Changing China

Changing China:Insightsinto Chinese dynamics

Asia 5Bringing you a flavour of businesstrends in Asia...in just 5 minutes

A Futures Coaching initiativewww.futurescoaching.com

Going underground

Reasons for change

Size, stupid1.3 bn (damn!) : you feel the pressure of people and the need to fight to survive

Ultra competitive: 1 place for every 90 university applicants

Starting overCultural Revolution = no intellectuals, no city culture, no entrepreneurs, no change

Change is so good because past/history is so bad

Keeping up with change is a key status indicator; even the old feel this pressure

Conversations regularly start with dialogue about what's new, what's the latest

Inconceivable rates of change

ExamplesBefore the Expo, Shanghai had 4 metro lines; 3 years later there are 10

There are 6,500 kms hi-speed train lines; by 2020 there will be 20,000 kms

AnecdotesInterviewee left for a week; returning she couldn't find home due to a new tunnel

Bar advertised as venue for world cup TV; it had closed before opening match

InsightState capable of rising to almost any challenge

Rate of change likely to accelerate through own momentum; no signs of inertia

accelerating

At the top : Park Hyattis World's Tallest hotel

Getting to the top

StressChinese hide stress well; no visible tension, aggression

There is mental illness however; e.g. 3 student suicides in early June 2010

But 'face' is important concept i.e. best to not show stress

Letting off steam through alcohol is OK; bosses get tipsy on nights' out

Work rateWork long hours, but to western eyes workers can seem less productive

In truth, there is always a good cultural reason for taking the 'long way round'

Common to see people asleep in public

Leaving the ratraceAlmost impossible to slow down, down shift

Pressure of having to support 6 adults in retirement (2 parents; 4 grandparents)

Social pressure is enormous to keep up with the changes and not be left out

New ways to succeedNew parents want their kids to be more rounded, to have fun

Kids still need to pass exams but are being taught to be innovative

InsightWhilst achievement is all motivating, already signs that success has to be fun

Little Emperor's (single kid's) values will change Chinese society forever

In 10 years, a creative generation will change Chinese brands' image & success

climbing

Land-grab: LV have nearly 40 outlets in China; Burberry aim

for 100 in mid-term

Retail Therapy

It really works!Going shopping is a hobby for most middle-class urbanites

It is explicity claimed as an anti-stress tool; work hard to spend hard

Young spend everything; makes work worthwhile; a very tight connection

From thin airWith low salaries & high rents, how do they spend so much?

In 1998 most were virtually given their homes; since then prices are up 10 times

Home prices have tripled in last 3 years in Shanghai: people feel very wealthy

Grandparents are extremely thrifty but will give anything to their Little Emperors

The stock market has risen 160% in 5 years

GiftsA 'gift' is a term often used to mean a bribe in China

State officials can expect to at least double their salaries through gifts

Luxury brands' might gain as much as half their sales revenues because of gifts

Anecdote: Salvatore Ferragamo customer ordered 300 ties to give as gifts

Municipalities fight to have luxury brands locate in their district, for presige - & gifts

What a luxury!New middle-classes want Western luxury brands – now moving to tier 2 & 3 cities

Luxury wants China – prices 2.5 times European rates; shops look empty but at

these margins, they can afford to wait!

However, C&A, Zara and H&M having success too

shopping

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