Review: Chinese CheckersBy Paul B. Brown | Posted 03-01-2002
China Dawn: The Story of a Technology and Business Revolution
By David Sheff
HarperBusiness, March 2002 320 pages, $26.95
You think you have problems? Picture yourself as a CIO working inside China today. You have to deal with two economic revolutions simultaneously. While you and your fellow businessmen are replicating the industrial revolution, you're also struggling with your own version of what the U.S. went through in the 1990s: the changes wrought by the communications and information revolution centered on the Internet.
The result in China is exactly what you'd expect: tremendous turmoiland opportunity.
When you are talking about a fifth of the world's population and an economy growing at better than 7 percent a yeartwice that of the U.S.the numbers that make up this kind of transformation can quickly become too big to comprehend. For example, the potential size of the Chinese technology market must be measured in the trillions of dollars. To his credit, freelance journalist David Sheff tells China's story by concentrating on a handful of people, all native-born entrepreneurs and financiers. Among the players: venture capitalist Bo Feng, who learned English while serving as a bus boy at Chinese restaurants in Silicon Valley; Edward Tian, who built China's Internet from the ground up; and entrepreneur software developer Wang Zhidong, who created a program that automatically translates English-written software programs into Chinese. China now possesses the same verve that was present in Silicon Valley in the late 1980s and 1990s. For example, when an American venture capitalist expresses reluctance to fund Wang's latest Internet venture, believing that the Chinese government limits access to the Web, Wangacting just like any other high-tech hot-shotcalmly continues to make small talk while he hooks his laptop into a nearby phone line and quickly accesses the VC's home page back in San Francisco, to show there is no need for concern.
Why should you care about this account, other than as a fascinating snapshot of a developing economy? There are four reasons:
The Chinese market represents 20 percent of the world. Given its size, you need to understand it.
China may not need you. China Dawn challenges the basic assumption most CIOs and other business leaders have about doing business in China: Find a local partner who can provide contacts and distribution for what you sell. But a growing entrepreneurial class may not need you. You are going to have to offer them more than a product to import. As one entrepreneur puts it: "Intel, HP, Microsoft, Oracle and the others assume that China will be theirs, but they underestimate the Chinese entrepreneur."
The Chinese aren't just a market; they're also potential competitors. Rather than buying from you, they may go after your markets.
Perhaps most intriguingly, the experience in China shows what can happen when you start with a blank slate. Consider Internet infrastructure. In the U.S., its growth has been basically incremental. But China is gearing up to handle 300 million new users in the next five years.
That kind of growth requires a new way of thinking for anyone interested in expanding markets both online and off.
PAUL B. BROWN is editor-in-chief of DirectAdvice Inc., the online financial planning company, and the author of 12 business books, including Zoom: How 13 Exceptional Companies are Navigating the Road to the Next Economy (with James Citrin), just published by Doubleday.