European managers should make big efforts to learn about the Chinese environment: no short cuts!

The European Leadership Centre was established by IEDC-Bled School of Management in 2002 to promote European leadership through conferences, workshops, round table discussions, and research; its founders believe in the importance of good leadership in achieving heightened European competitiveness and also more progressive and socially responsible European development. This year, the European Leadership Centre organizes its 13th Annual Conference, titled ‘China & Europe, Leadership in 21st Century Globalisation (June 4 and 5, 2015). The conference will focus on two questions that will most determine the prospects for the 21st century: how Europe will adapt to the emergence of Chinese global leadership and how China will adapt to its new role. One of the two keynote speakers (together with Vice President and Dean at China Europe International Business School Prof. Hellmut Schϋtte) is Prof. Jean-Pierre Lehmann, who has been working with IEDC-Bled School of Management from its very beginnings - for almost 30 years. He is the professor of International Political Economy at IMD International Institute for Management Development since January 1997. His main areas of expertise are the socio-economic and business dynamics of East Asia, the impact of globalisation on developing countries and the government - business interface, especially in respect to the global trade and investment policy process. In 1994 he launched the Evian Group, which consists of high ranking officials, business executives, independent experts and opinion leaders from Europe, Asia and the Americas. He is the author of several books and numerous articles and papers primarily dealing with modern East Asian history and East Asia and the international political economy.

You are the keynote speaker (together with Prof. Helmut Schϋtte) at the 13th European Leadership Centre's conference, 4-5 June 2015, which focuses on China: Europe. What are going to be your major points on the topic?

For much of history China was the wealthiest nation in the world. As recently as 1820 it accounted for 33% of global GDP. By 1950 that number had dropped to less than 4%. In a nutshell, as Europe rose, China was submerged by failing to adjust to the transformations (the industrial revolution, the rise of Western empires). It has been a very turbulent period that the Chinese call the "era of humiliation". In 1980 China was still one of the poorest countries in the world, with a GDP per capita weaker than that of many African countries like Burundi or Chad. It is roughly at that time, however, that China undertook probably the most radical and transformative reform programme the world has ever seen. Since then China's rise has been extraordinary. It has either surpassed or is about to surpass the US in aggregate GDP, it is the major trade partner of over 100 countries throughout the world, it is now also massively engaged in overseas foreign direct investment. This is an entirely new paradigm and one Europeans are not accustomed to. The challenge to Europe is to adjust to these changes and engage China constructively as it continues its surge to great power status.

What are the biggest differences in 'doing business' and 'the leadership style' in China and Europe that managers should bear in mind?

While China is a rising power, it is also a country in transition. In not much more than the last decade it has transitted: from a very low income country to a middle income country, aiming for high income status by 2030; from a predominantly rural peasant society to a predominantly urban middle class society; from a closed economy and society to an open economy and society: China has now the biggest number of overseas tourists (about 140 million) and students going abroad; from a predominantly state controlled economy to a hybrid state-market economy. These transitions have taken place within a political regime that remains quite difficult to comprehend - it is still relatively opaque. European managers should make big efforts to learn about the Chinese environment: no short cuts! They should develop Chinese contacts. They should keep open and curious minds.

Zheng Bijian has written in the late 1970s: "The most important strategic choice the Chinese made was to embrace economic globalization rather than detach themselves from it." How has been this choice realized so far?

In many respects amazing. Not only are Chinese businesses present throughout Asia, but also they are now the biggest trading partners and in many cases also investors in Latin America, Africa and the Middle East. A British author Jonathan Fenby said that when Mao Zedong took control of China in 1949, he changed China; when Deng Xiaoping launched his reform programme, he changed the world!

What is the most important China's contribution to the world economy over the last decade?

By far, far, far the greatest contribution China has made to the world economy and to mankind is to have lifted over half-a-billion people from poverty. China has redefined the global market.

Source: The Slovenia Times