Adopting The China Strategy: Aggressive Enterprise vs National Development

China Development Model
China managed to grow its economy faster than any other country in history

AFRICANGLOBE – Undoubtedly, China’s economical success is phenomenal. Some are challenged by it; some intimidated. And some feel threatened. I fall in the category of those challenged by it, and it fueled my curiosity to know how China achieved its present economic status. Several sources have analysed the transformation of the Chinese economy, but I laid my hands on a book titled: THE CHINA STRATEGY by Edwards Tse which attempts to narrate the enterprise side of the coin.

It is important to quickly mention that different people have their perception of the Chinese experience. While some condemn some of the approaches to building their national wealth with international prominence,  there is one that even though condemned, should never be ignored by any country aspiring to develop its economy: it is Aggressive Enterprise.

Edwards Tse started the first chapter of his book by stating Li Ning as one of China’s most recognizable faces. He shot to fame in 1984, winning six medals in gymnastics competitions at the Los Angeles Olympics, three of them gold. Since then, he has remained in the spotlight by becoming one of the country’s most successful businessmen as the owner of China’s largest sportswear company. The eponymous Li Ning brand has more than 7,550 retail outlets across the country and annual sales of more than $980 million.

 The Li Ning Company Limited is still tiny compared with Nike and Adidas, whose global revenues in 2008 were $18.6 billion and $15.9 billion respectively. But Li Ning’s growth is faster; its global marketing, still in the beginning stages, includes sponsorships of major leagues in the United States, Argentina and Spain.

 Then the 2008 Olympics went to Beijing. Li Ning was chosen to light the torch at the opening ceremonies in Beijing’s Bird Nest stadium, in front of a television audience of more than a billion viewers. The moment must have been particularly difficult for Adidas, which has spent a quarter billion dollars on Olympic sponsorship and marketing during the run-up of the games. Suddenly, here was not just one of China’s most famous Olympic gold medalist, but one of their leading business rivals- and a living symbol of the intent, ambition and competitive spirit of Chinese enterprise. In a handful of seconds, he stole the show from his western competitors.

More captivating to me is the next paragraph- “China has hundreds of thousands of Li Nings: entrepreneurs who have driven one of the fastest sustained national economic growth rates of any country in the world history. They may not all be as successful as Li. But after decades of being held back by their country’s adoption of socialism, they and the rest of the Chinese population are moving forward with the force of water gushing from a broken dam. The intensity of their aspirations, joined with the plans of the government and the presence of the country’s hundreds of millions of ordinary people, suggests that future developments in China will over-shadow even the momentous change in recent past- and in a way that affects the strategy, and even the identity of companies around the world (Italics mine).

From the foregoing, I like to stress …but one of their leading business rivals- and a living symbol of intent, ambition and competitive spirit of Chinese enterprise. An average Chinese has the spirit of enterprise and competition in the global economy. Another word that best describe the Chinese spirit of entrepreneurship is Aggression. This remains a truism.

While I join many others, particularly Development Economists who have pontificated the harm of globalisation and free trade economic policy by the world economic rules dictators, I must say that China has rather turned globalisation and free trade to its advantage. China has actually proved right the preaching of the proponents of free trade that openness is a veritable tool to economic prosperity.

Adopting the China Model in Africa

As mentioned in a previous article, “A cursory look at the China’s approach with that of Nigeria reveals the Nigeria is also adopting Foreign Investment (through direct and portfolio investment) and the Local Content recipe.” Factually, one of the harm of free trade policy is such that a well industrialised country can freely export her goods (subject to duties) into a developing country which local market is struggling for survival. One should also bear in mind that a product processed with machine will produce more quantity and make consumer cost more affordable. This is one of the reasons why it is challenging for an average shirt maker in a country like Nigeria to compete with a global brand like TM Lewin. But China understands the fact that it takes aggression to be a player in the global economy and will settle for nothing in achieving this. Thus, the statement “tough times don’t last but tough people do”  points to China and the result is quite obvious.

An average Nigerian shares this spirit of enterprise. Irrespective of the environmental frustrations, few still grow successful enterprises while major part of the population struggle to sustain their ventures. For millions of those who are unemployed, the spirit is also there but the challenge is where to engage the spirit. It is rather unfortunate that in the midst of so much economic potentials in the country, the youth who make up about 70 percent of the population (the core of the country) are substantially inactive.

Furthermore, Tse mentioned in his book that there are hundreds of thousands of Li Nings, entrepreneurs who have driven one of the fastest economic growth rate  in the world. What readily came to mind is the imagination of hundreds of thousands of the likes of Aliko Dangote, Oba Otudeko, Mike Adenuga permeating every area of economic potential in Nigeria and their likes across the continent of Africa with huge turn-overs in their companies. Not only will the people never struggle with poverty, but the standard of living will greatly appreciate.

Nigeria should be able to focus on major field(s) for economic dominance, say I.T, Healthcare or tourism — a la the Indians. While I do not totally displace this kind of reasoning, I will say Nigeria is far blessed than that. Nigeria prior to the discovery of oil had earned so much from Agriculture and Mining. The advent of oil ran other sectors aground. If Nigeria has been so serious about becoming economically vibrant, adding the oil boom to the already thriving Agricultural, Mining and real sector would have quadrupled the nation’s GDP and Per Capita Income today with proof of good standard of living of the population. The use of technological advancement to facilitate production would have made a phenomenal impact in being a dominant player in the global economy.

According to Tse, after thirty years of opening and liberalizing its economy, nowhere else, not even among the mature markets of Japan, Europe, and the United States, offers the same extraordinary range of brands and products as China. For every drink, Chinese companies make their own versions of every international flavor- and many flavours that are not produced elsewhere. For magazines, there are Chinese editions of such familiar global titles as Cosmopolitan, Vogue, and Elle. Driving on the streets are locally manufactured vehicles from almost every global brand car maker  General Motors (GM) and Ford, Toyota and Honda, Volkswagen (VW) and its subsidiary Audi, BMW and Mercedes, Citroen and Hyundai- plus a host of local auto brands, including Chery, Geely, Brilliance, and Great Wall.

Part Two