Prior to AmCham Shanghai, Gibbs worked in Asia over for more than two decades, mostly in banking and technology businesses. He spends about half the year at this home in San Francisco, and the other half in Shanghai. Edited interview excerpts follow.Gibbs: The discussion about China has become entirely consumed by national security and other very contentious topics.
This is a new version of China, there’s no question about it. The risks are high and the challenges are different. Many of us are not happy about the direction China seems to be heading, turning inward and putting more emphasis on self-sufficiency. Beijing unfortunately has a very different relationship with the West than it did before. But that doesn’t mean the business opportunities simply go away.
I deliberately picked authors that I knew would have a diversity of views. Some are China-born, others are not. Both groups of authors make cultural observations, but you can see a difference between what the foreigners have to say from what China-born people have to say when they address the questions like guangxi , mianzi and those kinds of things.
In the next chapter, I asked Jean Liu to talk about government relations. This is also extremely important for all businesses operating in a place like China. She happens to come from the education business, but the relationship between business and local government is fundamental to success in the China market and different from how we operate here in the United States.
That may seem unfair or restrictive, but given the role they play in the economy, that's actually helpful. They can save you from wasting a lot of time and resources if what you’re trying to do doesn’t fit their plan. If you accept that the government is there to guide you and let you know what's likely to be successful and what's going to be a non-starter, then local government is a good place to start.
American businesses have generally done well at localizing management. They have not done as well at localizing decision-making. Those are actually two different things. You have situations in which local managers are not empowered, and decisions have to keep going back to headquarters. That’s a problem. The need for decision-making flexibility that creates more flexibility for local actions is an important lesson from the book.