Entrepreneurial China

China:10 Insights into Chinese entrepreneurs

Asia 5 Bringing you a flavour of business trends in Asia...in just 5 minutes A Futures Coaching initiative www.futurescoaching.com

engineThe changes in Chinahave been propelled by Chinese entrepreneurs.... Aided bygovernments policies towards economic reform

aspiration71% Chinese business people want to be self-employed (vs 55% USA, 45% EU) Chinese entrepreneurs want to go fast..... 37% want to expand quickly vs 14% USA and 17% EU (source: Eurobarometer, 2009)

four types There are four types of entrepreneur in China 1. Self-employed subsistence workers2. Tide Players – driven to escape poverty, emerging from late 1980s 3. Sea Turtles – Foreign educated Chinese returning to start businesses from late 1990s4. Young entrepreneurs motivated by recent economic opportunity

tide players These people are true survivors: they have a pragmatic philosophy: “When you face a great tide, the important thing is action” >50 year old Chinese entrepreneurs started with nothing...but at least had no incumbents nor inherited wealth to challenge them Grew up under Mao: worked on farms; very poor; self taught maybe had rightist parents who were executed Luckiest went to University when opened up after 1975; but few speak English

sea turtles Aware of the role foreign-educated Chinese played in Taiwans take-off, authorities have actively encouraged this return e.g. by setting up science parks, working with foreign companies Returnees from the West are known as hai gui Many of Chinas most successful entrepreneurs skillfully have adapted winning American concepts for domestic consumption e.g. Taobao (the Chinese ebay)

youngProfile of young Chinese entrepreneurs - fewer single children (since solo childs parents are more controlling) - more mid-region than eastern coast (more virgin territory, plus coast now affords salaried alternatives) - more male, urban - educated, often studying law or business (but less to PhD level) - motivated by opportunties or dissatisfaction with standard office work (source: 2011 study by Tsinghua University)

political realismBusiness people in China are politically conservative andfavour slow change over radicalWhat counts is stability and efficiency –and the ongoing goodwill of the regimeOfficial policies toward private businessradically improved after 1992

the way thingsget done Politics is important. 40% of entrepreneurs are in the Communist Party; it is essential to court good relationships with the authorities Guanxi (connections) is much misunderstood by the West; even returning Chinese have to re-educate themselves to the rules of the gameIt is said that the US is ruled by law and China by people Entrepreneurs must be ready for factionalism,opportunistic power realignments, gifts for officials etc.

still murkyThings holding back entrepreneurs - continuing political and legal uncertainty - access to funding (capital markets are underdeveloped) - difficulty attracting high skilled labour and management - less nurturing talent (although colleges for entrepreneurs have opened e.g. by Alibaba businessman, Jack Ma) - residual low status attached to private business (but this has radically improved)

moreGet into theheads of someof Chinassuccessfulentrepreneurs(and academics)

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Entrepreneurial China

by Chris Middleton on Feb 17, 2012

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Entrepreneurial China — Presentation Transcript