China 2005

The
International Forum
CHINA

Shanghai, Hangzhou and Wuhan
April 18-22, 2005

"There is chaos under Heaven, and the situation is excellent" - Mao Tse-Tung

For the outsider, what is happening in China may appear chaotic. But it is the lens through which we look at China that often makes it seem as such. In truth, what some perceive as chaos, many others see as an excellent opportunity. So how does one learn to lead an organization in such an environment if our perspectives are so different?

Introduction to The International Forum in China:

The International Forum in China is for executives who lead a global business here, in the region or who are responsible for the strategic direction of their firms worldwide. This Forum is an opportunity for participants to learn from others who have business interests in China and how the changes taking place here will affect their personal and professional choices in the future.

Participants in the program learn from each other and from leaders in business, government, education, the arts, medicine and society. The program is designed for participants to gain a first hand understanding of the culture and the changes taking place in China today. These "encounters" with people are face-to-face, informal and wherever possible, in their own environment, so that all may understand more clearly and see first-hand the complexity of the challenges and opportunities in China today.

"How do you think about China? What is the lens through which you look at what is happening here? First you must 'know yourself" and from there you can assess what you encounter in China"
-Clinton Dines, President, BHPbilliton China

Encounters with people across China also provide a lens through which to view our own organizations, cultures and countries and in so doing gain a greater understanding of ourselves.

The International Forum creates programs which challenge leaders to learn more about themselves and the world outside their organizations. Our programs combine an in-depth and on-the-ground learning experience of markets and societies in the world that are of strategic importance to participants, while also providing a time for introspection and learning about oneself as a leader. Programs like The International Forum in China emphasize learning from other leaders in many disciplines either through encounters with them or in hands-on experiential learning. The International Forum has been creating Active Learning experiences for leaders all over the world since 1988.

Jan Oksum of Norway bicycles through local neighborhoods and markets in the early morning;

Dominique de Boisseson of Alcatel China and Bill Cook of Shin Caterpillar Mitsubishi discuss their businesses in China;

Ulrika Nilsson of SEB, Sweden learns about life from a graduate business student at Zhejiang University

Turid Anita Brandtzaeg from Norway comes unexpectantly upon a group of school children in a village outside of Hangzhou

"People are now saying that they have everything - so now what? What do they stand for? What is right and what is wrong? Where is the moral compass in China?
- John Pomfret
Former Bureau Chief, The Washington Post, Beijing

China Today

How is China affecting the world and the choices we will be making on a personal and professional level in the future?

Is what is happening in China today sustainable?

How do we lead organizations now in the world and in this region and who do we get to help us?

Among many factors, China’s progress to date is marked by:

A dramatic series of regulatory changes and economic liberalization

An intense focus on acquiring knowledge and moving up the value chain

A growing trend of enterprises going out to the world to learn and compete

A renewed commitment to become a regional leader

An energized and educated younger population with a superior will to work hard and succeed in China and the world today

China also faces many challenges including:

A widening gap between rural and urban populations in terms of income and opportunity

Growing unemployment brought about by the restructuring of the State-Owned sector

Intense competition which is putting tremendous pressure on the "real" value and rate of return of manufacturing in the world today

An increasing challenge of efficient capital allocation, a banking system in crisis and a system which is over invested in, over resourced and at overcapacity

The need to support a growing aging population (expected to reach about 400 million above the age of 65 by 2030) with little to no social safety net

A real concern for the availability of natural resources, energy, water and food for 21% of the world's population

A struggle to find a set of common values, a moral compass and create a civil society after years of living under the all-encompassing system created by Mao in 1949

The International Forum in China Addresses:

How what is happening in China will affect the the rest of the world and the choices we make at a personal and professional level

The different approaches to the challenges of leading a global company in the region

A greater understanding of our own values, institutions and organizations by learning with others from around the world

Personal leadership development and preparation for dealing with enormous change and uncertainty.

Some questions and points for discussion include:

The Significance of the Greater China Economy in the world today:

It has become one of the fastest growing economies in the world and it is now the sixth largest trading nation and third largest economy after the US and EU (adjusted for purchasing power parity)

	It is the largest recipient of foreign direct investment (at $50 billion inbound investment this year, surpassing the US for the first time) yet foreign investment is less than 10% of its total capital investment.
	It has 9.6% of the world's exports and productivity is increasing at 10% per year

Its membership in the WTO has signaled new opportunities for foreign investment and changes in the old rules and restrictions

400,000 mainland Chinese studied overseas in the past 2 decades and 140,000 have returned home. There are 47,000 MBA students in China today.

500,000 Chinese from Taiwan have now moved to mainland China and it is now Taiwan's biggest export market (surpassing the US)

More than 100,000 South Koreans live and work in China in cities like Qindao and Tianjin

	Thousands of Japanese companies are now located in China to access labor, markets and other inputs to produce product for export to world markets
	America’s consumption is financed by Asian credit and manufacturing efficiency. Over time there will be an inevitable transfer of world wealth to Asia from the West. How will it happen and in what time frame?

China's re-emerging Civil Society and the Social Challenges

	As the dismantling of the state owned enterprises continues and with it the social safety net - what is emerging to take its place?
	What value systems are emerging in China now? What does it mean to be "Chinese"? How do views on right and wrong, success and failure differ by generation?

	How will China deal with the growing gap between rich and poor, rural and urban, increasing health hazards and the challenge to its healthcare system in dealing with the spread of AIDS and other diseases such as SARS?
	Will the social challenges in China threaten the stability of the modernizing system, which the party has sought so diligently to maintain? If so, what will be the response?
	How are the values of the younger generation changing? Is there a real shift from collectivism to individualism - with less feeling of responsibility to others? How much is China being influenced by the outside and how much by what is happening inside China? How will this change Chinese society and its ability to deal with future challenges?

The Outlook for Political and Social Stability in China and the Region

China now sees its interests aligned with the developed world rather than the developing nations and is adopting a mentality of "great power". It has moved to resolve its territorial disputes and become more engaged in global issues and security. However, The U.S.'s increasing assertiveness in international affairs since September 11 will undoubtedly lead China to engage in a different way than it has in the past.

	How will China respond to America's changing influence around the world, particularly when the U.S. does something which challenges China's own interests either domestically or internationally?
	Will China succeed in its efforts to influence North Korea into a less threatening position with North East Asia and the world? What are China's interests in a relationship with North Korea?
	The estimated level of non-performing loans in China are as high as $700,000 billion mostly with the State Owned sector. What are the implications for global stability of a financial crisis in China?
	How will China deal with perceived and real threats inside and outside its national borders - including "extremist" ideals of minority groups?
	Domestic coal supplies 70% of China's energy needs, but China will soon be the second largest consumer of oil in the world after the US. How is this influencing China's relationship with its neighbors?
	For the East Asian region, the question of China's growing power becomes increasingly critical. How is the power structure shifting in Asia? and what impact is the continued challenge to Japan's economy having on this?

The "China Way"

China’s system for doing business is deeply rooted in its history and culture. Its entrepreneurial companies, public companies, State Owned Enterprises, and banking system may seem like any other but their purpose and behavior is uniquely different than other systems. The means for acquiring capital, human talent and creating the structures needed to conduct business differ greatly from other economies in the world, particularly the West.

Foreign firms who assume that things in China are as they seem, do this at a cost.

	How do the concepts of ownership, networking, assets and the structure of the firm differ between China and other Asian systems as well as the West?
	What is the primary purpose of the firm in China? Is it to create wealth for shareholders, employ people, help build the society and communities, provide useful goods and services or something else?

In what ways do these differences affect the behavior of Chinese enterprises when dealing with foreigners?

How can a foreign company recognize these cultural differences in the way it manages its operations in China?

	In what ways does China’s culture account for its remarkable economic growth and the emergence of a vibrant private sector? What will it mean for its future?
	How can a foreign company recognize these cultural differences in the way it manages its operations in China?

The Global Company in East Asia

The forces of change and instability which influence business in China and the region and ultimately in the world are looked at first hand with individuals and foreign companies who have now been operating in the region for decades.

	How are global companies structuring their organizations across East Asia?
	How are they integrating cultural differences across the region and aligning their organizations towards common objectives?
	How are they managing their operations in China differently now after years of experience, mistakes and learning?
	How are foreign companies in China dealing with issues of counterfeit and intellectual property violations?

Program Design

The five days of The International Forum in China are filled with interviews and encounters with all types of people in China. It is a rigorous program beginning each day with an optional Tai Chi class or a bike ride through local neighborhoods. The mornings and afternoons are filled with visits to companies, schools, hospitals, homes, villages etc. At least once a day, participants are given a choice of what to do. Some may choose to visit a small company, while others choose to visit a high school to speak with students or be part of a session on values and social change with some of our resident experts. The Forum agenda is a combination of pre-arranged meetings and visits that support the learning objectives of the program. It also includes a selection of unexpected and surprise encounters.

Resources: For the months prior to the Forum, participants receive a series of packages of reading materials written by our expert resources and others as well as a list of questions to consider. They also receive a journal in which to prepare questions and objectives for their participation at the Forum.

The 22 participants of the Forum are accompanied on their journey by a team of expert resource people who travel with us by train and airplane through China. They are chosen because of their extensive experience in China. In April 2004 resource people included: Dr. Ken DeWoskin, University of Michigan; Dr. Gordon Redding, INSEAD, Dr. Derong Chen, Norsk Hydro, Beijing; Professor Tianxiang Zhan, Zhejiang University, Mr. John Pomfret, Washington Post, Beijing; Ms. Chiara Dai, Lexmark International, Shanghai; Professor Guy Olivier Faure, Sorbonne University and Dr. Marc Faber, Managing Director, Marc Faber Ltd, Hong Kong.

For a complete list of the other resources of The International Forum in China please contact us.

Cynthia Carroll of Alcan, at Shuguang Hospital, Shanghai; Participants meet with Jesse Wu of Johnson & Johnson China

Who you meet and how you learn:

Meet with leaders of foreign businesses in China. Share what it takes to succeed, what it is like to be here, to deal with governments and partners, local Chinese leadership, mistakes to avoid and how to seek clarity on your own goals and plans.

Meet with the leaders of a number of “private” Chinese companies in Hangzhou, Yiwu and Wuhan and learn how they are dealing with their own challenges of distribution in China, cost pressures, marketing, quality control, intellectual property violations and growth in domestic and foreign markets.

Visit hospitals, meet doctors and patients, discuss how Western and TCM (traditional Chinese medicine) are being used together, and learn about health care in China.

Discuss with students and faculty members in universities the challenge of preparing China’s leaders in science, technology and business and learn about their individual career aspirations.

Meet residents of a local village, see how changes are affecting family life and community, visit homes, nursery schools (where English is taught!) and assess the emerging values and moral compass in the context of China’s history and present.

Consider the amazing development of Shanghai, in the context of Asian urbanization trends, in discussions with developers and others familiar with city management.

Understand the issues of China’s migration to the cities by meeting people who started a school for children of migrant workers in Shanghai. See how they deal with local government and address the challenge of what to do for Shanghai’s 3 to 5 million migrant workers.

Meet with young business managers from different foreign companies in the interior of China as they face the challenge of penetrating China’s vast inland markets. Learn about questions of branding, distribution, personnel and intellectual property protection.

Visit with a foreigner who has been building a foster care system for China that has already placed half a million children from orphanages in China with parents in China.

Proposed Itinerary
(Subject to Change)

The Program officially begins in Shanghai early on the morning of April 18, though the group will convene informally the evening of April 17. From Shanghai the program travels to Hangzhou in neighboring Zhejiang province. From there it moves to Wuhan, the capital of Hubei province, in the center of China on the Yangtze River. The program ends after dinner on April 22.

Photos: The Bund in Shanghai at night; Participants meet with Dr. Shen, President of Shuguang Hospital in Shanghai

April 18-19: Shanghai

In Shanghai, participants meet with business leaders and employees of foreign (American, German, French, Singaporean, Korean and Japanese) companies operating in China. It is an opportunity to learn face-to-face from people who have led organizations in China for at least the past 10 years and who have immersed themselves in Chinese culture. Their wealth of experience and insight provide a lens through which one can view some of the many changes taking place in China today. Young people from all over China have come to find work in Shanghai. Discussions with them reveal aspirations, frustrations, hopes and insight into China's future.

Shanghai experiences all the benefits and challenges of an exploding urban center. Meetings with people in hospitals, schools, social service organizations and the arts give participants insight into the changes taking place in the urban societies and the challenges facing education, healthcare, the elderly and the migrant population.

As the gateway to China and the city traditionally reserved for foreigners, Shanghai also provides the right setting to consider China's relationship with the region and the rest of the world. China's domestic challenges including an aging population and rising unemployment as well as its increased need for energy sources are discussed with experts and people involved with these issues on a day to day basis.

Ken DeWoskin from the USA meets with employees at the Toshiba factory, in Hangzhou, which now produces half of the company's laptop computers for the global market; Participants meet at the Guan Fu Art Club in Hangzhou and discuss the future of the financial system in China with experts from Beijing

April 20-21: Hangzhou and Yiwu

Hangzhou, once the capital of the Southern Song dynasty, today is the site of one of China's best universities and hot bed for many of China's new entrepreneurs. The city provides an opportunity to experience China's growing "private" sector through meetings in companies with young entrepreneurs involved in software and technology development. Participants will speak directly with young business owners who have begun to expand globally in search of new ideas and markets. The "private sector" is also dominated by companies who have been transformed from state owned or town and village enterprises to semi private companies. Participants will meet with two leaders who have taken old and inefficient state companies and turned them around to now compete globally in manufacturing and retail.

Discussion with employees of some of these companies provides insight into management philosophies, approaches to creativity and an insatiable appetite to learn and to succeed.

This city also provides an opportunity to explore the practice of Traditional Chinese Medicine, particularly in combination with Western medicine.

The small city of Yiwu, is the marketplace for those from developing and developed economies all over the world who have come to buy goods from China at its source. Manufacturers of low cost, small commodities including socks, handbags, Christmas decorations, hair pieces, silk flowers, small appliances, toys etc sell directly to traders and wholesalers from small shops and booths in either one of the three enormous enclosed markets or from the streets of the city itself. Last year it is estimated that its turnover was 20 billion RMB or $2.5B (US) with exports at about $1.5B.

In this city of trade, participants meet with leaders of private enterprises, which did not exist 20 years ago and which today are changing consumer markets around the world through their aggressive cost structures and choice of product.

Photos: Exploring the markets of Wuhan; Dominique Trott, Tianxiang Zhan and Ken DeWoskin speak with students at Wuhan University

April 22: Wuhan

Considered to be at the center of China, where the Hanshui River meets the Yangtze River, it is the largest inland port in the middle section of the Yangtze and a major stop on the Beijing-Guangzhou railway. It is also part of China's "go west" initiative to bring economic development further into the interior. Surrounded on all sides by rich farmland, the city is slowly taking over rural areas as it expands and develops.

In Wuhan we meet with Chinese and foreign firms from textiles to technology. University students from all over China come to Wuhan to study at one of the 47 universities in this city and will speak frankly with us about their job prospects, their home towns and their views on China and its future.

Wuhan is home to many treasures in particular a collection of Bronze bells and musical instruments from the the Warring States period (482-221 BC). Viewed as part of the mandate of heaven, music played a key role in the moral development of the gentleman's character. The order established in music was presumed to be a model of Heaven's perfect harmony. The twelve note non-tempered scale that was created in China in 400BC is both a scientific and artistic wonder. Participants discover the secrets of this era not well known to many in the West.

The city is also a site for a discussion of the ancient thought leader, Confucius, and how what he wrote over 2,000 years ago still has relevance to understanding China and Chinese culture today.

The villages surrounding Wuhan provide insight into China's changing rural landscape and the social challenges brought about by China's economic reform. How displaced farmers are finding alternate sources of livelihood and what their hopes are for their children are shared in informal talks with them.

Participants will meet the owner and employees of a small machine and die shop in the center of Wuhan, which hires laborers from surrounding villages and produces plastic components for export.

These face-to-face encounters with people from all parts of China’s society, economy and leadership are considered in an individual and group project for presentation and discussion on the final evening of the Forum.

"China is the most competitive place in the world.
If you can make it here, you will make it anywhere"

- Peter Harris
Javelin Investments

While the schedule may be rigorous, there is still time for laughter, spontaneous conversation with the people we meet along the way, new friends and a little time for dancing in the early morning with the locals.

To View Photos from The Leaders Forum in China April 2004 click here

For information on how to register for this Forum program please contact us at Mail@internationalforum.com