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July 15, 2015

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Home » Opinion » Foreign Views

How will you face China’s personal challenge?

By Phil Rosenzweig | July 15, 2015, Wednesday | Print Edition

There are a lot of headlines and analysis these days about the slowdown of Chinese economic growth, which at 7.4 percent in 2014, was the weakest in nearly a quarter of a century.

Let’s put this into perspective. China’s growth in the business world and the world in general has been immense. It has been the fastest growing major economy, averaging roughly 10 percent annual GDP growth, for over 30 years.

So let’s not be fooled by short-term economic trends or other so-called slowdowns. China is growing and will continue to grow in size and influence in industry after industry.

The increasing role on the world stage for China and its people will bode important challenges on three different levels for the Western business world. But it’s really the third which will mean the most for individuals.

1. The international challenge

China’s influence on the world stage is changing the balance of global power. The country has recently led the creation of the Asian Infrastructure Investment Bank and is reshaping Asia, while in many developed nations, especially in the US, infrastructure is falling behind.

2. The company challenge

Executives at Western companies are used to thinking of China as a host for suppliers or low-cost competitors. But now Chinese companies are moving up the value chain and many are very competitive in high-tech areas.

Today, Huawei is the largest telecommunications equipment maker in the world. Xiaomi has quickly risen to become the world’s third biggest smartphone distributor. Lenovo is one of the top selling global computer companies.

Competition from Chinese companies will be a challenge for almost any Western business but it is the next challenge which individuals should be most concerned about.

3. The personal challenge

For Westerners, the personal challenge goes way beyond the challenges that they might face at one particular company.

Almost all professionals in the West will work for multiple companies during their careers.

They may work for Western companies who do business or compete with Chinese companies. At one point in their professional lives, they may work for a China-based company. They may work for a Western company that one day gets acquired by a Chinese company.

In a generation from now, Western professionals will also be working alongside and competing with highly qualified Chinese professionals who speak their languages perfectly.

Students from China now make up 31 percent of all international students in the United States, according to the International Institute for Education, for example, and other Western countries report similar trends. These students will soon graduate and transform the international business landscape.

So is China a challenge or an opportunity for individuals?

When Westerners think about career development, they should stop thinking about China as a faraway country that doesn’t concern them.

At a minimum, Western professionals should find a way to develop greater cross-cultural and interpersonal skills as well as an understanding of Chinese behaviors, interactions and strategies. This is important even if they never work directly for a Chinese company.

But many people’s careers may very well take them to China. They could work for a Western firm that might be investing there. They might lead some of their firm’s activities in the country.

Having a network, understanding norms of agreement and disagreement as well as negotiation and decision making are crucial in China.

There are many things individuals need to know in the new business world in which China is increasingly a major player. In short, while China’s economic and corporate influence continues to grow, more and more Western executives must learn to think in a different way.

Phil Rosenzweig is Professor of strategy and international management at IMD. The article is adapted from his original version at http://www.imd.org.

Foreign Views


 

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