Opinion

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Chinese firms need a five-year plan

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I recently retired as UK senior partner of BDO after 23 years as a partner with the firm. Last year, I took up a position as visiting professor at Xiamen University, China. My wife is Chinese and I decided to spend three months exploring business opportunities in the region and trying to learn some Mandarin.

I’m blogging about my experiences in China for Real Business – catch up on part onetwothreefourfivesixseveneightnine and ten of my journey so far.

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China has a Five Year Plan, but few of its businesses seem to. Most are characterised by pragmatism and a short term, tactical approach to opportunities. 

In part, recent history contributes to this, together with the rapid, leap-frogging pace of change and lack of protection for IP, whether foreign-owned or home-grown. 

The goal of Chinese entrepreneurs seems to be to get rich quick, IPO on a foreign market and diversify into property and equity markets (not always in that order!). 

There will be exceptions to this, but there seem to be few that have a long term vision and the goal of building a sustainable brand and legacy business. 

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I have previously noted that Chinese business seems focused on short-term and pragmatic tactics, in this climate of hyper-growth. 

At a micro level, this approach can be seen in the physical fabric of much of China’s development. Although infrastructure is often new, the build quality of offices, hotels (and perhaps civil engineering works, although I am not qualified to tell) often seems merely “good enough”, rather than “excellent” or “fault-free”. 

Many expats say that Chinese co-workers often also exhibit this trait in their work and have to be coached towards a culture of Kaizen.

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