GSB | Jack Wadsworth, head of Morgan Stanley's Asia operations

WADSWORTH HAS MOVED BOLDLY TO TAKE ADVANTAGE OF CHINA'S OPPORTUNITIES

Few are better prepared to capitalize on China’s potential than Jack Wadsworth. He has been running Morgan Stanley’s Asian operations for a decade–longer than any other head of any U.S. securities firm in the region. He operates from a broad, deep knowledge of distinctions among countries and capital markets, but his long tenure offers another advantage as well. Working in cultures where the long-term view is valued, Wadsworth has stuck around and demonstrated a commitment to the region.

His move to Asia came in 1987, 24 years into a career that included nine years at Morgan Stanley’s investment banking division and 15 years at First Boston. He was assigned to Japan to run the firm's Asian division. "Working in Japan was like starting over. It added a whole new layer of complexity," he recalls.

Wadsworth moved his division from Japan to Hong Kong in 1992, and from this vantage point he has monitored Japan’s economic swan dive, growth in developing markets like Indonesia and Taiwan, and more–while keeping a sharp eye on China, of course.

“After Tianamen Square, China was essentially unfinanceable for two years,” he says. “I remember going there in 1989 right afterward and it was like a ghost town. The political crackdown slowed down the whole region, which is now heating up.” Between 1992 and 1996, direct foreign investment has grown from $11 billion to $40 billion.

Encouraged by China’s double-digit economic growth and falling inflation, Wadsworth moved in boldly. In 1995, Morgan Stanley became a 35 percent shareholder in China International Capital Corporation, becoming the first foreign partner in a Chinese investment bank. Because China’s domestic capital markets are closed to outsiders, the joint venture provided a point of entry.

“That’s a critical part of our strategy. No one thought we could do it,” he said. “We wouldn’t venture to do that in any other country.”

To do business in Asia requires thinking long term, because Asians do. It also requires patience. “One thing that is common to these countries is the difficulty of getting things done. That’s not cultural; it’s a function of developing markets,” he says.

Ten years building businesses in Asia has given Wadsworth a clear perspective both on Asian cultures and America’s. “Looking back at America from Asia has been instructive, especially from Japan,” he noted. “What really drives America–creates jobs, creates capital–is new companies, and that arises out of creativity. Creativity is a fundamental American phenomenon. It’s fundamental in our education system and in our free and open economy. Being creative involves taking risks, and risk involves being willing to fail.”

In the Japanese culture and business environment, “It’s harder to recover if you fail,” he explained. “What excites me about China is that underlying its culture and history is an acceptance of risk taking.”

After a decade in the East, cheek by jowl with the awakening dragon of China, Wadsworth can’t imagine doing anything else. “Building business here is the most exciting thing I could do. Everything in my career has been a rehearsal for what I’m doing now; the play is just about to start.”

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						WADSWORTH HAS MOVED BOLDLY TO TAKE ADVANTAGE OF CHINA'S OPPORTUNITIES Few are better prepared to capitalize on China’s potential than Jack Wadsworth. He has been running Morgan Stanley’s Asian operations for a decade–longer than any other head of any U.S. securities firm in the region. He operates from a broad, deep knowledge of distinctions among countries and capital markets, but his long tenure offers another advantage as well. Working in cultures where the long-term view is valued, Wadsworth has stuck around and demonstrated a commitment to the region. His move to Asia came in 1987, 24 years into a career that included nine years at Morgan Stanley’s investment banking division and 15 years at First Boston. He was assigned to Japan to run the firm's Asian division. "Working in Japan was like starting over. It added a whole new layer of complexity," he recalls. Wadsworth moved his division from Japan to Hong Kong in 1992, and from this vantage point he has monitored Japan’s economic swan dive, growth in developing markets like Indonesia and Taiwan, and more–while keeping a sharp eye on China, of course. “After Tianamen Square, China was essentially unfinanceable for two years,” he says. “I remember going there in 1989 right afterward and it was like a ghost town. The political crackdown slowed down the whole region, which is now heating up.” Between 1992 and 1996, direct foreign investment has grown from $11 billion to $40 billion. Encouraged by China’s double-digit economic growth and falling inflation, Wadsworth moved in boldly. In 1995, Morgan Stanley became a 35 percent shareholder in China International Capital Corporation, becoming the first foreign partner in a Chinese investment bank. Because China’s domestic capital markets are closed to outsiders, the joint venture provided a point of entry. “That’s a critical part of our strategy. No one thought we could do it,” he said. “We wouldn’t venture to do that in any other country.” To do business in Asia requires thinking long term, because Asians do. It also requires patience. “One thing that is common to these countries is the difficulty of getting things done. That’s not cultural; it’s a function of developing markets,” he says. Ten years building businesses in Asia has given Wadsworth a clear perspective both on Asian cultures and America’s. “Looking back at America from Asia has been instructive, especially from Japan,” he noted. “What really drives America–creates jobs, creates capital–is new companies, and that arises out of creativity. Creativity is a fundamental American phenomenon. It’s fundamental in our education system and in our free and open economy. Being creative involves taking risks, and risk involves being willing to fail.” In the Japanese culture and business environment, “It’s harder to recover if you fail,” he explained. “What excites me about China is that underlying its culture and history is an acceptance of risk taking.” After a decade in the East, cheek by jowl with the awakening dragon of China, Wadsworth can’t imagine doing anything else. “Building business here is the most exciting thing I could do. Everything in my career has been a rehearsal for what I’m doing now; the play is just about to start.”
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