The Business of Doing Business with China: An Ambassador Reflects

Summary

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One of the defining features of the early 21st century is the emergence of the People's Republic of China as an economic power. With respect to competing with China, ambassador Joseph Caron remains confident that Canadians will adapt to the commercial and economic challenges it poses: if they develop their global and corporate strategies, and if they bring to the task the skills Canadians have shown in competing with firms from the US, Japan, the EU and developing countries. All strategies for a successful relationship with China must embrace the following three principles. 1. China strategies require the clear and explicit commitment of leaders, CEOs and presidents and boards of directors. 2. A joint effort is essential. 3. Canadian's built-in expectations about return-on-investment, reliability of contracts, rule of law, mutual trust, formal and informal rules of business conduct often have little relevance in China. You have to prepare yourself for a totally different operating environment.

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The Business of Doing Business with China: An Ambassador Reflects

One of the defining features of the early 21st century is the emergence of the People's Republic of China as an economic power. Among observers and interested parties, the suddenness of China's rise and its role in global affairs generates optimism and excitement about seemingly unlimited opportunities. Yet China's emergence also generates uncertainty and questions about the broad implications of its rise.

China could perhaps be viewed as a conventional state that has stepped boldly to the forefront by continuous and rapid economic development, replicating in many ways the experience of Japan, Korea and Taiwan. But this tells only part of the story. In fact, most people believe that China's sudden emergence is defined by exceptional characteristics and dynamics which make this story uniquely important. This view also suggests that the challenges posed by China's growth must also be unique. In these and other respects, I think that most people are right.

The facts are clear: China now accounts for 4.5 percent of world GDP in dollar terms and 13 percent of world GDP in PPP terms. The British Treasury projects that this share will increase to about 19 percent by 2015. The World Bank believes that, because of China's rise, developed countries' relative share of global output will decrease, even as the absolute volume and value of that output increases. In global macro-economic terms, we will all, potentially, gain. I don't think that this is an optimistic projection. I think that it is a realistic one, because I beli...

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