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Managing the China Challenge

Managing the China Challenge: How to Achieve Corporate Success in the People's Republic

Kenneth G. Lieberthal
Foreword by Dominic Barton
Copyright Date: 2011
Pages: 149
  • Book Info
    Managing the China Challenge
    Book Description:

    Multinational corporations now look toward China with both trepidation and anticipation.The speed and scope of Chinese economic growth is changing the global distribution of power and resources, possibly to the detriment of the major industrial powers. But this same transformation presents tremendous opportunities for companies who understand China well enough to leverage both its accomplishments and its deep-seated problems for corporate benefit.

    Longtime China scholar Kenneth Lieberthal brings to bear a unique combination of experiences as former top government official, political scientist, professor of international corporate strategy, and consultant. InManaging the China Challenge, he draws on his deep understanding of China's political and economic systems and the priorities of local and national leaders to illuminate the strategies foreign companies must master to succeed in the Middle Kingdom.

    In straightforward language, using numerous concrete examples to support his ideas and recommendations, Lieberthal cogently presents not only how to benefit from doing business in China, but also how to avoid the serious risks that the endeavor entails. The implications Lieberthal lays out for corporate strategy are wide-ranging and critically important.

    eISBN: 978-0-8157-2205-2
    Subjects: Business, Management & Organizational Behavior

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Foreword
    (pp. ix-xii)
    Dominic Barton

    China has clearly established itself as the world’s new economic hub. With its close to double-digit GDP growth, China is becoming the key shaping factor for more and more global industries. No longer can it be said that China is only a source of low-cost manufactured goods, exporting a “China price” to the world; many leading Chinese businesses are rapidly moving up the value chain on the back of home-market demand to challenge the historic global leaders. Indeed, China’s burgeoning domestic demand is becoming one of its greatest attractions. Additionally, with its hundreds of thousands of new engineering graduates each...

  4. Preface
    (pp. xiii-xvi)
  5. Acknowledgments
    (pp. xvii-xviii)
  6. ONE Where China Wants to Go
    (pp. 1-10)

    China is a country whose past weighs heavily on its present and future. It is, in Chinese eyes, a past of glory and also of humiliation, as a great civilization was brought low by those countries that first mastered the Industrial Revolution in the nineteenth and twentieth centuries. As of the mid-1700s China arguably had the world’s premier civilization, political system, and economy. By the early decades of the twentieth century, however, it was widely dubbed the sick man of Asia, a country unable to adapt to the modern world, govern itself, or defend its interests.

    The very core of...

  7. TWO Growth Drivers and Constraints
    (pp. 11-47)

    As China pursues ongoing rapid growth, how successful will it be? What elements in China will fundamentally drive the future, both in terms of promoting growth and constraining it?

    Many factors bode well for long-term growth. The fact that despite strenuous efforts China still remains behind the cutting edge of technology in virtually every sector means that it can leverage the advantages of technology lag in most sectors for the coming decade and more. It is, as Japan and others have learned, far easier to move up a technology curve than to advance once on its leading edge. Those not...

  8. THREE The Operating Environment
    (pp. 48-58)

    The party-state is deeply, pervasively engaged in China’s economy, even though market forces determine most specific retail economic outcomes. The complexities of this political system are enormous, and many important details vary significantly by locality. No brief overview can fully convey the precise structures and relationships that make up this system.

    But there are core fundamentals—including operating principles—that are not published but that are known and are critical to understand in order to navigate the Chinese party-state effectively. Understanding these principles and their operational consequences permits businesspeople to develop the right questions to ask in order to turn...

  9. FOUR Necessary Changes in MNC Strategy
    (pp. 59-79)

    The above overview has substantial implications for multinational corporation strategy. This chapter highlights these implications for key components of every MNC’s approach to China: positioning the China effort in overall corporate operations, government relations, product development, human resources, locational strategy, and marketing. The conclusion is that it is possible to succeed competitively in China, but the keys to that success require critical readjustments to many core corporate practices.

    There conceptually are three broad stages in the evolution of managing the China effort within most MNCs. The first treats the country as such a unique kind of animal that most of...

  10. FIVE Managing Risks
    (pp. 80-109)

    China presents a high-risk business environment in which many of the challenges are those characteristic of most emerging markets. Business ethics are not very well developed; the government actively interferes in the economy, influenced by both national and local politics; the legal system often provides very inadequate protections; and so forth. However, some types of risk have “Chinese characteristics” that are sufficiently distinctive and consequential to warrant relatively detailed attention and specific mitigation strategies.

    In broad terms, there are six categories of risk: political, reputational, ethical, cyber, environmental, and corporate governance. Overall, they grow directly out of the dynamics of...

  11. SIX Looking to the Future
    (pp. 110-114)

    China is a huge country in the midst of massive change. So many things are in motion at once that nobody can be sure of exactly what the future holds. The momentum for ongoing rapid growth is overwhelming in terms of government plans, people’s aspirations, and the operation of the underlying political economy itself. At this point the system is geared to produce extraordinary growth by virtue of its own internal workings. That growth is, moreover, reaching deep inland, fueled by the tsunami of migration from countryside to cities and the phenomenal expansion in infrastructure and in educational opportunities available...

  12. Notes
    (pp. 115-132)
  13. Bibliography
    (pp. 133-142)
  14. Index
    (pp. 143-149)
  15. Back Matter
    (pp. 150-151)