Review
Greatly welcomed. -- Lord Powell, KCMG, President of China-Britain Business Council
Systematic and eminently sensible... [A] helpful exposition of the need to balance Western and Chinese business methods. -- China-Britain Business Review, September 2006
Wang offers sound advice to business leaders planning on making the long march east... [A] timely, well-informed book. -- Business Voice, the CBI magazine, September 2006
Book Description
By examining Sino-Western joint ventures, the most complex and challenging of all business arrangements that are in a sense an engagement of 2,500 years of almost oppositely developed Western and Chinese civilisations, The China Executive provides an inside-out, human-centred perspective on what it takes to achieve business success in China: from stepping into the networked society, reading the dynamics of the China market, approaching and selecting a partner, and negotiating with a potential partner, through to bridging communication gaps, training local staff, leading the Chinese, and balancing managing and leading. Packed with anecdotes, pictures, and above all, wisdom, the book is easily accessible and highly practical.
Using China as a reference point, The China Executive also illuminates the limitations of the Western view of business, and offers existing and potential executives worldwide the definitive guide to developing a global view of business in the 21st century, including the integration of results and relationships, of analysis and intuition, and of competition and co-operation. The book concludes that the secret of global business success lies in taking a higher worldview by combining a Western things-oriented, divided worldview with a Chinese human-centred, integrated worldview, and mastering global business by combining modern Western management excellence with ancient Chinese leadership wisdom.
From the Publisher
Western business leaders tend to presume too much and underestimate the difficulties of doing business in China. Taking a few leaves out of Wei Wang's book could help.
By Stefan Stern, Management Columnist of the Financial Times, Special for BUSINESS VOICE, September 2006.
"China tantalises executives with its promise of riches, but also with the threat of muscular and strengthening competition. How to engage with this fast-growing market of 1.3 billion people - or, as Procter & Gamble has put it, a land of 2.6 billion armpits?
Wei Wang is ideally placed to help. A Chinese national, he took an MBA at Loughborough University in the 1980s, and has been engaged on Anglo-Chinese (or should that be Sino-Western?) projects ever since for multinationals and investment companies. He is managing director of 2W China Investment Consulting, a firm that specialises in advising businesses on their strategic investments in China. (He also runs an online forum at TheChinaForum.com.)
In his book Wang offers sound advice to business leaders planning on making the long march east. His broad message is that we tend to presume too much and underestimate the difficulties for foreigners trying to do business in China. The good news is that there is lots of business to be done by those who take the right approach.
There are four critical skills needed to find a suitable business partner in China, Wang says. First, China is a connections-based society, rather than a rules-based society. Second, you need the ability to interpret both 'analysis- and intuition-based methods', China being a market (and culture) where hard data is only part of the story. Third, choosing a partner well, based on location and your strategic aims, is vital. And fourth, negotiate wisely according to Chinese principles, where 'a contract may seem to be only a draft' as a basis for an ongoing relationship.
Western business schools, Wang says, have concentrated too much on sophisticated analysis and failed to see 'what business really is and how it can be successfully done'. Nowhere is this insight more valuable than in China, where relationships, tact and understanding the concept of 'face' (or public standing, reputation and esteem) are so vital.
The pull of China is stronger than ever but it is important not to be carried away. Huge doubts remain over the solidity of its banking sector. Corruption and bribery are widespread. And despite extraordinary economic growth, exports and inward investment, many foreign firms in China feel they are not always on a level playing field. Where is the protection from intellectual property piracy, and equal access to an open and transparent regulatory regime?
Tensions with China's trading partners are growing, as we saw earlier this year in the 'bra wars' with the European Union. This is a highly complex, if potentially rewarding market. Wei Wang has several important insights to share in this timely, well-informed book."
From the Back Cover
"An important and timely book about a topic that will be of interest to all global leaders." Dr Warren Bennis, Distinguished Professor of Business Administration, University of Southern California, and Author of Leaders
"Most executives planning to invest in China or having invested in China would be attracted by the concept of the book. The book should have a good market." Geir Boe, General Manager, Jotun China
"The book will be appealing to many who are in the business circle investing or interested in investing in China. With his deep understanding of both Chinese and Western cultures and first-hand experiences of running joint ventures in China, the author presents in the book background, reasoning, analysis and history and philosophy of managing a successful 'family life' when investing in China." Dr Peter Chang, President and CEO, Clean Asia Renewable Energy & Former President and CEO, Asia Power
About the Author
Previously, Dr Wang had been at the core of developing a number of Sino-Western joint ventures in China for a multi-billion dollar British multinational, and was managing director of a US$25 million dollar pharmaceutical joint venture. His first-hand experiences covering the whole process of making an investment in China, his ability to see things simultaneously from both Western and Chinese perspectives, and his broadly based education in both China and the West including a PhD in manufacturing engineering and an MBA from Loughborough University make him eminently qualified to tackle this immensely multidisciplinary and highly challenging subject.
Excerpt. © Reprinted by permission. All rights reserved.
The idea of writing a book like the one you are holding was born more than a decade ago, when I was a part-time MBA student at a leading business school in the UK in 1991. I consciously invested in my personal development to prepare myself for a China-related business career. As I read management guru Tom Peters' In Search of Excellence, I thought that maybe one day I could write its China version. However, the experiences I gained at a British-based multinational not only illuminated the limitations of Tom Peters' research-based approach; they also helped me develop the feel for the whole nature of business, which has served as the foundation of this book.
The multinational I joined in January 1995 was a food conglomerate (FC) with an annual turnover of about £4 billion, 55,000 employees, and businesses in Europe, Australia and North America. Although publicly traded, over 60% of the multinational was owned by a billionaire family, the head of which had been chairman and CEO of FC for twenty-five years and nicknamed "the Boss". Recognising the economic potential in Asia, he set the grand vision of "building another FC in Asia within ten years" and gave the spearheading task to the CEO of his leading British company (BC), which contributed half of FC's profits. In late 1994, the CEO appointed Tony, his former director of research & development, as Asian director to set up an office in Hong Kong.
I was appointed as business development executive, assisting directors at the "nerve centre" of BC to make China-related investment decisions. On my first day at BC, the CEO personally came down to the "nerve centre", introduced himself and welcomed me by shaking my hand. I felt very warm. But soon, I discovered that what drove the corporate behaviour of BC was one word: "logic". The directors seemed to be in debates about everything, yet they acted co-operatively once decisions were made. One such decision was to develop BC's struggling starch subsidiary in the Chinese context through forming a joint venture with a local partner. It was an "investment logic" that convinced everybody at BC because, using the joint venture as a foothold, the starch subsidiary would have access to a market that could be predicted only to grow. It was also the norm for junior staff to challenge senior staff - even the secretary challenged the directors when the former had a piece of truth or logic in hand. In short, it was logic that made BC an organised entity and ensured everyone's efficiency.
In China, however, the biggest lesson I learnt was that, for better or for worse, it is people who are central to everything. As such, the China investment challenge is a people challenge in nature, as demonstrated by my experience of being at the heart of developing and running one of BC's multimillion-dollar joint ventures.
People's disruption of the logic based on which an investment decision should be made. As published data on the China starch industry were extremely scarce, BC's director of starch development and I had to rely on guanxi (i.e. people one already knows), including a German equipment supplier and my personal friends in China to arrange visits for us in China. But logic did have a place - I spotted a potential partner in a Chinese statistics book, a Chinese company (CC) that was China's largest producer of a flavour ingredient from starch. In March 1995, we visited a few ministry officials, and some major starch producers and users. Located in rural central China, CC was state-owned. Its chairman Mr Chen told us that CC had just imported equipment for a new starch plant, which could be built and run jointly by BC and CC, with BC contributing know-how and CC buying the produced starch. Upon hearing our report back in the UK, BC decided to pursue Mr Chen's proposal.
The following eight months saw streams of BC staff travelling to CC for visits and discussions, during which, while BC strove to check every technical detail, Mr Chen wanted to get on with making the decision to establish the relationship. Then the dire prediction by Lester Brown of the Worldwatch Institute that China was to have problems with feeding its growing population caused "the Boss" concern over investing in China starch. My on-the-ground investigations, however, showed that the plant would have a secure maize supply. Of course, central to all these activities had been the effort of a BC accountant to assemble a financial model based on local operating conditions, but he had no way to verify the reliability of the data provided by CC staff.
In November, Mr Chen visited BC in the UK. We also took him to see "the Boss" in London. I was struck by the very plain style of the billionaire's dress and office, which was in sharp contrast to the extravagant style of many newly rich Chinese I had encountered. "The Boss" first asked Mr Chen about the ownership of CC, showing concern that as CC was owned by the state Mr Chen might not be CC's chairman in a few years' time. Mr Chen answered that that was true in theory but in the Chinese reality his job was almost guaranteed for the rest of his life. Satisfied by Mr Chen's answer on ownership, "the Boss" then advised that as "competition" would soon erode margins in starch production, it might be worth BC and CC considering an integrated starch and derivative facility. Mr Chen said that CC had achieved its success through "rolling a snowball", but accepted his logic. Following further discussions, BC and CC agreed to target a starch derivative (SD) that was being produced by just one Chinese state-owned enterprise using technology and equipment imported from Europe.
