Continued Growth in China
Now that February has rolled around, most of us have arrived in 2008 (or are you still writing “2007″ on your checks?), but 2007 year end results for many companies are just now being communicated. Many US-based multinationals are reporting continuous growth outside the US, especially in Asia-Pacific. Chris mentioned Amazon a few days ago and last week, Reuters reported that McDonald’s had 15% growth in China last year and they are gearing up for more growth in the next two years.
In a 2007 poll by the US-China Business Council (USCBC), the vast majority of US companies doing business in China are profitable, growing and optimistic about future growth. According to AllBusiness, “almost nine out of ten companies say China is ‘at or near’ the top of their companies priorities. The poll also reveals that 57% of the US companies in China are selling mainly to the Chinese market; only a minority is producing in China to sell in the US or in other countries.
I have been telling people for a number of years that our children will all be learning Chinese. I’ve recently adapted my prediction: I now see Chinese lessons in my future also.
Does your company do business in China? Do you travel there on business?
Image from www.mo-dp.bias.ne.jp
Tags: China growth, McDonalds in China, US-China Business Council
8 opinions for Continued Growth in China
Kelly
Feb 4, 2008 at 11:08 am
We don’t do business in China but have noticed an increase in requests for referrals to Hong Kong, Singapore and other hot spots in Asia. I think you’re right that it’s going to be an increasingly important business destination for US and other countries.
Jean Mercedes
Feb 4, 2008 at 5:06 pm
Kelly, when you get requests for referrals to Asia, what do you do? Do you now have a network in Asia that you refer to?
Liz Fuller
Feb 9, 2008 at 5:37 pm
Hi Jean
I enjoyed your comment about “learning Chinese” in your forseeable future. I have colleagues working on their executive MBAs who are currently doing just that. But in reality that is not a widespread or longterm solution.
One of the drawbacks that we find in working with China as opposed to India, is their lack of widespread knowledge of English. I have heard English as a Second Language described as the international language of business.
How do you see the Chinese working to overcome that challenge?
Liz
Jean Mercedes
Feb 10, 2008 at 1:39 pm
Hi Liz,
I’m not an expert on China, but my personal belief is that the Chinese market is so big, they won’t really need us in the future. That may sound radical, but look at it this way - it is everybody else trying to get into and establish themselves in China. India has an advantage, certainly, with widespread use of English, and the offshore capacities they offer are a result of their English skills. But in terms of building up their internal markets, I believe China is ahead. It will be interesting to watch these two major countries in the years to come.
Liz Fuller
Feb 10, 2008 at 1:46 pm
Wow Jean.
That’s the first time I’ve heard anyone say, “they won’t need us anymore”. Chilling. But maybe it’s the truth.
I lived and worked in India for six months and from what I saw, their two biggest challenges are their lack of infrastructure and their inability to focus their forces to really take advantage of the opportunities being presented to them. Being a large and very diverse democracy of many states, it is challenging to get everyone moving in the same direction.
Ironically since China is not democratic they can advance ideas and projects with less discord and diversion.
So it is interesting how they each have challenges and they each have opportunities.
I don’t know where we are going to end up in all of this. I do wish we were putting as much focus on educating and engaging the next generation as both those countries are. I see that as their real competitive advantage in the global marketplace.
Liz
Jean Mercedes
Feb 11, 2008 at 5:18 pm
Hi Liz,
Sorry for being rather direct on the “they won’t need us anymore” bit. Obviously China is a large and complex country and it is easy to get into trouble with generalities, but that is my quick take on it (and also my understanding of why China can get by with fewer English speakers in comparison to India). Of course China will have trading partners which they will “need” in the future and in our global day and age everybody is intertwined, but as an outsider, I do see China building up their national market quickly with companies from other countries trying to grab a piece of that future pie. If you want to be there as a company, you will need to understand them.
Thanks for sharing about India. Do you still work with companies from India? How did the 6 months you spent there change your views on globalization or on international business?
Jean
Liz Fuller
Feb 11, 2008 at 6:00 pm
Hi Jean
No need to apologize for being direct. In fact, I liked it. It made me take pause and really think about what you were saying, probably more so than if you had simply soft-peddled it.
I see a lot of opportunity in the global marketplace and am not fearful of the challenges ahead. I think that each country (the US included) has its own strengths and its own weaknesses and competition can make us stronger.
I am fascinated by the cross-cultural communication challenges of collaboration and business. Understanding differing worldviews can open your eyes to understanding more of your own culture. I found it very stimulating.
Liz
Jean Mercedes
Feb 13, 2008 at 5:46 pm
I am with you, Liz. I also find it fascinating. Jean
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