A must read for foreigners doing business in China, 25 Dec 2000

At that time, there were plenty of books written about history, culture, politics and economics in the PRC. However, there was very little written about business and how to succeed in creating and exploiting business opportunities.

What I like about this book is the modesty displayed by the authors, yet the huge store of knowledge and understanding that is contained therein. In the Foreword, Sir Alan Donald writes, 'There is no such thing as a Western "expert" on China, only varying degrees of ignorance' and, 'Seeking to understand China...is a long-term process'. In their Introduction, the authors quote Lord Macartney, who tried unsuccessfully to open up the trade routes in the late 18th century on behalf of King George III, 'Everything is covered by a veil'. They also quote a more recent China hand, Sir Percy Craddock, 'This is a big canvas, much of it still dark'. But the great contribution of these two learned authors is the provision of a huge amount of advice to the newcomer to China and, most importantly, their ability to look at things through Chinese eyes.

The book begins with an introduction to China, followed by a review of China from a Western perspective. The third chapter 'The furniture of the mind' describes the different philosophies that China has experienced and the values that Chinese hold most dear, namely: respect for age, hierarchy and authority; saving and an aversion to conspicuous consumption; face - particularly the concept of giving it; and other cultural dimensions such as motivation through ethics rather than consequence; the emphasis on synthesis and unity; the circular system of elements rather than their diversity; harmony versus self-interest; and certainty rather than the evaluation of risk. The fourth chapter deals with the obligatory subjects of relationships and regulation. After 'An ethical interlude', that covers rights, responsibilities and the ever awkward subject of corruption, the authors do justice to the concept of creating harmony through alternative venture formats in the PRC. This is followed by advice on the marketing format and the marketing process.

There is a huge amount of historical analysis, current fact and common sense advice for the businessman seeking to exploit this huge market.

Some issues are left for another book. For example, the authors omit a long dissertation of the Chinese economy for good reasons (there are already plenty of other sources; much forecasting is guesswork; and macro-economic data has limited use in a country of this size). However, by doing so, there is little advice on sectors which are being given priority by the PRC Government or in which foreigners will be competitively advantaged post WTO Accession. There is little coverage of the issues of recruitment, training and culture change - issues that foreign companies wrestle with as they seek to develop and manage their businesses in the PRC. There is little mention of the secrets of containing costs and maximising returns in a volatile and competitive environment. There is also little mention of the thorny problem experienced by all expatriates - that of trying to get head office to understand the realities of doing business in China. But, as the authors point out 'China is too vast and complex a subject for there to be "one big book about China" which tells you all you need to know'.

This is a book that will inform the beginner - and the expert - on the factors that can lead to business success. It is about risk assessment in a country where investment is high risk. 'China is constantly changing and yet it is always the same' as the authors wisely point out. There is much good information and advice in this book. Much of the experience of the last decade of large-scale foreign direct investment in China is captured in a very readable form, complementing the historical analysis of philosophy and culture.

This is a 'must read' for anyone 'Doing Business in China'.

John Stuttard spent five years in the PRC as Chairman and Chief Executive of PricewaterhouseCoopers China. During this time, he led the development of PwC's business that grew from 50 people in 1994 to 1,400 in 1999. In 2000, a book he wrote on doing business in China, 'The New Silk Road', was published by John Wiley & Sons (ISBN: 0-47 1-37722-8). This has now been translated into Chinese and was recently published by MOFTEC in Beijing, for use by PRC enterprises seeking to understand how Westerners view business opportunities in China.

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