2nd Building Bridges Event dives into China/SEA Relationship

Professor Bala Ramasamy, Director of the Global EMBA programme, welcomed the attendees and gave a short overview of the Building Bridges aims.

Professor Bala Ramasamy

“We started this event series to provide a platform for all manner of interested parties to better understand where China fits into the global business landscape in an objective manner. We’re not here to ‘sell’ China, or to provide an idealised narrative; we’re here to openly discuss how things really between China and the rest of the world, the good and the bad.”

The theme of this second part of the China/SEA Symposium was “Unpacking the China Market”. To deliver the opening lecture, Professor Ramasamy introduced another CEIBS faculty member, Assistant Professor of Economics Howei Wu.

Assistant Professor of Economics Howei Wu

Professor Wu is recognised by Poets & Quants as being among the “Best 40 under 40” business school professors (top 40 professors under the age of 40) in the world. Calling on her extensive experience, she managed to outline the current state and future prospects of the Chinese economy in just 30 minutes – no easy task given the size, scale, complexity and development speed of the subject matter.

This was followed by a dialogue between CEIBS Associate Professor of Strategy, Chang Hyun Kim, and Lim Lay Yew, the Singaporean Co-Founder & Executive Director of Esco Lifesciences Group. The company began in Singapore, before expanding into multiple SEA territories and then China. In their discussion, Mr Lim shared his experiences of expanding into the China market, along with advice for SEA companies looking to do the same.

CEIBS Associate Professor of Strategy, Chang Hyun Kim, and Lim Lay Yew, the Singaporean Co-Founder & Executive Director of Esco Lifesciences Group

For the final part of the event’s agenda, Professor Ramasamy hosted a panel discussion entitled Navigating Success: Challenges and Opportunities in China's Dynamic Market whose participants represented a diverse range of companies and industries with interests in China and SEA.

Professor Bala Ramasamy. Calvin Boon, PhD, CEO & Founder, Brocade Consulting Ltd (HK); former Vice President & GM, Molecular Diagnostic China, Thermo Fisher Scientific. Helena Li, Executive President, Trina Solar; CEIBS Alumna. Damon Gu, Global Head of Strategy & Business Development, Toll Group; CEIBS Alumnus. Lim Chiang Fong, (CF) Managing Director, Chinese and Technology Corporates, Enterprise Banking International, OCBC Bank.

The following sections outline the main insights from each part of the event.

Insights drawn from Professor Howei Wu’s lecture.

It’s no secret that the Chinese economy has been under a lot of pressure recently. 2008 marked the “New Normal” where growth slipped from double to single digits. From 2020, however, it is perhaps more accurate to consider a 5% growth target as the “New New Normal”.

The establishment of this New New Normal can be attributed to two main factors – China is getting richer as a nation, and confidence in its economic future is at an historic low ebb. Those two things might seem incompatible, paradoxical, even, but they tell a story of an economy that is coping with a major transformative shift from low to high quality growth.

The government’s long-term strategy for restoring confidence has already been clearly signalled and set, with productivity being the most coveted driver for long run GDP growth. President Xi has repeatedly highlighted the importance of embracing new quality productive forces, with three critical industries being highlighted across state media – electric vehicles, batteries and renewable energy.

More broadly, this trend is supported by China’s increasing emphasis on innovation and research, investing five times more today than in 1996. This steadily rising investment in R&D demonstrates how advanced technology, education, innovation and infrastructure will form the new strengths of the Chinese economy, taking over from the traditional strengths of cheap labour and cheap money.

So even though the Chinese economy’s growth is undoubtedly slowing down, it is still growing. It is steadily shifting its focus to embrace a new set of strengths that can build a new kind of economy, one that is futureproofed and ready to make the most of emerging technological advantages.

Insights drawn from the dialogue: Unlocking Growth Opportunities in the China & Asia Pacific Healthcare Sector, between Professor Chang Hyun Kim, and Mr Lim Lay Yew.

Insights drawn from the panel discussion – Navigating Success: Challenges and Opportunities in China's Dynamic Market

Prof Bala: How do you look at the Chinese economy today? How do you rate your confidence in it on a scale of 1 to 10?

CF: 10. Because of Chinese ingenuity, you see their business influence everywhere, throughout Asia, Africa, everywhere. From the Singaporean perspective, we see a consistently strong government push to ensure that China’s economy keeps growing and innovating.

Damon: 9. From a global supply chain perspective, China still has massive manufacturing capability, but now it’s much more flexible and responsive to consumer demands. My score would be 10, but China loses 1 point because so many Chinese companies still lack the necessary global perspective and management expertise needed to be truly effective global operators.

Helena: 9.5. That half point is room for improvement on the communication and cultural recognition side. We could do better at establishing more transparent and collaborative relations with the rest of the world. If Chinese companies want to expand overseas more effectively, we need to work on our global image and communications style.

Calvin: 6.5. The next 10 years will be critical for determining its long-term future. China wants to go in the direction of high value, highly technically advanced R&D, but there is an impatience bred into Chinese business culture. There is too much of a willingness to take shortcuts to achieve ROI. Having said that, there are ‘rare gems’ that look at innovation the right way, and that makes them attractive for MNCs to partner with.

Prof Bala: If a mid-sized SEA-based company is looking at China with an eye for expansion, have they already missed the boat?

CF: No, it’s not too late. In fact, now is still a period of strong opportunity for SEA companies because China is eager to revive its FDI inflows, so investors and new entrants are welcomed with open arms. However, be very clear about what you want to do before coming to China; don’t make the mistake of thinking it’s a simple backward economy that’s easy to enter.  Treat China as any other modern advanced economies.

Damon: Now is the best possible timing for market entry. I’ve just come back from Yiwu, China’s “Small Commodity Capital City”, and the local government is promoting foreign investment very strongly. They’re hungry for business and that means you’ll get the best possible deals.

Helena: It’s best to look at China comparatively, not in a vacuum. Whether your confidence in China’s future economic prospects is at 9.5, 6.5 or lower, where else are you going to find a higher number? Where are you going to find the right innovation conditions, joint venture opportunities and access to talent that will ramp up productivity quickly? Only China offers all these things together.

Calvin: SEA companies haven’t missed the boat, but in the healthcare industry, you must come in with a product that is going to change the market, because the speed of innovation in China is incredibly fast. If you look at JV activity in the industry right now, the big multinationals are only looking for the rare Chinese companies who have something unique. They don’t bother with anything less, because the speed and ferocity of competition wipes out so many lesser players.

Prof Bala: Does China still offer the right kind of opportunities for professionals in their 30s to build their career? If so, what kind of leadership qualities should they be developing to succeed in today’s China?

CF: Willingness. Willingness to take on challenges, to change, to travel, to work hard to match the speed and innovation of the market.

Damon: To Quote Steve Jobs: “Stay foolish, stay hungry”. Look at yourself in the mirror and answer if you’re ready for the challenge of long working hours, for high pressure environments and so on. If it’s right for you, I can guarantee it will be one of the most exciting chapters in your life. Still, you have to enjoy a challenge.

Helena: For female professionals, China is one of the safest countries in the world, and it has a working environment where women are respected. It’s still a great place for young professionals to learn, to gain experience, to discover their potential.

Calvin: Two things: try to see China as it really is, not as you want it to be, and be prepared to work extremely hard. If you want to build a career in China, you must be prepared to be pushed, and to push your colleagues as well. Once you leave the Chinese business culture, you will be well sought-after practically anywhere in the world, because you have held your own in a top-notch competitive environment.

In his parting words to the attendees, Professor Bala left with a piece of advice that applies to both companies and individuals who may be looking towards China for the next stage of their development:

“You test gold by using fire. So, if you think you are gold, then test yourself with fire. As our panellists and speakers have eloquently demonstrated, today’s China is one of the most innovative, challenging and intensely competitive markets and working environments in the world. There’s no hotter fire, so there’s no better place to really test yourself.”

Look out for the next stage of Building Bridges series, where the next twinned events will focus on China’s relationship with Europe.