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Stephen Douglas

Degree:

EMBA

Location:

United States

Industry:

Public Administration

Year:

2016-17

By Stephen Douglas

FOMO or as a pre-emptive strike? Why foreign firms must be in China

Before the China Oxford University Executive MBA module, I wondered: Should I take extra time off work to sight-see? A wise old-hand advised: Sure, if you have any vacation-days from work remaining.

After 14 EMBA months; 14 modules; 32 written assignments (averaging 3,000 words and 50 footnotes each); and having read about 2m words from cases, journal articles and books, you wouldn’t be surprised to learn that I don’t have that much spare time-off left – and, there’s still four modules left to go!

That wise old-hand, however, then continued: Of course, Professor Thun will be curating perspectives on China which few if any “sight-seers” will ever encounter. So I shouldn’t worry if you don’t prolong your stay.

And so it proved.

The pre-module reading prepared the ground to understand a complexity in political-economy which doesn’t usually penetrate the often ideological and uninformed journalism we read about China.

We learned about how, over twenty years, one village-elder, without much help or hindrance from the State, led a village from the brink of the subsistence economy to become the centre of one of the largest industrial clusters producing braking systems for vehicles the world has ever seen. Of how another village following a similar trajectory cornered 90% of the world zipper market. We smiled at this one, only because: which of us would have thought to identify such a seemingly insignificant market niche and pursue it to its ultimate conclusion? And yet, these are the stories which explain the modern Chinese economy, repeated countless times in apparently limitless areas of industry.

The story of our Oxford Saïd China EMBA module was helping us to understand the patterns running through such developments so that we could make informed choices about whether and if so how to enter the Chinese market ourselves. As one article put it Shakespearianly: To JV or not to JV?

In the mornings we took classes, while in the afternoons we visited a number of world-class Chinese and non-Chinese companies. Each day was dedicated to a different topic: Politics and Business in China; Foreign Firms; Private Sector; State Sector; Challenge of Innovation in China; and China’s future.

It’s clear that non-Chinese companies will rue the day they ignore the internal Chinese market. It’s not a question of whether you’ll currently make a profit. Rather, it’s a question of the future.

If you’re not in China today (or in many other so-called emerging markets) learning how to compete with Chinese companies, you won’t be ready when those same inventive, restless, infinitely innovative, hungry, capital-rich, iterative and pragmatic Chinese firms arrive in your own home market.

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