The Hindu Business Line : China's five surprises

THERE have been many studies undertaken by economists and academics to unravel the secret of China's spectacular growth. The latest to join the crowd is Strategy+Business which deals at length with five "surprises" which have apparently escaped the notice of run-of-the-mill observers.

The first surprise is the decent burial given to the common impression that companies in China are more concerned with turning out low-cost items, earning returns more from volumes than from variety or versatility. Actually, the entrepreneurial vigour, particularly among even local small players, is said to be so intense that there is keen competition among them to produce global brands as well as to get a brand status for their commodities.

The second surprise is that China today is a "hotbed for rapid innovation" and a beehive of professionals engaged in exploring new frontiers in R&D and boldly experimenting with application of new technologies to come up with original products and services. Its investment in R&D has reached the level of being the world's third largest and, in the last few years, it has also doubled the number of engineering and science PhDs.

The third is the enormous contribution being made by executives with diverse talents and skills who are attracted to China not both for the opportunities it provides and the fascinating cross-fertilisation of modes of governance and management practices. The dynamism and momentum characterising the economy owes not a little to multinationals from practically every industrial nation which are in healthy competition with overseas and domestic Chinese businesses.

The fourth surprising feature is the shedding of cultural outgrowths like guanxi or "connections", a euphemism for influence-peddlers and door-openers. More and more, world-class quality and customer-satisfaction are becoming decisive for business success. "What you know is already more important than whom you know".

Finally, China is consciously bringing within its cultural and economic fold a number of countries in Africa, Central Asia, Latin America and emerging markets elsewhere by luring them with offers of its business models and strategies.

This enables it to widen avenues for trade and commerce, besides supplanting the already established Western presence.

(The full report of Strategy+Business can be seen at www.strategy-business.com/resilience)

B. S. Raghavan