One Billion Customers - James McGregor [0]
Published by Free Press
Rockefeller Center
1230 Avenue of the Americas
New York, NY 10020
Copyright © 2005 by James McGregor
All rights reserved, including the right of reproduction in whole or in part in any form.
FREE PRESS and colophon are trademarks of Simon & Schuster, Inc.
The Wall Street Journal and the Wall Street Journal Book colophon are trademarks of Dow Jones & Company, Inc.
Book design by Ellen R. Sasahara
Library of Congress Control Number: 2005044398
ISBN-13: 978-0-7432-8245-1
ISBN-10: 0-7432-8245-0
www.simonsays.co.uk
To my family
Cathy, Sally, and Grady
John, Sally, Armando, Bruce, Laura, Donald,
Douglas, Lisa, John, and Mary
Contents
Cast of Characters
Preface
Introduction A Startup and a Turnaround • With one foot firmly in the past, and the other stepping into the future, China is simultaneously the world’s largest startup and turnaround.
1 The Grand Bargain • Two hundred years of foreign domination and duplicity have left a residue of suspicion and distrust. Understanding that history is essential to doing business with the Chinese.
2 Same Bed, Different Dreams • Avoid joint ventures with Chinese government partners. The clash of civilizations in Morgan Stanley’s joint-venture investment bank shows why and offers hard-learned lessons on how to cope.
3 Eating the Emperor’s Grain • China’s relationship-driven system is often incompatible with honesty. This peasant tycoon’s journey into the dark heart of China’s endemic corruption shows how it works and outlines your options.
4 Dancing with the Dinosaurs • Powerful bureaucratic opponents can be beat if you have China’s interests at heart. Dow Jones and Reuters demonstrate how using China’s own tactics can be useful.
5 Caught in the Crossfire • Government lobbying must be a key part of your China business plan, especially for technology companies that might be squeezed between hot competition and the Cold War.
6 The Truth Is Not Absolute • The Communist Party believes it must control information to stay in power, but China needs an informed citizenry to compete in a global economy. This leaves the media, from Rupert Murdoch to a crusading Chinese journalist, searching for the size of their cages.
7 The Best-Laid Plans • Government planning and manipulation of foreign companies fueled China’s construction of the world’s largest telecom system. But this saga shows how entrepreneurship and the market can beat the planners.
8 Managing the Future • China is a nation always cramming for final exams, but it will take innovation, not prescribed solutions, to pass the global business test.
Acknowledgments
Index
Cast of Characters
Chinese Government Officials
Deng Xiaoping The leader of China from 1978 to 1989 who established market-oriented reforms and sparked the ongoing economic boom.
Ding Guangen China’s “propaganda czar,” director of the Communist party Propaganda Department who controlled the Chinese media throughout the 1990s.
Gao Xiqing A key founder of China’s stock markets and longtime senior securities regulator who most recently was vice-chairman of the National Council for Social Security.
Hu Jintao President of China and Communist party boss starting in 2002.
Jiang Zemin President of China and Communist party boss who carried out Deng’s reforms from 1989 to 2003.
Li Peng Premier of China from 1987 to 1998 who became the belligerent face of the government during the Tiananmen demonstrations. Despite his reputation as a conservative hardliner, he pushed government acceptance of a 1992 U.S.–China market access agreement that led to China’s first significant commercial regulatory reforms.
Long Yongtu Senior Chinese trade official who handled China’s negotiations for the country’s 2001 entry into the World Trade Organization.
Mao Zedong Chinese Communist revolutionary leader who defeated Chiang Kai-shek in 1949 and led the People’s Republic of China from triumph into tragedy. His rule ended with his death in 1976 after the country’s economy