Exploring China's Evolving Global Role: 1st Annual Symposium
On 26th June, the CEIBS Shanghai campus hosted the very first Global EMBA Annual Symposium. Attended by about 250 Global EMBA alumni and students, alongside keynote speakers and panellists from internationally respected business institutions, this inaugural event gave attendees a new platform to explore the most relevant and pressing topics that are shaping business in China today, as well as China’s impact on the wider business world.
Assessing New Opportunities and Outlooks for the Chinese Economy: Why Hold a Symposium?
The CEIBS Global EMBA Annual Symposium has been established to create a platform for open and candid discussion about the factors that impact China’s current and future relationships with its international trading partners, asking the big questions at the heart of China’s ongoing global business journey and to better contextualise China’s rapidly evolving role in global business.
CEIBS Vice President and Dean, Professor Ding Yuan outlined the school’s rationale for the event:
“Throughout its history, CEIBS has played a vital role in facilitating global exchange and creating cutting-edge business knowledge. As we continue through this challenging pandemic period, it is even more important for us to work together to develop global solutions for global problems. This event fits with CEIBS’ existing strengths as a gateway between China and the rest of the world, one that fosters mutual appreciation of different business cultures, strategies and market conditions.”
China’s Role in Global Business: Competition, Collaboration, Innovation, Disruption
Chosen to open proceedings was CEIBS’ own Distinguished Professor Pascal Lamy. As a former Director General of the World Trade Organisation from 2005-2013, Professor Lamy is well acquainted with China’s potential to influence and even shape global business trends.
In his address via video feed, Prof. Lamy briefly explored the consequences of how changing perceptions of China (deteriorating in ‘The West’ but improving in ‘The Rest’) meant that China is well placed to tap into dynamic emerging markets, but also that its ability to form meaningful, long-lasting cooperative ties with Western business entities may be compromised. Prof. Lamy believes that this can be addressed by demonstrating greater ‘competitive neutrality’, meaning that foreign companies should feel that they are competing on the international marketplace with Chinese individuals and Chinese companies, rather than with the full economic power of the state.
Another critical concern raised by Professor Lamy was the impact of China’s aging population, which he branded as “the number one long-term structural issue facing the Chinese economy”. With its implications for reducing production and consumption levels within China, Prof. Lamy again highlighted the importance of accessing major foreign markets as a means of sustaining growth in the face of this demographic challenge. In this sense, he felt optimistic, since China has so much to offer in terms of emerging technologies and services.
The second keynote speaker was Marcos Troyjo, President of the New Development Bank (NDB), established by the BRICS nations in 2015 to fund and carry out major infrastructure and development projects that are socially, environmentally and economically sustainable. With the approval of $24 billion as at the end of 2020, NDB is active in all BRICS nations with growing global confidence and ambitious further projects anticipated.
Mr Troyjo started his address by identifying the common trait associated with countries that succeed in a globalised world:
“My ‘secret recipe’ is that nations rise whenever they successfully adapt to the changing contours of globalisation. Nations who rise faster or more ambitiously are those who can anticipate globalisation trends and even shape them.”
Expanding on this theme, Mr Troyjo characterised the current state of globalisation as having decelerated from a high point of 2008, to the stage where many of the world’s primary economic powers and regions are going through a period of restructuring their trading partnerships, decoupling some, strengthening others – all of which gives current-day globalisation a more cautious flavour, described by him as being like a car decelerating in heavy fog.
For the BRICS nations, and China specifically, Mr Troyjo believes that the tectonic plates of globalised trading have already shifted, with the total GDP of the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America) actually being less than that of the “E7” (the 7 largest emerging economies including Brazil, Russia, India, Mexico, Indonesia, Turkey and China) when adjusted for Purchasing Power Parity (PPP). Critical to shaping the BRICS nations’ path is the establishment of mutually agreeable trading standards, environmental regulations, sustainable procurement and the general encouragement of fostering diverse talent pools. Mr Troyjo emphasised that the world has gone from dominant commodity cycles – such as coffee, gold, etc – to the point where talent is the new cycle. For any nation, even more important than fostering talent in areas of existing strength and specialisation is the creation of talent in new areas, to equip the country’s talent pool for the inevitably changing trends of globalisation.
Innovation, Brand Appeal and the Lingering Impacts of COVID-19
The theme of the first panel discussion was, perhaps inevitably, the impact of the global pandemic on China in a business context. Moderated by CEIBS Professor Richard Carney, panellists Leon Wang (Executive Vice President, International and China President at AstraZeneca), Allan Gabor (President, Merck China) and Ioana Kraft (General Manager, European Union Chamber of Commerce in China), constructed their outlook for a post-Covid China.
Between them, the panellists presented a fairly united front, each being relatively bullish about China’s continued growth. More specifically, they pointed towards the expanding opportunities that China presents for meaningful collaboration with international companies. This is something that the panel felt has, in many ways, been kicked up a gear by the pandemic, as it has caused business leaders across the world to value speed of reaction time and decision-making more than ever.
Each panellist expanded on the theme of China’s growing ability to act quickly and decisively to business opportunities. Leon Wang, in particular, felt that all too often, Western companies continually underestimate the speed with which their Chinese competitors can overcome technology barriers and grow to challenge them – issuing a general warning that “there’s no question that the opportunities are present in China, what international firms really need to worry about is their ability to capitalise on those opportunities fast enough.”
Ioana Kraft reinforced this point by highlighting a figure from the European Union Chamber of Commerce in China’s recent large-scale survey of businesses and their response to the COVID-19 pandemic. In it, 72% of their respondents said they felt that Chinese firms are now as innovative or more innovative than their international counterparts. Again, she emphasised a growing trend that post-COVID China is being seen as not only a powerhouse of consumption and production, but also an engine of innovation that can be both aided and leveraged by outside collaborators.
In closing, Allan Gabor of Merck China reiterated that making the most out of dealing with China in a post-COVID world will require a more flexible and strategic approach than in the past:
“The intersection of technology sectors is perhaps the greatest opportunity that China offers. The pandemic has shown that solving our biggest problems requires collaboration on a wholly different scale, and whoever can think and react in this cross-sector manner is poised to benefit most. China has proved that it’s no longer just an affiliate or just a usefully large consumer market; it has capabilities and strategic opportunities that are on the rise. As such, to seize the opportunities that China can truly offer, you have to bring China into the centre of your company’s decision-making process.”
Innovation Flows: The Role of MNCs in China
The second panel discussion focused on the evolving roles of MNCs in China. While the appeal of China’s vast and diversifying domestic market is nothing new, now more than ever there is a sense that innovation is flowing freely between China and the rest of the world.
The panel – consisting of Nicolas Poirot (President & CEO, Air Liquide China), Sylvain Laurent (Executive Vice President, Chairman, Infrastructure & Cities Board, Dassault Systèmes) and Eddie Chen (Managing Director Head of China/Asia, EURAZEO) – put their extensive knowledge and experience to the task of debating how MNCs can grow sustainably in, and with, China. Under the guidance of its moderator, CEIBS Professor Shameen Prashantham, the panel launched into a spirited discussion of China’s growing capacity for ‘open innovation’, and how (surprisingly) even state-owned enterprises are now increasingly showing their capacity for being agile and dynamic, rather than simply big and powerful.
Leading on from the previous panel’s assertions, there was agreement that the fast-paced decision-making processes witnessed in Chinese businesses of all sizes was a crucial source of competitive advantage that MNCs can and should learn from. Air Liquide’s Nicolas Poirot emphasised that this is useful not only for seizing new opportunities, but also for terminating unsuccessful ventures in a timely manner.
“Partnering with Chinese firms is definitely useful for helping you develop the discipline to kill bad projects quickly. In the West, we are often too sentimental about our ideas, clinging on to them longer than we should when they clearly aren’t working out. This helps you avoid needless waste and learn internally by looking directly at failure and accepting it for what it is.”
Other key points from the discussion included Eddie Chen’s warning that while plenty of companies pay lip service to the concept of viewing China as a strategic market, only by developing a comprehensive and targeted methodology for doing business with China can MNCs hope to achieve any lasting success. Sylvain Laurent (Executive Vice President, Chairman, Infrastructure & Cities Board, Dassault Systèmes) added that MNCs need to be aware of China’s push towards sustainability and ready for the rapid changes that it will bring:
“Sustainability is not a constraint in China, it’s a way to push innovation. We’re seeing more concrete climate targets coming through now, but more importantly we are seeing government and big businesses looking for more ways to encourage sustainability at the SME level by educating smaller firms and providing them with the financing and capacity to transform their way of doing business. This is speeding up nationally and by province, so the challenge for MNCs is to be ready to keep up with the pace and find good opportunities to be a positive part of the process.”
The last major topic of discussion was the complexity of maintaining effective communications between an MNC’s China office and its global HQ – often a thorny issue at the best of times. The panel recommended that while company culture would dictate the most effective solution, the best policy was to: “Deliver, not defend. Don’t defend your way of doing things in China too argumentatively, just deliver, and let the results speak for themselves. It’s best to maintain a diversity of opinion even if your view doesn’t align with that of your HQ. It’s your job to demonstrate concretely how your strategy can work, rather than stubbornly butt heads with HQ.” – Nicolas Poirot
Assessing China’s Appeal to International Brands
The third of the major themes to be explored was an assessment of the driving forces for global brands to break into the Chinese market in 2021. With its rapid digitalisation, and a consumer audience that is developing much more diverse and sophisticated preferences, China is a markedly difference prospect for brands trying to make an entrance today compared with ten or even five years ago.
This panel consisted of Jenny Gu (Chief Executive Officer of Richemont China), Allan Zhang (Executive Director, Shui On Management Limited), and Curt Ferguson (Managing Partner, Ventech China Venture Capital) and was moderated by CEIBS Professor Yajin Wang.
Jenny Gu of Richemont China highlighted how China will remain extremely attractive for international brands who can successfully tap into the evolving mindset of the Chinese consumer. Crucial to this will be their ability to navigate China’s growing (and at times bewildering) array of digital and social platforms, and subsequently presenting an appealing offering that is truly ATAWAD (Anytime, Anywhere, Any Device) – which is the new barrier for entry, thanks in part to the restrictive influence of the pandemic. This, meanwhile, is essential to brand building and maintenance.
This was echoed by Curt Ferguson. The former Coca-Cola President explained how his biggest challenge upon arrival in China in 2016 was getting to grips with the digital landscape. He cited the speed of innovation and easy access to capital as the principal reasons why Coca-Cola was facing a rising tide of billion-dollar competitor brands in China each year. To compete effectively, he feels that complete confidence in China’s evolving digital landscape – from TikTok to TMall – is a prerequisite.
Finally, Allan Zhang, Shui On’s Executive Director, explored the growing influence of sustainability in the Chinese consumer outlook:
“Brands, whether they’re Chinese or international, need to be able to show that they clearly understand Chinese consumers’ needs. Increasingly, we’re seeing that they want to be living more sustainably and want their brands to prove that they can enable this. They need to be able to show their values and ethics openly as part of their communications with their target audience. Consumers aren’t just buying things anymore, they’re buying into the deeper value embedded in the service or product. There isn’t so much of a blind acceptance of unquestioned brand appeal among Chinese consumers.”
In closing, the panel cited three main trends that they thought would shape the near future of international brands’ presence in China – embracing sustainability, offering deeper connections to a given brand’s wider purpose and heritage, and finally, providing opportunities for socialisation between consumers.
The Symposium was rounded off with a final greeting from CEIBS President (European) Dipak Jain by video conference, who wished the students and alumni well and thanked them for their ongoing contribution to the school.
A New Way to Examine China’s Development
The inherent value of events of this nature is their ability to bring together academic and business leaders in a way that will stimulate meaningful debate, and subsequently encourage greater levels of understanding across all industries, nationalities and cultures. By putting Global EMBA alumni and current students in the same room with leading lights of the Chinese and international business worlds, we aim to make each symposium a similarly invaluable platform for testing all manner of interpretations regarding China’s current position, and future prospects.
We hope that you enjoyed the inaugural event, and we look forward to building on its success at next year’s symposium.