China – different perspectives on development

I’m writing this on the bullet train from Beijing to Suzhou travelling at over 300km/hr.  Not bad being able to travel over 1000km in 5 ½ hours for around $250NZD.  I’m having problems getting internet access, so this is no frills without links to other websites…(who is clicking on those anyway?)

Business environment and regulations

Today I met with Sabrina from Dezan Shira, who assists foreign companies operating in China. She gave me a great overview of the business environment, particularly in relation to accounting, tax and law.  NZ and China are not that different in general methods of taxation or the rates applied for corporate, goods, services and local government.

We discussed Free Trade Zones which are now commonplace and highly competitive.  Do these have merit in NZ?  Particularly in locations outside cities to encourage certain industries that suit a regions characteristics or to shift growth away from cities where a business could be based anywhere and more growth in a city will end up costing more in total in the way of infrastructure investment,  household indebtedness and quality of life through longer commuting times.  I like how Free Trade Zones are used as a way testing/piloting what happens in different industries and regions.  There’s a simple overview of the Shanghai Free Trade Zone on their China-briefing.com website.

Being Asia-ready and enabling growth

While in Boston I’d met with Richard who also works for Dezan Shira heading up their North American operations.  He has spent considerable time in China so had some fascinating insights that really challenged me not to apply my own world view to other countries like thinking long term and in cycles rather than short term and linear.  The more time I spend in China I realise it’s more a civilisation than a country.  This must bring challenges in managing growth when overall stability is important but each locations want growth.

It raises some interesting questions around where future growth will happen in the world and how is society responding to the shift in world dynamics?  With Europe and US growth flat, Asia is predicted to play to account for much of the future growth.  So much of NZ”s world is centred on our past links to the Western world with the UK, Europe, US and Australia.  Are we China and Asia ready?  Potentially everything will require some form of change from tourism offerings, language, links with government, skills needed by people, what is taught in our education system to name but a few (see Asia NZ foundation release on these lines last week).   As raised yesterday, perhaps it’s a case of starting small and gradually increasing offerings rather than a big bang approach.  What have we got to lose versus the cost of missing out?

Richard’s insight on the best way to enable economic growth locally was not at all what I expected but on the mark – talented people innovating in local government (yeah right you say!).  As an observation – business and government are much more intertwined in the Europe and China than NZ…food for thought.

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