During the Circuit Breaker last year and in between jobs, I had the luxury of time to resume my reading habit. While it was only for a short-lived moment, I was able to complete 4 books. For the whole of 2021, I am ashamed to confess that I would most likely end up reading only a grand total of 1 book. I am grateful that I made the right choice in choosing the “Red Roulette – An Insider’s Story of Wealth, Power, Corruption, and Vengeance in today’s China”. I am mindful that this is predominantly a Personal Finance blog, so I would like to share with you some takeaways on this aspect from this book. This is my book review of Red Roulette, which I think is a must read for those doing business in China.
1) Early Adopters and their pot of gold
The main protagonists, Desmond and Whitney, belonged to the earlier generations of businessmen to benefit from China’s economic opening. They were definitely not amongst the first wave, but it goes to show that there is still enough money left on the table for those who are slightly late in the game. Paralleling this to the famous innovation curve in Diagram 1, I would say that Desmond and Whitney are “early adopters”.
These early adopters will potentially make plenty of hay as the sun is still shining. Whitney was astute in the game of guanxi （关系）and milked her relationships for all its worth.
Back at home, we also see some of the Merdeka generation benefitting immensely from Singapore’s economic progress. The days of making up to 10X of our cost from our HDB flat might be long gone but there are other asset classes which are just beginning their ascendancy. That is why I decided to set aside 5% of my investment portfolio into cryptocurrencies. I am definitely not an early adopter, but I hope that I can harvest a small pot of gold when it becomes mainstream in the future.
2) A wealthy appearance
In the biography, Desmond and Whitney readily admitted that they spent lavishly on luxury goods to keep up with an appearance of fitting in with the crème de la crème of the Chinese bureaucrats and business elite. They bat no eyelid in blowing a few hundred thousand euros for wine tasting in France, or buying the exclusive imported car etc. This wealthy appearance projected an image to their business partners that they truly belonged to the bourgeoisie.
Closer to home, the need to project a wealthy appearance is playing out in the same manner. We are only 1 social media click away from seeing a particular contact showing off the latest designer bag or flashy car. For instance, I am extremely turned off when salespersons show off their material possessions. Instead, it does not impress me one bit. If you mull over this longer, you might realise that some of them could be hiding their insecurities behind a veneer of wealth instead.
3) Art of deal making
I would highly recommend Red Roulette to businessmen because it demonstrates the art of deal making within the Chinese system. Particularly, it explains in detail how the Chinese conducts business. There is a great deal of wine and dine involved before the topic of business is even broached. It is also very important to understand the ins and outs of the Chinese political system. This topic merits devotion because China’s political system is truly unique in this world.
I could relate to this because I spent 1 month interning in China. I recalled that just as we were approaching the end of the working day and almost on a daily basis, my supervisor would tell me that he was going to meet “Mr XYZ” from the authorities. He spent time to explain to me where this person stood in the local political hierarchy and how only after getting his blessing, could he meet Mr ABC to get the official stamp. This would be one of many stamps that he had to obtain in order to obtain regulatory approval for the project. Therefore, when Desmond wrote that his liver was part of collateral damage, I could definitely understand why.
This internship experience has also proven to be very valuable in my career thus far. Whenever I have to make business trips to China, I at least have a shallow understanding of “how the system” works and need not start from ground zero. Similarly, some of the lessons learnt were also applied when dealing with the rich Chinese during my stint in Indonesia.
4) Luck is important in life, but you must be ready
There were many occasions whereby Desmond commented that Whitney and him simply got lucky. For instance, he readily admitted that the Ping An deal (which multiplied their capital several times after its IPO) proved that “wealthy people aren’t so much brilliant as lucky”. There is obviously some element of truth in it but I feel compelled to state that while luck is important, one must also be ready to seize the moment when it arrives. Without the awareness that a golden opportunity has presented itself and the necessary competence to execute it, any such luck would simply dissipate after some time.
So let us not forget that Desmond was amongst the rare breed of graduates educated in prestigious universities overseas. Whitney also slogged her life away to cultivate cosy relationships with top Chinese officials early in her career. These were competitive advantages that they put to good use subsequently. Therefore, while it was true that luck and serendipity were sometimes involved, their hard work behind the scenes enable them to strike while the iron was hot. Rather than bemoan the lack of luck, we can all try to make our luck by being ready first.
I thoroughly enjoyed reading Red Roulette and reviewing it from a personal finance perspective as well. The last time I did such deep reflection on a literary piece was probably the A Level Literature exams paper! For those who are interested in the book, you can purchase it from Amazon through my affiliate link or head over to Kinokuniya stores in Singapore.
Meanwhile, I strongly believe that reading is a good habit to inculcate and that is why we read to our daughter daily. Hopefully, you will read more than 1 book that I did for the whole of 2021.
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