He recently spoke with Frederik Balfour, BusinessWeek's Asia correspondent, about the challenges of running the company and the future of the Chinese telecom industry. Edited excerpts of their conversation follow:
Q: How did you get involved with China Netcom?
A: The four state shareholders -- the Ministry of Railways, the Shanghai government, the Chinese Academy of Sciences, and the State Administration of Radio, Film & Television -- said they wanted an outsider. They said: "You know how to run a business, why don't you do something for your country?" I couldn't say no.
Once I joined, I found myself on a train I couldn't control, going faster and faster -- it became part of the Chinese company reforms. Life became very difficult with four state shareholders and regulations and competition from China Telecom. But I majored in ecology, and evolution taught me about the survival of the fittest.
Q: How did you deal with different stakeholders?
A: Jiang Minhang [son of former President Jiang Zemin] was a shareholder from the Chinese Academy of Sciences. He was a good director and had something in common with me -- we both studied in the U.S. But the first year was a disaster. I was a CEO, but they didn't give me a directorship because all directors must be ministerial level.
I had to wine them and dine them and not let them color me as the foreign-educated Chinese guy with money. That was a handicap. I had to give up my U.S. green card to run this company. You have to become part of them, with a company car and driver. I have an Audi A6 2.4 liter class. Every senior official drives these. Directors drive 2.6 liter versions.
Q: Do you regret having left AsiaInfo?
A: I don't know. I'm often wondering because a friend of mine, a professor, says India is better at promoting entrepreneurs and world-class companies, but the [Chinese] government always controls large companies. The private sector can only go so far. I'm from private enterprise and learned the skills of surviving in a large state-owned enterprise. That's a 50% business and 50% politics balance.
Q: What made you decide to take a 20% stake in PCCW [a Hong Kong telco] earlier this year?
A: We lack innovation and management knowhow, which are hard to find in China, where all telecom operators are state-controlled. Hong Kong is very competitive. The people assets are very important. We also have control of Asia Global Crossing [purchased when Global Crossing went bankrupt] and can work with them on that.
Eventually we will form a joint venture with them -- PCCW -- in Southern China where we aren't strong. [China Netcom only has operations in the north, China Telecom has the south.] We also have a lot of buildings and land, the legacy of a telco, which we can sell to PCCW Property and let it manage them for us. In Beijing we have more than 2,000 buildings, even a five-star hotel. It's stupid. We want to sell that.
Q: What's your relationship with board member Rupert Murdoch?
A: He became my mentor. Whenever I get frustrated, I read his [biography]. I cannot let him down. EDITED BY Edited by Patricia O'Connell