Shortly after President Nixon's trip to Beijing, two friends of mine had an idea. Stephen Chou and Bill Donnett wanted to be the first to publish and distribute an American magazine in China. I thought it was a good idea, so I made a modest investment and joined the board of China Consultants International, publisher of the AMERICAN INDUSTRIAL REPORT.

The editorial office was in Hong Kong where it was printed in the new, simplified Chinese text. Advertising was sold from a small office in Washington. A handful of major American companies supported the magazine, primarily manufacturers of industrial equipment much sought by an emerging China.

The AMERICAN INDUSTRIAL REPORT was a give-away, for there was no way to solicit subscriptions. Initially, 15,000 copies printed bi-monthly were distributed through Chinese governmental agencies. Eagerly passed along, readership per issue approximated 300,000.

I then made a recommendation to the Board I've since regretted.

Our profit was minimal; but, after all, how productive could a staff of two in Washington be? If we had a larger advertising sales organization, we'd sell more space and make more money. Or, so it seemed to me.

I called on Tom Carmody, head of McGraw-Hill's San Francisco office. They were an ideal organization to sell our advertising space. Carmody agreed and suggested I meet with Harold McGraw, Jr. in New York. All went well, and they took over advertising sales and also purchased a forty-nine percent interest in the magazine.

Revenue from the sale of advertising space did not increase. In fact, it declined. McGraw-Hill salesmen were not qualified to answer critical questions about doing business with China as was our previous two-man staff.

Why, then, did McGraw-Hill get involved? In retrospect, the answer is apparent. The long-term potential of the Chinese market was important, and the AMERICAN INDUSTRIAL REPORT gave them a proper introduction.