In every consultant, there are bits of being a problem solver, a reporter and a process manager. The way these attributes manifest depends on the person. Most consultants believe they are problem solvers. In reality, lots are more inclined towards the latter two attributes.
By Edward Tse | February 2019
Dr. Edward Tse’s article on China’s philanthropy was published in the augural issue of Social Investor, commissioned by the Chandler Foundation.
From e-commerce platforms and Internet mobility service providers to AI and blockchain developers, Chinese technologies companies are transforming China’s economy and changing entire industries – including philanthropy.
China has a long tradition of giving, although it stagnated for roughly three decades when wealth was nationalized under the rule of Mao Zedong. Today, China is home to more billionaires – 819 in terms of US dollars – than anywhere else in the world, outnumbering the US and topping the Hurun Global Rich List 2018. And China’s super-rich are increasingly engaging in philanthropic causes.
According to Harvard University and UBS, between 2010 and 2016, donations from the top 100 philanthropists in mainland China more than tripled to US$ 4.6bn, and 46 of the wealthiest 200 Chinese billionaires now have charity foundations. Giving is much more common among ordinary citizens as well. It was reported that early in 2016, more than 20% of the total charity in China came from individual donors, a number that has grown steadily over the years.
Corruption and Transparency Woes Impede Progress
Despite those growing numbers, the philanthropic industry has been plagued by corruption and a lack of transparency. These are especially prevalent with non-profit organizations that claim to be government-supported.
In 2011, for example, a woman named Guo Meimei received a substantive amount of money from an official at the Red Cross Society of China, then flaunted her luxurious lifestyle on social media. In 2012, to cite just one other example, the China Charities Aid Foundation was accused of money laundering and embezzling.
For private philanthropists, a number of institutional and social barriers make it difficult for them to build, promote, and sustain charitable organizations. Policies mandating high expenditure rates and low administrative costs are two such barriers. Private foundations are required to spend a minimum of 8% of their previous year’s assets, making it almost impossible to grow an endowment. As a result, philanthropy remains a largely monopolized, state-run sector, and donations are largely limited to a few causes: education, poverty alleviation, and healthcare.
Technology – the Great Gamechanger
However, new technologies have helped bring innovative approaches to philanthropy and encouraged broader participation.
Tech giants, in particular, have already learned to take advantage of their branded merchandises to involve the general public in philanthropic activities. For example, in response to the 2008 Wenchuan earthquake in Sichuan, Tencent, the company behind China’s biggest social network as well as the largest gaming company in the world, established an online donation platform. More than half a million people contributed, raising a total of US$ 2.9m. Tencent added donation options to WeChat, the instant messaging and social media app with one billion monthly active users, and allowed users to give any amount with a swipe of a finger, making philanthropic engagement easier than ever.
New technologies have created more diversified ways of giving. The rising popularity of fitness apps in China has inspired tech companies to incentivize giving among the younger, more health-conscious, generation. Through the Xingshan (“doing good”) app developed by the Beijing-based company iMore, users record the number of steps they take each day, which is then “donated” to charities through corporate sponsors. By the end of 2015, users of Xingshan had walked a total of 2.8 million kilometres, raising more than US$ 4.6m for 52 different public welfare organizations and projects.
Facing the troubled reputations of charitable organizations, new types of charity platforms have stepped in to address both transparency and accountability issues. Real-time updates on donation collections, along with different verification systems, guarantee the funding reaches the right people at the right time. For example, JIAN Charity – launched by Alibaba’s Cainiao Logistics in 2016 – is an online donation platform where people can place orders and then track the real-time location of the items they donated.
When it comes to smaller donations – often a much more manual process – this kind of tracking can be challenging. By encoding the lifecycle of each donation on a blockchain, Ant Financial, a subsidiary of the tech giant Alibaba Group, addresses these transparency concerns and significantly reduces operating costs.
Embedded within a larger digital ecosystem like that of Alibaba’s, philanthropy has an even more magnified potential. On Taobao, an online shopping site, sellers can register for the “Treasures for Charity” program, allowing them to donate a portion of sales revenue to non-profit projects. Sellers not only draw more customers but this also boosts their conversion rate. Even though the per-deal donation can be as low as US$ 0.0058, the cumulative effect is significant: in 2017, 1.8 million participating sellers and 350 million buyers donated a total of 245m RMB (US$ 35.7m) to charity projects the world – owing to the enormous transaction volume and user base on the e-commerce platform.
A New Era for Philanthropy in China
China’s private wealth continues to expand, and philanthropy in the country is on an undeniably upward trajectory. New technologies are unlocking more inventive forms of giving, which become more synergized with companies’ mega business ecosystems. Public awareness about philanthropy is rising, while non-profit organizations are regaining their credibility and trustworthiness. I expect a brighter future.
“Like himan, organizations are driven by their subconsciousness. ‘Business as usual’ is the norm. That’s why many co’s can’t cope with today’s fast-changing environment. The leader’s job is to raise the level of consciousness of the organization so it’s fully alert.”
“The basic requirement of a qualified consultant is to excel in three types of leadership: Thought Leadership, Client Leadership and Team Leadership. Deficiency in any one of these dimensions would make a consultant incomplete.”
Everything in the world is a duality (underpinned by a union or non-duality). Sun and Moon. Yin and Yang. Order and Chaos. Intellect and Creativity. Strategy and organizations all manifest in terms of duality. The best problem solvers are those who are aware of this and can consciously balance the forces within the duality in a dynamic manner.”
With major disruptions taking place on both the demand and supply side epitomized by technological changes, massive market scale and gradual retorms， China has become the world’s leading business laboratory. The country has transcended its identity as a market or a manufacturing and supply base, it has become a definitive source of cutting edge intellectual capital on strategy and business. The radiation of that source to rest of the world will impact how executives, investors, academics and professionals expand their thoughts on businesses.
Organizations are consisted of people. While most people are disillusioned by what their mind tell them, the same thing happen in organizations but with a much bigger scale. This is what we call “organizational subconsciousness.” Left to its own course, this could be dangerous and could lead an organization to deprivation. The job of a leader is to lead the organization to build and sustain its “organizational mindfulness.”
Quantum physics tells us that the world is not entirely physical nor entirely deterministic. Same applies to organisations. While there are physical and deterministic aspects to an organization, there are also non-physical and probabilistic aspects. Leaders must understand this in totality and incorporate this understanding in leading an organization forward.
有人说：“我们已经不是咨询公司，而是伙伴公司。” 哦。正确的咨询是专业而不是生意；以客户的价值放在最重要的地位。咨询顾问与客户的关系是一种共生的关系，而不是一项买卖。所以咨询顾问就是客户的伙伴。咨询公司亦即等于伙伴公司。
Problem solving is both a leap and also iteratiions. It’s a leap because at all times, a consultant needs to have clear hypotheses of what the answers to the problem ought to be. However, the hypothesis by definition would evolve as the consultant gathers data and carries out analyses along the way. At any given point in time, the consultant needs to have a vision of what the end answer would be. Usually that vision is pretty blurred at the beginning but as data come in, it would become clearer. However, with more data, newer vision would emerge and that is often blurred. It will become clearer as more data come in. This cycle of iterations will go on for a number of times till an acceptable picture evolves. That picture may have some resemblance with the original hypotheses but often there are plenty of differences. Leaps and iterations are the intrinsics to first-principle problem solving.
By Edward Tse | SCMP
Edward Tse says the trade war is helping to accelerate the mainland’s reform and innovation
Original published by South China Morning Post on February 4, 2019. All rights reserved.
In trying to curb China’s supposedly unfair trade practices and substantially reduce its trade deficit with China, the United States is unintentionally helping to accelerate China’s reform and innovation.
Washington’s trade war has gained support from many in the Sinophobic circle of politicians, businesses and lobbyists, who have long complained about Beijing’s treatment of foreign businesses, especially those from the US, on issues such as intellectual property protection, forced technology transfer and market access.
However, while it is arguable that China’s market liberalisation could be faster, it is unfair to say Beijing has blocked most foreign companies. In the tech sector, pundits lament that Facebook and Twitter are blocked in China, but neglect to mention Apple, Amazon, Bing, LinkedIn, eBay and Airbnb are not.
While Chinese tech giant Huawei has met with the American and other governments’ roadblocks overseas, its American counterpart Cisco continues to do business in China. As The Economist’s Schumpeter column notes in the June 28 edition, the picture of American firms being victimised in China is exaggerated.
Since US President Donald Trump’ tariff war broke out, China has accelerated the opening of its market to foreign companies. Last April, Beijing set a timetable for phasing out foreign ownership limits in the automotive industry. It is also easing curbs on sectors such as banking, securities, insurance, agriculture and aircraft manufacturing. Recently, BT Group became the first non-Chinese telecom company in China to get a nationwide operating licence. S&P Global’s Beijing-based wholly-owned subsidiary was also given a green light to enter the Chinese bond rating market.
Source: Internet
Reform is also coming to the private economy. To boost the private sector, Chinese President Xi Jinping met entrepreneurs last November, and China Banking and Insurance Regulatory Commission chief Guo Shuqing followed up with a statement that no less than 50 per cent of new loans should go to private businesses.
At the same time, China is stepping up mixed ownership reform, that is, diversifying the ownership of parts of the state sector. According to the National Development and Reform Commission, 100 more state-owned enterprises will join the mixed-ownership reform programme. Along the way, many “zombie” enterprises will be eliminated.
To improve the protection of intellectual property right, China’s top court has started to rule on intellectual property cases since the beginning of this year; laws are also being drafted to ban forced technological transfer.
In Davos, Chinese Vice-President Wang Qishan stressed that China would continue to carry out structural reforms and adhere to multilateralism.
Last November, The New York Times wrote in a special report: “The Chinese economy has grown so fast for so long now that it is easy to forget how unlikely its metamorphosis into a global powerhouse was.” In fact, China owes the remarkable resilience of its economy to its own evolving development model of “three-layer duality”.
At the top, the central government sets goals and directions, giving the rest of the country clear targets to follow. At the grass-roots level, private entrepreneurs have re-emerged and become a major force in driving the growth of China’s economy. And in the middle, China’s local governments channel their resources into national and local priorities, often competing but also collaborating within regional clusters. To this end, they work closely with entrepreneurs who bring innovative ideas to bear.
Undoubtedly, the current trade dispute has generated much uncertainty and volatility for China, as well as the rest of the world. It has exposed a fundamental mistrust of China in certain parts of the West, and given some Western businesses an opportunity to amplify their long-standing concerns about China, justifiable or not, through their respective chambers of commerce. This should have woken up the Chinese government to the fact that it needs to adjust its approach. This is why Beijing is reinforcing its commitment to globalisation and accelerating reform.
Source: Internet
The short-term issues brought on by the trade dispute would naturally unsettle some foreign multinational companies operating in China, but for many others, especially the larger ones, China has become so strategically important that they must figure out a way to overcome the challenges.
China’s innovation – the fast-evolving consumer demand patterns, rapidly developing government policies and regulations, increasingly prevalent tech-enabled business innovations, and the emergence of bona fide innovative and competitive local companies – has led many foreign multinationals to the realisation that what they have learned in the West won’t give them an advantage in the local market any more. Their success in China is no longer guaranteed if they rely only on what they already know. They will need to learn how to innovate in China, for China, and also in China for the world – and this won’t be easy for many.
China has reached a turning point. The age of single-minded pursuit of growth is over, and there will instead be a focus on refining the country’s economic structure, quality and sustainability. However, many in the West and even some within China are doubtful about whether Beijing will be able to make the necessary changes in a timely manner.
The challenge remains for the Chinese government to demonstrate its commitment and ability to fully implement the changes. Paradoxically, the pressure from outside, intended to thwart progress, is likely to push China into more reform and opening. Expect new waves of developments and new opportunities for companies from all over. The companies who can seize these opportunities will be among the true winners in the trade dispute.
ABOUT ME
Founder & CEO of Gao Feng Advisory Company, a global strategy and management consulting firm with roots in China. —learn moreReceive notifications of new posts.
