Why business with China will never be the same again
As I continue to coach multinational executives who either work in partially or fully locked-down Chinese cities, or virtually work with teams, clients and suppliers there, one question keeps coming up. Is there a simple narrative to explain China's unfolding economic, political, business and cultural environment for expats and foreign firms? After all, whatever the future brings, international managers must make decisions accordingly, from strategic investment through hiring and promotion and down to what equipment they should source locally and what they can import into China.
This is a hard question, because both the 'China is opening' and the 'China is closing' narratives remain fundamentally true but incomplete and misleading. Opening, because despite the country's physical isolation, new multinational investment and projects take place in the PRC, Chinese firms invest abroad and new agreements happen, like the one between Beijing and the USA's dreaded Internal Revenue Service (IRS): see the end of the article. Closing, because the government shows little interest in convincing frustrated expats and firms from leaving or attracting new ones. Over time, barriers will create bypasses and Beijing will have to start over again.
The best answer is probably that China is in a kind of identity crisis. The People's republic has swung between internationalist and nationalist narratives for 70 years, opening and closing again. Before that, similar patterns repeated for millennia. Meanwhile, commerce continued: business is more agile than people or states. Transitional periods, like the present probably, allow companies to keep what worked and rethink what didn't, scrap outdated business models and focus on newly arising needs. That starts with the realisation that while everyone yearns for the return of normality and the 'good old days', the world moves on. When China reopens, it will be a different place for foreign business.
Read the full article on Asia Power Watch and let me know what you think: https://asiapowerwatch.com/why-business-with-china-will-never-be-the-same-again/