STRATEGY + BUSINESS ON COMPETING IN CHINA

Strategy + Business has a good article on competing with China. This article is an interesting addition to the conversation started by Jim Macgregors book. Here's a  snip from the S+B article:

“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function,” F. Scott Fitzgerald once wrote. He might as well have been describing the future of China. There are at least two prevailing views about this country’s emerging global identity. Believers assert that by 2030, if not sooner, China will be the world’s largest economy. It is already the fastest growing, averaging a 9 percent GDP increase annually over the past 20 years. Skeptics respond that its growth is bound to falter, soon, amid the environmental, social, and political problems brought on by rapid expansion.

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Comments

[David]

This was a well-written article, and it is a considerable improvement over the usual acutely out-of-touch stuff we read over here in the international media.

A few of qualifications, though.

First, while mentioning marketing twice he completely overlooks that you could count the number of Chinese enterprises with a CMO on the fingers of a single hand, and still have change left over. Chinese companies are notoriously unsophisticated marketers, and what is making the difference here between success or failure is great marketing. Lenovo's success was the result of a superior CHANNEL, not better management, product, or innovation. Look behind any success story in China, and you'll find half-decent, if not very good marketing. Tse missed that.

Second, he exaggerates the extent to which these "trends" are evident among Chinese enterprises. Brain gain? Edward Tian is the exception that proves the rule, and I think we've yet to hear the real story of how well he's fared at China Netcom since its forced restructuring.

Third, he lauds international aquisitions by Chinese companies without questioning the rationale that underscores these bids. Was the Unocal bid the right move to aquire access to upstream supplies? Or were there better ways to invest $19 billion in China's energy future? And remember - the jury's still out on the Lenovo - IBM thing.

I could go on, but you get the point. Tse is headed in the right direction, but he falls disappointingly short of offering a revelation that we can use.

David