A few years ago, I wrote in ‘Investments in China,’ a chapter in the book Opportunities in Emerging Market:
- ‘If you are from a developed country, and you investing in your country or another developed country, you probably have – and may not even be aware that you have – a set of internal, integrated assumptions about developed countries.’
- ‘If you find an investment in Germany (and you’re not German), you bring along your set of assumptions based on your experience in your own or perhaps other developed countries.
- ‘Things are different but manageably different.’
- ‘Then you find a first opportunity in China.’
- ‘But if Germany is manageably different, China is just different.’
From that I suggested that to invest successfully in China, you have to understand – and be aware of - what those differences are.
- You have to constantly challenge your assumptions about China and the tendency to make one-for-one correlations about China based your experience in developed countries – always remembering China is just different.
- And you have to understand not just the economic, financial and business aspects but also ‘history, politics, culture, and even military factors.’
This theme of challenging assumptions permeates the excellent, ‘What the West Gets Wrong About China: Three Fundamental Misconceptions,’ by Rana Mitter and Elsbeth Johnson, in the Harvard Business Review.
- It’s a terrific corrective to the errors we all make at one time or another in thinking about China.
There is much more in the essay than presented here.
- I encourage you to have a look at the entire analysis.