August 15, 2022

Vyacheslav Lysenko: How to create a bridge to China with Ukrainian business

6 min read

Starting a business is meant to bring financial independence, more income, higher status and the opportunity to spend time on your hobbies. However, besides the positive aspects of entrepreneurship, one needs to know about the negative ones. Entrepreneurship is a potential profit, but it also brings many risks like losing money or even your business itself. Any business is a series of trials and errors, but the result could be a solid enterprise when led by a leader who knows how to deal with crises.

Ukrainian businessman, Vyacheslav Lysenko, has vast experience in this regard and knows how to cope with different crises because he went completely bankrupt four times in his life. Today he is considered as the “discoverer” of China, somebody who created a bridge to China for Ukrainian business. He is a leading expert on Ukrainian-Chinese relations, the founder of the successful “Ukr-China Communication” and the shareholder of Meest China (delivering goods from China to Ukraine). But in the beginning, Lysenko’s business was not related to the East at all.

First steps in business

In the 90s, many aspiring people in business were engaged in any activity that could make money, and Lysenko was no exception. In 2000, he found himself in Kyiv because business partners in his native Cherkasy ripped him off and left him broke. He started a new page in life; with each fall, he moved to a higher level. “Every time I fell, it was hard. Experience is a great thing. As people say, ‘it is always with us and always in the background of us.’ So each time I fell, I had just a little more faith and understanding that I had to cope with the situation,” — recalls Lysenko.

He decided to engage in external economic activity in Kyiv. “I asked myself: ‘What am I good at?’ I wouldn’t say I liked working with production, which entails routine and meticulousness. But international economic activity is more related to customers, suppliers, working with contracts, the human factor is important there, and the whole team’s focus. When I started everything from scratch and had a job as a hired CEO for the first time, this company was involved in building materials supplied from abroad. I’ve seen shortcomings, downtime, the silly ways how we can lose money. Therefore, just a year later, I launched a company that was engaged in foreign economic activity. The person who hired me got an extra 25% in my new venture. In two years, the enterprise became quite successful. Clients arrived because we gave a guarantee, were responsible, and stick to our word, the quality of our customer service was our primary concern,” says Lysenko.

In 2003, with the election of Viktor Yanukovych as prime minister, a series of business terrors began. For some reason, Lysenko ended up on the “blacklist”, his competitors ‘ordered’ him, arrested and kept him in a pre-trial detention center for an entire month. There he read a book, which had a profound effect on him at the moment. It was said that every millionaire went bankrupt on average 3,8 times. By that time, the businessman was on his fourth bankruptcy.

China on the horizon

At that moment, was when Lysenko’s business began going uphill, though he had to deal with his criminal case which made it difficult to do business for the next eight months. But when the case went to trial, everything fell apart, he was not even accused. “I had eight months to think about the global situation. When I thought about a country that could be promising in the future, China was the answer. After all, China is the fastest-growing market with its goods filling up the shelves. I had practiced eastern martial art (wing-chun) in the past, so that also played a role in choosing China. This was the beginning of a partnership story with the Chinese. Everyone said that no one would pay for this, but, as the saying goes: ‘Persistence makes all the difference.’ I chose the first ordering customer, who was theoretically ready and I did not regret it. After that, we started closing deals and working with new clients. The company started growing, we opened our representative offices in Beijing, Ningbo (near Shanghai) and Guangzhou. Territorially we were all over China. We were developing, and we made mistakes and, one even cost us around one million dollars,” — the businessman recalls.

Lysenko has always said that it is difficult to create connections in China. This process took him about seven years. After that, doors began to open for him, big deals, big opportunities. Though at the same time, you need to understand the philosophy of responsibility: losing face once may resulting in losing everything in China.

When the entrepreneur was just starting to work, he immediately bet that the Ukrainian market would not be the only consumer. Moreover, the economy in Ukraine was volatile and been taking off and falling continuously. While in European countries, the economy is more developed, And even if it is not actively developing, it is still at a high level. In China, Lysenko carried out a large number of transactions, traded metal in many countries of the world with Chinese partners and accompanied transactions for the purchase of factories and equipment. This allowed for creating large profits and further opportunities.

“We knew one Chinese partner for five years before we joined forces. While fulfilling obligations of a contract in 2008, prices fell and our client canceled the contract. The price of raw materials then fell by 40%, and our client made an advance payment of 30%. And to fulfill the contract, he had to lose another 10%. He refused, and the partner who accompanied the deal said that he would fulfill the obligation of the other side of the contract anyway since it is very risky to lose face in China. And I closed 10% instead of the client. It cost me $ 950,000 in installments. After I paid the first part of the money, the partner said that he sees me as a very responsible person and wants to work with me. After that, great offices and great opportunities began to open up for me,” says Lysenko.

Does Ukraine need China?

For many years Lysenko has been surprised by the shortsightedness of the Ukrainian authorities. According to him, while working with China at the interstate level, “we paid much attention to the development of Ukrainian-Chinese relations, it was just mainly in the commercial segment. For Ukraine, China could become a fairly strong partner in the agricultural sector, for example. Only 9% of China’s land is suitable for agriculture, so sooner or later food crisis questions will arise. However, Ukraine is the largest country in Europe and could solve this issue. But Ukraine needs money to invest in farming and develop that sector using the latest technologies. We could be a strategic partner for China. China is ready to work with us, but Ukraine has shown little desire to cooperate with China. Our president has been to China only a few times. Ukraine is not working on on this and is missing out on huge opportunities that China could offer by opening access to technology and finances. One Chinese politician told me: ‘On a global scale, Ukraine is a small power, it needs to be open to all profitable opportunities and not try to adapt to one of the strong powers. Ukraine needs to be neutral,’ — Lysenko recalls.

According to him, China is a rather difficult country, and he realized that the Chinese are different people who think differently. Anyone who can find the key to their mentality will be able to help other businesses. That’s where the idea originated, that he could create a bridge for Ukrainian business to China and the corresponding title, “Ukr-China Communication” reflects that.