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Doing Business in China

Michael Lee is on the verge of becoming the first American entrepreneur to build big in the world’s most populous country.

David H. Freedman

Voilà It's the moment of truth: Michael Lee sketches out how a complex flow of cash and debt will see his company's massive Nanjing project through to completion.

Michael Lee is eerily quiet as his world comes down noisily around him.

Packed into a cramped conference room in his company's modest offices in Nanjing, China, Lee's key managers are at one another's throats. The more angrily they spit blame at one another for the disastrous, unsalvageable situation the company finds itself in, the more enervated Lee seems to become, until finally he is no more than a slumped statue following the action only with slight movements of his eyes.

The company has been piloting two stupendous commercial real estate development projects, one in New York City and the other here in Nanjing, a city of eight million west of Shanghai. Lee, who was born and raised in Taiwan and is a U.S. citizen, is spending a week in Shanghai and Nanjing to frantically work contacts, make new ones, push his contractors, and do whatever it takes to keep the 4-million-square-foot Nanjing project moving ahead. His managers are now explosively listing the ways in which this mission has failed. The time frame is too short. The plans are all wrong. They've got the wrong consultants and architects. They lack a coherent vision. Their management structure is dysfunctional. There's more—a lot more. But the real killer, the one truly insurmountable obstacle, is that they don't know where the money will come from. And if the project dies, as it now appears it will, the company stands to lose the tens of millions of dollars of its own funds it has sunk into the project and tens of millions more of funding from investors large and small.

The recriminations go on for more than an hour, during which time Lee mostly doesn't say a word or even change his grim expression. And then, suddenly, Lee seems unable to contain his emotions. They show first in his eyes, then his mouth. The members of the group notice the shift, and, caught by surprise, they become quiet and simply gawk at him.

Lee is not a polished executive; there is nothing slick about him. He is short and a little dumpy, with a pleasantly bland face. He speaks in an odd way that makes him hard to understand in two languages. He does not have an M.B.A. On the other hand, Lee has certain qualities that can't be taught in business school or faked with a smooth smile and line of chatter. He is an intuitively shrewd student of what makes people and deals tick; he is gutsy and ambitious, a relentlessly opportunistic entrepreneur who refuses to recognize when something can't be done. Above all, he is a classic networker who knows how to forge ties and make them work for him and the other guy—even in China, where the vast majority of Western business people find themselves shut out of the best deals and baffled as to how to break in. Lee has parlayed these skills into a small empire that, should the New York City and Nanjing projects survive, would be a large empire. And he would be one of very few Americans to pull off such a massive coup in either China or contemporary New York. Lee could end up being the biggest small-business owner in the world.

Lee has fought hard to keep both projects afloat. And in spite of an endless stream of near-showstoppers, he has repeatedly surprised his doubters and even his own managers. But the meltdown today here in the Nanjing meeting makes clear that Lee is finally out of surprises. Though that would make it hard to explain why, as his angry, exhausted, defeated team members look on in open-mouthed disbelief, Michael Lee has broken out in a grin.

Four Days Earlier: Saturday, Shanghai
The train from Shanghai's airport to the heart of the city hits 265 miles per hour, according to the digital speedometer on the train's wall. It's one of a network of ultrahigh-speed trains China is building to connect all of its major cities, and you can see that same sort of visionary, furious growth everywhere you look in downtown Shanghai. Many of the extravagant hotels and malls and office buildings here weren't even gleams in architects' eyes five years ago, and the ubiquitous cranes suggest China is just getting warmed up.

I am to meet Michael Lee for the first time in Xintiandi, a downtown village-style mallish community of chichi restaurants, clubs, and retail shops. First, though, I find Michael Meyer, a college classmate of mine who went on to become an executive for the giant Tishman Realty & Construction, specializing in shepherding massive urban commercial projects through the maze of obstacles that confront any big development. Now, he is the president of Lee's company, the F&T Group, which is based in Flushing, a New York City neighborhood making up a chunk of Queens. Meyer ushers me up to a stunning, shimmering restaurant that Lee has mostly taken over tonight.

Meyer points out Lee, who is rushing around and between the large, crowded, boisterous tables of the restaurant in what seems to be a nonstop game of hit-and-run schmoozing that leaves his targets beaming. Lee spots us and comes over, and before Meyer can finish the introduction, Lee is pulling me to the tables, where I am paraded around to various groups of diners for enthusiastic introductions. Meyer has to translate Lee's words for me, even though Lee is speaking English. Apparently, one eventually gets used to his slightly garbled style of speech, which is not a product of poor grammar or thick accent but apparently something inherent to his palate. I'm being introduced, Meyer tells me with an apologetic shrug, as the famous business journalist who is following Lee around. "Michael doesn't try to impress you with who he is," Meyer adds. "He impresses you with who he is with."

David H. Freedman: A Boston-based contributing editor, Freedman is the co-author of A Perfect Mess, which examines the useful role of disorder in daily life, business, and science. His other books include Corps Business: The 30 Management Principles of the U.S. Marines; At Large: The Strange Case of the World's Biggest Internet Invasion (co-authored with Charles C. Mann); and Brainmakers: How Scientists are Moving Beyond Computers to Create a Rival to the Human Brain.

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