Ben Wey Offers Advice for Entrepreneurs

Benjamin Wey

When Ben Wey arrived in the United States from China more than twenty years ago he was following the American Dream. While on this path he was confronted with the ups and downs most entrepreneurs are familiar with, teaching him lessons that helped him avoid pitfalls and make the right choices in the future. Of course there can be no guarantees of success when following even the best advice; Ben Wey suggests several tips that hopefully can ease the way to business success.

1.    It is helpful to concentrate on whatever it is that you are familiar with, know about and is exciting and important to you. It is impossible to be successful at something you do not believe in.

2.    Loving what you do goes a long way to assuring success.

3.    Don’t be afraid to ask for help. Do not hesitate to connect, network, ask for advice; find a person who can act as a mentor for you.

4.    It is important to be goal oriented. Have a vision and a plan of exactly how you are going to accomplish what you have set for yourself.

5.    As an entrepreneur you embody your product. From the moment you wake in the morning until you turn in for the night; remember that you represent your product. You and your brand are one.

6.    It is valuable to reinvent yourself, but remember it is not necessary to reinvent the wheel.

7.    Just because you might lack experience or knowledge about something does not mean you cannot forge onward. Get a great team around you who can make up for your own weaknesses. Together you can do anything.

8.    Simple is better. Concentrate on just one thing, and be the best at it. Have patience, build your experience base, and do not abandon your project.

9.    Just dive in! Be careful not to overanalyze your situation, as you go along things will happen.

10.    Do not ever sit on your laurels. Education in ongoing; you should never stop learning new things. Even take a course to give your confidence a big boost. Ben Wey suggests a course such as FastTracNewVenture offered by Bloomberg for entrepreneurs who are getting a new business off the ground.

Benjamin Wey is the President of the New York Global Group. This New York and China-based company is a private equity investment firm which specializes in transactions related to China and Chinese businesses.

Ben Wey on Investing in Chinese Companies

Mr. Benjamin Wey, President of the New York Global Group, advises corporate clients based in China on their growth strategies. Headquartered both in China and New York, NYGG has a staff which is largely conversant in both Chinese and English who are also experts in finance and accounting. The company has launched over 200 projects in China since opening their office in Beijing in 1998.

Due Diligence Assures Quality

The New York Global Group does intensive due diligence on all their prospective clients. Although many potential deals pass through their offices, less than 2% of all the companies based in China which are reviewed by NYGG succeed to pass through the company’s strict review process.

Interestingly, some of those companies that were rejected by NYGG still managed to find their way to the US public markets through different means; many of which resulted in an assortment of problems for investors.

Small Percent of NYSE and NASDAQ Firms are China Based

Less than 3% of all the listings on the reliable NASDAQ and NYSE are China based companies. According to Ben Wey,

“Few people may realize that in the first half of 2010, over 190 Chinese companies became public on China's Shenzhen Stock Exchange after raising a total of US $30 billion in capital, the highest amount in the world for growth companies. Within the Shenzhen Stock Exchange is China's one year old NASDAQ-styled ChiNext Board, which serves high growth micro-cap companies. The ChiNext has listed more than 100 new companies and these listings are currently trading at an average P/E multiple of 64 times ( on average, these listed companies reported 48% increase in net income for the first half of 2010.) Many of these small cap Chinese names on the ChiNext have successfully raised astonishing amounts of capital from Chinese investors -- often hundreds of millions of U.S. dollars each in highly oversubscribed offerings.”

The Prospects for the Chinese Economy Look Good

Chinese Economy Essentially Stable

In the 14 years between 1990 and 2004 the Chinese economy grew at an average rate of 10% annually. Growth like this generated lots of capital allowing loans to stay current. There is little to fear, even if the growth rate of China’s gross domestic product falls into the single digits, which it will eventually according to simple laws of math. The banks in China, says Benjamin Wey, president of New York Global Group, are in little danger of mass defaults.

“I would say that the vast majority of Chinese commercial banks’ loan portfolios are quite stable,” Ben Wey reassures.

Loans Tied to Real Estate

That is not to say that China is immune to economic realities. Even if it were to happen that China should go through hard times in their real estate market, it would be painful, but not painful enough to ruin the country’s economy, says Wey. This is because a large part of loans from Chinese banks are tied to (collateralized) by real, hard assets, like commercial property.

China’s goal is to stimulate demand at home, while at the same time reducing its dependence on exporting. Exporting now makes up about 40 percent to China’s total economic activity.

Wey points out that the yuan went up in value by 5% last year, against the dollar, which was not quite enough to satisfy US traders.

“Stronger than expected growth in the American economy this year will be necessary to strengthen both currencies,” says Wey.

Future Prospects

So what are the prospects for the future? China is now striving to develop more home-grown producers of such consumer items as automobiles, appliances and more, in anticipation of an emerging middle-class with disposable income on hand which will propel their purchasing power. There is little doubt that such companies will be founded in the coming years in greater and greater numbers.

How does all this bode for the US economy? Despite all the strength in the Chinese economy, there is one major asset that the US has in reserve. As Ben Wey puts it, “I am a firm believer that innovation comes out of a free society.” The American democratic system allows for the kind of innovation which grabs and holds unto new markets.

To be competitive with China, though, the US will have to straighten out its own economic situation.

“We cannot afford to run the kind of budget deficits we are running today,” says Wey. “Every year we have a deficit, we are indirectly helping China to become stronger.”

China Moving to Global Economic Dominance

Ben Wey, in his capacity as president of New York Global Group, has his eye on China and its continuing development, and for good reason. Many believe today that China is on its way to joining the great global economic powers of the world in strength and influence.

There is power in numbers and the number of people in China is something to be reckoned with. The population of China stands at about 1.3 billion, and still growing. That is more than four times the US population, representing a hefty workforce as well as consumer marketplace. Sheer numbers force us to stand up and take notice.

The New York Global Group is an advisor to mid-market businesses forging financial deals with China. Ben Wey, president at NYGG, who formerly served as personal consultant to the Research Institute of the state-owned People’s Bank of China, observes that the Chinese banking system will also help to bring China into the domain of global economic power.

Consider the different ways in which US and Chinese banks generate revenues.

Recently American banking institutions have increased dependence on investment banking deals plus complicated derivative products. It is no secret what these types of risk-laden financial instruments can do to what appears to be a strong economy. American banks have also seriously reduced their commercial lending, especially for small and medium-size companies. The drying up of access to money hits small to medium-size companies hard as they often depend on those loans to succeed. Since these smaller companies are the majority of US employers, the disruption of the success of these types of companies affects a large number of workers in America.

“If this were in China,” Ben Wey says, “banks would be loaning money to companies with real assets, instead of seeking quicker money on Wall Street.”

In contrast, China’s banks are focusing on more tried and true banking practices. They receive deposits from customers, make loans, and make their profit on the simple notion of the difference in interest rate between lenders and borrowers. Derivatives play a comparatively minor role in the total balance sheet for Chinese banks.

“I would argue that Chinese banks are relatively more stable than U.S. banks because their earnings tend to tie into the real economy, rather than the performance of stock markets,” says Benjamin Wey.