Here’s a useful little summary of the move towards privatization in China:
Drastic privatization of Chinese companies
The Chinese private sector expanded 50% between 2001 and 2004 when the number of private companies reached 1.9 million according to a release this week from the Chinese Statistics Office.
This confirms the drastic expansion of the sector. The Chinese economy is currently, a mixed economy”, said Fred Hu Zuliu, from the Goldman Sachs Investment bank office in Shanghai.
Hu Zuliu believes the private sector must represent at the moment anywhere between 32 and 40% of China’s GDP, which contrasts dramatically with the 95% when the deceased Deng Xiaoping launched the reform and open economy process 25 years ago.The report also shows that in the same period, government owned companies dropped 47,9% in the three years considered, totalling 192.000 companies less at the end of 2004 reports the South China Morning Post.
Of that number 169.000 were directly controlled by the Assets Management and Supervision Committee with the purpose of cutting them in half and keeping only those which belong to strategic areas for Beijing such as oil, energy and naval construction.
During that three year period the number of “collective property” companies, remnants of the transition from a centrally planned to a market economy, also contracted drastically from 858.000 in 2001 to 456.000 in 2004.
As to the number of foreign companies operating in China the number rocketed from 13.000 to 152.000.
Following Beijing’s strategy to improve the economy and adapt them to open market rules, the government privatized 60.000 companies from the manufacturing sector between 1996 and 2005, indicates the report
Link.
I’d like to know more about whether ChinesePod users do business or plan to do business here. We could do a lot more busienss-oriented lessons on the topic if you wish. We could also do English language podcasts on doing busienss here and invite some people with real experience in the various fields. Any comments?
Ken Carroll 凯恩
Dear Ken,
What a great idea!!!
My first business relation with China was in 1982. As you can imagine a great adventure, but risky. We could feel the potential and we knew that we had to be there, but the financial risks were too high. We decided to postpone our manufacturing projects, but to keep in contact with potential Chinese manufacturers. We are into high-end electronics.
Now since a few years we have established a few OEM projects with different Chinese companies. It is intense work and it requests a lot of time, understanding and patience. I am going to China every 2 months. Quality…. is still a big issue. They can do it, but they don’t really feel it. Just an anecdoct: while we were having a discussion about quality standard, we mentioned Ferrari as a luxury brand reference…. Of course we got a “mei wenti” reaction. But 2 days later, the production manager came to ask us what is Ferrari. It was a good lesson for us. What were we thinking about: the production unit of this company is located in the middle of nowhere, very few cars. And that is the main difficulty about having business in China, forget about your Western references, forget that the company headquarters in Shanghai do not reflect the rest of the company… and so on. Realize that business is not based on a contract, but on relations. Chinese manufacturers do not think long/mid term, but very short term. They want to make quick profit, they also know that they are wanted. Also do not bring all your projects in one company, make them feel that you have other possibilities in China or outside. Check the companies backgrouds, they are very often related to each other. You have won, when they start to ask you: “why we did not get that project?” But be smart, do not make them lose their faces…Be more Chinese than them: “we are friends, even if we disagree”.
There are so many things to be said….
Having business in China is great, I love it. It is a great challenge.
Hi chenet,
Great comments. I love your anecdote anbout the Ferrari. I also like the fact that people like you put the time and effort into China. it’s hard work getting to know and understand this place, but it is worth it in the end - there is a return.
If you have any requests for particular lessons, just let me know. We can produce them for you.
Ken
Wow this is cool. I just found your site two days ago(so far, very nice) but this is exactly what I was looking for: business language.
I have two requests you might work on.
1. Can you do a few more lessons on business relationships (e.g. guangxi) and give a little insight on chinese manners, and on the same note:
2. How to tell them I’m only 19 and I DON”T DRINK OR SMOKE! Politely, of course
I think I might have confused something here. Do you mean “business meetings” or something more formal like “business contracts”. I assumed you meant how to talk to business men during a “meeting”.
As I said before, I just started listening and I’ve only completed up to lesson 13. So if you’ve already done any lessons on “business meeting” you can ignore me and go on with your usually planned schedule.
Thank you for this commercial break, and now back to your regularly scheduled program
ben,
we’ll have lots of busines-related stuff coming up soon.
I’ll get the team to write a lesson on drinking and smoking, or in this case, not driking and smoking.
You’re a young fellah. With some hard work now, you could be fluent in Mandarin in a couple of years. Good luck!
thanks
Doing business in China would be a great topic–I specifically work in teh graphic design/marketing business, and we do a lot with packaging production in China. Anything you can do to help with “jargon” would be much appreciated!
First Hand Experiences of an Indian Manufacturing Executive in China can be viewed from the link above.
I plan on doing business in China, after I graduate that is. If I graduate. All I ever want to do is study Chinese, it’s addicting.