Advice for US Companies in China 李开复演讲资料

Opportunities&ChallengesforMultinationalsinChina:LearningfromtheMicrosoftExperienceKai-FuLeeCorporateVicePresidentMicrosoftCorporationTalkOutlineChinaOpportunity6IngredientstoSuccessinChinaMicrosoft’sPresenceinChinaEarlystrugglesRecentsuccessesConclusionChinaOpportunityHugegrowingmarket“ThesinglemostimportantthingtohappeninourlifetimewillbetheemergenceofChina.”–JohnThornton,formerPresidentofGoldmanSachsNowaProfessoratTsinghuaUniversityGDPgrowth9%peryearsince1978.Consumerssaving$1trillionperyear.2002:Chinabecame#1mobilephonemarket.2004:Chinawillbecome#2PCmarket.Next5Years:Software&servicesCAGR=50%!UnitsofPCShipped(in000s)FY00FY01FY02FY03(E)US43,71542,80938,80939,670Japan12,29413,86611,89711,625China5,4747,2268,71210,450%ChangeFY00-01FY01-02FY02-03(E)USN/A-2.10%-9.20%2.10%JapanN/A12.80%-14.20%-2.30%ChinaN/A32.00%20.60%20.00%ChinaOpportunityWorld’sLargestLaborForce“Throughskillfulcontrolofresidency,China’s900millionruralresidentswillgraduallymovetocitiesandtakejobsinmanufacturingorinformationprocessing,perhapsat20-30millionperyear.ThiscouldgiveChinaasustainablesupplyoflow-costlaborforthenext20-30years.”–KenichiOhmae,TheChinaImpact.TraditionalindustriesManycitieswithgoodinfrastructurePeopleinflowfromruraltocitiesExcellentprocess&know-howinmanufacturingKnowledgeeconomy150,000computergraduates/yearGreatemphasisoneducationButIT&softwaresignificantlylagIndiaMarketOpportunityisLucrativeVolkswagen40%marketshareinChinaMotorola20%ofglobalrevenuecomesfromChinaKodakIn4years,Chinawentfrom17thto2ndIntel$4+billionrevenueinChinaL’Oreal“Imagine,1.3billionlips!”-LindsayOwen-Jones,CEO,L’Oreal.6IngredientstoSuccessinChinaChallenges&SuccessfulFormulaBuildstronggovernmentrelationshipsPlaybyChina’smarketrulesMakealong-termcommitmentThelocaleconomyisthetoppriorityNurturelocalpeopleBuildtrust,notPRBuildStrongGovernmentRelationshipsUniquepowerofgovernmentRelationshipsrequiredatalllevelsThespiritofthelawmattersmoreChina'scultureisbuiltontrust,relationships,mutualrespect.Theconceptoffaceisveryimportant.AvoidsensitivitiesandfindeveryopportunitytomakeChinalookgoodNegotiationsarebottom-upandinformal.“Itcannotbeoverstatedtheimportanceofaccommodatingthegovernment.—JohnStuttard,theNewSilkRoad.PlaybyChina’sMarketRulesExpecttorespect“Chinesemarket”Thegovernmentfortheirownreasonswhatrulestoapplyandwhotheywouldliketodobusinesswith.Whiletheyvalueglobalstandardpractices,theystillexpectMNCstoadapttolocalrules.Marketconditionschangerapidlyandoftenirrationallyduetoanimmaturemarketeconomy.“WetakeprideinviewingourselvesasaverylocalcompanyinChina’”–MikeZafirobski,COOMotorolaMakeaLong-TermCommitmentContributeFirstandBenefitLater:EntitlementfrompowerofmarketMNCsmusthavelong-termcommitment.JV,investment,training,localpartnership,technology&know-howtransferFriendsmaybegivengreatopportunities“Chinahasdiscovereditsleverage.Theynowsay‘Ifyouwantmarketaccess,giveustechnlogy’”–ErfeiLiu,ChairmanofMerrillLynchChinaLocalEconomyistheTopPriorityLocalcompaniesarealwayspreferredMNCsexpectedtohelpnurturelocaleconomyinexchangeforaccesstotheChinamarket(needtomoveupthevaluechain)Bonus:helplocalcompanybuildexportbusinessChinaoftenignoresinternationalstandardsandattemptstobuildChinastandardsIPProtectionisweakLawstoprotectlocalcompanies“Don’tthinkChinesecompaniesdeservetolosetoforeigncompanieswhenforeigncompanieshaveabetterproduct.ItisdifferentthataforeignerismakingmoneyandnotaChinese.ThedownfallofChinesecompanieswillcomebacktohurtallcitizensofChina”–ProfessorTanHaoqiang,ITInfluentialinChinaNurtureLocalEmployeesChinaprefersMNCsthatdeveloplocaltalenttomakethemmorecompetitiveinternationally.Localtalentishighpotential,butinexperiencedSendoverqualified,seniorleaderswhointendtorepatriate“MybossaskedmehowtoexpandtheIBMbusinessinChina.Iansweredfirstwehadtogrowthelocalpeople”–WilsonWong,firstChiefRepresentative,IBMChinaBuildTrust,notPRCorporateimagerequiresmuchmorethanPR.GoodcitizeninChinahelpinglocalcompaniesSinglemessage(likeChina’sown)=unifiedorg.“BoastingPR”isverynegativeinChinesecultureLow-profile&humilityismuchbetterPublicmediaisimmature,powerful,manipulatedWhilepositivePRmaynothelpacompany’simage,negativePRcandamageacompany’simage.MicrosoftInChinaCommercialSales&Marketing1992:SetupBeijingOffice1995:SetupMicrosoftChinaLtd1996:SetupShanghai&GuangzhouOffices2003:300employeesGlobalTechnicalEngineeringCenter1998:established2004:300employeesMSITInnovationCenter/R&D/ATC2004:300employeesMSRAsia1998:established2003:150researchers+200internsJointVentures2004:2corporationsestablishedMicrosoftLowlightsinChinaMistakeson“respect”&“commitment”GovernmentprocurementlawPiracy&anti-Piracymeasures“Goodenough”softwareManagementturnoverCenterofmediaattentionSeveralstrongbutpersuasivecriticsMicrosoft’sRecentSuccessesBuildstronggovernmentrelationshipsPlaybyChina’smarketrulesMakealong-termcommitmentThelocaleconomyisthetoppriorityNurturelocalpeopleBuildtrust,notPRBuildStrongGovernmentRelationshipsMicrosoftandChinaAnnounceGover