Supertrends of Future China: Billion Dollar Opportunities for China’s Olympic Decade
by James K. Yuann and Jason Inch; World Scientific Publishing, US$27.95
The Beijing Olympics focused the world’s attention on China and the dramatic transformation it has undergone in recent years. Supertrends of Future China offers a primer on the forces that will drive business in the post-Olympic decade.
Unlike much that is written on business in China, authors James K. Yuann and Jason Inch use their years of experience as analysts to explore the cultural as well as the market trends. It is a refreshing approach but one that still leads to a hard economic conclusion: The next decade in China is likely to be as remarkable as the one that preceded it, with no shortage of opportunities for savvy businesspeople.
Out with the old
Yuann and Inch believe the key to succeeding in China in the upcoming years will be to follow what they dub the “supertrends” of business, society and wealth. Many of the old assumptions about China will need to be thrown out. In manufacturing, for example, the authors see a shift toward added value and innovation as producers bid farewell to the low-end knock-offs currently synonymous with the “made in China” label.
On the social end, China’s “affluencing” middle and upper classes are coming to expect and demand higher quality products, especially technologies like mobile phones, which help reinforce their social networks. Chinese send text messages and join internet communities in numbers that dwarf their Western counterparts. The authors believe smart marketers will recognize these media as important new ways to reach their customers.
The trends therefore are interrelated, but the book unfortunately tends to oversimplify the connections. Even as the authors claim to be shaking up our outdated ideas about China, they insist on stale generalizations about Chinese culture, such as over-stressing the role of Confucianism, when making their analysis.
They have included insightful anecdotes that can be revealing for old China hands and newcomers alike – a businessman’s recollections of his first trip to Shanghai in the early 1980s is one particular highlight – but the placement of these stories is not always clearly linked to the point the writers are making in that chapter.
This flaw stems from a larger problem with Supertrends of Future China, namely that the authors don’t have a clear focus as to whether their target audience is people already doing business in China or merely considering market entry.
As a result, one of the strengths of the book – its breadth – unfortunately, is also one of its chief weaknesses. The numerous examples and anecdotes, while frequently interesting on their own, suffer in that they appear without adequate contextual information. Ultimately the authors give a scattershot view of China’s “supertrends” in which it is difficult to see a clear and coherent picture taking shape.
In Yuann and Inch’s defense, this lack of coherence is perhaps one of the chief lessons to take away from the book. Anticipating the next big opportunity in China requires an appreciation of the society as nuanced, not monolithic: the so-called “China market” is more like 1.3 billion markets of one.
In China, people like to use their guanxi for their own benefit. They don’t like to share guanxi, but when they do, it is to act as a middle-person to barter some kind of social transaction. An important part of guanxi is actual physical access to a person. An email address or even a phone number is not enough: People in China exchange business cards spontaneously on being introduced, whereas Westerners may wait until the end of a meeting and even then only give a name card on an as-needed basis. While Westerners guard their mobile phone number almost as carefully as a home address, a Chinese CEO’s card may even have a personal mobile phone number.
Real guanxi is about a personal relationship, a connection, a common bond, such as being related, coming from the same hometown, having gone to school together and, most importantly, having a history formed through long interaction and reciprocal favors supporting mutual trust. Guanxi is, therefore, anything but the distant relationships enabled by LinkedIn and other social network website connections with their three or more degrees of separation.