Understanding China & Chinese People provides lessons for businesses developing in China. It discusses that without understanding Chinese culture and history, companies will fail to gain trust and respect. The presentation emphasizes understanding differences in communication styles and perspectives between China and other countries. It also outlines China's growing economic strength through increasing investments in education, technology, and global talent recruitment. The document stresses that to succeed in China, businesses must understand China's long history and traditions as well as modern changes, and approach the market with flexibility, innovation and respect for Chinese partnerships and regulations.

1. Understanding China &
Chinese People
- Lessons before your business development in China
Tony Zhou
Inspirees

2. Why this presentation topic?
♦ Without understanding, there is no
respects and trusts
♦ The underestimated communication
problems have led to the failures of
many foreign companies in China
Tony Zhou, CMG meeting, 28-09-05

3. Do we know each other enough?
Tony Zhou, CMG meeting, 28-09-05

4. Many people think
♦ Chinese is a most difficult language
♦ Chinese eat lots of dogs
♦ It is very difficult to communicate with
Chinese people
♦ The language of Holland is German
♦ Unilever is an American company
♦ Amsterdam = red light district
Tony Zhou, CMG meeting, 28-09-05

5. Unbalanced information flow
♦ Western publications into China vs.
exported Chinese ones 10 : 1
♦ Dutch students in China vs. Chinese
students in NL 80 : 8000
Tony Zhou, CMG meeting, 28-09-05

6. Let’s face the challenges
♦ “Europe is being squeezed by the
capitalization of US & low cost
competition from China” - Financial Times
♦ “There will be more trade conflicts
between China and EU” – Bo Xilai
♦ “We have to learn how to deal with
China politically and economically”
- Tony Blair
Tony Zhou, CMG meeting, 28-09-05

7. Chinese threats
♦ Supply infrastructure at enormous scale
with lower costs
♦ Flourishing and huge market
♦ Strong work ethics
♦ 15 million university graduates
Chinese price + Chinese Hi-Tech
= The rest of the world has a problem?
Tony Zhou, CMG meeting, 28-09-05

8. China’s share in global GDP
OECD 2003; A.Virmani 2004
Tony Zhou, CMG meeting, 28-09-05

9. An realistic view
•Unbalance between coastal area and inland
•Costs are increasing
•Science & technology are still lagging behind
•Most of the talents stay abroad
•Traditional weakness in life sciences
•Huge social pressure from the ageing population
Tony Zhou, CMG meeting, 28-09-05

10. Brain drain from China
Tony Zhou, CMG meeting, 28-09-05

11. Science & Technology Policy
♦ S&T in very high priority
– Education
– Social environment
– Policy
♦ National program and funds
– National Natural Science Foundation, “973” Program (basic science)
– “863” Program (technology)
– Torch Program (high-tech/innovation)
♦ Oversea talents program
– “Long-River Scholar” Program
– “Spring-Enlighten” Program
– Governmental and private funds available
– Scholarship for top students oversea
– More management positions provided
♦ Oversea acquisition and alliance
– TCL(Thomson SA), Lenovo(IBM), SAIC (Ssangyong Motor)
Tony Zhou, CMG meeting, 28-09-05

12. China is catching up quickly
Total R&D R&D spending Growth in Annual
spending in GDP R&D university
($ bln) (%) spending engineering
(%) graduates
China 60 1.2 18.5 *300,000
EU 166 1.9 6.5 180,000
Japan 104 3.1 6.2 n.a
USA 286 2.8 5.8 60,000
*Accounts for 60% of all students enrolled in the university (year 2001)
Tony Zhou, CMG meeting, 28-09-05

13. R& D spending
900
8 00 US
EU
7 00
J
apan
China
600
500
n
$ bl
400
300
200
100
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Y ear
Tony Zhou, CMG meeting, 28-09-05

14. The influences of returned oversea Chinese
scholars
♦ Some big shots in the current government
– Zhou xiao chuan, Director of Central Bank of China. (Economy, USA)
– Zhou wen zhong, Vice Minister of Foreign Affair Ministry. (Economy,
Bath Univ., UK and London Economy Institute)
– Zhou Ji, Minister of Education Ministry. (Civil Engineering, New York
State Univ.)
– Wu qi di, Vice Minister of Education Ministry. (ETH, Zurich)
– Xu guan hua, Minister of S&T Ministry. (Stockholm Univ.)
– Ma song de, Vice Minister of S&T Ministry, (6th Paris Univ. )
♦ What they have brought back to China
– International perspectives
– Understanding of knowledge based economy
– Democracy and innovation ideas
Tony Zhou, CMG meeting, 28-09-05

15. The oversea Chinese are helping
as well
♦ Chinese talents in NL are helping Huawei
Technology to build 3G network for
Telfort.
♦ VCWI/CNLN organize symposiums which
are participated by the top scientists from
China and high-rank officials from both
governments.
Tony Zhou, CMG meeting, 28-09-05

16. To understand China, you need
to know its history and social
foundation.
Tony Zhou, CMG meeting, 28-09-05

17. Marco polo
Egypt Assyria Greece Roman Dark Charlemagne Feudalism Renaissance Industrial WWI/II
Empire Ages in Europe evolution
-5000 -1050 -200 BC/AC 200 700 1000 1300 1600 1900 1949 1978
Neolithic Zhou Qin Han Three Tang Song/Yuan Ming Qing Republic New China Opening
Shang Kingdoms China &Reform
writing system standardizing period of cosmopolitanism authoritarian
walled cities writing script, disunity, & cultural flowering, political culture
bronze technology weights and spread of height of Buddhist laid out, an inward
measures Buddhism influence, active looking state
territorial expansion
feudalism, open civil service growth in commerce dramatic increase
Confucianism exams introduced, and maritime trade in population,
born Confucianism well urban expansion and substantial expansion
established technological innovations, of new territories,
examination system for authoritarian structure
bureaucratic recruitment unable to meet Western
firmly established, military and culture
neo-Confucianism challenge
•Why China managed to remain its civilization and kept unification through the history?
•How has the West influenced China?
Tony Zhou, CMG meeting, 28-09-05

18. The essences of traditional
Chinese culture
♦ Confucianism, Daoism, Buddhism
♦ Respect for nature
♦ Self discipline
♦ Family/group oriented
♦ Respect for seniority and authority
♦ Compromise and harmony
♦ Respect for scholar and intellectual
Tony Zhou, CMG meeting, 28-09-05

19. The culture impacts
♦ Less aggressive mentality
♦ Indirectness
♦ Less individualistic
♦ Longer power distance
♦ Enhancement of social stability
Tony Zhou, CMG meeting, 28-09-05

20. The new features
♦ Culture Revolution 1965-1976: disruption of
humanity
♦ One-Child policy since 1976: pressure for the
ageing society
♦ Opening and Reform since 1978: entrepreneurship
♦ Personal relations or network (Guanxi) plays a
crucial role
♦ Entry into WTO since 2002: international orientation
♦ Western influence: democratic mindsets and
individualism on rise
♦ The nationalism
♦ High sense of crisis, hard working, flexible
♦ “Belief” crisis
Tony Zhou, CMG meeting, 28-09-05

21. Be prepared for …
♦ “First dinner, then business”
♦ Different behaviors within the country
♦ Language and other communication problems
♦ Nationalism
♦ Business interfered with the personal relationship
♦ Less regulated but more dynamic business
environment
♦ Local protectionism
♦ IPR issues
Tony Zhou, CMG meeting, 28-09-05

22. Suggestions
♦ Go and meet the people & country
♦ Mindsets need to be changed
♦ Conduct thorough market investigations and
policy studies
♦ Remain good relationship with the government
♦ Business strategies comply with political trend
♦ Hire a local expert
♦ Innovation is the key to remain competitive
♦ React quickly
♦ Well design your IP strategy according to the
situation in China
Tony Zhou, CMG meeting, 28-09-05

23. Examples
♦ Good stories
– Carrefour
– Janssen Pharmaceuticals
– NovoNordisk
– Philips
– Roche
♦ Sad stories
– Ahold
– Volkswagen
Tony Zhou, CMG meeting, 28-09-05

24. Resources
Tony Zhou, CMG meeting, 28-09-05

25. China is open to you. Explore it
with understanding and respects,
different mindsets and realistic
expectations!
Tony Zhou, CMG meeting, 28-09-05

26. Success!
Tony Zhou, CMG meeting, 28-09-05