With more than 1.3 billion inhabitants, or 20% of world population, and an im-mensely wide territory, China cannot be considered one indistinct country when discussing the consequences of and responses to economic crisis.
“To China’s south, the Pearl River Delta encompasses Guangzhou and is strongly linked to Hong Kong. The Delta is home to China’s export-oriented industries, in such areas as toys and textiles, and these are suffering because of the crisis. Up to 80% have experienced falls in their orders and many have already closed,” explain Saro Capozzoli, General Man- ager of Jesa, a firm headquartered in Shanghai and specialized in providing consulting services during the settle- ment phase of new plants.
“In the north, around Beijing and Tian- jin, many firms belong to the so-called ‘heavy industry’ sectors where the mar- ket has not stopped and there is con- tinued business growth” adds Marco Gentili, Partner in Jesa. “In the Yangtze River Delta where Shanghai is located, this economic region is geared towards China’s domestic market and the impact of the global crisis is less serious”.
Saro Capozzoli stresses, however, that the impact of the crisis is also uneven for different types of businesses even within these regions.
“The crisis is more evident for the 630,000 foreign companies operating in China where the source of economic insecurity is external with their markets undergoing downturn,” he added. “For another part of the business community, they still see infrastructure continue to be built. For example, some 36 bridges were built in China in just the last three years.”
At the end of 2008, China’s Central Gov-
ernment announced a massive $US750b stimulus spending package with a large proportion of funds going to expanding the country’s railway network and hous- ing. China is where the globe’s fastest and arguably biggest rollout of 3G broadband services is currently taking place. “Chinese employees accept sacrifices for the ‘common good’ and everyone tries to work in a more effective way to ob- tain the best result”, Marco Gentili notes. “Many companies have reduced their ex- penses, especially on holiday festivities and everyone has accepted this situation, hoping for a change in the mid-term”. To boost consumer spending, the Govern- ment has given some signals that it would extend reform to its VAT system while tax reductions already underway have put more money into the bank accounts of China’s consumers and households.
Merit wins
In China, personal connections or ‘guangxi’ is an important first step to- wards finding potential business part- ners, clients and friends. Both Saro Capozzoli and Marco Gentili are at pains to point out that only meritocracy will enable this relationship to develop beyond this important means of introduction.
“In modern China, people are managed in a flexible way and they feel free to move from one company to another one if their interests or ambitions are not met. A lot more young Chinese are exposed to the way the outside world works, and many of them have gone overseas to study” they add. “When they move up Maslow’s hierarchy of needs, people here are driven by status and that will de- termine which company they work for.” Regarding career matters, performance remains core to effective professional cooperation and people are reward- ed in ways commensurate to achieve- ments and outcomes.
“Like elsewhere in the modern world, companies need to pay a lot of atten- tion to rewarding employees who are innovative, whether it is through find- ing solutions to problems or coming up with new and successful products for the marketplace.”
“Efficiency depends on transparen- cy, leadership and participation by all in the company,” Capazzoli explains while noting some difference in the Chinese workplace.
Da "THE WORK STYLE MAGAZINE" 2009