Book Review: “Doing business in China”

This is a review of Torrens’ “Doing Business in China” which I recently wrote for the Irish Times

“Horn Xiānshēng, we very much like your products but we will not buy any more”, a senior executive from a major Chinese mobile operator told me. I was disappointed, and naturally asked her why. She responded: “your products are excellent, but your technical staff here do not understand your own products well enough”.

I was astounded and told her that although we were expanding quickly, in fact we had not yet recruited any technical staff in Shànghǎi, and instead supported her company from our team in Běijīng. “You are wrong Horn Xiānshēng: here is the business card of one of your own consulting engineers in Shànghǎi”. I looked at the card and realised that it was apparently one of our corporate business cards but fraudulently made out instead with the name of a technician employed by one of our local resellers. Needless to say, the contract with the reseller was quickly rescinded and we immediately built our own team in Shànghǎi. The customer subsequently significantly increased her business with us.

Undertaking business in China reveals fascinating perspectives on the attitudes and ethos of the Chinese, and indeed perhaps of human nature itself. While I was a child and then teenager in Ireland, many in China were reduced to a survival diet mainly of grass and leaves in their famine stricken countryside. Now they, and especially their children and grandchildren, have an opportunity to personally exploit the most rapid enrichment that any nation has ever experienced. A race to a high standard of living with well over a billion participants naturally leads to competition, envy, and friction. Rules are broken, short cuts are taken, and nearly everyone feels an urgent right to grow rich. We in turn can shake our heads and tut-tut: but we experienced our own somewhat similar national fervour during our Celtic property boom.

Many books have been written to help guide westerners to undertake business in China, and no doubt more will emerge. In my view, the best focus on the spirit of the Chinese themselves, which has largely remained steadfast despite rapid and momentous change.

Torrens’ “Doing Business In China” captures some of the passion of China and of the Chinese project, but is written as a sterile outside observer. The voices of the Chinese themselves are rarely sought to give colour and illustration. Torrens is indeed a foreigner, but apparently not an investor: he has little to offer in the balancing of opportunity and risk mitigation, of reward and safeguard. Finally, he is a foreigner but not investor, but apparently nor even even a business strategist: there are scant details and specifics given for the business projects which he mentions in passing, and little analysis and assessment of the usually subtle lessons therein.

His “Doing Business in China” is in fact not really about doing business in China. Genuinely, a reader should be forgiven for concluding that the message from this book is “don’t do business in China – it would be far too fraught”. The book is possibly instead an economist’s perspective on macro trends, percolated with grains of filtered business and political events.

The book is conceivably best occasionally tasted rather than laboriously ingested. It is repetitive: for example we read more than once that Héféi is one of Unilever’s largest manufacturing sites; likewise, that Lenovo acquired IBM’s personal computing business (in 2004, or was it 2005 ? Torrens gives both dates in different parts of his text!) ; and likewise, how domestic competitors in the mobile phone market have placed Motorola and Nokia under pressure.

The book is severely unbalanced. The first three of its ten chapters stand over 50% of the text, and by the end of the fourth we are 65% done. The introductory chapter is arguably the best but sometimes confuses outsourcing manufacturing to China for re-export to the global market, with strategies to enter and sell into the Chinese domestic market. The second chapter summarises national political structures and social stability. The third discusses national consumer trends, the regions of major economic growth and investment zones. The fourth looks at a selection of risks, including protection of intellectual property. The remainder of the work gives a cursory tour of corporate structures, acquisition mechanics, human resource management, governance, social responsibility, and fraud. Much of the observations and recommendations presented here are applicable to many other jurisdictions as to China itself and therefore will not be particularly insightful for the seasoned global player. The book abruptly halts by outlining three future national scenarios, analysis of which would be a worthwhile contribution. However, very little is forthcoming. The book runs out of steam and stops short.

Torrens’ well sums up his own manuscript when he quotes a Chinese proverb at the start of his chapter 4: “A conversation with a wise man is better than ten years of study”. His book is apparently derived from time devoted to reading reports, news and wire services, and insufficient to the real insights and direct personal experiences of business in China.

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About chrisjhorn

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One Response to Book Review: “Doing business in China”

  1. John Dennehy says:

    Thanks for saving us from what sounds like a drudge of a read.

    There’s obviously no substitute for visiting China and actually doing business over there but one thing Irish companies could do is work with one of the many talented Chinese interns that are in the country. For a very small investment Irish companies could get an awful lot of insight into the Chinese market and, perhaps more importantly, into the culture.

    In my company (hrlocker.com) we had two Chinese computer science interns working with us for the past few months. They localised our entire software product and our web site. They also helped with issues such as trade mark registration in China and always got a much better rate when they phoned any Chinese service providers.

    Interns who have studied in Ireland often feel a bond with the country that remains well into their careers back home.

    I agree with Chris on the merits of the proverb. But if you don’t have access to any wise men you could do worse than working with a smart intern.
    John

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