The Insiders: Building China Expertise in Turbulent Times

The following is a guest post from CPG partner, CRCC Asia, a leading China internship and consulting firm.

“Taking a trip to China,” American President Richard Nixon observed before his momentous visit to the People’s Republic in February 1972, “is like going to the moon.”

This year will mark the fortieth anniversary of Nixon’s “trip to the moon” – a diplomatic masterstroke that reopened China to the outside world, and helped catalyze the currents of modernization that would shape the country into the economic powerhouse it is today. Looking back, it is difficult to appreciate just how audacious a gamble Nixon’s trip was – how little Westerners knew about China at the time, and how truly isolated the country was from the rest of the world, even the Communist bloc. In those days, a violent revolutionary tide had swept away all of the old certainties about the land and its people. The expertise accumulated by generations of Western merchants, missionaries, and scholars – the proverbial “old China Hands” – had been rendered obsolete by the Communists’ radical reorganization of state and society. For twenty years, China had loomed as a vast terra incognita, impenetrable and indecipherable to outsiders.

Today, of course, that defiant isolationism is largely a thing of the past. Decades of “reform and opening up” have transformed China from an impoverished pariah state into an economic colossus vigorously flexing its muscles on the world stage. The drab cityscapes that Nixon encountered have been replaced by shimmering skylines of glass and steel stretching out as far as the eye can see. Materialism, consumer culture, and other agents of what used to be called “spiritual pollution” are now firmly embedded in everyday Chinese life – for better or for worse. All told, China at the dawn of 2012 is stronger, more prosperous, and more open to the outside world than at any time in living memory.

For all that, however, China remains a deeply confounding place. Open doors can only open so far; time and again, the alluring promise of the country collides with frustrating “facts on the ground.” Millions of newly affluent urban Chinese may sip lattes at Starbucks, converse with foreign friends and colleagues in English, and travel abroad, but this cosmopolitan sheen glosses over a heady nationalism that has only gathered strength with China’s rise. By the same token, Western brand names may be ubiquitous, but China is still, by any objective measure, a difficult place for foreigners to do business – let alone flourish.

These contradictions are neatly captured in the American Chamber of Commerce’s 2011 China Business Climate Survey. According to the survey report, 83 percent of respondents planned to expand their China operations in 2011; they cited record growth from previous years, and expressed relative confidence in China’s ability to weather a prospective economic downturn. At the same time, a majority also reported increasing concerns about China’s lack of transparency, corruption, overweening bureaucracy, and government-sponsored protectionism, claiming that these have put “long-term growth and, in some cases, continued market participation into question for the first time since China began its market reforms more than thirty years ago.” With a sensitive transfer of political power approaching, how China will manage its economy in the coming year – and how foreign enterprises will fare in the process – are anyone’s guess.

What is certain is that local knowledge and expertise are critical and integral to success in today’s volatile China market. The old refrain about doing business in China – that guanxi, or personal relationships, are the ultimate arbiter of success or failure – is not entirely accurate. In economies where transparency is at a premium, timely, accurate, and highly specialized information is also key. As China enters a new period of uncertainty, the companies that perform best will be those that develop the most nuanced and sophisticated understanding, not only of their Chinese consumers, but of the wider political economies in which they operate. And in this quest for information, companies like CRCC Asia, a leading China internship and consulting firm, are playing a powerful supporting role.

CRCC Asia was founded in 2008 with the aim of forging diverse and mutually beneficial links between China and the global community. Its core services – business consulting, internship placements, and intensive courses in Chinese language, finance, and law – are designed to provide participants with a unique inside view of China’s economy and society. The internship program in particular gives up-and-coming professionals the opportunity to develop considerable “on the ground” expertise in a wide variety of China sectors, from marketing and finance to engineering, IT, and logistics. By providing foreigners with access to China’s complex and ever changing business world, CRCC Asia is helping to educate a new generation of China experts. Their skills, experience, and insights will no doubt prove invaluable in the years to come.

China and the world have come a long way since Nixon’s historic visit in 1972. The country is no longer as remote and inscrutable as it once appeared; few people today would say that venturing there is “like going to the moon.” Yet China is still an enigma in many ways. As the new year unfolds, and as China enters a new phase both in its domestic politics and in its relations with the outside world, there will be a new demand for professionals who understand how the country works from the inside – and how to apply that knowledge to benefit China, the global economy, and the world at large.

Enrico Piccinini is an associate at CRCC Asia’s Shanghai office. To learn more about CRCC Asia’s products and services, please visit http://www.crccasia.com.