To understand China, we should unlearn what we know
Every day now, we see a new headline about China. The news is not about doing business in China, not about the Chinese economic miracle, nor is it about shocking pollution levels, not even about human rights violations.
Today, the media warn us about China going West. It’s about Jack Ma who gets invited like a head of state in Belgium. It’s about China seemingly successfully arm-wrestling Trump on trade tariffs. Or even about how China is becoming more ‘open’ and ‘ecological’ than many Western countries. Did we miss the memo that China has changed? Or is this a smart trick of the Chinese to fool us?
Politicians, business leaders and journalists are more than ever puzzled with China and are reaching out to China experts to make sense of it all. They ask questions like whether China has really moved from ‘made in China’ to ‘create in China’. Whether China is opening up or getting more authoritarian?
To understand what is happening, people also read books about Jack Ma or attend a Chinese culture seminar and encourage our children to learn mandarin. To understand China, the key isn’t learning: it’s unlearning. To understand modern China, one should recognize that the old mental model about China is no longer relevant. Please, don’t hire a China expert, read about Jack Ma or learn Chinese – it will only slow you down and confuse you more. By the time you think you figured out how China works, it will have changed once again. Unlearning China is not about forgetting, but about looking at China with a different mental paradigm. The Chinese companies we read about in our media are embracing a new world, while we mostly try to understand China from their old world. It’s wrong and irrelevant.
Chinese Social networks like Tencent or Bytedance are years ahead of Facebook, because they are not thinking about building a social platform, but about creating a fun, convenient and personal journey for users. Alibaba is going beyond Amazon’s customer-centricity vision by creating an ecosystem that touches any customer’s life every minute of the day. Tesla’s competitor NIO is not interested in producing cars but create a digital vallet like experience in its next-generation self-driving cars. China’s largest online travel company Ctrip.com is miles ahead of booking.com to help you discover new places, people and experiences - by connecting you with people ‘similar to you’ whilst traveling.
To change your mental paradigm, follow four steps:
1. Let go of the image you have about China
Forget about copy-cat China. The drone company DJI or health-tech company iCarbonX will prove you wrong.
Forget about the hierarchical organizations. The home appliance giant Haier will contradict that same management model where middle management is almost non-existent.
Forget about the communist or new pseudo-capitalist country. Think of China as a thriving consumer driven society with a government that stands ever firmer with the rising power of the middle class. A government that clearly has the upper hand today.
Forget about lack of transparency. Search engine company Baidu opened up their AI source code to create an automotive ecosystem, whilst investing into blockchain to increase quality through traceability of suppliers.
Forget about lack of privacy or social responsibility. Most Chinese unicorns today have a strict policy on data privacy, where data belongs to the patient, client or user and cannot be shared. Companies like Alibaba and Tencent have impressive Corporate Social Responsibility programs just to prove they are doing good for society – and it makes a real difference.
2. Use the model of Silicon Valley to understand China
A place where money, big market and great talent is easily accessible. An ecosystem where technology, infrastructure and entrepreneurial culture are conduits for creating the next Google. An environment of hope, can-do and think big ideas to make dreams come true. The new China has all that too, whether in Beijing, Hangzhou, Shanghai or Shenzhen.
What makes China even more potent are its state-of-the-art production houses, pay-it-forward government support and lightning-fast speed of execution. China’s new technology innovators resemble those of Silicon Valley, but live on steroids (factories), the mindset of a champion (execution driven) and with the most powerful personal coach (government).
3. To grasp what is happening in China, you need to ingrain a new mental habit
Imagine China as an unlimited supply of resources – which it often is. Think of an unlimited amount of available money for good projects. Visualize an unlimited number of consumers and market, which keeps growing. Rely on an endless amount of production capabilities and skills to build anything you dream of. Prepare for vast amounts of competitors that will keep you sharp and pro-active. Don’t worry about delays or regulation barriers to implement that crazy new idea – it’s called ‘China dream speed’. Rule out cultural or physical borders, knowing you can rely on millions of new friends who are global citizens. This is how Chinese founders think - from the first-time entrepreneur to Jack Ma. This mindset is probably not what you learned about China so far, as it is so very different from how European managers and founders think.
4. Listen to Chinese dreams, read about its visions, watch closely its future companies, and talk to their new consumers
The journey to discover China’s new normal has only just begun, and it is going to be one of the most amazing changes and advancements in history of mankind. Those willing to be part of it and willing to unlearn everything they know about China, will benefit from it first. Those who keep the old China myths and truths alive, will be fighting the just awoken powerful dragon, instead of flying high with the beautiful new phoenix known to harvest opportunity, success and prosperity.