China’s Disruptors is another in the recent groundswell of books examining China’s business past (since 1978) and present, and then extrapolating from it to the future to paint a picture of how the country’s re-emergence as a great economic force will change the world. Written by Edward Tse, CEO of a consulting firm with roots in China, the book takes a strategic consultant’s view of the world, with a gee-whizz pleasure at reciting impressive numbers and factoids and a strong sense of current business trends, though with perhaps less sense of where these trends will ultimately lead.
The book starts with the litany of the extraordinary statistics which are testament to the extraordinary rise following opening up and reform, along with potted biographies of the early entrepreneurs who turned inefficient state-run segments into today’s all-conquering giants like as Huawei and Lenovo. We get a welcome chapter on the creativity of Chinese businesses. The failure of Western media to appreciate the innovation of these firms is clearly down to its expectation that these companies should be innovating as Western firms do. However, as the book makes clear, the creativity required by Chinese companies is of a very different order. For example, Alibaba’s use of an escrow payment system was necessitated by the lack of a credit system, while it’s invention of Alipay came about to handle the volume of online payments. If developing economies are going to be the drivers of the world’s growth, then Alibaba, which managed to grow in spite of poor national logistics and infrastructure, will be one of the foremost models. Similarly, the low cost smartphone manufacturer Xiaomi will surely be far more emulated than Samsung or Apple.
The disruptors to whom the title refers are, of course, the emergent Chinese companies like Geely (which purchased Volvo), Tencent (which has popularized micro-purchases in a way no western internet company has), Alibaba (the world’s highest valued retailer, which has no inventory), and Xiaomi (which crowdsurfs for ideas for its weekly updates to its mobile OS). The time of copycatting Japan and the US is over, one Chinese executive notes a touch ruefully; Chinese businesses must now develop their own models. Where they will go from here will likely be one of the main stories of the 21st century.
Published in Business Tianjin