Abstract
During the past several years, much has been written about the business opportunities in China. Dixon and Newman open their book with an example that demonstrates common business thinking about market-share possibilities: “Right now in China the ownership of ball-point pens averages only .5 per person. In the U.S., the figure is nine. If Chinese consumption was to reach the U.S. levels, more than 10 billion additional pens would be sold” (p. 1). However, the authors’ goal for this book is to temper unbridled optimism by providing a warning to businesspeople who are contemplating expansion into China.
The book is easy to read, and its layout facilitates understanding of the points stressed by the authors. They have included vignettes and exposés to demonstrate their ideas clearly and provide samples of situations encountered by other businesspeople in China. These exposés “come entirely from open source material” (p. 2) and illustrate many problems that a business risk analysis might not identify. Furthermore, in each chapter's conclusion, the authors summarize the points made in that chapter, thus reinforcing their message about doing business in China. The final chapter in the book is a reminder of the “warnings” the authors have stressed throughout the book.
Chapter 1 functions as the introduction to the book. It gives the reasons for writing the book and offers a reminder that there are many business opportunities in China. It closes by mentioning that Western business philosophies often do not mesh with the Chinese method of conducting business.
Chapter 2 lays out some of the positives and negatives of doing business in China. The authors provide statistics about economic performance during the past 20 years, with a caveat that most of the data were provided by China's State Statistical Bureau and thus were subject to “positive spin” by the government. Regardless of the overall veracity of the data, China's economic improvement is impressive. The authors follow this discussion with several negatives, most of which are expanded on in later chapters. The categories of problems briefly mentioned in this chapter include economic, social, political, and legal.
In Chapter 3, Dixon and Newman provide hints or “rules of the game” about doing business in China. They concentrate on the importance of relationships and networking (guanxi) in Chinese businesses. They then discuss reports about rampant corruption throughout the government, military, and business communities and the impact that politics and political allies can have on even the most basic business transactions.
The rules are followed by a chapter on the players of the game. Here, the authors focus on the different types of business entities, such as state- or village-owned enterprises. They also discuss the roles the People's Liberation Army and the “princelings” (the children of previously high-ranking Communist party leaders) have on all aspects of business in China. The army operates many businesses that produce goods needed by the army, as well as other operations that prove profitable. As the authors note, it is often risky to do business with the army because of the power it has throughout China.
Chapter 5 provides explanations about the Chinese legal mind-set. There are several different legal concepts in the Chinese system, and rarely do they match Western ideals. In this chapter, the authors “endeavor to demystify these legal concepts and, in doing so, ease out the implications for foreigners doing business in or with China” (p. 77). The concepts are often confusing, and the vignettes are an excellent way to explore these complex legal idiosyncrasies.
The issues addressed in Chapter 6 should be of vital interest to businesspeople contemplating working in China. The chapter is called “Crimes Against Foreign Business Personnel” and offers several situations that the typical businessperson might face in China. One of the most unusual incidents involves a Chinese businessperson kidnapping the foreign partner to ensure settlement of a business dispute. These events are unlikely to happen in the West and, therefore, are quite shocking.
In the final chapter, the authors recap the warnings expressed throughout the book. They also incorporate suggestions from experienced security consultants in Asia to aid business travelers heading to China. Overall, these security recommendations, when coupled with the explanations about Chinese business practices and the warnings the authors scatter throughout the book, give excellent counterarguments to the positive reports in the popular press. Thus, Dixon and Newman's goal of reminding businesses to use a great deal of caution before leaping into China is accomplished.
This book would be an excellent complement to any MBA curriculum. In addition, the business manager contemplating China will find this book an excellent compendium of both the opportunities and the adversities that can result from doing business there. Finally, the book provides vignettes that could inspire more focused research in this area; the stories themselves demonstrate many possible research puzzles.