In-Depth

by Malcolm Riddell

What the West Gets Wrong About China
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‘Why do business and political leaders in the West persist in getting China so wrong?’

CHINADebate

CHINADebate

Malcolm Riddell
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Founder of CHINADebate

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June 20, 2021
‘Why do business and political leaders in the West persist in getting China so wrong?’
‘Why do business and political leaders in the West persist in getting China so wrong?’
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What the West Gets Wrong About China

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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.
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'The most significant philosophical shift since Deng'

‘Carnage in China's financial markets signals the beginning of a new era as the government puts socialism before shareholders and regulatory changes rip apart the old playbook. According to some analysts, it is the most significant philosophical shift since former leader Deng Xiaoping set development as the ultimate priority 40 years ago.’
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What the West Gets Wrong About China
0

‘Why do business and political leaders in the West persist in getting China so wrong?’

From that I suggested that to invest successfully in China, you have to understand – and be aware of - what those differences are.
6/20/2021

Harvard Business Review

CHINADebate

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Rana Mitter | Oxford
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What the West Gets Wrong About China
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Part 1 | ‘Why do business and political leaders in the West persist in getting China so wrong?’

‘Why do business and political leaders in the West persist in getting China so wrong?’
6/20/2021

Harvard Business Review

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Rana Mitter | Oxford
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What the West Gets Wrong About China
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Part 2 | ‘Myth 1: Economics and Democracy Are Two Sides of the Same Coin'

‘The truth, then, is that China is not an authoritarian state seeking to become more liberal but an authoritarian state seeking to become more successful—politically as well as economically.’
6/20/2021

Harvard Business Review

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Rana Mitter | Oxford
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What the West Gets Wrong About China
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Part 3 | ‘Myth 2: Authoritarian Political Systems Can’t Be Legitimate’

‘A Marxist-Leninist system is concerned not only with economic outcomes but also with gaining and maintaining control over the system itself.’ ‘That has huge implications for people seeking to do business in China.’
6/20/2021

Harvard Business Review

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Rana Mitter | Oxford
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What the West Gets Wrong About China
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Part 4 | ‘Myth 3: The Chinese Live, Work, and Invest Like Westerners’

‘For much of its turbulent modern history, China has been under threat from foreign powers, both within Asia (notably Japan) and outside it (the UK and France in the mid 19th century).’ ‘China’s rulers, therefore, see foreign engagement as a source less of opportunity than of threat, uncertainty, and even humiliation.’
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The New York Times

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Jack Nicas, Raymond Zhong, & Daisuke Wakabayashi | The New York Times
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Jack Nicas, Raymond Zhong, & Daisuke Wakabayashi | The New York Times
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“This business model only really fits and works in China. But then you’re married to China.” ‘The Chinese government was starting to pass laws that gave the country greater leverage over Apple, and Mr. Xi would soon start seeking concessions. Apple had no Plan B.’
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