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Home >> Opinion
UPDATED: 15:00, January 26, 2005
Chinese businessmen worldwide face five challenges
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What main challenges are Chinese businessmen worldwide facing today? And how should they deal with these challenges?

Challenge one: About investment

About 300,000 old and 300,000 new overseas Chinese are of Fujian Fuqing origin. These new overseas Chinese are a new force through which overseas Chinese businessmen play a role in China in the 21st century. However, many new overseas Chinese are facing a choice conundrum which once puzzled some old overseas Chinese businessmen. Since most new overseas Chinese have small amounts of funds - between $100,000 and $200,000 they have difficulty in finding development opportunities after China jointed the WTO and when competition in market economy becomes fiercer. To change this kind of situation some experts and scholars have proposed to create conditions and encourage new overseas Chinese to make investment put together from small funds. They plan to combine small capitals so that they can develop jointly.

Challenge two: About cultural conflicts

For new Chinese businessmen modern financing means and business modes can perhaps ease much of the pressure. But more of the cultural challenges are unavoidable for them. It is said that TCL's Li Dongsheng once went to France for a meeting at a weekend after he had acquired the color TV business from Thompson. He was annoyed and puzzled by the finding that none of the senior French officials came. He seemed failed to understand how important weekends are for Europeans.

The shoes-burning incident in Spain appeared to be due to dissatisfactions of the Spanish rivals. But what hided behind the appearance was the cultural conflict. In Europe weekends are for rest. Nobody works on weekends. But the corporate culture of Chinese businessmen is that business does not recognize holidays, which inevitably met with the discrimination of the Spanish. By the time they went into disadvantaged position in the competition and sustained loss their anger could not but erupt.

Challenge three: About business mode

Whether it is old Chinese businessmen or new Chinese businessmen when new immigrants come to a strange place they often start from the catering and laundry industries and gradually expand their business. However, as world science and technology develop rapidly some traditional business concepts of Chinese businessmen such as family-like management are facing the impact of new business modes such as e-business. Mr. Beckman, an expert on Asian economy, believes that the flourishing of Internet and e-business is posing a great threat to the traditional business mode of Chinese businessmen worldwide. He said Chinese businessmen engaged in traditional trade use their global network of relationship formed by family members and friends to gain trade information and carry out trade. This kind of network has always been one of the key factors contributing to Chinese businessmen's success. In today's world, however, the Internet can send huge amount of information to remote places. The appearance of e-business again makes direct trade between the manufacturer and consumer possible without the middleman in the process. These have formed direct challenges to the existence basis of Chinese businessmen.

Challenge four: About family-like management

Chinese's businesses must also experience the transformation from family-like management to professional management.

A study shows that in Asia the influence of family culture can be felt ubiquitously in Chinese businesses. Not only small and medium-sized businesses are owned by families or individuals but many large Chinese business groups are also often controlled directly or indirectly by a certain family.

This kind of family control of businesses is manifested in two forms. One is businesses controlled directly by families. These are small business groups. The other is through core companies or holding companies. The core companies or holding companies then own the shares of subsidiary companies to realize indirect control. Generally speaking, in Chinese companies in Asia families and the senior management controlled by families dominate the development of companies in a comprehensive way, which is manifested in the form of highly centralized power.

Most shares of listed Chinese businesses in Southeast Asia are controlled by the founding families. Apart from large groups the control of small and medium-sized Chinese businesses in Asia is also mainly in the hands of families. The proportion of traditional companies whose management and ownership mingled is very large.

Li Guangyao once said at the Chinese Businessmen Conference held in Melbourne: "It is not easy to transform from family management to professional management. This is in conflict with the deeply rooted cultural instinct. Those companies with Chinese investment which cannot make advancement in this respect will be unable to compete in the global market."

Challenge five: About political participation

Overseas Chinese entrepreneurs must face a special challenge, that is, to participate in the host country's politics.

In Southeast Asia, Australia, North America and Latin America more and more Chinese are participating in the local and national politics. As these Chinese communities further make their roots in their new homes, as Chinese entrepreneurs carry out trans-boundary cooperation in the global economy they no longer feel the unease. Like Professor Lin Yifu from the Chinese Economy Research Center of Beijing University said: "On the mainland whether it is state-owned enterprises or private businesses we all have many opportunities. Chinese businesses overseas which share blood relationship with us would also have a large opportunity. This opportunity should be won with our efforts and grasped by us.

By People's Daily Online

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