I had a brief and interesting chat with a couple of folks tonight at the London Business School.
LBS is a superb place for having discussions with people who have enthusiastic and provocative ideas, not to mention the seemingly boundless energy to execute them.
Anyway, midway through our conversation, a new acquaintance asked me: “Are there still opportunities for people like me in China?” What he meant was, could he, with more than 10 years of expertise in his field, with an Executive MBA from a well-recognised business school, but without previous China experience, still make it in one of the most solid emerging markets left around?
I won’t bore you with my actual answer but the thrust of my response was assuring – after all, why shouldn’t someone with more than a decade of sound experience, know-how and ability do well in a growing market like China?
But I had to wonder if he had listened to James Chanos recently and the accompanying “China is a bubble” stories.
It seems that people are contining to take sides and a few more commentators are challenging Chanos’s “Dubai times a thousand” rhetoric.
If you boil it down though, the conventional wisdom seems relatively united on the outcome, from both the Chanos and anti-Chanos sides. There is general agreement that, while there is clearly a property bubble appearing on the horizon, it will not tear at the fabric of the Chinese economy.
I have argued before, that I see this as the likely outcome. A bubble is coming but it will not derail the Chinese economy, because the engines of growth right now in China are neither real estate nor the stock market.
And, actually, though I perhaps haven’t said this in my previous posts , I think that the drivers of growth are government spending in large infrastructural projects and continuing high export demand (yes, notwithstanding some of the desultory 2009 figures that came through, China’s exports do continue to surge).
I will go further now to say that I believe there is enough time yet for government spending to be balanced by consumer spending, and that China’s competitive advantage in exports has not even fully begun to be realised.
This is why I don’t see China as about to implode.
And why I do still believe that individuals with no prior knowledge of China but with acumen and drive (and above all experience) should find themselves able to do well there.
7 Comments
The problem with Dubai is that they have all this oil money and they’ve got no idea of what to do with it. So all they do is build these extravagent structures, buy football clubs, and the like, and there is very little chance of a commercial return on these “investments”. However, in China, people put money into the country with the expectation of making a profit out of it. There will be bubbles created – it happens in the most modern economies – but in the end, there will still be assets capable of generating profits left somewhere. In Dubai, when a bubble burts, who really wants to have ownership of, let alone live in, a hotel in the middle of the desert?
You realize you’re going to have to return with either your interlocutor’s end of the chat in a guest post, or a summary paraphrase from your side, Counselor? Too good to miss!
In any event, a couple of things which bear mentioning:
** I hear conflicting reports about the actual significance of the export trade between the US and China. While the numbers you cite from the Reuters link show y-o-y growth and quarter-by-quarter rises, I still need clarity on how much the export trade affects the trade relationship between those two and the ramifications of a possible rupture. I’m still not convinced, even though I’m hardly going to dismiss the economics thing out of hand.
** do you really think the Chinese market needs more trained Rotweilers (read: MBA grads) rather than electrifying entrepreneurs, a la what Richard Branson is trying to achive there and in India (http://www.amazon.com/Business-Stripped-Bare-Adventures-Entrepreneur/dp/0753519615/ref=tmm_pap_title_0)?
Daniel, you and I are somewhat allied on this point. Recalling my original post on this subject, I think some of it has to do with the “one man’s vision” angle of it vs the national development aspect. China encountered problems when it was all about one man and what he wanted.
ADM…the summary will come in time. Perhaps you have more than a passing interest in the content of the discussion…?
The one-line summary is that experience is key since this is what would give someone with smarts and drive the added quality – i.e. why one employer or business partner would pick her or him out of hundreds of other hopefuls.
Otherwise, you will be another foreigner at the bottom of the ladder struggling. It’s not impossible, but it gets harder.
I take your point on the export figures I quoted. (And am taking that down for a post in future.)
Finally, with the MBA grads, I have a bit of a prejudice too against someone who with a cumulative 6 months’ real world experience but a nice b-school qualification thinks he or she will change the world. But the fellow I was speaking to had actual experience and skills and was different from type, I thought.
Indeed looking forward to the sequel.
Note to self: I must find a better article for your community which describes the somewhat chimeric nature of the Sino-US export-import relationship.
I once read a well-elaborated post on this very subject and cat-o-nail tails across the back on me that I can’t access it quickly. Basically, its author looked at the macro numbers and realized that most of the fear-mongering that generally accompanies the export shakedown is not substantiated by the majority of the stats. The media cherry-picks these for propagandistic purposes and that’s one of the main contributors to the ratcheting up of the tensions.
To wit, what percentage of the US’ GDP does the trade relationship comprise?
Is the Sino-US relationship nearly as important as US-Canada crossborder trade (what we’ll loosely call the “side-to-side” versus the “top-to-bottom” trading relationship)?
There’s likely heaps of material out there which even further elaborates on things.
In any event, this was another GJ-P thought-provoking piece.
Found something which isn’t precisely related, but does discuss how the US can ameliorate its trade deficit with the Chinese: http://washingtontimes.com/news/2010/mar/02/chinas-debt-to-us-treasury-more-than-indicated/
ADM, your library of resources continues to impress.
It’s no longer trade with the US which concerns the Chinese. They are looking for markets in other places. As I look into the Chinese export market, the more I am convinced that it is about Africa and the Middle East.
China continues to buy up US treasury bonds because they are safe and it diversifies its African portfolio.