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Transcript: Vincent Lo, Chairman, Shui On Group

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HONG KONG, China (CNN) -- He's an outsider who's become the consummate insider. Hong Kong's Vincent Lo is one of the biggest foreign property developers in China.

Lo started investing in China in 1985. He's known by the media as the King of Guanxi, a Chinese word for connections. How well connected is he? Well, he got the redevelopment rights to part of historic downtown Shanghai. The area surrounds the building where Chairman Mao himself held his first Communist Party Congress.

That development, Xintiandi, is a concept that Lo is looking to recreate across the country. The Boardroom caught up with Shui On's boss at his Hong Kong headquarters.

Stevens: Do you think that connections are that important, as important as many people think they are if you are going to do business in China?

Lo: Connections and relationships are important everywhere, anywhere. Of course in China, because the rule of law it is not as strong as in the west so a lot would rely on personal relationships. What is also interesting to compare is that because China is one party rule, so if you work with certain officials within a city when they move elsewhere they are actually bringing that relationship with them. And also other party members can always call up their comrades to check on you and that would be a very good reference.

Stevens: Obviously there are roadblocks to doing business in China do you have any simple rules or things to avoid when going into China for example?

Lo: Always take a long term view and never try to just read reports or newspaper clippings or things like that to try and understand what is going on there. Spend the time go and understand what is really is happening.

Stevens: So good intelligence?

Lo: Not just intelligence, that is why I think the decision makers should be there on the spot to try and understand and appreciate what is happening.

Stevens: Easier said than done I guess though isn't it?

Lo: Well that is why a lot of multinational companies would have problems. Don't try to make decisions thousands of miles away.

Stevens: Do you think that is a common failing of multinational companies that they try to do China by remote almost?

Lo: Quite a few multinational big companies are doing well but because they really have a stranglehold on the kind of business they are working on but for the smaller businesses they would have a lot of trouble if they try to control from thousands of miles away.

Stevens: So basically your advice is get your suitcase out and...

Lo: Or get someone who can make decisions on the spot.

Stevens: You are a very keen and very good golfer. You have a handicap now in the single digits. Do you think it is important for any aspiring business person doing business in China to pack a set of golf clubs when they come over?

Lo: Yes I think that would be useful. Certainly I think a lot of people want to try and play golf. Officials, unfortunately, they are not allowed to play golf because the Central Government reckons that it is taking up too much time and it is too capitalistic maybe.

Stevens: Does business get done on the golf course though?

Lo: Actually playing golf and talking business is one of the best ways because you don't need to sit down face to face and negotiate like that you can just have an idea floated walk away, come back and talk about it again.

Stevens: How many times have you used discretion as the better part of valor and let the other person win the hole?

Lo: I never do that because I am out there to win.


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Vincent Lo

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