about 1,000 words. You can easily keep that in your head and sit down, start and finish. You can think the whole thing out at once, but a book is much bigger. A book is, say, about 80,000 words, but an article is around 800 words. A book has to hang together and has to make sense. When writing a book, you have to stick together, you have to watch when you repeat yourself, or contradict yourself.

Were there any unexpected revelations about foreigners doing business in China?

I didn’t have any big blockbuster secrets, but I think some of the stories I tell were surprises for someone who knows China, some of the stories about the corruption, and some of the stories about the companies who came here with such totally wrong ideas.

Did you have any feedback about the book from your Chinese friends or colleagues? Do you think there is anything of interest to Chinese readers in the book?

The book has been translated into a couple of languages, though not Chinese yet. It would be a bit funny if some Chinese come to me to read about how to do business in China. But they might find it interesting as an example of what a foreigner thinks about doing business in China.

How have ordinary investors and business people from the West been affected by the recent product safety scandals and the resulting political backlash in the United States?

The timing I guess is good for me since I talk about the food safety issue in the book. The thing is, everyone comes here for lower costs. In the West, a lot of people look at China as the one that is driving down the price of everything, that China is undercutting everyone for the cost. But China does not always drive the price. When our companies come and say that the price needs to be cheaper and cheaper, Chinese producers have to go along. So this is very much the responsibility of both sides. I feel like everyone is diving down to the bottom. Companies will spend more, and I guess the price will rise and the margin will fall. More has to be done and more has to be spent on quality control.

The political backlash in the United States is interesting. People get very excited about China for any number of reasons. In other countries, the reasons could be currency and labor issues or political tensions. Because China is so big, everyone always worries about how if things are going well in China or not, it will have a huge impact on them. So anything that happens in China gets magnified quickly and gets emotional. I understand a little bit that people in the United States see America as losing jobs and political influence to China, especially in Asia.

I once talked with a German friend, and he told me Germans are not bothered by such worries and he thought such worries were typically “American.” Do you agree?

Yes, I guess I know less about Germany, and I know that reaction in the United States is emotional and not rational. It’s interesting that the European Union has done a better job selling to China and they have a pretty good trade balance with China. In general, China’s trade with Europe is healthy and balanced. In the United States, it’s way out of whack. Some Chinese would say—and to most economists I think it’s acceptable—that the U.S. trade deficit is not because of the currency issue. The currency is undervalued maybe by about 8-12 percent. But even if you fix it, you wouldn’t solve the balance. It’s about America’s spending habits and China’s saving habits. It’s all these macroeconomic issues of imbalance. So China does need to develop domestic demand and rely a little bit less on export growth, and the United States needs to save more money and stop borrowing and spending more than saving. It’s not the United States that likes to take the blame ourselves. If the Congress is up for election, they don’t want to tell the people that it’s our fault we spend too much. They say it’s China’s fault. n