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EMBA students from London Business School visited BiMBA

Apr 18-2013   



 

EMBA students from London Business School visited BiMBA

On the afternoon, Dec. 16th, the famous economist Richard Portes led a group of more than 70 EMBA students from London Business School to visit the National School of Development, Peking University. They came here to attend the communication program organized by BiMBA (Beijing International MBA at Peking University).

The communication programs were divided into two sessions. The first session was a small academic discussion hosted by Professor Richard Portes, with Professor Huang Yiping and Professor Xu Jianguo from CCER invited as special guests. Professor Xu first summarized Chinese current economic structure and explained to the audience how to boost Chinese domestic consumption and balance the Chinese economy. Then Professor Huang shared his thoughts on the Chinese economy from a macro perspective. He said that “when talking about Chinese economy, people may easily go to two extremes”, which means that people tend to take Chinese economic take-off during the past two decades either as an unprecedented “world miracle” in terms of GDP growth rate, or as a development model that is problematic, unsustainable and inefficient if measured by certain indicators, such as energy intensity or green GDP. In Professor Huang’s view, these two conditions co-exist and do not conflict with each other. The recent years witnessed Chinese robust economic development, but also problems in the economic structure, namely “overheated investment, sluggish consumption.” Looking back at the past 60 years, Professor Huang concluded, the first 30 years’ development was clinging to a central-planned economic model and failed, while the later 30 years was marked by the practices of comparative advantage and free economy, which turned out to be a great success. But Professor Huang also mentioned that the reform has not yet finished, and one example he gave was that the factor market is still not fully opened. The state-owned enterprises controlled most resources and the pricing power of the factor market, which distorts the initial resource distribution and the end price at the production market. Professor Huang is optimistic about the future reform, pointing out that the reform direction is to free the factor market and make private sector’s entry into certain industries easier, but he still emphasized “gradualism” at last.  


Then Professor Richard Portes asked two questions about Chinese economic development. The first one was why China was facing the overseas pressure of RMB appreciation and floating its foreign exchange rate. Professor Huang responded that it was necessary to float the RMB exchange rate, because many Chinese neighboring countries had to adjust their domestic interest rates according to the RMB exchange rate. But he also argued that the world’s general economic imbalance was not attributable to China’s current exchange rate system, giving an example that the depreciation of U.S. dollars several years ago did not reduce the American huge indebtedness. Even if the Chinese currency appreciated, there would be upward pressure on other countries’ currencies to balance the world economy.


The second question was about Chinese economic structure. Professor Richard observed that the Chinese public sector have been largely expanded in recent months, which would shrink the private sector. How would this phenomenon affect the Chinese economy? Professor Huang explained that the expansion of public sector in recent months was caused by the “stimulation package” Chinese government injected into the market, which should not be worrying much. The public sector and private sector could nail down a “win-win” situation if the private sector joined in the stimulation plan and provided services to the public sector development.


 Some students also raised some specific questions. One student wanted to know to what extent was China willing to sacrifice its GDP growth for the world economic balancing. Professor Huang said it was true that Chinese economy faced the overheating problem now, but the slowing down of Chinese economic growth would cause economic losses of some other countries. What China had to do was restructuring its economy and balance the development today and development tomorrow. Another student asked how to develop the Chinese service sector. Professor Huang pointed out the importance of soft environment, which included legal system improvement, protection of intellectual property rights and also sharing of market information. The government should open the factor market and reform the banking system, which would make the private sector’s financing more convenient.

 
Before the second session began, Liu Qian, director of the Department of External Affairs and International Program of BiMBA, introduced the BiMBA programs to the visitors. Then two foreign businessmen, John Russell the deputy manager of Weber Shandwick and Thierry Delmarcelle the manager of Greater China region of the Monitor Group, were invited to a small conference entitled “overseas enterprise in China”. Mr. John first introduced to the audience Chinese investment environment, suggesting the importance of public relations for investing in China. The overseas enterprise should find right positions and develop sound relationships with Chinese governments at all levels, because Chinese government often have great control over its economy. According to Mr. John, Chinese economic policies always have two implications, one at policy level and the other at the political level, which caused some problems such as low efficiency of the government and the lack of definition of authority and responsibility. To make the audience better understand the Chinese political and economic environment, Mr. John compared the governing styles of Brussels, Washington D.C, and Beijing, explaining how to build good public relations particularly in China.  

  
After Mr. John gave a clear picture of Chinese investment environment, Mr. Thierry took Monitor Group’s business in China as an example, telling the audience several factors contributing to successful investments. The first factor is to improve the company’s management level and understand the company’s strength and weakness. The second factor is to understand Chinese politics, and develop “guanxi” in the political and business circle. As for the third factor, Mr. Thierry put emphasis on the sustainability of development and entrepreneurial innovations.


Then Mr. John and Mr. Thierry discussed with the students from London Business School about some hot topics about Chinese economy. Some students feared that the lack of intellectual property rights protection in China and questioned whether rampant fraud and piracy would hurt the economic benefits of overseas enterprises. Mr. John admitted the problems really existed, but China had progressed a lot in anti-piracy movement. He also emphasized that a good protection of intellectual property rights would take a long time, giving an example of the famous British writer Charles Dickens, who was extremely annoyed about the piracy of his books in the United States. Other students showed their concerns about the obstacles to investment in China, and Mr. Thierry focused on differences in culture and language, reasoning that doing business in China should follow certain rules and models deeply rooted in Chinese cultures. Therefore a new entrant into Chinese market should better start its business in the form of joint venture. At last, Mr. John told the audience that foreign investors in China should well take account of Chinese patriotic feelings and not touch the “forbidden line”.


On the evening, EMBA students from London Business School and MBA students from BiMBA made communications on a buffet party at the National School of Development. Through introducing to each other their own programs and playing games together, they deepened mutual understandings and developed good mutual friendships.

EMBA students from London Business School visited BiMBA

Apr 18-2013   



 

EMBA students from London Business School visited BiMBA

On the afternoon, Dec. 16th, the famous economist Richard Portes led a group of more than 70 EMBA students from London Business School to visit the National School of Development, Peking University. They came here to attend the communication program organized by BiMBA (Beijing International MBA at Peking University).

The communication programs were divided into two sessions. The first session was a small academic discussion hosted by Professor Richard Portes, with Professor Huang Yiping and Professor Xu Jianguo from CCER invited as special guests. Professor Xu first summarized Chinese current economic structure and explained to the audience how to boost Chinese domestic consumption and balance the Chinese economy. Then Professor Huang shared his thoughts on the Chinese economy from a macro perspective. He said that “when talking about Chinese economy, people may easily go to two extremes”, which means that people tend to take Chinese economic take-off during the past two decades either as an unprecedented “world miracle” in terms of GDP growth rate, or as a development model that is problematic, unsustainable and inefficient if measured by certain indicators, such as energy intensity or green GDP. In Professor Huang’s view, these two conditions co-exist and do not conflict with each other. The recent years witnessed Chinese robust economic development, but also problems in the economic structure, namely “overheated investment, sluggish consumption.” Looking back at the past 60 years, Professor Huang concluded, the first 30 years’ development was clinging to a central-planned economic model and failed, while the later 30 years was marked by the practices of comparative advantage and free economy, which turned out to be a great success. But Professor Huang also mentioned that the reform has not yet finished, and one example he gave was that the factor market is still not fully opened. The state-owned enterprises controlled most resources and the pricing power of the factor market, which distorts the initial resource distribution and the end price at the production market. Professor Huang is optimistic about the future reform, pointing out that the reform direction is to free the factor market and make private sector’s entry into certain industries easier, but he still emphasized “gradualism” at last.  


Then Professor Richard Portes asked two questions about Chinese economic development. The first one was why China was facing the overseas pressure of RMB appreciation and floating its foreign exchange rate. Professor Huang responded that it was necessary to float the RMB exchange rate, because many Chinese neighboring countries had to adjust their domestic interest rates according to the RMB exchange rate. But he also argued that the world’s general economic imbalance was not attributable to China’s current exchange rate system, giving an example that the depreciation of U.S. dollars several years ago did not reduce the American huge indebtedness. Even if the Chinese currency appreciated, there would be upward pressure on other countries’ currencies to balance the world economy.


The second question was about Chinese economic structure. Professor Richard observed that the Chinese public sector have been largely expanded in recent months, which would shrink the private sector. How would this phenomenon affect the Chinese economy? Professor Huang explained that the expansion of public sector in recent months was caused by the “stimulation package” Chinese government injected into the market, which should not be worrying much. The public sector and private sector could nail down a “win-win” situation if the private sector joined in the stimulation plan and provided services to the public sector development.


 Some students also raised some specific questions. One student wanted to know to what extent was China willing to sacrifice its GDP growth for the world economic balancing. Professor Huang said it was true that Chinese economy faced the overheating problem now, but the slowing down of Chinese economic growth would cause economic losses of some other countries. What China had to do was restructuring its economy and balance the development today and development tomorrow. Another student asked how to develop the Chinese service sector. Professor Huang pointed out the importance of soft environment, which included legal system improvement, protection of intellectual property rights and also sharing of market information. The government should open the factor market and reform the banking system, which would make the private sector’s financing more convenient.

 
Before the second session began, Liu Qian, director of the Department of External Affairs and International Program of BiMBA, introduced the BiMBA programs to the visitors. Then two foreign businessmen, John Russell the deputy manager of Weber Shandwick and Thierry Delmarcelle the manager of Greater China region of the Monitor Group, were invited to a small conference entitled “overseas enterprise in China”. Mr. John first introduced to the audience Chinese investment environment, suggesting the importance of public relations for investing in China. The overseas enterprise should find right positions and develop sound relationships with Chinese governments at all levels, because Chinese government often have great control over its economy. According to Mr. John, Chinese economic policies always have two implications, one at policy level and the other at the political level, which caused some problems such as low efficiency of the government and the lack of definition of authority and responsibility. To make the audience better understand the Chinese political and economic environment, Mr. John compared the governing styles of Brussels, Washington D.C, and Beijing, explaining how to build good public relations particularly in China.  

  
After Mr. John gave a clear picture of Chinese investment environment, Mr. Thierry took Monitor Group’s business in China as an example, telling the audience several factors contributing to successful investments. The first factor is to improve the company’s management level and understand the company’s strength and weakness. The second factor is to understand Chinese politics, and develop “guanxi” in the political and business circle. As for the third factor, Mr. Thierry put emphasis on the sustainability of development and entrepreneurial innovations.


Then Mr. John and Mr. Thierry discussed with the students from London Business School about some hot topics about Chinese economy. Some students feared that the lack of intellectual property rights protection in China and questioned whether rampant fraud and piracy would hurt the economic benefits of overseas enterprises. Mr. John admitted the problems really existed, but China had progressed a lot in anti-piracy movement. He also emphasized that a good protection of intellectual property rights would take a long time, giving an example of the famous British writer Charles Dickens, who was extremely annoyed about the piracy of his books in the United States. Other students showed their concerns about the obstacles to investment in China, and Mr. Thierry focused on differences in culture and language, reasoning that doing business in China should follow certain rules and models deeply rooted in Chinese cultures. Therefore a new entrant into Chinese market should better start its business in the form of joint venture. At last, Mr. John told the audience that foreign investors in China should well take account of Chinese patriotic feelings and not touch the “forbidden line”.


On the evening, EMBA students from London Business School and MBA students from BiMBA made communications on a buffet party at the National School of Development. Through introducing to each other their own programs and playing games together, they deepened mutual understandings and developed good mutual friendships.