Born in Shanghai, Eddie Wang spent his childhood in Taiwan and, at the age of 12, came to Hong Kong where he finished his middle school and university studies. His Shanghainese father, a tailor, always impressed on him the need to excel, and in those days, excellence meant only one thing: working for The Bank - the Hong Kong and Shanghai Banking Corporation.
Wang joined HSBC in 1973, after six months of working with another local bank.
In 1980, he was asked by John Strickland - who would later become HSBC chairman in Asia - to move to London to look after the production of the bank's own cheque books at a printing factory in Chichester, armed with HK$30 million and given a deadline of six months.
Wang was so successful in this task that his next posting was in Milan where he looked after the printing of the bank's demand drafts. Subsequently, he was moved back to Hong Kong to become the office-planning manager when the bank was building its iconic Central headquarters, designed by Norman Foster.
In 1994, Wang became HSBC's head of China business. "Some people even thought that we wanted to get back the bank's headquarters in Shanghai," he says.
After six years of negotiations with the People's Bank of China, which was then in charge of regulating foreign banks on the mainland, Wang was given the option of setting up a "representative office" in Shanghai - another pioneering status for HSBC.
But after almost 30 years with HSBC, Wang felt the urge to move on. The bank, however, had other plans, asking him to stay for three more years, this time stationed in Los Angeles to help run the private banking business of the newly acquired Republic Bank.
In 2003, during a post-Sars trip to China, Wang felt the urge to go back to the mainland and do his bit to help. A year later, by mutual arrangement, he left HSBC, ending a career with the bank that lasted for almost a third of a century.
After this misadventure, Wang returned to Hong Kong and was enjoying himself out on the fairways when, one morning, he got a call from Beijing inviting him to go to the capital with no further details. "I like to be adventurous, so off I went," he says.
The call was from the China Banking Regulatory Commission and the job on offer was the presidency of the China Minsheng Banking Corporation, where he helped double the company's assets and net profit between 2006 and 2009.
The rest, as they say, is history. And key lessons from that history will now be shared by Wang - a published author and currently McKinsey senior adviser for Asia-Pacific - at the Classified Post Banking Luncheon on August 30. The following are excerpts from Wang's enlightening and amusing interview with Rex Aguado on the general themes of his talk.
Were you appointed immediately to head China Minsheng or was there some vetting involved?
It took almost six months because they really had to check everything - your last name, which family you came from, the things you have publicly said over the past 30 years.
Did your stint with the underwear manufacturer come up?
They just laughed. Say no more, they told me. I had the feeling they didn't want me to make it so public.
Is there a difference between the way banking is done in Hong Kong and in China?
Yes, the Chinese way of doing things is just different. In China, you cannot just take anything as real. What one says can have many different interpretations.
So the truth is not only one truth?
That's right. For example, if you submit an application form, the official receiving it will tell you they will "consider" it. You then proudly tell the head office the application should be ready soon because somebody was considering it. Then nothing happens after one month. You go back to the official and he will tell you not to worry because they are "studying" your application. So you're happy because they are actually studying it. But two months later, still nothing happens. You go back to the official and this time he says, "Basically, no problem." So what does that mean? All these could mean something else.
How does this affect business for foreign bankers?
Some of them misread what the officials are saying. While locals tend to proceed with business without reading the fine print of a directive or licence from a government agency, some foreign players are overly cautious - they hesitate to do things and they miss opportunities.
So it takes special skills to read between the lines.
Exactly. You really have to know these people well, the language they use. In other words, you have to mingle.
What do you mean by the "myths" behind domestic banking in China?
That means that what you see and think as real or true is actually not so. It may actually be the opposite of truth.
How about foreign bankers' dealing with their colleagues or employees?
It is always difficult to strike a balance. You cannot just forget about those other guys and do whatever you like, because you'll fail. But you cannot just go and follow all these guys either. You must let them know that you know without saying it. For example, if somebody gives you a paper to sign and you read it line by line, they'll laugh. So the next time, you may just sign off on the document without checking it, because you have to trust your guy and the burden is on him to make sure everything is correct.
Is this inability to read between the lines one of the reasons some foreign banks fail on the mainland?
Yes, it is, although there could be a thousand and one other reasons. In any case, you have to mingle with these people to understand the Chinese way of doing things.
Doesn't this reinforce the stereotype of the inscrutable Chinese, even in banking?
Some may think that because local mainland bankers are making lots of money, they may have bigger brains. Actually, it's not like that. The banking business on the mainland is not that complex. There are just so many people wanting money from the bank. You don't even have to go out to get business.
You will also be talking about the importance of guanxi, or relationships, to do business in China. Is guanxi tradeable? Can you buy guanxi by hiring the right people?
No. It's no use. Yes, you can hire one person with, maybe, 20 good guanxi. But to have a decent business, you may need as many as 1,000 guanxi. And then you may only use this guy once, but at other times, he's just being idle.
But it seems that some of the big investment banks hire people with very good guanxi. Does this work?
Yes, maybe you hire one person who is very well connected with this very powerful person. So that's good, but only for that line. For another line, that person is no good. So you need another person, and maybe the more you have, the better. But you cannot cover everything.
Also, you have to remember that guanxi is about relationship, not connection. And sometimes, I think connection is more important because it's very difficult to build relationship as it takes time.
Classified Post Banking Luncheon: China’s domestic banking – myths, truths and opportunities Date August 30 (Tuesday) Time12:30pm - 2:30pm Venue 3/F, Happy Valley Racecourse, Hong Kong Language English Fee HK$2,000/HK$1,600 (by August 18) Registration www.classifiedpost.com/luncheon Enquiries 2680 8232
Some themes that Eddie Wang will cover
Matter of trust Government agencies often lend money, certain of being paid back but without asking “what if” questions
System saves Companies connected with the political system are sometimes protected or even spoiled to prove “the system” is working
Size matters Mainland companies are usually encouraged by the government to grow very big very fast – and to become strong only afterwards
Leaders vs Leadership Leaders take responsibility for problems and solutions, while leadership ensures harmony and one voice
Excellent article with so many examples of the way business can be done differently in China that many Western people have not yet understood.
One point of contention that I have is the reading of the small print etc in contracts for foreigners; it is true that business in China may rely as much on guanxi as it does with legal contractual obligations, and therefore the small print may matter less. It is also worth adding that the laws in China are not always clear, and open to interpretation, therefore the small print could have little meaning.
However this applies primarily to Chinese locals. If foreigners do not follow the law to the letter (assuming the interpretation is properly understood), then they are much more likely to get in to trouble, and this is against a backdrop where local courts are unlikely to be sympathetic to their cause anyway unless it is a clear enhancement to local employment and taxes.
So while it may be a competitive disadvantage, and not the way business is always done in China, foreigners should be careful about the small print, since losing in court can be much worse than losing an opportunity.