China’s economy is steadily increasing in importance and it is likely that it will be the globally most important one in the near future. Yet, it is fascinating, how little people outside China know about an industry, that has brought up totally different players than the markets in the rest of the world. The more the US has to deal with what its current president is destroying, the clearer the strength of the Chinese long-term strategy becomes. Only if we learn from the ones that are different from us, the ones that choose new ways of doing things, and the ones that are more successful in what they do, we can learn, adapt, and improve ourselves.
I believe that – from a Western standpoint - this description is true for China:
1) There are yet very few people speaking Mandarin as a foreign language while there are neither many Chinese in Mainland China with a good command of English. Another simple evidence is just that – even in Shanghai and Beijing – there are yet so many business opportunities for trading, technology exchange, and business models not exploited – a clear sign for too little business between China and the Western world.
2) Chinese do things differently - compared to Western people. The most prominent differences from a macroeconomics perspective are for sure overall politics and the governmental influence on the economy. From a microeconomics perspective, Chinese people embrace changes and new Digital solutions, they love to learn from foreigners, buy foreign products, and understand foreign companies. Generalizing, this is a huge behavioral difference to Western people.
3) Success of a country is something relative and it depends on the indicators at hand. Indicators could be the amount of foreigners (refugees) in the own country, the country’s GDP, the amount of CO2 produced or the smog level in cities, the city rankings in “top places to live”, how minorities are treated, the number of wars in the world etc. However, looking at the pure economic factors, China is now outperforming other countries for years and it is likely that China will continue this road of success.
Resuming, there is a lot to understand, learn, and adapt. If you or your company wants to be successful, take a look at what similar companies do. These are not always your competitors – many Chinese companies have not yet gone global – but they soon will – and they will be very good in what they will be doing. In my next few posts, I will introduce you to some “hidden champions” of the Chinese economy that I had the chance to meet during my trips through China, and I will talk about the way they work, what they think, and what they do better than the companies we currently know.