Is partnering with China better than being left out?

Tuesday, November 29, 2011 11:59
Posted in category Going to Market

Speaking at a panel discussion at Fortune’s Most Powerful Women’s Summit, General Electric Senior Vice President Charlene Begley said that it was better to partner up with China versus being left out.  Not the first time that a GE executive has expressed some misgivings about doing business in China..

The comments come at an interesting time.  China recently “relaxed” the domestic innovation buying policies, the chambers are all reporting that their member companies are seeing more profit this year (and expect better next year), and nearly every day a new foreign retailer is expanding their presence in China’s major cities.

But, are things really that good?  Are they really that bad?  Should firms see China as a “better to join than be left out” market?  And what should firms give up to make it in China

These were questions that this weeks Bloomberg piece China Halts U.S. College Freedom at Class Door I think highlights in amazing detail, and given my work with the China Europe International Business School .. well, it struck a cord.

The article itself leveraged a recent issue at the Nanjing Hopkins Center where the partnership between the U.S. side and Chinese side was put to a test, a test that the Chinese side “won”.  A partnership with 25 years of history, and one that has resulted in one of the most widely respected “China” programs, the test came in the form of a student experiment in bringing together Chinese and Western contributors to write about current events in a new publication.

A publication that was to be distributed off campus.

Where it all started to unravel was when one of the Western students posted a piece on China’s leadership that was not received well by the Chinese side, catalyzed Chinese contributors to pull their pieces, and eventually ended up on the desk of the Chinese dean… needless to say, a few of the Western students were called into the principal’s office for a cup of tea.

For the authors, this was the example they needed to make the case that Hopkins (in their pursuit of success in China) has had to give up some of its values.  To set aside of piece of who it is in order to maintain its presence in China.

The article then goes on to examine the impact that this incident will have on the wider trend of well respected institutions that are setting up in China (Duke, Harvard, Stanford, and NYU).. and offers some choice quotes from the Deans of those schools:

“The one thing we have to do is maintain our academic integrity, our academic independence,” Bollinger said. “There are too many examples of a strict and stern control that lead you to think that this is kind of an explosive mix.”  … which is why (according to the authors) Columbia has no plans to open a full campus like the others

Duke (who will open a campus in 2013, administrators have had “pretty good conversations with people at Hopkins” and would be comfortable drawing similar distinctions between “intra-campus discussion and what you do at large,” President Richard Brodhead said. [..] “We know China does not observe the same norms of First Amendment rights that we’re used to in this country,” Brodhead said

Which leads me back to the original question.  Is it better to be in China than not?

Should academic institutions at the caliber of Stanford, Harvard, NYU, and Duke come to China no matter what?  Even if they have to sacrifice some of their “integrity” to make it work?

If nothing else, I hope you’ll enjoy the article as it is an interesting case of where a little issue can create ripples that test even the longest relationships.  For me, I personally found the entire writeup of the event a bit blown out of proportion, however the point that the article was trying to make was a good one.

That, regardless of contract or explicit intentions, there are lines in China that exist and firms (academic and otherwise) do have to make a decision about whether they will observe those lines (by moving their own) or defend their lines (and accept the loses that come with the situation).

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