The document provides information on cities, people, and businesses in China. It discusses several major cities in China including Hangzhou, known as an e-commerce hub, and Langfang, emerging as an IT services center. It also notes that China's population is aging and its middle class is expanding beyond coastal cities. Several large Chinese businesses and industries are mentioned like banks, energy companies, and chemical firms, as well as the growing trade between China and Africa.
4. Urban clusters
and hub cities
in China
http://www.mckinseychina.com/wp-content/uploads/2012/11/Whats-next-for-China-Jan-22-v2.pdf
5. Hangzhou, a city of over 6 million inhabitants close
to Shanghai in East China and a long-renowned
destination for its historic pagodas and natural
beauty, is now also recognized on another score - as
“China’s e-commerce capital.”
There are more than 60,000 employees in Hangzhou
working in Internet and e-commerce companies such
as Alibaba and Panshi.
http://www.mckinseychina.com/wp-content/uploads/2012/11/Whats-next-for-China-Jan-22-v2.pdf
6. Langfang in northern China is emerging as an information
technology services hub with many big data centres
http://blogs.ft.com/beyond-brics/2013/05/15/langfang-chinas-cloud-computing-hub/
8. Yinchuan, Chongqing and Chengdu in
the West of China have been given an
additional boost by the government's
Go West campaign.
https://globalconnections.hsbc.com/global/en/articles/chinas-second-cities-the-new-kids-on-the-block
9. Middle and affluent classes in China are rapidly
expanding beyond the coastal cities
http://www.bcg.com/documents/file47063.pdf
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20. In group settings, in particular, the Chinese pay
much more attention than westerners to hierarchy.
Hierarchy is reflected in the way Chinese people
address and greet each other, who speaks during
meetings, and how decisions are made.
http://www.hbs.edu/research/pdf/09-076.pdf
21. To maintain economic growth, China needs technological
innovation, which it will never develop unless it abandons its
test-based education system, now controlled by gaokao, the
all-important college entrance exams.
China is accustomed to hierarchy and ranking, and the
education system delivers both. Chinese students regularly
win any competition that depends on test performance.
Where they fall short is creativity, originality, divergence from
authority.
http://www.nybooks.com/articles/archives/2014/nov/20/myth-chinese-super-schools/
22. Much of Chinese R&D investment is not
market driven but heavily state directed.
http://sloanreview.mit.edu/article/whats-next-for-the-chinese-economy/
23. Company decisions are typically reached in
a top-down manner, with only the very top
of the pyramid involved in decision-making.
http://knowledge.insead.edu/INSEAD-knowledge-ten-principles-for-business-in-China-120222.cfm
24. One of the tensions inherent in Chinese
business culture is autocracy vs.
empowerment.
http://viewswire.eiu.com/report_dl.asp?mode=fi&fi=767864861.PDF
25. As a consequence of the massive economic
transformations in China, new behaviours and qualities,
such as assertiveness and autonomy, are required for
achieving success, whereas characteristics that used to
be beneficial for adjustment, such as obedience to
authority, are perceived as problematic.
http://www.ratswd.de/download/RatSWD_WP_2009/RatSWD_WP_58.pdf, p. 2.
26. 2/3 of big Asian firms are state-controlled or - often
family-run - “business houses”.
China’s drive to reform its state-owned firms is
meant to make them more responsive to customers.
Xi Guohua of China Mobile plans to give shares
to his staff.
http://www.economist.com/news/leaders/21603002-asian-business-reforming-its-emerging-multinationals-will-change-way-we-all-live-world
27. Some Chinese companies are crowdsourcing
product development.
Xiaomi, for example, has an online community of
fans whose recommendations for product
improvements are reflected in weekly software
updates.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
29. Economic development in China has been
linked to changes in work values with the
new generation of Chinese managers placing
a higher value on individualism and
less importance on Confucian values than
older generations of managers.
http://www.na-businesspress.com/jabe/coxweb12-6.pdf
30. Small units / teams at Li & Fung Ltd.
http://youtu.be/6OoFZG2s2E0
http://www.lifung.com/
31. Chinese society is collectivist in that individuals
identify with an “in-group” consisting of family,
clan, and friends.
Within this, cooperation is the norm. Outside it,
zero-sum competition is common.
http://knowledge.insead.edu/INSEAD-knowledge-ten-principles-for-business-in-China-120222.cfm
32. Instead of working in separate departments, like
most large corporations, Haier’s 80,000 employees
now work in some 2000 fluid teams.
Any employee can propose an idea and if it is voted
a winner then that person becomes the team
leader. The team manages itself and is responsible
for the profit or loss of the project.
http://www.destination-innovation.com/articles/meet-chinas-champion-innovator/
34. If you want to get something done in the West,
you have a meeting and you discuss the issues
and perhaps you vote.
In China, the meeting is usually the last step,
only a formality.
http://www.mckinsey.com/insights/leading_in_the_21st_century/developing_chinas_business_leaders
35. Further inspiration on meetings
http://www.slideshare.net/frankcalberg/facilitationmoderation-of-meetings
37. In the 1970s, China had an extraordinarily high level
of inequality. The state taxed 80% of the population
- the peasantry - in order to subsidize the 20% in
urban China.
1st generation private entrepreneurs in China tend
to come from humble and rural backgrounds.
http://sloanreview.mit.edu/article/whats-next-for-the-chinese-economy/
38. Many Chinese CEOs make decisions
instinctively, feel comfortable with rapid
and flexible responses to new industry
trends and shifts.
http://www.mckinseyquarterly.com/Strategy/Globalization/How_corporate_China_is_evolving_2159
39. Commercial success in China is often intimately linked
with tempo.
Innovation in this sense involves not the development
of brand new technology, but rather the introduction of
incrementally upgraded products with unprecedented
rapidity.
http://sloanreview.mit.edu/article/innovation-lessons-from-china/
40. The emphasis on speed in China can be seen in part as
a response to a particular kind of customer routinely
found in China.
This customer demands new functionality, low price
and rapid delivery. He/she wants the new product now
and wants immediate service when bugs arise.
http://sloanreview.mit.edu/article/innovation-lessons-from-china/
45. For hundreds of years prior to the West’s Industrial
Revolution, China and India together accounted for
about 50% of the world’s economic activity.
Then, as Western economies industrialized, China
and India fell behind - down to only 8% in 1970. This
trend began to reverse in the 1980s, and today,
these two countries account for just over 20% of
global economic activity.
http://www.strategy-business.com/article/09401?pg=all
47. Top 8 manufacturers by share of global
nominal manufacturing gross value added
http://www.mckinsey.com/insights/mgi/research/productivity_competitiveness_and_growth/the_future_of_manufacturing
50. In China, state-run companies and their
affiliates account for more than half the
country’s GDP and jobs, and of the 73 Chinese
companies listed in the 2012 Fortune Global
500, 65 are state-owned.
http://hbr.org/2014/01/the-new-rules-of-globalization/ar/2
54. The Yangtze river is the longest river in Asia
Sources
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2568
http://www.travelchinatour.com/yangtze-river-three-gorges-dam/yangtze-river-three-gorges-dam.html
56. The World Wildlife Fund (WWF) works with Coca-Cola, which
operates 39 bottling plants in China, to improve the water
quality of the upper reaches of the Yangtze river.
For example, WWF and Coca-Cola work with rural farmers to
reduce the runoff of animal waste into the river by turning
pig waste into biogas, a type of fuel that can be used for
cooking and heating.
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2568
57. Energy / natural resources have strong strategic importance for China
http://hbr.org/2014/01/the-new-rules-of-globalization/ar/1
59. The about 16'000 chinese mines are the most
dangerous in the world.
In 2008, more than 3,000 people were killed in
mine floods, explosions, collapses and other
accidents in China’s coal-mining industry.
http://www.nzz.ch/nachrichten/panorama/china_bergwerk_unglueck_1.4047426.html
http://www.reuters.com/article/topNews/idUSTRE5AK08Y20091123?
60. China has become the world’s largest
market for wind power technology,
accounting for 35% to 45% of annual
installed capacity globally.
http://sloanreview.mit.edu/article/innovation-lessons-from-china/
62. Beijing-based Goldwind acquired turbine
designs by partnering with, and later
acquiring, Vensys, a wind turbine company
based in Neunkirchen, Germany.
http://sloanreview.mit.edu/article/innovation-lessons-from-china/
64. PetroChina spends 0.3% of its revenue on
IT and Sinopec spends 0.1%, both well
below the global industry average of 1.4%.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
65. Online crowdsourcing platforms such as
www.specialchem.com, www.cheminno.com.cn,
and www.innocentive.com allow companies to
post R&D challenges.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
66. Companies can build their own platforms, as Dow
Corning has done with its digital direct channel,
Xiameter, which focuses on SME customers and
now represents 40% of the company’s sales.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
69. The “big four” banks in China
The Bank of China
http://www.boc.cn/
The Industrial and Commercial Bank of China
http://www.icbc.com.cn/ICBC/sy/
China Construction Bank
http://www.ccb.com/
The Agricultural Bank of China
http://www.abchina.com/
70. The big four Chinese banks mostly evolved from government
organizations into quasi-corporate, state-owned entities.
The Bank of China is publicly traded out of Hong Kong and run
like a banking corporation. However, the CEO of the bank does
not report to the shareholders and is not appointed by them.
The CEO is chosen by Organization department of the
Communist party which technically owns nothing. But the CEO
also holds a vice ministerial rank in the government which makes
Bank of China somewhat of a government ministry as well.
https://www.goodreads.com/review/show/998943997
71. The big four Chinese banks can function as an arm of the government into
the economy. When the central government wants to influence various
aspects of the Chinese economy, directing the lending of the big four banks
is their most direct tool. For example, they can increase lending to state-
owned enterprises and local governments and/or increase lending into
strategic industries and infrastructure.
In this regard, it is worth noting that the big state-owned enterprises to
which lending from the big four banks tend to go, account for just 20% of
the Chinese workforce. While small and medium enterprises employ 80%
of the Chinese workforce, they account for only 20% of bank lending.
https://www.goodreads.com/review/show/998943997
72. Tiantian Fund Sales Company Limited,
www.1234567.com.cn, is a leading information
portal and sales platform for mutual funds.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
73. http://www.wacai.com/ is a personal
finance mobile app that allows consumers
to track and analyze their daily expenses
and receive investment product
recommendations.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
74. Alipay, a leading Chinese third-party online
payment provider, served more than 845 million
registered accounts and facilitated transactions
worth more than $290 billion in 2012.
http://global.alipay.com
http://www.mckinsey.com/Insights/Business_Technology/More_bank_for_your_IT_buck
75. Yu’ebao, a money market fund linked to Alipay’s
online payment platform, had attracted more
than 80 million investors as of February 2014,
just 8 months after its launch.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
76. Consumers can buy insurance from insurers’ websites,
online marketplaces such as www.taobao.com, and
specialized insurance marketplaces such as
www.hzins.com and www.xyz.cn.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
77. Tencent is one of the participants in
Webank, which will focus on lending
to small firms and consumers.
http://www.ft.com/intl/cms/s/0/fa232b90-6fd5-11e4-a0c4-00144feabdc0.html
85. http://www.weibo.com/ has the same
140-character limit as Twitter, however
140 Chinese characters convey far more
meaning and information than 140
western characters.
http://dcbf.dk/Latest/From+DCBF/ca40/newsid/20181
86. Due to reasons such as government control
and censorship of state-owned media and
traditional trust in word-of-mouth in China,
Chinese people trust social media to a far
greater extent than traditional media sources.
http://dcbf.dk/Latest/From+DCBF/ca40/newsid/20181
88. 79% of Chinese Internet users send instant
messages, compared with 21% of U.S. users
https://www.bcgperspectives.com/content/articles/digital_economy_globalization_china_digital_3_0_online_empire/
90. Similar to the text messaging service WhatsApp -
with elements of Instagram and Skype tossed in -
WeChat has accumulated over 300 million users
in its first two years by embracing an entirely
different strategy from Weibo: going after the
international market head on.
http://www.theatlantic.com/china/archive/2013/07/wechat-not-weibo-is-the-chinese-social-network-to-watch/278212/
95. In 2012, Walmart bought a 51% share in Yihaodian.
http://www.mckinseychina.com/wp-content/uploads/2013/03/MGI-China-Etail-full-report-March-2013.pdf
96. Marketplaces’ share of e-tailing in China is large
http://www.mckinseychina.com/wp-content/uploads/2013/03/MGI-China-Etail-full-report-March-2013.pdf
100. A typical Chinese company spends only 2% of
revenue on IT versus international benchmarks
of around 4%.
As these companies struggle to bring
technology into the core of their operations,
they need massive amounts of help to do so.
http://www.mckinsey.com/insights/strategy/a_pocket_guide_to_doing_business_in_China
102. Sources and further inspiration
http://www.huawei.com
http://www.scribd.com/doc/136892832/Huawei
http://lenovo.com
http://frankcalberg.wordpress.com/2013/12/07/selecting-a-notebook-laptop/
http://www.xiaomi.com
103. Hon Hai / Foxconn Technology Group is partner for
joint-design, joint-development, manufacturing,
assembly and after-sales services to global
computer, communication and consumer-
electronics companies.
http://www.foxconn.com/
106. Xiaomi crowdsources features of its
new mobile phones rather than
investing heavily in R&D.
http://www.mi.com/
http://www.mckinsey.com/insights/strategy/strategic_principles_for_competing_in_the_digital_age
107. People at work making Lenovo products
http://www.strategy-business.com/article/00274?pg=all
108. Lenovo’s U.S. workers are cross-trained and
can perform different functions, whereas
Chinese workers are typically trained to
perform just one.
http://www.strategy-business.com/article/00274?pg=all
110. In China, buyers of homes are usually forced to pay
1 - 3% commissions for broker-facilitated purchases
of existing homes, and renters must pay up to one
month’s rent as a commission.
Online platforms such as www.fang.com and
www.anjuke.com can now match supply and
demand without commission fees.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
111. Online sourcing platforms from
http://www.sohochina.com/ and
http://www.greentownchina.com/,
two of the top Chinese real estate
developers, are growing strongly.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
112. http://www.economist.com/news/business/21591864-chinas-best-makers-construction-gear-are-now-world-class-digging-victory
The best Chinese firms have rushed to upgrade their technology
by buying, or entering joint ventures with, foreign competitors
and suppliers.
http://www.sanygroup.com/ bought two German firms,
Putzmeister and Intermix, and entered a joint venture with
Palfinger of Austria.
http://zoomlion.com/ bought CIFA of Italy.
http://www.liugong.com/ and http://www.xcmgjc.com/
formed joint ventures with, respectively, America’s Cummins
and South Korea’s Doosan, to improve their diesel engines.
113. A few companies, such as http://www.cnfantasia.com/
and http://www.vanke.com/, have rolled out community
service platforms.
Examples of apps
Colour life.
ZhuZhe.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
114. There's an increase in remote working in China. The
need for office space is expected to shrink by about
20% by 2020.
Remote working also allows companies to avoid heavy
traffic, high rents, and the high living cost in central
business districts.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
116. Shangpinzhaipei, the made-to-order furniture maker,
has online storefronts where consumers design their
furniture themselves.
As a results, a typical Shangpinzhaipei store is only
200–400 square meters, while other brick-and-mortar
furniture retail stores usually need 400 - 1,000 square
meters to display a dozen or more showrooms.
Sources
http://www.mckinseychina.com/wp-content/uploads/2013/03/MGI-China-Etail-full-report-March-2013.pdf
http://www.spzp.com/
http://shangpinzhaipei.tmall.com/
http://e.weibo.com/shangpinzhaipei
118. The Chinese government allows a limited number
of foreign films into the country every year. In
2012, it increased the number of foreign-made
movies that could be shown on the mainland
from 20 to 34.
http://hbr.org/2014/01/the-new-rules-of-globalization/ar/4
120. Of 493,000 pianos made worldwide in 2012, nearly
80% were manufactured in China.
More than 100,000 were produced by Pearl River,
the world’s biggest piano-maker.
http://www.economist.com/news/business/21591243-chopins-piano-maker-gives-up-others-are-fighting-
chinese-rivals-major-challenges-minor
http://xn--9swz3nih585i.com/
123. Some car manufacturers in China
https://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Applying_global_trends_A_look_at_Chinas_auto_industry_2643
http://mitworld.mit.edu/video/904
Beijing Automotive Industry Group (Daimler partner).
BYD. 10% owned by Warren Buffett.
Chang’an Automobile (Suzuki partner).
Chery Automobile Co.
China First Automobile Works.
Dongfeng Motor (Citroën partner).
First Auto Works (Volkswagen partner).
Geely Automobile Holdings.
Great Wall Motor Company.
Guangzhou Auto Group (Honda partner).
SAIC (GM Partner).
Shanghai Automotive Industry Group (Volkswagen partner).
Tianjin Automotive Industry Group (Toyota partner).
124. Auto vertical websites like www.yiche.com
and http://www.autohome.com.cn/ are
growing rapidly.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
125. The used car market in China is expected to grow more
quickly than new car sales, from 3 million vehicles sold
annually in 2014 to more than 20 million by 2020.
E-commerce platforms such as http://www.youxinpai.com/
and http://www.cheyipai.com/ can help dealerships source
quality used cars, help consumers find the right vehicle,
and increase the transparency of information in each
transaction.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
126. The taxi app market in China is dominated
by Didi Taxi and Kuaidi Taxi - backed by
Tencent and Alibaba respectively.
http://www.reuters.com/article/2014/02/27/us-china-taxiapps-idUSBREA1Q03V20140227
127. Further inspiration on transportation innovation
http://www.slideshare.net/frankcalberg/transportation-innovation
129. http://www.haodf.com/ manages schedules
for hospitals and physicians. It is China’s
leading physician-patient consultation
platform. More than 50,000 doctors from
across China answer patients’ question at no
charge.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
130. Doctors can turn to learning portals such
as http://www.dxy.cn/ to stay on top of
the latest research.
http://www.mckinsey.com/insights/high_tech_telecoms_internet/chinas_digital_transformation
131. 22 innovation hubs – similar to Silicon
Valley - have been created within the
life sciences and biotech industries
across China.
https://www.mckinseyquarterly.com/A_CEOs_guide_to_innovation_in_China_2919
132. To overcome its many challenges in China, Pfizer is taking a
3-pronged approach to alliances.
1. It has teamed up with a local company, Zhejiang Hisun, to
tap into low-cost manufacturing capabilities and a
generic drugs portfolio.
2. It has allied with China’s Jointown Pharmaceutical Group
to extend its reach to hospitals in the countryside.
3. It has invested USD 50 million in Shanghai Pharmaceutical
Industry, which has vast R&D capabilities.
http://hbr.org/2014/01/the-new-rules-of-globalization/ar/4
133. Chunyuyisheng is a doctor’s consultation
app that lets users remotely consult with
physicians.
http://www.chunyuyisheng.com/
http://www.techinasia.com/doctor-consultation-app-chinas-biggest-investment-healthcare-startup/
134. http://www.mckinseychina.com/bringing-technology-into-chinese-healthcare/
Chunyuyisheng has more than 15 million consumers
registered along with 10,000 physicians and claims to
receive hundreds of thousands of queries a day.
More than 1 million members of the Chunyuyisheng
platform are paying USD 1-2 per month for the
opportunity to ask unlimited questions and receive
answers within the hour.
135. Thank you for your interest. For further inspiration and
personalized services, please feel welcome to visit
http://frankcalberg.com
Have a great day.