China Competes

I was then introduced to a medium-sized IT companies. The CEO and all senior level managers were all post-80’s. Yes all of them except the CEO had not reached the age of 30. And the CEO was only 31! It’s almost like a technology company in the Silicon Valley. Having said that, their business was based on the old and tried relationship cum technology application instead of innovation. If you’ve ever been in direct contact with any Chinese companies, you know their ambition is much bigger than entrepreneurs in any other Asian countries. There are simply too many business opportunities in China. For smart people they can easily seize any one of these available opportunities and become rich - very rich indeed.

The next day I was back to Shanghai to sign a contract with a Sweden-based training company. Just like most multinationals nowadays, they’ve selected Shanghai to be the location of their Asia Pacific headquarters, not Hong Kong. Did Hong Kong lost its lustre as a favourite place for company headquarters? I believe so. The market is not there. All eyes are on China now. Hong Kong only has a better legal system now, and all other competitive advantages that were there in the 90’s gradually disappeared – Higher quality human resources, better financial system, and more advanced infrastructure. Infrastructures like highways, airports, public transportation are easy to catch. Hong Kong still has a slim edge over Shanghai in terms of financial system. At least its currency is freely convertible to foreign currencies, and there is no control of currency flow in and out. Some companies may not care too much though, as they keep reinvesting their income into this huge market.

Human resource quality, however, is the most obvious area that Hong Kong has lost its advantage. Hong Kong used to be known as an international city, then ‘Asia’s World City’. My worry is one day it will become just one of many ‘China’s international cities’. Do managers in Hong Kong possess international perspective? You got to be kidding me! Maybe those over 40 years of age still have more international exposure. Over the past 13 years since Hong Kong was reunited with China, it’s tried very hard to become a domestic city of China. People may say the future is China so it is natural Hong Kong turns its eyes to the Middle Kingdom. By doing so, however, competitors of Hong Kong have also changed from Singapore and Tokyo to Shanghai, Shenzhen, Guangzhou and Beijing. What can differentiate Hong Kong from these competitors, and what advantages does Hong Kong possess that can help it compete? Unfortunately there does not seem to be any. The youngsters in the Yangtze River Region are well educated. Their English are slightly poorer but not that far behind. Their international exposure is as much, if not more than, as their Hong Kong counterparts. More importantly, they have a strong sense of purpose and will to succeed, which people in Hong Kong and particularly youngsters are lacking.

Let’s get back to my partner training company in Shanghai. The President was a Swedish lady who started this office eight years ago. She was very proud of what she’s achieved. She told me her daughter and son both spoke some Putonghua, and would be volunteer workers during the Shanghai Expo. More and more foreigners are heading to China. They are preparing to stay there for a long time, if not for good. They all feel the dynamism and strong growth atmosphere there. As one of my foreign friend from Australia once said, “It’s a once in a lifetime experience to be in a high growth country like China. I’ll be there for experience, if not for fortune.”

We are probably lucky to have the chance to witness all these historical changes in China. It is not yet in the big league but close.