2. China — the world’s largest art installation
“new genre public art”
relational art
participatory art
community-based art
dialogical art
community-engaged
art intervention
3.
4. Acting program
Chinese Repertory Theater
Confucianism
Guanxi
Mianzi
Chinese-style socialism
Feudalism
Authoritarianism
One-party Nationalism
Materialism
Ethical system in transition
Rote learning
State-controlled media
Censorship
Great Firewall
5. –William Shakespeare
“All the world's a stage, and all
the men and women merely
players: they have their exits
and their entrances…”
6. A cast of 1.3 billion
780 M (60%) rural farmers
325 M (25%) "workers,"
non-rural people
104 M (8%) members of
the middle class
52 M (4%) businessmen
and senior managers
39 M (3%) government
cadres
195 M (15%) with money
9. –Andrew Hupert
“…Now, here’s the important
thing. The average Chinese person
has a weird love-hate thing going with
America… ”
10. –Andrew Hupert
“…On the one hand, they think you
are super-human in terms of your
intelligence, strength, power and
ability…”
11. –Andrew Hupert
“…On the other hand, they consider
you an inferior life-form — something
akin to a reasonably clever dog who
has been trained to walk upright and
wear a tie…”
13. –Andrew Hupert
“…but will try to screw you over as
quickly and severely as possible.
(Just like back home! One of the
few familiar aspects of business
here.)…”
14. –Andrew Hupert
“…Also, Chinese think all
Americans are rich and incapable
of learning even the simplest facts
about doing business in China.”
15. ‘Ease of doing business’
91 out of 183 countries.
Enforcing contract and
registering property are
acceptable.
Behind S. Africa. Better
than other BRICs.
Hong Kong ranks
second.
16. 8 growth constraints
Human resources (i.e. finding qualified workers)
Administrative licensing and product approvals
Competition from Chinese companies
Lack of equal treatment from domestic
companies
Competition from other foreign companies
Investment restrictions
Lack of consumer awareness/understanding
about products
The slow pace governmental policy reform.
17. Market access - Service sector
(financial, legal, information, telecom)
Huge barriers to service
trade.
Isolated economy.
37% of U.S. products fail
in the China.
Negotiates access with
“negative list”.
18. Modest steps to increase
market access
Exploring “pre-establishment
rights,” ensuring national
treatment at the preliminary
phase.
Pledged to open more
sectors to FDI.
Increasing access to China
through a US-China BIT is
critical to increasing service
trade.
19. Discrimination - the favoring
of domestic enterprises
Project bidding
Receiving incentives
scope of business
Indigenous innovation
preferences
The ability to open
branches quickly
20. –Steve Dickinson,
Attorney,
Co-author of China Law Blog
“The risk is: as China
becomes increasingly
stressed by the declining
growth of the economy,
the government has
shown that it will seek
foreign scapegoats…”
25. –Steve Dickinson, Attorney
“As a result, taking action against foreign
violators of Chinese law is an obvious way for
the Chinese government to deflect attention
away from the deeper problems in the Chinese
economy and society.”
26.
27. Transparency of government
and corruption
Chief concern of
companies
Party leaders seen as
clinging to power to
enrich themselves
58% of companies in
2011 had seen no
improvement
28. –Zhang Xingxiang, currently a Practitioner-in-Residence at Indiana U.'s
Research Center for Chinese Politics and Business, about his life as an
official in China
“Although government agencies were required
to abide by the stipulations of laws and
regulations, the enforcement of laws was a big
headache in China…”
29. “…The law itself did not have intrinsic
mechanisms to ensure its implementation. The
State Council usually issued regulations or
circulars which [specified] how to enforce the
law…”
–Zhang Xingxiang,
former official in China
Li Fei, deputy director of the
Legislative Affairs Commission of
the National People's Congress
(NPC) Standing Committee,
attends a press conference of
the 11th National People's
Congress (NPC) on the
formation and perfection of
Socialist legal system with
Chinese characteristics in
Beijing, capital of China, March
10, 2011. (Xinhua/Chen Jianli)
30. –Zhang Xingxiang, former official in China
“…Without [regulations and circulars], most of
the time the law was just a written piece of
paper posted on the wall but never seriously
executed…”
31. –Zhang Xingxiang, former official in China
“…The Constitution and Legislation Law
stipulate the rank of legal instruments: among
laws, regulations, rules, circulars and decisions,
from highest to lowest. In practice, however, it
went in a totally different direction…”
32. –Zhang Xingxiang, former official in China
“…Whenever companies or individuals had a
legal issue, they did not just look up the law, but
sought decisions from a mayor, a governor of a
province, or even the Premier because they
knew such disposition was more effective.”
33. Restrictions on inbound
investments (i.e. ownership limits)
Most restrictive FDI policies (both G-20 and OECD index).
Negative list “… mirrors China’s ..restrictive, foreign
investment catalogue, and goes backwards in certain
aspects.”
“Encouraged” FDI has restrictions.
Agriculture, food, energy, mining, finance, telecom, health,
education, media, and logistics, (U.S. strengths), are
heavily restricted.
34. Results of the restrictions
77% of FDI through WFOEs
Remaining 23% JVs.
Firms from countries that have good
strategic ties invest a greater portion
of their FDI in China.
China still receives 10% of global
FDI.
Restrictions limit U.S. FDI
significantly.
If trends persist the stock of Chinese
FID in the U.S. will soon exceed the
stock of U.S. FDI in China.
35. Standards and conformity
assessment
Rules for how products are
designed, manufactured,
sold, used, disposed of, and
certified.
Lengthy environmental
assessments necessary.
Standards are purposely
complicated for foreign
firms.
36. Intellectual property rights
enforcement
Most dangerous country in
the world…w.r.t intangible
asset protection.
Poor property rights and
rule of law.
Over 90% of foreign
managers worry about IPR
enforcement.
37. –Gary Locke, America's ambassador to China
“For every foreign company calling for stronger
IP protection, there are more Chinese
companies calling for the same.”
38. IPR protection and
U.S. direct investment
High technology and
intellectual property are
the basis for most U.S.
FDI worldwide.
For U.S. IPR enforcement
needed to capitalize.
U.S. FDI levels in China
are low.
39. China IP risk management
IP risks can be managed.
No perfect form of IP protection.
Chinese firms benefit from the
IP system.
If your IP has value, and can be
copied easily, it will be copied.
Otherwise, the Chinese will be
trained by the foreign business.
40. IPR strategy in China
Prioritize IP protection.
Develop an IPR strategy.
Make use of the Chinese system.
Register trademark(s) ASAP.
Prevent infringement and ensure
enforcement if violation occurs.
When forced to share your IP, isolate!
Dan Harris
Steve Dickinson
41. Market competition with Chinese companies
(state-owned and private)
72% of foreign firms
compete directly with
state owned
enterprises.
Many Chinese
companies want to
improve quality, to
sell abroad.
42. Policy preferences
competition with Chinese companies (state-
owned and private)
Favoring of domestic firms.
Pursuit of local innovation
and “national champions”.
Subsidies and
discriminatory regulations.
Must invest where service is
provided.
43. Consumer preferences
competition with Chinese companies (state-owned
and private)
Consumers may prefer
native companies.
Increasingly diverse
consumer
environment.
Companies sink when
fail to account for
consumer preference.
44. Cost increases, including
labor, materials, and inflation
62% had increased wages by 5%
to 10%. 8% had hiked wages more
than 15% (2011).
Inflation affecting material costs.
US firms continue to profit. Less
ambitious plans to expand (2012).
Concerns about operating issues
and macroeconomic risk (2012).
Rising costs and human resources
constraints are growing challenges.
45. “China Plus One” Strategy
Diversifying is difficult.
SE Asian countries and India
are more difficult.
Comparable market hard to find
in terms of size where wages,
benefits and regulations are
both lower and weaker.
A richer, more regulated China
is better than no China.
46. –Peter Cai
“The incoming labour shortage and wage
increase will have profound consequences for
the world economy.”
47. Increased focus on technology
upgrades and innovation
Chinese companies will
need to focus on
productivity increases
through more
technological upgrade
and innovation or face
the certain prospect of
going out of business.
48. Production migration to
lower-cost regions
Chinese manufacturing
industry will migrate
from the eastern
seaboard to central and
western parts of China
or even or other low-
cost neighboring
countries such as
Vietnam.
49. Emergence of a new
Chinese consumer class:
The increase in real
wages creates a new
class of consumers in
China, helping to
rebalance the Chinese
economy, which has
favored producers over
consumers for the last
thirty years.
50. –2012 AmCham report
“[Despite the increasing costs of
doing business] our members
remain deeply committed to
China. …with the goal of serving
the Chinese market.”
51. China approaching the
“Lewis Turning Point”
The vast labour pool nears
exhaustion.
Wages rise for hundreds of
millions of workers.
Profits decrease and new
technology needed to grow.
Consumer class emerges
but ONLY if China gets rich
before it gets old.
Sir William Arthur Lewis,
Saint Lucian economist,
winner of the Nobel
Memorial Prize in Economics
52. Administrative licensing, including
difficulties gaining business licenses and
product approvals
Huge task: administration,
licensing, permits and
product approvals.
Bureaucracy — #1 concern
for 31% of overseas firms.
Inconsistent licensing
practices and forced
technology transfers.
Result - pace of business
slows.
53. Talent recruitment and
retention
A lack of talented, skilled
workers — #1 issue since
2010.
The demand for good workers
is way higher than the supply.
Retaining best staff is difficult.
Changing jobs increases
salary up to 30%.
55. Energy Supply
Cleaner conventional energy
Natural gas
infrastructure
Distributed gas power
Power plant mercury
monitoring and control
Coal-bed methane
Advanced nuclear power
57. Electric Power Infrastructure
Intermittent power management
Distributed energy management
Energy storage
Charging infrastructure
Grid communication networks
Energy saving/ resource
efficiency
58. Green Buildings
Green building design
Building energy retrofits
Green building material
supply
Integrated energy efficiency
solutions
Green building energy
management
60. Pollution control
Clean Water Market
opportunities
Wastewater and sludge
treatment
Water-use efficiency
equipment
Water-quality monitoring
technologies
61. Next generation IT and
Biotech
Estimated investment in
next generation IT will
be RMB 2 trillion, in
which 80% is allocated
to mobile broadband
(MBB) and fixed
broadband (FBB)
(中国经济时报 2012).
62. World cruise industry
– Pierfrancesco Vago,
executive president of MSC Cruises
“The world cruise industry is experiencing a period of
healthy growth and now this sector has great hopes
placed in China, a country that constitutes a "new
frontier" of enormous potential, albeit with the
challenge of a scanty and inadequate infrastructure.”
63. Automotive, aeronautic, and
luxury
These markets mastery of
economics and politics.
In a “socialist market
economy”, states and market
intertwine in complex ways.
The government’s directives
are crucial to capitalize on
opportunities.
Every company must monitor
economic policy.
64. Leisure industry
The rapidly expanding
tourism sector poses
opportunities for
innovation and product
differentiation as more
Chinese travel at home
and abroad.
65. Mobile devices and apps
Smartphone markets continue
to grow.
Potential to reach 700 million
active smartphone users.
Barriers to entry — foreign
firms need to follow a few
rules.
Pay close attention to industry
shifts in China, and forge the
right relationships.
66. Consumer healthcare
World’s largest growth opportunity
for consumer healthcare products.
The consumer healthcare market
could reach $60 billion by 2020.
China will become the world’s
second-largest consumer market
by 2020 (McKinsey).
Healthcare spending is projected
to grow to an estimated 10.5
percent of urban households' total
annual spending by 2020.
67. China Wellness
Potential Opportunities in Tier-2
and Tier-3 Cities.
Health clubs, spa, cosmetic
products, beauty salons and
nutrition and dietary supplements.
Concentrated in Beijing and
Shanghai.
The nutritional and dietary
supplements market in China is
projected to grow to USD 26,614.7
million by 2016.
68. Senior care, geriatrics, elder
care
Immense opportunities in
changing demographics.
200 million plus seniors. Only
3.9 million nursing home beds.
50% living alone in rural areas.
30 million plus are disabled.
By 2050, seniors double to 400
million, 33% of entire
population.
Nursing homes are an
emerging investment
opportunity.
69. “…in several years, the health care sector and
its related industries (from hospitals to elderly
care centers, and from ambulance services to
post-injury rehabilitation treatments) will be one
of the largest business sectors of the Chinese
economy – possibly even larger in size than
property. … in the next 10-15 years, health care
will ….certainly be one of the top 3 drivers of
China’s economy.”
– Alberto Vettoretti
Dezan Shira & Associates
70. –Rush, Limelight
“
All the world's indeed a stage
And we are merely players
Performers and portrayers
Each another's audience
outside the gilded cage
”
71.
72. –Andrew Hupert
“…There are probably all sorts of
long-winded sociological theories for
explaining this bizarre
phenomenon. Do you really care
about any of them?…”
