Tse delivers the familiar warning against going into China with blinders on and stereotypes intact. Instead, he says, companies must recognize that they will have to deal with the difficult realities of operating there, particularly in terms of the government, and adapt accordingly. Although this may seem obvious, countless unsuccessful foreign forays into China have proved how difficult it is to follow the standard advice. Tse provides a useful reminder: “The most successful one world companies will be those that negotiate the multilevel intricacies of relationships with officials, value-chain partners, and customers, then integrate these elements into a global framework. Bringing these complexities into coherent focus is the foundation of any China strategy.”
The way to achieve this difficult goal, Tse maintains, is by mustering the strategic vision, versatility, and vigilance needed to build new business strategies that incorporate the four economic drivers. Versatility, for example, requires mental fluidity and resilience, speed of action and organizational nimbleness, coordinated operations among markets, constant monitoring of new developments, managing human capital, establishing and maintaining relationships in China, running Janus-faced operations, and having an effective executive in China. Again, obvious, but not always heeded by foreign players.
“No other country resembles China. No other country has so many opportunities — and challenges. And no other time has been so crucial for entering China as now,” Tse concludes. “The paradoxical truth, however, is that a China strategy is not a strategy for entering China. It is a strategy for creating a global business, in a way that prepares for something that may be happening for the first time in history: the knitting together of worldwide enterprise into a coherent whole.”
Whether such a rosy scenario will be borne out remains to be seen. Yet it’s clear that a changing, growing China is inevitable. The best means of navigating its challenges, then, are knowledge and preparation. This year’s best books on China are a good place to start.
- Sheridan Prasso has been writing about Asia for more than two decades, having been based in China, Hong Kong, Japan, and Cambodia. She is a contributing editor at Fortune and was previously Business Week’s Asia editor. An associate fellow at the Asia Society, Prasso is the author of The Asian Mystique: Dragon Ladies, Geisha Girls and Our Fantasies of the Exotic Orient (Public Affairs, 2005).