Are Chinese Businesses Like Ours?

The answer to the question of whether Chinese businesses are like ours depends on who is doing the answer for you.  The government of China would say, "they are just like yours" having Boards of Directors, being offered on foreign stock markets, and being independent of the government.  It is the last one I take issue with.

There are several examples in my book that lead a reasonable person to say they are not like our companies in one respect.  Performance in the Communist Party has nothing to do with the career of business leaders outside of China, but inside, it does.  http://www.amazon.com/The-Chinese-Information-Communications-ebook/dp/B00BUTEHEA/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1366117421&sr=1-1&keywords=dennis+f.+poindexter

Today brings another good example to add to China Mobile and Alibaba.  The Wall Street Journal has the story of Jiang Jianqing, "who built Industrial & Commercial Bank of China, Ltd. into the most profitable state-owned bank in China."  [see Tor a Top Chinese Banker, Profits Hinder Political Rise, Lingling Wei and Bob Davis in today's Journal]  Once again, we see profit and loss has less to do with rising in the ranks of China's business than position and likability in the Party.  Like China Mobile, this leader of the banking industry was passed over for promotion because he didn't pay more attention to the Party.  The fact that he was successful in business was no help there.

If we were more like the Chinese, we could rise to the top of our career field by being a good member of the Democratic Party and being successful in our business area.  Those two might get a person elected to public office here, but they might not.

So, when the Chinese say, "We are just like you"  they don't mean it literally.  They just want you to believe they are just like us.  Where it matters is when the state says to loan more money to our growing industries, when the bank knows there is greater risk in doing that and declines to increase its risk.  For that judgement and good business sense, a person can never go any higher in his career.  So, are they just like us?  I would hate to think so.