Four days in Shanghai for a procurement
roundtable gave Steve Bagshaw an inkling of the commercial power yet to be
realised by China
China plays a huge
part – possibly a disproportionately large part – in our collective procurement
thinking. I hadn’t visited the country until last month when I went there to
host a roundtable discussion in Shanghai and visit two supplier factories just
outside the city.
Spending four days
in such a huge city, not to mention a vast country, presents only a tiny view
of “what it is like”. But my observations and the details of the conversations
I had with senior buyers (both Chinese and European) revealed some surprising
results.
First, the
conversations themselves. I was truly amazed how many people spoke English to a
high standard – a really high standard. Now, of course Shanghai is the
commercial capital of the country and such high levels of linguistic skills
will not be found everywhere. Twenty years ago I worked managing foreign
student study programmes to the UK. Many of the study fellows (as we quaintly
referred to them) were from China and very few spoke English to any meaningful
level, so the huge change has happened very quickly. Speaking English is no
guarantee in itself of commercial ability, but it does give a good indication
of what is important to stimulate success.
You can’t go very
far in China without somebody raising the issue of corruption. There is quite a
lot of disagreement over the extent to which it happens. Some say it is rampant,
others take the view it is no worse than anywhere else. But what was agreed
among people I spoke to is that less effort is put into prosecuting those found
involved in corrupt activities. This masks the problem and has the unfortunate
consequence of allowing miscreants to move from one company to another
undetected.
The issue of
working conditions has also attracted a lot of attention. Rightly so. I toured
two factories and I have to say they were pretty much like factories in the UK
– except they didn’t have the radio on. Of course nobody would volunteer to
show me around a terrible hovel staffed by children, but nonetheless there was
nothing Potemkin village about either plant. Just uniformed (and uniformly
young) workers making parts for the things we use day-in day-out.
That isn’t to say
that problems don’t continue over working conditions in China. While I was
there local media reports covered (yet) another suicide at a factory where
eight other employees had already taken their lives. The consensus is that
these problems continue in the electronics and clothing sectors, but not
elsewhere. Like corruption, the problem remains, but doesn’t impede the truly
rampant growth.
China is desperate
to move away from being known as the place that can compete only on price. It
wants to compete on products and expertise. And if the developments of the past
15-20 years are an indication, they will do exactly that. And quickly. As one
expat said to me: “Miracles happen here.” For sure things happen quickly.
Skyscrapers appear within months, roads and railways are constructed at
breathtaking speed. Industry leaders there know there is no point in trying to
compete in areas sectors such as automotive. But for newer areas – wind
turbines and solar power were the two that came up most frequently – China is
starting from the same point. If the Chinese apply the same dedication to these
sectors as they do to linguistic expertise and infrastructure, they are very
likely to succeed.
