Charlie Rose Talks to John Mack

Were U.S. business leaders satisfied with their conversation with Hu and the U.S.-China summit? Do they see change coming?
Anytime there can be a direct dialogue, CEOs find that helpful. What the Chinese want, I think, is a better understanding, having the U.S. really understand what they're trying to do. I was there in December, and I had a discussion with one of the vice-premiers. He talked about our congressmen, our senators, coming to visit him and saying, You should be doing this, you should be doing that. … He said: "I've read over 100 books about your country. I know something about your culture, but I'm not an expert. To come and preach to me what our country should do when you really don't have an understanding, I find very resentful."

One of the things I've found as a businessperson: Our elected politicians don't travel enough. To understand the Chinese and to get along … we need more meetings like what took place with the CEOs and Hu Jintao. And then kind of cajole and push and say why certain things should work and certain things wouldn't work. That's the dialogue I think they're looking for. They really want to work together, and work with us.

What's the goal of this dialogue?
To build relationships. The Chinese … want to trust the people they're doing business with. You can't just fly in and fly out. The first—I'm going to guess—25 times I went to China, I didn't do any business. The first piece of business that we got was a power project. We raised debt money. I finally said to the minister, "Why did you give me this business?" And I laughed at his answer. He said: "You're the only bank that has come without a lawyer. You trust us."

Do they recognize that there's a belief among some businesspeople that they want to learn what you can teach them and then say goodbye?
We can't forget, this is still an emerging market. Really, it wasn't until the late '80s, early '90s, that they started making this huge change in their economy. So you can understand why they don't want to see outside companies come in and take control of their major businesses. They have to be cautious. But at the same time, I think if you build the sense of trust and communications over time, some of the complaints that we have will go away. Look at General Motors (GM). General Motors sells a lot of cars [there].

The Chinese like their Buicks, right?
It's been one of their best businesses. Do they own 100 percent of it? No. But I would argue, in China you want to have a local partner, and you want to make sure it's fair. It takes time, and I think our time frame is very short. Their time frame is very long, and they have issues they have to address. One of the big ones is unemployment. I think they have to create over 25 million jobs a year. You have this whole movement from the agricultural sector into these urban centers, and you need to create jobs to do that. So you could understand why they have to be somewhat cautious. But at the same time, I've never dealt with any group around the world who are [more] open to ideas … and who make sure that you get the right return on your investment. Are there places where someone has copied things? The answer is yes, but that's not just in China. Do they do some things that upset people? Absolutely, they do.

There are a lot more Chinese students studying in the U.S. than Americans studying in China.
That's right. And I think that's changing. But these students are going to go back to China. They're going to have a different view of things. I think things will change in China.

One of the questions that keeps coming up—in the U.S. and everywhere else—concerns whether America is in decline.
Well, one thing that you have to change—we owe so much money. We have such a large deficit. Clearly, that, I think, saps a lot of our power to be as creative as we should be. But I do not hold the view that America is in decline. I believe we have, you know, ups and downs.

Are the Chinese worried that their economy is expanding too fast, that inflation will get out of control?
They're very concerned about inflation and what it could do to their economy. But again, after having said that, I think they're very focused on it. Their central bank is very focused on it. And they get a lot of advice from people from the outside.

You urge people to go to China. And then you ask them how many books they've read.
I don't ask them about the books. I just want them to go.