China – A Business Adventure by Saharsh Atra (MBA ’19).
If you think you can swim just because you know what water is and you have seen others do it, you will be in for a surprise when you step into a pool. The same can be said for any travel experience. On my recent trip to China, I was amazed beyond belief.
The trip was organized by the University at Buffalo School of Management with fellow graduate students from my class. Over two weeks we travelled to three cities (Beijing, Shanghai and Hong Kong) with a number of company visits, alumni events and stops at all the usual tourist spots.
Although China has been categorized by most of the firms (such as the International Monetary Fund, etc.) as an “emerging economy,” I am astonished by the potential China has in terms of the growth it can sustain while already being on competing grounds with the developed world. My observation may be biased since I only visited the biggest cities in China, but some of the following stats support the point I am trying to make:
- China is third on the list of countries having the most highly cited researchers in 21 fields of the sciences and social sciences, with more than 10% from mainland China
- In terms of infrastructure, China has close to half of the worlds tallest buildings and is home to the fastest railway services (I was fortunate enough to get on top of one of those buildings and travel in the train between Beijing and Shanghai, which goes over 340 kph or 210 mph)
- China was third in the total number of gold medals won in the 2016 Summer Olympics
- And finally, they are the second largest economy in terms of Gross Domestic Product (GDP)
All these accomplishments may however be attributed to the large population, since these numbers diminish if we go by per capita figures. But, having more than a billion people comes with its own set of problems, especially when you have a non-democratic system. I would refrain myself from calling it a communist government and would instead describe it as “adaptive authoritarianism,” as described in a recent book I read.
The up side of having such an administration is a dynamic system which is extremely fast moving and continuously improving. This was evident from what I observed in Beijing, which was one of the most polluted cities of the world just a few years ago. However, I was amazed to see how quickly China was able to bring about a change in air pollution levels, which was quite evident when comparing Beijing with Shanghai, where the levels where not so good.
It is important to know the cultural differences to conduct business in China. Building good personal relationships with people is one of the most essential steps to be successful. China is a high-context culture, which scores low on individualism and indulgence while high on power distance. This means preferences and priorities can be different in personal as well as professional settings. Profit is a priority, but is second to community, as we heard in our conversation with China National Petroleum Corporation (CNCP, one of the top five Fortune Global 500 companies).
China’s opportunities come with its own set of challenges. One of the biggest being the constant threat of others copying your patents, business models and even logos. However, the large population means there is enough market for everyone to succeed. The other obstacle is regulation, especially for international businesses which are restricted in many ways to operate freely. This means that not only setting up shop if difficult, but if you become a huge success you risk becoming a target as well.
Whenever people ask me where do I want to work, I am never able to give them a straight answer because I never have a single place in mind. Coming from India for my MBA to U.S., it felt like this would open up more options for me to work anywhere in the world. The purpose of me going on this trip was to have an experience of how businesses work in China which is one of the biggest economies with a lot of potential for the future. If I want to work in a global setting, I am sure my work will have relations with China directly or indirectly and I hope my experiences from the trip will come in handy in case I require them.
Saharsh Atra (UB MBA ’19) is an MBA Ambassador.