going to Zhuhai, Dongguan and all these other places. I could see how well the staff meant it, but the cost overrun was big and so was the frustration. Members were joining the Chamber, but then dropping out when their expectations weren’t met. So we had a yoyo effect. What I wanted was a bigger pull factor, meaning that our engagement, our content, our management style and our events should convince people to come to us, rather than push hard and have us rushing around trying to attract every pizzeria.
Is there any lower limit that you feel the Chamber shouldn’t drop below?
If we drop below 1,500 that would be something to look into, but you also have to understand local conditions. Maybe 100 members in Nanjing is too much, and maybe 80 would be better, so that you have a better grip on the membership and you don’t stray into other cities and spend a lot of resources for just five or six members and forget about the others. What makes a difference is when a group of companies pays for 25 per cent of your membership revenue, such as the Advisory Council – this is where you should focus. If they decide to pull the plug you are left with a hole that you can’t fill with three hundred companies. I always felt that one of the toughest challenges—and I’m not sure I ever solved it—was how to get the Advisory Council fully engaged and happy to continue.
We have a good sign-up every year, but it should be like the Champs Élysée in Paris – it is our best street, with the biggest brands. If one of the big brands pulls out, there shouldn’t be a willingness to take on a second- or third-class brand just because they are willing to pay for it. I felt very strongly that we should keep our Champs Élysée a prime area with sparkling names. Once you lower your sights—for example by opening it up to any consultancy, as I am sure there are many that would pay to sit at the table with the big boys—you then might cause the others to leave, because they would question the level of exclusivity. It is a huge challenge, and one that I hope the Chamber is up to, to have the strength to turn away companies that have the money, and to keep a good mix of companies across a wide range of sectors and from different countries, so that it still remains an exclusive body and not just something that can be bought into.
What was your most difficult decision to take as president?
The most difficult decisions are always when you have to fire people. I remember in 2009, when we were having real financial difficulties, I had to fly down to Shanghai to let the general manager of the local chapter go, who was actually a friend of mine. The local board did not agree on this, and I personally had to fly down there to convince them, and then I had to meet him myself to explain that we cannot continue. That was really difficult, but it turned out to be the right decision. We created a sense of urgency, and eventually became financially stable, and did not replace him for a while, but we forged a new direction afterwards.
Another difficult decision was when one of our local chairs was running up and down the country in 2009, pretending to be president – printing name cards with the president’s title on it and meeting and greeting Chinese dignitaries. We got wind of it through the Governor of Henan. Yet the local board did not want to let him go, and thought that he was doing a good job. So the secretary general, Michael O’Sullivan, and I had to go to Tianjin to meet the board and convince them. We had to eject the guy from the membership and we had to install a new chairman. That was really difficult, someone hijacking the Chamber. I felt that local chapter boards are often so close to each other, that even if someone sins or is just not up to the job they will still keep them on the ticket. As a leader of an organisation you have to bite the bullet and be convinced that you’re doing the right thing, and then try to communicate this. It’s difficult.
What were your happiest moments?
I think there were two. During my first term with Trade Commissioner Ashton, and in my second term with Vice President Jyrki Katainen, I was asked to join the meeting with the Chinese Vice Premier and all the ministers in the EU Commission’s seat in Brussels, the Berlaymont. The Chamber was also given the chance to cherry pick all the global CEOs who would be sitting around the table. I felt like the European Chamber had really made it to the top – we were relevant, we were credible and we had the content. The fact that the Commission felt strongly that we should decide who is at the table, and that we could do the messaging, that was perhaps the happiest I felt.
The most recent happy moment was at the 2017 AGM in Shenyang, a chapter we have all thought at one point or another that we should maybe close – for a while it looked more like a fiefdom and not like a chapter at all. Its turnaround story over the last two years has been incredible. For the AGM, three times more people turned up than they have members. I cannot express how happy I felt when I saw how full the room was.
What about the most distressing?
Probably when I had to fight to get rid of this dual membership. The personal attacks that came, particularly from the German Chamber, trying to instigate a campaign for people to not listen to me. When I went to see the bilateral chambers, they waited until I left the room before strongly going against everything that I had said. I felt really bad, because I was hoping they could say that to my face, but none of them had the guts to challenge me. I took the time to go and speak to them, but I know from people who stayed in the room after I left that they tried to portray this issue as my own personal vendetta [against the chambers], and that was hurtful. But more than 90 per cent of our membership voted in favour and that was the best band aid I could have imagined. Now the relationship with the bilateral chambers is amicable and productive. Hardly anybody remembers those days in the trenches.
Given that you have a day job as head of a multinational company in Beijing, how did you manage the work load?
Over my six years as president, one thing was always very clear: BASF came first. I never dropped the ball there. They pay my salary, they put faith in me and they gave me the time to engage in the Chamber’s activities. It takes a lot of discipline to focus. I grew accustomed to an 80:20 rule – do things 80 per cent perfect and then move on. A lot of people spend a lot of time trying to make things 100 per cent right, but I found the final 20 per cent is the most time consuming part and takes so much more effort. You don’t have the time, energy and appetite for other topics with that approach. So for me, if things were 80 per cent, then I would move on. To deal with multitasking you need focus, and to choose your communication channels – I am not on Wechat, I assume that if something is really important someone will bring it to my attention by either talking to me or via email. So I try to cut down on the avenues of communication so that I know that whatever is really important will become more apparent.
The job cuts deeply into your private life – you may get home at 8pm and look after the kids, but by 10pm you’re back to the emails. So it helps to cut down on external distractions, instil in yourself a sense of discipline, and develop a network of contacts who can help you to fix things – friends that you can challenge, and that can challenge you. Sometimes you can stop on the fringes of a topic because a trusted advisor tells you not to go down that road. People often waste their time because they have set their mind on something – I can’t even tell you how many ideas I had for the European Chamber that I ended up dropping early on.
How far would you get before dropping these ideas?
I can often sense that there is no appetite among the membership for a certain topic when I talk to them. Being in meetings is important to get the informal views of what people are really interested in. This means you have to be approachable, and never appear presidential in these circles. If you get the sense that there is no appetite, then drop it. For example, after the overcapacity study I thought we could build on it with further papers every three months in order to stay in the news on this topic, but first I realised, a) we could stay in the news on other topics, and then b) the members were not willing to come up with the data set, so I dropped it like a hot stone. The ability to admit that the idea you came up with is not going to fly is a useful trait. Often, the quicker you can do so the better. At the same time, if you are convinced you have a good topic that somehow doesn’t seem to resonate with the membership, then you just have to up your communication skills and convince them.
So what do you do to relax?
First of all, I have small children, and they could not care less about status or discussing intellectual topics or any of the things we have talked about here. They have immediate needs—they want Lego—and that really grounds you. Trust me, once you’ve changed a diaper you don’t feel very presidential. Second, I have a very warm-hearted wife who has a lot of patience, and also the ability to give me the time I need to feel a sense of privacy. She never confronts me with accusations about why I haven’t been around, instead she confronts me with candles and other things to slow me down and get me away from this. I try to repay her with affection. We have a wonderful relationship that really relaxes me. I have even turned to watching TV series with her—she’s a really big fan—and I realised that I had become so far away from this kind of thing. I found that watching something for 45 minutes and then discussing it can really take your mind off things.
Then it’s books – I’m a ferocious reader, but I probably buy more books than I could read in a lifetime, but my curiosity is something that is never ending. It’s mostly non-fiction and poetry. I love poetry, and given my time constraints a Haiku really helps! Poetry appeals to me as it gives me a sense of the beauty of language and how you can use it to paint a picture, how you can reflect on the complexity of the world by playing with words. In terms of fiction, I may return to that now, but during my presidency I didn’t have the patience for it.
For non-fiction, many of my friends publish books, people like Tom Miller, Joe Stieglitz and Chris Patton, so I try to read them and engage with them and even tried to introduce them to our members. This is something where we found little receptiveness, which is a pity. We had many events where we tried to put these guys in front of an audience. Often the room had 30 to 50 or so people, but were mostly from embassies and not from our membership. I don’t understand why management-level people often do not feel the curiosity to break out of their briefing notes and engage with someone who has spent a year or two developing a thought, in order to get a sense of the bigger picture. I think there is a real danger with people in jobs like ours to turn into intellectual 100 metre runners, but China requires the stamina of a marathon runner, with the occasional need to break into a sprint. If you don’t try to connect with authors of these kinds of books, it must be difficult to comprehend the development of China. So I would advise getting away from briefing notes, stop running the 100 metres and try to engage.
What about music?
I’m a big jazz fan. I watch Ken Burns on jazz and love to listen to Miles Davis and others, but only when I have the time to listen. I’m not a very good background listener, if I am listening to something I really have to focus. So music has been pushed back a little bit. Jazz for me has always had a liberating effect – it is very telling that autocratic systems never struggled with classical music, but they always did with jazz. Jazz is liberty, engagement, improvisation, curiosity, and I always felt that this is how I wanted Exco to run, and how I wanted the whole Chamber to run. You have this same beat that you’re all following, but you give people the liberty to shine in particular moments, and the whole thing is called art.
When US presidents leave office, they leave behind a letter to their successor in the oval office. What would you write?
First of all, work very hard, but read a lot to make it look easier. Try to compress your messaging into a very clear narrative – this is sometimes hard to do. China is very complex, yet when you meet the media you only have 20 to 40 seconds to get your point across, and I found this very daunting and challenging. So, work hard, read hard, challenge people and engage. I used to have this Dintaifung inspiration group, where I was always seeking the best Beijing minds in order to get a feel of what I could say. That was always rewarding and riveting. So, work hard to make it look smooth.
Another thing I felt very strongly about, and I know this from working for my company, is never allow your assistant or anyone else to write your speeches – they must be genuine and they must be in your language. People assume the fine detail of what you say is important, but no, how you deliver it and what you get across is what stays in people’s minds. I felt that if I had just notes instead of a fully written-up speech, I would be able to adjust my speeches to people’s body language. Maybe get inspired by speech writers, but make it your own. Make it shorter, make it more colourful, otherwise people will get bored, and not only will you end up losing a point you will come across as one of those party hacks.
It should also be remembered that when you speak to a journalist you aren’t just talking to the person with the microphone across the table, you are communicating to a million people. Accessibility is very important, so trust the person with the microphone has a genuine interest not to put you into an awkward position. Trust the journalist is just interested in listening to something and that you have something interesting to tell. You can always refuse journalists, but I think to engage with them is vastly important. It’s like a name card for the Chamber. Never make it more than two minutes. Many people ask me how I manage to always get in the newspapers. I don’t have a press conference every Tuesday morning, people just call me on my mobile phone and I have something to say – I have something to say because I read up on these issues and I get good advice.
Another point to make is, the buck stops with you. If something is a success it’s about the team; if something gets screwed up, it’s you. Take that ownership. You have to be an optimist and maintain a good sense of humour to deal with shortcomings. Every time you try something and it doesn’t work, it’s the president, and you shouldn’t evade that responsibility.
Does that make you feel isolated?
Sometimes you feel painfully lonesome, for example when I went public on the Anti-monopoly Law in 2014, and the NDRC came down on me like a tonne of bricks. I realised that I needed to first explain to the members why this approach was good for us. The company that had asked for this help was, of course, nowhere to be seen, and all of a sudden I was against the mightiest ministry there is in China. That was a very lonesome moment. But I felt very strongly that it was the right thing to do, and then maybe faith kicked in, so I hung in there and I reached out to friends and allies, and after a while I was really able feel that I had a support system. At one stage, though, as a leader, if it’s the right thing to do then you just have to do it and bear the consequences, and have the ability to communicate that decision.
Were there occasions when something you said wasn’t reported in the right way, and did you feel the need to set the record straight?
I only did that once, and that was because my company was mentioned in the newspaper. So I had to make sure they understood that I speak on behalf of European business and not on behalf of my company. Sometimes it seemed too intriguing for journalists, particularly Germans, they always seemed to want to put my company name in the story. But I must say, I am grateful for the years of trust I had with most journalists who honoured that.
You agonise about headlines, because you talk to a journalist and you think you have put your point across, and you know they have it in their draft, but then someone in London or New York puts in a headline that makes you cringe, and you wonder, what the hell are the government and the members going to think about this? You can’t undo it.
I was very keen to have op-eds out there, messaging that I could control, but even there the headline is written by someone else. So members maybe don’t understand that if you want to be in the news, it has to be news that sells and to an extent needs to be interesting and controversial. This is not a company pamphlet, this is the Financial Times, and these guys decide, you either play by their rules or you are not part of the discussion. So I decided to take the 80:20 approach again – if 80 per cent of the messaging was right, and 20 per cent was a failure, well, I just hoped for forgiveness for that 20 per cent.