China surprised me in ways more than one. Going into China, I knew that China has come a long ways since the days of Mao when people starved, just to keep up to their cultural beliefs. Yet, the sheer scale of development and the feeling of being in highly dynamic, fast growth, “everything is possible” mentality of China was overwhelming. Beijing and Shanghai are obvious examples of what China is hoping to achieve, but the development in interior areas like Suzhou and Chengdu made me stop and wonder what the Chinese juggernaut is striving to achieve.
The speaker sessions were eye-opening in a different sense. They brought to light the deeper issues, both positive and negative, at play in China. The cultural visits to Great Wall of China, Tiananmen Square and Forbidden city and the opportunities to mingle with locals helped me understand the Chinese mentality to make the most out of least, and how it could potentially be driving the decision making process of business leaders in China. Visits to local restaurants, drinking Chinese beer, sitting in the middle of Shanghai outside a Cold Stone shop, dancing in a mostly western Chinese pub, all have left a deep impression in my mind about the whole host of issues that are at play in making China the place to be.
Frank Hawke and Donny Huang sessions
These two sessions represented the perfect yin and yang at play in China. While Frank exposed the flaws in Chinese growth model, its export-oriented economy, lack of domestic consumption, the mandate from heaven, the demographic challenges and how far China still has to go to achieve its true potential, Donny brought to light how far China has come despite the challenges, the fallacy of democratic ideology in China, the philosophies that drive Chinese decision making, the drive, passion and “everything is possible” mentality of Chinese and the ultimate mission that China is on, to regain its position as the world’s biggest economy (as it was in middle 18th century).
The two sessions left my head hurting for a little while before I could absorb all that I had heard. While I could see the possibilities of tremendous disruptions in Chinese growth story based on what Frank said, I could also not forget the sheer Chinese passion that Donny exemplified. The China as we see from a Western perspective is much different than what Chinese see. The challenges that China faces are real, but their biggest asset, their people, are as confident as they ever have been, and I can not, but think that Chinese growth story has long ways to go and that despite all the challenges and turmoil that may face them, China will continue to march towards realizing the dreams of its people with the same ferocity and passion that it has displayed in last three decades.
David Wolf, Media Panel, US Embassy and Jay Boyle sessions
To learn from an industry leader, media and somebody who has been on the ground dealing with ground level challenges of doing business in China was very refreshing.
The five stages of regulation that David talked about (ignorance, fear, restriction, experimentation and accommodation) put in perspective a lot of actions that CCP has taken over the course of last so many years. More than anything, it gave me hope about China, in the sense that the things that CCP restricts today may be accommodated in future, exactly the way they have been slowly opening up to Internet, and how they have leveraged it to let people blow-off their steam, without threatening CCP’s rule.
Media panel discussions reinforced in my mind how western media looks at China only through a critical eye, and how important it is for us to experience China physically to increase the depth of our understanding about China. While the speakers were fantastic, I do believe that the real stories about China do not come up through Western media. As a result of the trip, I have become a regular reader of online version of China Daily and Shanghai Times, which should give me a better understanding of issues at play in China.
Jay Boyle confirmed some of my fears for doing business in China. He reinforced the belief that we heard over and over during the trip – “Everything is possible in China, but nothing is easy”. The growth and glamour of Shanghai and Beijing could have very easily duped me for the efficiencies of doing business in China, but Jay grounded me to the dark realities of inefficiencies, mismanagement and lack of data points in China. Without this lack of caution and awareness of the ground realities, it is easy for businesses to lose their way in China, and no wonder how many companies have been caught (on the wrong end) with the idea of going to China without focusing on their business model.
Ivoclar and GM-SAIC
Very often, when companies look at China, they stay focused only on abundant cheap labor that China offers. However, this is only a part of Chinese story. Visits at Ivoclar and GM-SAIC demonstrated how companies can effectively tap into the huge Chinese market.
Ivoclar visit demonstrated leadership required to succeed in China and how an incremental entry approach to China can do wonders without exposing businesses to huge risks. GM-SAIC demonstrated how a business that has failed so miserably in US can succeed in China, if only it is willing to look for ways to adapt to Chinese requirements. GM’s entry into Chinese market through a joint-venture, its deploying of best practices in China, its hiring of local talent to capitalize on Chinese passion and its smart leveraging of subsidies provided by Chinese government have made GM China a shining star in an otherwise miserable failure of a company. Any business that plans to enter China stands to gain from GM’s experiences. All the factors that I mentioned above have now become a part of my playbook, if I were to bring my business in China.
I went to China with an open mind, but also with my own predispositions about how much of their success is for real, and how much of it is because of their sheer size. I come back from China with an enlightened mind, a mind that applauds the hard work that Chinese have put in to come as far as they have, yet also with a mind that is grounded in the realities and challenges of doing business in China. After seeing all that I saw, I ask myself, what is it about China that makes it tick? Is it cheap labor or huge domestic market or both? Is it the mandate from heaven or the will of its people or both? Is it a “harvest” market or a “growth” market that will fuel future innovations or both? Increasingly, I realize, the answer to above questions is both, like the Yin and Yang, the balance and harmony that exemplifies Chinese philosophy.
Confucian, Tao, Mao, cost of democracy, mandate from heaven, power of people (even in a communist country), collaboration, joint-ventures, cheap labor and huge domestic market are a few of the other thoughts that will cross my mind whenever I think of China. The most important of these thoughts though, would be the drive and passion of Chinese people.
In the end, I can not, but help draw the final analogy, that of China and a high speed train running at 200 mph with a billion and a half people on board. How far they have come so fast makes even the mightiest ones wonder about their prowess, how far they still have to go to achieve their full potential makes pessimists poke holes in their strategy and how confident they are of their future success makes optimists see days of Chinese glory ahead. At different points during the trip, I had each of these feelings. In the end though, I can not, but be an optimist about Chinese future and the business opportunities that it represents.