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Understanding the new and emerging China

I don’t profess to be an expert on China. I have, however, run the internal audit and risk functions at a number of companies with major operations there and so have some measure of insight.

Apple’s contract manufacturing partner in China, Foxconn, has been in the news a lot recently, including in this article in a business journal. What is never said in any of the major reports is that Foxconn is part of Hon Hai, a Taiwanese company! I will let you decide what to make of the news reports, the workers’ conditions, the labor laws in China, the governance culture in Taiwan, and the culture of this Tawianese company and its Chinese management.

Ethics and the ethical culture are another issue, described well in many places including in thisWall Street Journal piece. My experience includes investigating a fraud where the entire IT management of a new plant in China got together to set up a company to supply the plant with IT equipment and services. When I interviewed the head of IT (who was the CEO of the supplier), he defended his actions by saying that the setup ensured quality and low-cost procurement. He said that this was the way people did business in China, giving contracts to people they know. How fast this is changing, I don’t know.

What does seem to be changing is some of the traditional business culture in China. Just as India is benefiting from the return of many of its entrepreneurs from the US, so is China benefiting from its citizens who are returning after going to school and working in American companies.

fascinating article in Fast Company talks about these returning executives, called ‘sea turtles’. The piece profiles three Chinese technology companies and their innovative ways to stimulate innovation, imagination, and creativity – by energizing and empowering their employees. Frankly, I suspect many Western companies could learn from their success!

While caution should be exercised in interpreting this as a major change in Chinese work culture, surely this augurs strong competition for Western companies and an opportunity for global companies to adopt similar methods in China.

What do you think?

By the way, I wrote about another Fast Company article on my IIA blog.

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  • Hi Norman,

    with all the successes that part of the world has had, i just don’t see much more acceleration left. at some point the laws of business cycle need to reassert themselves and a period of adjustment sets in.

    my 2 cents.