By Kari Huus
MSNBC

In China, Jim Lundberg has started a business that could hardly be any leaner. "I have no office, no assets, no credit cards, no business cards. I don't exist, says Lundberg, a cheerfully bullheaded American entrepreneur. And yet, with one assistant, a Web site and a good idea, he is doing booming business. Or perhaps it's more accurate to say he's doing a bang-up business.

LUNDBERG'S "BANGERS", which he produces at a factory outside Beijing, don't look like much. They are nothing more than inflatable plastic tubes that blow-up to about three feet in length. But when they're whacked together, they create an incredible din. And when hundreds of people bang them together at the same time, well, it's enough to make a guy miss his free throw. The entrepreneur -- Jim Lundberg -- and the product, sporting the Nike logo.

Sports organizers and sponsors (including heavy hitters such as Budweiser and Nike) have swamped Lundberg with orders of more than a million sets since his start-up in 1997. As colleges and women's sports started discovering Bangers, Lundberg's company, called Logo Bangers, has moved into the black and may soon set up its own factory to keep up with demand. And to top it off, Bangers seem to market themselves, simply through television exposure of major sports events.

It isn't supposed to be this easy. Doing business in the post-Communist, post-Confucian country is complex ? almost unfathomable, if you believe many Chinese and China consultants. Americans companies tend to believe that bigger investments are more likely to succeed, because Beijing will generally step in to protect big-dollar deals that run into bureaucratic or regulatory obstacles.

FLYING LIGHT IN CHINA
ESmall entrepreneurs...are a lot more adaptable, FREDERICK HU Reseach director, Goldman Sachs in Hong Kong.

But the case of Bangers illustrates that with the right idea, there is another way to succeed in China by flying light, lean and under the radar screen. It's an approach that has been mastered by Hong Kong and Taiwan companies, that tend to make smaller investments, and take their chances with corrupt officials and other local nuisances. "Large companies hire all kinds of lawyers and accountants," says Frederick Hu, senior economist at Goldman Sachs in Hong Kong. "They get frustrated in China because the rules keep changing. Small entrepreneurs, by contrast, are a lot more adaptable. All they have is a little capital and a good idea. And even if the market or the rules shift, they can shift very quickly."

CLOAK AND DAGGER BEGINNINGS
Lundberg, 38, has taken adaptability to an extreme. He showed up in Seoul in 1990 with a suitcase and no idea where he would work. After an evening in the pub district, he had a lead on teaching English, which led to jobs working in the patent office and promoting American football in Korea. The idea for Bangers came from a Korean baseball game, where thousands of fans were sporting them. Lundberg started working with the Korean company that holds the noisemaker's patent for that country. Eventually, he became convinced that he could make Bangers cheaper than the Korean company, and beat the guy in other markets. He left for Beijing (showing up, once again with a suitcase and a computer) started looking for a manufacturer. But well before he nailed it down, Lundberg surrepticiously bought 5,000 sets of Bangers from the former Korean boss and sent them to Nike as samples. A day later, Nike called and asked for 25,000 sets for the U.S. Men's National Soccer World Cup playoff game against Costa Rica, in Portland, Oregon.

After that, the response was terrific. Using the toll-free phone number or the Web site address printed on the Bangers packaging, the orders started rolling in from major sponsors like Budweiser and Mastercard. "I was very optimistic," says Lundberg. "I thought I was going to be rich. Meanwhile I was struggling to find a factory in China to do the production."

NOT SO FAST, THERE, COWBOY
Finding the right factory was no mean feat, even for a relatively simple product. After a nationwide search, Lundberg ended up choosing a state-run plastic bag factory near Beijing that was good at the printing, but needed to beef up on the other production processes. And quality control remains a constant struggle. Lundberg has gone through several quality control managers, and still despairs that he may have to stay at the factory around the clock to make his fortune. One of his recent strategies: to occasionally give an order to a competing factory, to keep his partner on his toes.

A CLOSER LOOK AT CHINA
If there are lessons from Lundberg's experience, one of them is surely that the simpler the idea the better in an environment like China's. Bangers have no middlemen. Potential buyers contact him directly by phone or e-mail. The product is light, for fast shipping. And Lundberg doesn't attempt to grapple with marketing to the Chinese market, which is fraught with distribution and access problems.

Also, the Internet gave his business a powerful boost in information-scarce China. For instance, he found an essential color printing tool after a little time online, a couple of phone calls and $100. His Chinese-speaking assistant made dozens of calls to printing houses and other businesses in China, and finally announced that the tool could not be obtained in China.

Lundberg's experience also suggests that cultural savvy (the subject of many a how-to-do-business-in-China book) may not be the key to success. After all, Lundberg is a friendly guy, and has studied a little Chinese. But he didn't have to read Mao, Sun-Tzu and Confucius to make his business idea work. And he refuses to drink firewater with the boys, sing karaoke, carry business cards - many of the things held up as essential for business relationships in Asia.

"China is quite a chaotic country," says Hu of Goldman Sachs. "People tend to be quite individualistic at heart, despite thousands of years of Confucian teaching. So even if you have some idiosyncrasies, they won't matter too much."

Staying off the radar screen will become more difficult if Lundberg's business keeps going like this and that could present problems. "It is really the big multinationals who the government agencies focus on for pickpocketing activities," says James McGregor, head of the American Chamber of Commerce. "These small guys can often do pretty well. But sometimes once they do well, the bureaucratic vultures start circling."

BANGERS IN CRISIS
But so far, Lundberg's biggest crises didn't have anything to do with China. When the Korean economic crisis struck in late 1997, it wiped out his source of income in the early days. High-paying English classes from him in Beijing suddenly disappeared. Then, just after a whole rash of NBA teams expressed interest in Bangers, the 1998 NBA lock-out came along, putting most of his orders on hold. Other sports events such as horse racing have ruled against allowing the noise makers.

Now Logo Bangers is back on track, with a massive orders from the organizers of Women's World Cup '99, and new interest from baseball teams, who can order baseball-bat shaped Bangers. Lundberg is preparing to set up a new factory with the state factory boss who is now working as a subcontractor.

"It really has been pretty simple. It's mainly been a matter of being stubborn," Lundberg says. The biggest uncertainty is simply a matter of tastes, or an even cheaper competitor producing copies of Bangers out of, say, Mexico. "Of course, it could all die on me in a month. It's that screwy. This could be like pet rocks."