Call to exploit growing opportunities in China

Neil Selby, director of executive education at Cheung Kong Graduate School of Business (CKGSB), was in Oxford to address business leaders at a conference held by automotive supplier Unipart. He said that many businesses in the West have renewed their interest in establishing relationships in China because of the predictions of massive growth. "If China grows by more than 7% each year and the US by 2.5%, by 2019 it will be the world's largest economy," he said. "It will provide massive opportunities for companies in almost every sector, and will develop a very large middle class, which will grow by 200 million. There is no country in the world where that kind of change will be happening." He said that some UK companies feared it was too late to get into China as so many Western companies had already done very well there. However, given the predicted growth, China would remain an important market for Western companies to enter for at least the next 10 years. Selby told the audience that UK businesses need to focus on two key areas when considering entering the Chinese market. "First, Western businesses need to understand that the Chinese business operates in a different way. In Chinese organisations you have very hierarchical organisations, led by highly market responsive situational leadership. In the West, companies try to encourage a close personal relationship between the leader and the rest of the organisation and a more strategic approach," he said. "Secondly, the Chinese are by nature quite cautious and careful. They see the Western culture, which is much less risk averse, as 'ready, fire, aim'. They will look at things from a collective point of view rather than an individual point of view. "You have bear in mind that the Chinese culture concentrates on personal trust, rather than Western formal trust which comes from our system of law. A Chinese business person will need to have an idea of who you are before he or she can do business with you. You will find that developing those relationships takes time and patience."