As usual, one week on the business side, one week on the language side.
Of course, last week it was the latter, so time for the former.
From this week, I will post on my Linkedin profile only announces that are directly business-relevant- and short (I will try to keep each post to under 1,000 words, posting larger ones elsewhere).
Two weeks ago, the subject was The future of yiguoliangzhi 一国两制, i.e. the “one country, two systems” (or more) approach.
This time I had planned to write something about Guanxi 关系, concept that I started being intested in long before I actually began my journey through the Chinese language (more or less when I was also interested on other non-European “nuts and bolts” of corporate culture, such as the Japanese ringisho).
Instead, after reading earlier this week a short article about the announced reform of the hukou 户口 (residency permit) system, I decided to focus on something else- picking up signs of organized and planned change.
On my blog (http://www.robertolofaro.com/blog), I wrote in the past few articles sharing some ideas derived from news about the relationships between leading countries- including, of course, China- e.g. on “Chimerica”, or the role of local administrative elections to develop citizens’ participation.
How did I prepare this post? I did play a little game- go around http://english.news.cn, and select news published since last post on wodeshudian (July 27th), looking for articles identifying a change pattern.
I will first share a list of news items, then a short commentary:
- feed-back from China on the residency permit reform
- a new credit record system
- Beidou (China’s system akin to GPS, Glonass, or Galileo), after reaching 1-meter precision in May, helped to define plans for new services based on geolocalization
- plans for a new, larger underground neutrino lab
- after Alibaba, an invitation to have more Internet companies look abroad for their expansion plans
- the largest amphibious aircraft
- Internet to drive future growth up to 22% of China’s GDP growth through 2025, according to a McKinsey report
- a report on the shareholders meeting at FIAT, the last one to be held in my birthplace, Turin, Italy (reason: a Chinese bank is now one of the first 10 shareholders)
So: developing an internal demand for products and services by increasing the urbanization (hukou, credit system); “mapping out” the regions and towns that have to be expanded (again, the way the hukou reform is described); creating “local attractors and job opportunities” to avoid a brain drain, as China is churning out more engineers than many Western countries- together (the local innovations).
Hence, developing homegrown technologies and investing abroad might be disliked by McKinsey, that suggests to “follow the international standards”, according to the article listed above, but makes more sense if you have a large enough internal market with plenty of growth potential- so, you can actually use your own internal market to build momentum, and then ask others with find a common path, instead of becoming captive to marketing and innovation decisions taken abroad.
And, incidentally, was what Europe did in the past with the GSM mobile standard, which eventually generated a global convergence on 4G and beyond, instead of just following one of the standards used within the USA.
So, I wouldn’t be surprised to see more activism also in this arena, using the “soft approach” (e.g. sharing and freely licensing IPR, instead of patenting as a way to close the market).
I know that it seems a little bit too much to read into those few articles, but it reminded me some bits of “news from the ground” that I picked up a decade ago, while I was supporting start-ups and planning to return to Italy (plan that was eventually scuttled- but it is a long and irrelevant story).
Examples, staying clear of the commodities arena (i.e. copper, iron, etc.)? A huge demand for English language teachers, up to the point that in some remote but relatively well-off areas parents were willing to subsidize a new teacher from abroad; the experience from young graduates in design and other creative areas, who were asked to move in China to help coach those who will first follow them, and then, one generation down the road, develop their own way; the results of attempts by Italian companies within “IPR-based consumer good industries” (e.g. fashion, jewelry, other clothing accessories) to set a foot in China.
Incidentally: only confirmed by a speech that I heard recently in Milan at the Fondazione Italia-Cina on the movie industry (I wrote something about that in a previous post).
I could write my usual few thousand words discussing those few “threads”, but, frankly, I think that you can develop your own ideas, and “connect the dots” with something relevant to your own business: so, why should I waste my and your time? If you want to read something more about my “geopolitical” or “international political economy” ideas about China in the future, have a look at my blog, and search for past articles.
Anyway: your comments are welcome (write me on Twitter, Facebook, or Linkedin).
Meanwhile… have a nice week!
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