International Trade
For more than three years, I’ve written the international trade pages of the Midlands’ leading business magazine, Insider.
Such publications can be dry and inaccessible, but Insider welcomes the personal touch, as with these words from a feature on China.
One of the most experienced observers of all things Chinese - particularly from the commercial perspective - is No5 Chambers’ Carole Murray.
She studied Chinese at Cambridge University, at a time when the People’s Republic was barely on the map in terms of business links with the West.
Fluent in Mandarin, and with first-hand knowledge of China‘s economy, Carole has recently written about the country for both the FT, and the International Investment Report.
Intriguingly though, despite the raft of advice and data now available, she believes many Western firms still approach China with a naïve mindset.
"Many foreign entities just don’t understand the difference between the old China and the new, and assume that all commercial relationships will work as they might in the most sophisticated cities, such as Beijing or Shanghai," says Carole.
"I have worked on deals where both sides have gone ahead with proposals, and it has later been realised that neither genuinely knew what the others wanted."
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Midlands Insider - March 2009
For more than three years, I’ve written the international trade pages of the Midlands’ leading business magazine, Insider.
Such publications can be dry and inaccessible, but Insider welcomes the personal touch, as with the below words, from a feature on China.
I think it’s important - and more interesting for readers - not to focus purely on sectors, and cities, which have already received much attention.
... Meanwhile, No 5 Chambers’ partner, Carole Murray, has also just returned to Birmingham, after a month visiting China’s major commercial centres, including the northern city of Tianjin.
It might not be on every corporate radar, but surely should be, given its 10.5 million residents, which make it China’s third largest city, and its long-term focus on industry and technology.
The slowdown in China’s spectacular recent expansion has induced negative musings by some Western commentators, but Murray - a dedicated Sinophile since her undergraduate days at Cambridge - has a more positive mindset.
"I think a pause for thought would help everyone. We shouldn’t forget that China’s modern economy has only been developing over the last 20 years, and it is still early days to see what it might become," she says.
"We might now see the evolution of a more mature business climate, certainly with regard to corporate governance and banking standards. Predictions are always precarious, but I certainly see more reasons not to be pessimistic."
Not that Murray believes China is somehow insulated from the current woes, simply because economic growth remains significant by Western standards.
"People are defaulting on invoices, workers are being paid in kind because their employers have run short of cash, and there are a lot of sudden bankruptcies. I went past one site where I knew a factory used to employ 12,000 people, and it had closed," she says.
However, Murray points out that the power of China’s central government gives it great sway over the country’s fortunes.
"It still has the ability to switch from a capitalist economy into a command economy, it holds close to two trillion US dollars in its reserves, and has pledged to invest $600 billion into infrastructure projects, which will certainly create openings for Western firms."
Murray’s greatest concern is soaring unemployment among the rural millions who flooded into urban areas, during the boom years.
"Around a quarter of Beijing’s population are migrants, and the spectre of civil unrest now haunts the major cities. There is no experience here of an economic slump, because the period of dramatic growth has been so short, and no-one knows what might happen."
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