The changing face of China CEOs

Dr Laurie Underwood, senior associate professor at Xi’an Jiaotong-Liverpool University's International Business School Suzhou recently co-authored China CEO II, the sequel to the popular China CEO published 15 years ago.

The book, based on interviews with 25 China CEOs of multinationals, is full of insights and advice in this ever-changing field.

Dr Underwood offers five key pieces of advice to those wanting to do business in China:

1. Immerse yourself in Chinese culture and society

That’s my top advice. In China, business is still highly influenced by culture, such as the continued importance of face, guanxi (relationships), and humility. As a newcomer, you can’t avoid making cultural mistakes. The best strategy: quickly find a trusted Chinese ‘insider’ who can help you to avoid faux pas. This could be a member of your team or – even better – a Chinese peer outside of the company. One of the China CEOs I interviewed sought to add 500 Chinese friends on WeChat. Building your social network in or with China takes time, but the rewards are concrete.

2. Understand the key role of government in business

Open communication with the government on all levels – from the local district to national ministries – remains a critical component to successful operations in China. Aligning your company goals with those of the government is usually imperative. Like my first piece of advice, this lesson has stayed consistent from the last book.

3. Don’t underestimate Chinese competition

In the first book, the CEOs of multinationals still talked about having a competitive edge, whether in terms of technology or product quality. Today, that edge is gone. Now MNCs compete head-to-head with Chinese firms, and more Chinese firms are expanding internationally.

4. Keep up with China’s disruptive tech advances

No longer the “factory of the world,” China is now the world leader in many aspects of digital technology. Many MNCs are bringing the digital developments emerging in China – in digital marketing, fintech, and consumer technologies – back to their home countries.

5. Understand the changing ‘China CEO’ profile

When we wrote our first book, all 20 CEOs interviewed were men. We couldn’t find any female CEOs among the companies we profiled. This time, we are delighted to have interviewed four female top executives and eight Chinese nationals. It’s a clear sign of changing times! Also: among the international China CEOs included, most expect their successor will be Chinese and all have extensive China experience and solid Mandarin skills.

China CEO II (Wiley, 2020) was written by Dr Underwood and Professor Juan Antonio Fernandez.