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In this article, the authors discuss why the West still doesn't "get" China. They begin by discussing how multinational companies tend to manage China from the outside (Hong Kong and Singapore are close but not close enough). They also point out that the Chinese locals are becoming increasingly capable players and, therefore, more competitive.

Less visible reasons why companies languish in China are equally important. Most of these center on cultural differences. When conducting business in China, for example, foreigners want to believe that yes means yes, that the promised warehouse or factory is a pristine technological marvel, and that the resources and capabilities are more than implied-they are up and running. Although the truth is usually far from the reality, it is not because of any trickery; it is because we have not figured out how to read between the lines in China.

In exploring the nuances of cultural differences that continue to stump western companies, the authors offer ways to overcome miscommunications and create solid, successful relationships in China. The key lesson? With a new mindset, the East and West can get along.

As China continues to make progress towards a market economy, businesses around the world are ramping up their efforts to tap into the country's huge marketplace of 1.3 billion consumers. Despite concerns over such issues as intellectual property protection, corruption, the banking system and overregulation, executives from a number of U.S. companies are pushing ahead to invest in the Chinese economy through alliances, joint ventures, the venture capital market and other initiatives. K@W offers this special section which includes seven articles on these themes.

When U.S. and Chinese businesspeople sit at the negotiating table, frustration is often the result. This Harvard Business Review excerpt summarizes the historical and cultural disconnects.

The world's most populous nation has become a capitalist's paradise, supplanting Asia's "tiger economies" - and soon, perhaps, the West.

China offers potentially huge benefits for multinational corporations. With a population exceeding 1 billion and an immense supply of low-wage workers, China is coveted both as a consumer market and as a superb location to source products. But is China really the place where major corporations need to be in the decades to come? In this first of four special reports on China, experts from Wharton and the Boston Consulting Group explore topics such as opportunities and threats that global companies face in China; an analysis of how China compares with the rest of the world as a sourcing location; and the emergence of Chinese firms that challenge global multinationals, among others.

Editor's Note: for more good articles on doing busines in China, see
http://www.mbadepot.com/links/links.php?ID=3564

The contrasting ways in which China and India are developing, and the particular difficulties each still faces, prompt debate about whether one country has a better approach to economic development and will eventually emerge as the stronger. We recently asked three leading experts for their views on the subject. The essays are:

"India's entrepreneurial advantage" by Tarun Khanna

"China: The best of all possible models" by Jonathan R. Woetzel

"Sector by sector" by Diana Farrell

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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Where did modern economics originate? History shows that concepts of inflation, regulation and the free market can all be traced to ancient China, whose ideas were later refined by the Enlightenment thinkers

Long the world's factory, China is now becoming an attractive offshore location for IT offshoring (ITO) and business process offshoring (BPO). These markets are expected to grow as the Chinese government continues to entice foreign multinationals. Similarly, Chinese-based ITO and BPO providers are working to improve their capabilities to capture business from multinationals in the United States and Europe.

This paper highlights findings in
A.T. Kearney's most recent study of the ITO and BPO markets served by China. It discusses China's strengths and weaknesses, dispels some misperceptions, and offers A.T. Kearney's perspective on how China is doing in its efforts to become a preferred offshore destination.

A five-dimension analytical model for deciding when (and when not) to purchase from the East.

China is at a crossroads. Having become the world's factory and the most important destination for foreign investment, China's economy has boomed. Not only is China the preferred location for procuring goods, but its domestic market has achieved critical mass, driving global companies to increasingly target Chinese consumers. China is the place to be.

Yet there is a problematic side to China's success. China's growth has driven up global prices of commodities such as petroleum, leading to rising inflation in the West and the need for higher interest rates. Rising Chinese exports have driven down global prices of manufactured goods, wreaking havoc in product and labor markets in both emerging and developed markets. And China's exchange rate policy has inhibited adjustment of global economic imbalances leading to substantial exchange rate misalignment globally.

In this report, Deloitte Research examines seven key risks of doing business in China:

* Financial system
* Currency revaluation
* Overheating economy
* Faltering economy
* Transition from state-ownership to privatization
* Trade conflicts
* Income disparities

Deloitte Research also offers its point of view on how businesses can successfully navigate these dangerous waters and emerge strong.

Fourteen things every entrepreneur should know about the capitalist explosion heading our way. But don't assume that conceding China's rise means conceding to China.

If your company is interested in expanding its operations to China, are you aware of the existing ecommerce development challenges that await you? If partnering with a Chinese firm is in your company's future strategy, does your management team understand the contractual pressures of partnering and setting up business in China? Because of the government's intention to control its country's ecommerce growth and economic development, conducting business in China can be challenging and complicated. Identifying and understanding these challenges are important for companies hoping to implement partnership strategies that will aid in their business development.

The 21st century has been described as "China's century" and it is not hard to understand why. Since Deng Xiaoping initiated a program of path-breaking economic reform in 1978, China has experienced the most rapid modernization of any society in recent times. Companies are queuing up to invest in China, lured by the prospect of competitive labor costs and vast market potential. No fewer than 400 of the Fortune 500 companies have already invested in China. But making profits in China is still a harder task than many expect. Making money in China requires a strategy that is specifically tailored to the growth dynamics of the Chinese market and the risks and constraints stemming from its unique business culture and operating environment.

Just as Western managers have learned to do business with the chaebol and keiretsu, business groups in North Korea and Japan, along comes the challenge of climbing another learning curve, doing business with the qiyejituan, business groups in China. Managers will get a leg up on the learning curve by reading this comprehensive primer on getting along with business groups in China.

An interesting dialectic is currently being played out in China: The state is continuing its age-old tradition of preserving order while a much newer force, free-market capitalism, and a previously unheard of phenomenon, a middle class, are slowly creatin

Local companies are now the key competitors to beat in carving out a share of China's rapidly growing market. For foreign multinationals, it's time to try out some new strategies, because the old ones are running out of steam.

With reliable data hard to come by, creating a winning marketing formula for China can be a head-scratching exercise.

Editor's Note: this is the first article in a special report on China. I also recommend the article, "It's Not What You Know..." and the PDF "Not All Markets Are Created Equal"

Excerpts from a Q&A session with Paul Clifford, director and head of Mercer Management Consulting's Beijing office, addressing some of the special challenges of business-to-business selling in China.

Many multinationals have struggled to make headway in China. The problem isn't a Chinese aversion to foreign brands. Nor is it the brands' starting point. Rather, it's their approach to broadening market share. A handful of multinationals point to a better way.

China is on the CEO's agenda of virtually every global company, with a powerful concern - Intellectual Property (IP) - increasingly capturing top attention. Large sums of money and future strategic positions are at stake amidst a jungle of IP issues in China. Leading companies pursue three key IP objectives in China: defending and monetizing IP rights, influencing and monitoring the development of key standards, and managing the relationship between IP concerns and the broader business strategy. The paper presents emerging solutions and a "health check" to help the CEO get started on these objectives.

This report sets forth the organizational practices and design principles of companies that are operating successfully in rapidly developing economies, particularly China and India. Whether global companies are currently engaged in sourcing, manufacturing, selling, or conducting R&D in these markets-or, very often, doing all four-they are finding the task of organizing their activities there a significant challenge.

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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Ever since the Mao jacket went the way of the ozone layer, China has been the world's darling economy. 'Bigness' and very high rates of growth have persuaded otherwise canny investors to overlook some rather significant risks.

CEOs swept up by "China euphoria" could one day be surprised.

The Chinese consumer market has awesome demographics. It is huge, young and growing. But competition in the consumer market is growing, too. To win in China, companies must create strategies that overcome pitfalls while taking advantage of local strengths.

Companies that consider investing in China's huge but challenging market face an array of questions. What successful strategies have leading players adopted in the past? How are strategies best tailored to different markets in China? What trends are on the horizon? How can differentiation help a company beef up its competitive edge and become tomorrow's winner? To answer these questions, A.T. Kearney researched the leaders in different markets, analyzed their growth patters and identified their winning routes.

This is the second of two articles dealing with the challenges that multinational companies face in China and describing what they should do to achieve profitable growth there.

The first article highlighted the common pitfalls encountered in China and discussed the expected changes in the Chinese market and competitive environment. This second article describes what this integrated approach should entail. Companies should begin by generating deep consumer insights and building strong local capabilities. They should transform these insights into superior product market strategies, effectively manage sales and distribution and aim to achieve operational excellence. They also need to develop an organization that is fiexible, open to learning and adaptive in order to cope with China's vast size, great diversity and rapid rate of change.

U.S. companies are using technology to overcome barriers to doing business in the world's hottest market.

Just 20 years ago, China was among the world's poorest countries, with 80 percent of the population living on incomes of less than $1 a day. Since China launched its economic reform program in 1978, its transition from a centrally planned to a market-based economy has fueled one of the world's highest growth rates. Most often, a movement to market is about a devolution of power from the central government to the private sector. But one of the perils of gradual reform is the possibility that it will give rise to new economic distortions, the removal of which poses new and unexpected challenges to reformers. Chicago international economics and finance professor Alwyn Young stands on the sidelines of the Chinese free market fanfare and produces evidence that China's journey to the private sector has taken some unexpected turns.

A new breed of CEO emerging in China is wiring the nation - and portending change for just about everything else.

In a new book, Procter & Gamble tells how it brought consumerism to an untapped market.