The Harvard Business Review
recently published an article expanding upon remarks by Muhtar Kent, CEO of Coca-Cola, that China is a better place to do business than the United States. The post, entitled ‘Get Ready for China's Innovation Juggernaut’
, reiterated Kent’s comments that businesses in China enjoy a simpler tax system than their American counterparts, as well as reduced red tape and a less polarised political process.
The article’s author, John Quelch, is dean of the China Europe International Business School
in Shanghai. He highlights the strides China is making in entrepreneurial spirit and commercialising innovation, whilst referencing Kent’s concerns about American bureaucracy. Interestingly, these concerns were echoed in our recent BDO Ambition Survey: Global Opportunities
with CFOs mentioning red tape as a barrier to USA expansion
However, our survey also found that these barriers are far from unique to the USA and are equally applicable to organisations looking to grow into China
. Whilst there are similar challenges awaiting businesses expanding into both China and USA, the similar opportunities - such as market size and access to new customers - are greater and more numerous.
Although, the impressive growth rates available in the expanding Chinese market is what sets it apart from the mature American one, it is clear by talking to our clients and from the BDO Ambition Survey: Global Opportunities
that, despite the vast political, language and cultural differences between the two nations, they are both open for business and share many of the same opportunities and challenges.
In our Survey, an altered focus away from challenges towards opportunities and increased business confidence is also reflected when CFOs discuss their organisation’s own prospects of success. This is in contrast to The Economist’s
recent finding that amongst senior executives ‘global business sentiment is worse now than on the eve of the financial crisis in 2008’
. Despite the erosion of business confidence in the global economy in what is a time of unprecedented change, uncertainty and in many cases, austerity, the BDO Ambition Survey found that confidence is much less fractured when CFOs discussed their organisation’s own plans for cross-border expansion.
The BDO Ambition Survey discovered a great deal of optimism amongst C-suite executives with a clear focus on opportunities. Many are bullish about cross-border expansion into countries, such as China, USA and Germany and the opportunities they represent for growth. The survey found that CFOs believe their expansion initiatives into these new and sizable markets will be successful - as long as they conduct proper research, make sure they have talented, local people on the ground and seek good, solid advice.
Growth is not a panacea to the current financial crisis, however it is clear from our survey that business leaders feel it will be the first step in what will be a long journey to rebuild business confidence in the global economy and the institutions which govern them.