China: learning amid a crisis

In our recent EMBA trip to China, the visit to Guangdong province may have been the best opportunity to learn about the real China, and generate ideas to put in practice in Brazil. Guangdong Province is where the opening up started; in 1978 Deng Xiaoping visited the province and created the first special economic zones where the “market socialism” experiment began, using the Pearl River Delta and Hong Kong as fundamental trade and finance supports for internationalization of the Chinese economy. To begin with, the cautious, regional experiment is typical, political risk avoidance is important for the regime.

In the busy, crowded factory like city of Guangzhou, (old Canton) the provincial capital , and in the surrounding cities, our group of executives were able to see the real modern China, visit Chinese universities, and meet Chinese entrepreneurs and public officials. In a traditional Chinese university, students speak English but often the senior professors do not; and interpreters are required; senior executives and public officials usually address us in the Cantonese dialect, and often our mandarin speaking hosts from Peking also need interpreters! In companies, very often the junior managers are the only ones that speak English, and that fact is used as an advantage during negotiations, to gain time and create distinct decision levels.

Entrepreneurs are young, enthusiastic and ambitious. Two young Executive MBA graduates presented their companies producing western-style high end jewelry, and barbecue equipment! Both are focused entirely on exporting to sophisticated foreign markets from the very first moment since creating their companies, with very little interest in their internal market! Another small high tech LED flat screen start-up also has a tremendous market focus, and sells to all over the world from a very small and simple factory near Guangzhou.

In these locations decisions are fast and radical; local government applies all its efforts to attract investments. Special agencies facilitates public authorizations, negotiations with the union, and the necessary energy, housing and transport infrastructure. They claim to be one stop agents for business, and the attitude is definitely yes we can innovate, produce and export our products. The current crisis makes things more difficult, but the Chinese know that they are much better off today than 10 years ago; they feel that they can fix all their problems as they go forward; very real problems of housing, inequality, health, energy and infrastructure.

One recent example of a radical local decision was the ban on gasoline powered motorcycles in the main cities of Shanghai, Guangzhou and Beijing; over the last 3 years millions of them have been replaced by small, slow, quiet, safe and non polluting electric scooters. Dozens of local manufacturers produce these low cost vehicles, in spite of the fact that most of China’s electric energy is produced in coal fired thermo-electric plants.

At the same time we in São Paulo worry about the dangerous motorcycles in our heavy traffic, and suffer with accidents, death of young people, pollution from motorbikes and horrible traffic congestion when the inevitable accidents occur. Worse, 95% of our electricity is of hydroelectric origin, which is clean, renewable, and available at night to recharge batteries when demand is off-peak.

Inspired by the Chinese problems and their positive attitude, some of our Executive MBA alumni are proposing to go beyond the great social work they already do. They are proposing alumni projects for our program like a zero carbon footprint, a permanent public policy forum, and a fund raising program for use of cutting edge classroom technology.

I would very much like to hear your comments and contributions on initiatives like these.

P.S. I’m writing mostly in English because we have an international audience (25% of the readers of our blog) and also, some of our students need to practice their language skills. Feel free to make contributions in Portuguese, English, French or Spanish !

James