CKGSB workshop showcases the Chinese way of business to the world

Renowned mainland scholar says international firms must embrace China market and foster collaboration with its brands

Last Saturday, top mainland business school, Cheung Kong Graduate School of Business (CKGSB), hosted a workshop, “Winning in China: New Strategy for MNCs”, at the Four Seasons Hotel to promote its CKGSB-IMD (International Institute for Management Development) Dual Executive MBA programme.

In his speech, Professor Teng Bingsheng, associate professor of strategic management and associate dean of the CKGSB European Campus, noted that multinational corporates (MNCs) on the mainland are facing major challenges due to changes in the business environment. “There are three main hurdles for MNCs,” Teng says. “Number one is the rising cost of manufacturing – they can no longer take advantage of low labour costs and rents to make the mainland their manufacturing base. The second is the growing competitiveness of mainland brands – MNCs no longer hold a distinct advantage in product quality. The third is the stronger enforcement of anti-bribery regulations.”

In facing these challenges, Teng says, MNCs must adjust their mindset in doing business there. “Instead of seeing the mainland as a place to manufacture goods, MNCs should be thinking about making use of its white-collar workforce,” he says. “For example, mainland engineers are considerably cheaper than those in developed regions. MNCs should think about bringing high-end product development to the mainland rather than building factories.”

In recent years the mainland has demonstrated that it is capable of manufacturing world-quality products such as Xiao Mi smartphones. Teng thinks MNCs needs to acknowledge the abilities of local brands and bring their best products to the mainland market in order to stay competitive. “I don’t think companies can get away with bringing in second-tier products anymore,” he says. “Competition will be intense as mainland companies enhance the quality of their products. MNCs need to respect the mainland as a world-class market.”