Opening up a Modernized Inner Mongolia Inner Mongolia is one of China's northern provinces bordering the Mongolia Republic and Russia. We have just heard news that millions of cattle and wild animals died due to an unusually cold and long winter there. Whatever happens in the shortrun, the long range plan has been set and goals still expected to be attained. Given China's record of on-target development since the opening up in 1979, this ambition will either be on target or achieved before target time. In fact, there is a comprehensive time table for all major cities and all provinces to attain the status of "modernization". Shanghai 2015, Beijing 2018, Guangdong 2021, Tianjin 2026, Jiangsu 2033, Fujian 2034, Inner Mongolia 2055, Anhui 2055, Xinjiang 2055, Guizhou 2070 and Tibet 2090. The Mission is there, so is the Vision and Commitment. What constitutes Modernization? According to the Chinese Journal of Economic Development (Shanghai), modernization means the attainment of social conditions and living standards at a par with the rest of the modernized world. Here are some specific criteria: Near zero natural population growth Near zero discrepancy in supply and demand for energy and natural resources Social and scientific research and development at an adequate level and mostly funded by business enterprises Information system integration into most of the traditional industries and trades Social vices and corruption controlled and on the decline. Ambitious as it seems, the Chinese government is absolutely serious. Already, as part of the promotion of economic development in the Western part of China, today, a plane ticket from Shanghai to Urumuqi in Xingjiang, a 4 hour flying time trip, has been discounted to about 500 yuan or roughly $60 USD. Investment projects in the West are favored with loans and are exempted from corporate income tax for five years and reduced by 50% another 5 years. There are also hundreds of special regulations sweetening up the journey west for business and human resources. The Building Block of Progress - Human Resources One of the most rapidly growing lucrative business in China today is human resource training. While the MNC/s are trying very hard to invest in their employees to give their China team an edge before the arrival of more competition with China's entry into WTO, local Chinese enterprises are also working hard trying to catch up. Recognised deficiencies in work attitude, work methods, managerial knowledge, information technology are being addressed. One of the foreign human resource training consultants has already confided to friends that she has already made enough for a down payment of a southern Italian villa after just a few years in busines in China. That's how good business has been. Secretaries: The Executives' Partner For Efficiency In another case, a senior executive of another MNC announced to friends proudly that he did not need a secretary because he managed all emails himself and had another assistant take care of document filing. In yet another case, a training consultant doing secretarial training simply felt that there was no need for shorthand or typing skills for secretaries in China. Many of the expatriates have to bring in their own secretaries from Hong Kong or Singapore because they simply cannot find any schools in China that could produce the kind of efficient secretaries that Westerners are used to. If the $100,000 a year in time executives spend time typing emails or sorting files, how much time would he has left for critical and strategic plans and decisions? As the arrival of expatriate executives increases and Chinese executives learn about the need for this efficient partnership, secretarial training will probably be one of the most demanded services by business enterprises in China. The curricula for secretarial training in China will probably have to go through some adjustment. ...At least in order not to overburden the secretarial candidates with courses such as The History of Chinese Revolution, The History of Chinese Literature, and to add some needed practical skills in there instead. In one executive secretarial training courses, I wrote in Gregg shorthand on the whiteboard: "If you can read this, please stand up" All of the trainees sat still, motionless and looked at each other wondering what I was doing on the board. That's how big and how untapped the market is. I hope that someone from the Katherine Gibb School of Secretaries hears this. MBA Boom Chinese government approved an experiment in developing MBA programs at 9 universities in 1991. The number of MBA programs increased to 26 universities in 1994 and 56 by 1997. As of summer 2000, there were 34,240 admitted to MBA programs throughout China, from which 7,142 successfully graduated. Like the opening up of the country to foreign investment and technological transfer, MBA programs in China are not without the usual conflict of interests between economic and political agendas. Until recently, candidates for MBA must pass a test on political ideology in addition to other subjects in their entrant tests. Now, the political test has been moved to the oral interview phrase of the admission process. Academic and professional circles are today still arguing out the balancing act. China certainly needs a great number of professional managers capable of thinking and performing on par with MBAs from other developed countries. On the other hand the MBA is still a part of the nation's educational policy and therefore a very critical institution in ensuring a desirable path of political thinking. When Deng Xiaoping lauched his Market Economy drive, he faced even greater obstacles before an economic system that allowed those who worked harder to enjoy the fruit of their effort could be put into place. Although China has installed some controls over MBA programs at government operated programs, it also, wisely, permitted much more flexibility in accepting international joint MBA programs such as the China European International Business Administration Institute, thus allowing it to excel and develop relatively freely. While the need for professional business managers is a known fact in China, in practice MBA programs in China, like other undertakings, are subject to diverse quality in practice, resulting in varying outcomes. While the central Chinese government has worked very hard to employ standardization of quality in MBA programs, some of the programs seem to be executed better than others. As a result, one of the programs boasted an average of 8 to 10 job offers with a high level of starting salary per graduate, other programs simply graduated their MBAs right into the unemployment rows. Who's Got the Best MBA Program in China? MBA programs in China are assessed internally by givernment public agencies. According to the latest ranking by the Chinese National Supervisory Board on MBA Programs, the top 5 MBA programs in China are: Qinghua University Northeast University of Finance and Economics Nan Kai International Business Institute Fudan Institute of Management Beijing University These programs were assessed in 6 areas: Instructional Facilities Faculty Quality Instructional Management Organization of Learning Instructional Effectiveness Educational Uniqueness Trying to be accurate and fair as they did, strange things did happen. One of the most popular and expensive MBA programs in China, the China European International Business Administration Institute did not make this list of top five. However the CEIBA was ranked 13th in Asia Week's ranking of MBA programs throughout Asia. None of those top five above made Asia Week's list. CEIBA is a joint venture program between the Chinese government, Shanghai Municipal government and the European Union. It is the school that has claimed the average of 8-10 highly paid job offers per MBA graduate. MBA tuition fees at CEIBA cost 30,000 yuan in 1995. It is now 70,000 yuan. For any executive longing to dignify his experience with an Executive MBA program at CEIBA, his dream could come true if he could afford 188,000 yuan. The Cloning of the Cities Wide main boulevards in the city center. Tall glass buildings with round rotating tops. Big plazas, big parks, high tech industrial development zones, new suburban residential areas, new tall and massive buildings for various government agencies such as Customs, City Government, the Telecommunication Company, the Electrical Power Supply Company etc. That's the unwritten formula of modernization of the Chinese cities. In the late 80's to the 90's cities raced to achieve the image of modernization in order to attract foreign investment to their cities. The pressure was on city administrators to modernize and redevelop their cities. The result is the cloning of cities - one looks just like another. A journalist recently complained in his news editorials that this crazy city cloning is killing cultural and historical heritage in China. He cited one of the most world famous tourist cities of China, Suzhou. Suzhou used to be regarded as the heaven on earth and attacted many Chinese emperors with its beauty and culture. Sadly, today, much of the older part of the city has been torn down to give way to shopping centers, office buildings, and new real estate development projects. Today in Suzhou, it is so difficult to see any of those old glorious architectural achievements, canals, and gardens any more. Many tourists to this once famous city also complain about the disappointing trip to Suzhou. The author warned that, unless something is done to contain this wave of city cloning, even more of the unique and valuable cultural and historical heritage will be lost. In 1991 the mayor of Ningbo was transferred to a relatively inactive post in the provincial government on the ground of his inefficient performance on the city's redevelopment. There are also other city administrators who received a whipping due to their behind schedule work of city rebuilding. Nobody, it seems, has ever been punished for destroying the cultural and historical heritages of their city. Very naturally, to rebuild any city with moderniztion while maintaining it's historical and cultural uniqueness is a difficult task that demands know-how in many areas. Copying is relatively simple and fast. Thus, in many cities, they simply opted for cloning. The Numbers Game If the city of Shanghai of 17 million population were to achieve the status of modernization by 2015, it certainly will need a few million private automobiles and matching road surfaces. According to a recent forecast from an industrial source, China's total number of private automobile as of this year is between 1-2 million units. This number is expected to increase to 30 million by the year 2010, nine years from now. I wonder if any of the world's major automobile makers might turn their heads away from this "cookie jar"? Recently, the Chinese government announced the abolishment of price control on small automobiles. The move means that manufacturers are now free to set their own prices. Thus a small city car now costs only around 50,000 yuan comparing to about 90,000 a year ago. With financing from the bank, a Chinese white collar worker with steady job can own an automobile with only abour 1,000 yuan in monthly installment payments. At a Kia Motor's retail outlet in Shanghai, three pairs of young to middle age couples were checking out new automobiles. A young couple in the media broadcasting and advertising profession told me that most of people like themselves either already own a car or are considering one. Another older couple told me that since both of them had earned enough money from their own business 3 years after retiring from a state enterprise, only now, in their 60's, could they afford to buy a car for themselves. The Coming Chinese Consumer Market With the move toward the Latter Three Industries - Education, Recreation, and Culture - China is expected to be the biggest destination for the 1.5 billion international tourists spending more than $2 trillion USD by 2020. Already, spending on sport and recreation ranks 6th among Chinese consumption categories. While aggregate spending on sport in the U.S. has already exceeded $400 billion, and still growing at more than 20% a year, given the rapidly rising income level, it should come as no surprise if this area of spending in China grows to the magnitude of professional sport in the U.S. Perhaps someday, it will be the CNBA who acquire superstars from the NBA, who knows! It is expected that Chinese consumers in 2015 will spend 50% of their time on sport and recreation activities. Today, we can see more and more offerings for recreational classes such as painting, music, dancing, travelling, caligraphy, photography, cooking, home decoration, health clubs, social clubs, etc. These latter day dragons certainly are no longer worrying about how to get a pack of cigarettes, a television set, a bicycle, or even a pair of rubber-sponge slippers, as their did only two decades ago. Piset Wattanavitukul Shanghai, China

Piset Wattanavitukul is Managing Director of P. W. Consultants specializing in Investment, Management and Trade in and with China and Human Resource Development in Shanghai and Ningbo.

...from Piset Wattanavitukul's Awakening Dragon

Piset Wattanavitukul Amigo Consultants Shanghai, People's Republic of China

Piset is the Asia Pacific Management Forum's newest columnist, providing on-the-ground tips, advice and commentary on doing business, marketing, and management in China. Piset is based in Shanghai, one of the world's most exciting cities. You can learn more about Piset by clicking on his photo.

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