China Business

China’s Five Surprises: A Quick Update

Way back in 2006, in China’s Five Surprises, we did a short post listing out five things that surprise people about China. This post was based on a 2005 paper, called “China’s Five Surprises,” written by Dr. Edward Tse.  Out of the blue, a China lawyer friend of mine sent me a link to that post yesterday with a note saying: “Things were so much simpler and more innocent back then, weren’t they?” Yes, they sure were.

The paper listed the following as the five surprises:

1.  Many Chinese companies are already more than simply low cost competitors and even more of them will compete on quality in the future.

2.  We should expect Chinese companies to become more innovative over time.

3.  China has been able to draw top people from around the world, accelerating business competence.

4.  “Out from Guanxi.” Guanxi is overrated and rapidly declining. “High-quality management and transparent governance structures count more.”

5.  Chinese companies are going overseas.

At the time we had this to say about Dr. Tse’s paper:

This paper does an excellent job discussing where China business is today and where we can expect it to be in the future. Our own experiences cause us to agree with all five of these themes and we have already discussed some of these on our blog, here, here, here and here.  No controversial stand here, but we also agree with Dr. Tse that neither the “China will take over the world” nor the “China will crash and burn” scenarios reflect the reality on the ground in China.

My thoughts on the five today are as follows;

  1. Undisputed today. No longer a surprise.
  2. Undisputed today. No longer a surprise.
  3. Mostly true.
  4. Mostly true, but role of government has not declined and, if anything, has probably increased.
  5. Yes, but they are generally not terribly adept at it.

Your thoughts?

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