BEIJING - One simple question hangs over the head of every Western business person who looks at China:
Do I have to suffer through China now if I want to be there when business finally booms?
After spending a few days in Beijing with Western auto industry executives and government bureaucrats, I've formed a tentative answer to that question: No.
Don't drop a bundle in China while chasing the dream of a vast market in 10 years or 20 or 50. But you might want to be here now anyway - if you can make some money now.
China is a fascinating land of contradictions. A so-called communist government has tossed the social safety net into the Yangtze River. Compared to China, in some ways, America is a socialist paradise.
Meanwhile, a repressive central government is trying to create free markets. But the government lacks the regulatory mechanisms to ensure free markets, and it often lacks the will to enforce even its own end of a contract. And the central government can't force those pesky provincial governments to stick with the plan.
Now, government agencies talk about the need to create a globally competitive auto industry, even though that will require layoffs. But the government still picks the Western partner and dictates many of the terms for all car-making ventures.
A manager at a Western automaker says she likes China, although her phone is tapped and calls are mysteriously cut off.
No wonder Chrysler Corp. is exasperated with business in China. No wonder Peugeot is pulling out after a decade of disappointment. No wonder the Mercedes-Benz minivan venture is in doubt.
But a funny thing is happening to some companies on their way to the 21st century. They're making money in China.
Xie Penghong is deputy director of the Department of Automotive Industry in China's Ministry of Machinery Industry. On the day of our interview, he wore a colorful silk necktie filled with images of automobiles, the kind of tie often worn by a 'car guy' in marketing at an auto supplier.
In America, Xie would be a baby boomer. In China, he is one of the lucky survivors in a generation that failed to learn skills because they were too busy chanting slogans in the Red Guards.
His ministry is trying to square a circle. 'China is no longer a planned economy like in the old days,' Xie says. The ministry is trying to plan an unplanned economy that will work for China: improving public transportation even as it chooses the companies that will make cars for the hundreds of millions of Chinese who still crowd the bicycle lanes, even in the busy, modern capital.
Xie can talk the talk of modern business and lean manufacturing. He says the government will accept the social dislocation of taking laughably overstaffed plants and making them lean.
And some automakers think China is starting to walk the walk. That's why General Motors, Ford Motor Co. and others are lining up to replace Peugeot.
In Beijing, I ran into Scott Greer, the new president of UT Automotive. In an ironic comment on success here, he boasted that one Chinese operation was not losing money. Other UTA operations in China are even making money. This is real business.
So do you have to be in China now if you want to prosper in the future? No. Ultimately, a circle can't be squared and remain a circle. When China actually achieves a free and prosperous market, it's likely that today's governmental policies will have changed beyond recognition.
To succeed in China in 2020, you won't have to have been picked by a ministry in 1997.
Gerald Kania, the congenial vice president of Ford Motor (China) Ltd., oversees Ford's growing parts-making operations here. He foresees big business in China, although Ford hasn't been tapped by the government to make cars.
Still, he says, 'I think you have to be crazy not to be here.'
Maybe. But try to make it a real business today, not in 20 years.