月份：2020年2月

By Edward Tse
January 2020

Gao Feng Advisory’s CEO Dr. Edward Tse’s article was published in his regular column on Brazil’s HSM Management Magazine in January 2020 issue. In this article, Dr. Tse discusses the “working hard” culture of the Chinese businesses.

English Version

After decades of tremendous growth, China is now an upper-middle-income nation, according to the World Bank. Its reputation as an innovative economy is increasing. Along with its economic growth, China’s productivity too has been growing well.

The growth of China’s productivity during the last few decades is mainly due to the opening-up and reform policy implemented from 1978 onwards, its labor intensive exports driven manufacturing and investment-led growth model underpinned this extraordinary progress. Yet some strains associated with that approach have become evident in the last one decade or so as these economic drivers seem to be running out of steam.

China stepped into the innovation wave after the wireless internet (together with smart phones) became prevalent. Chinese entrepreneurs have leveraged this technology to create a range of new business models and products that cater to the evolving consumer and business needs. In the race against time and in the midst of hyper-intensive competition, Chinese entrepreneurs have to be fast, agile and adaptive in order to remain ahead of others. They often don’t mind using the market as a test bed for experimentation as they fine-tune their business models along the way. Quick experimentation often becomes the core part of the very culture of Chinese companies. Speed, rhythm, intensity and multi-tasking have become parts of the DNA of many Chinese companies. On top of this, evolving government policies and regulations are often a source of uncertainty and they keep Chinese entrepreneurs persistently and highly alert and vigilant.

As a result, many Chinese businesses have formed a culture of “working hard.” This is the now widely known as “996” schedule – which means working from 9am to 9pm, six days a week. This has become common place among Chinese entrepreneurs, particularly among large internet-based businesses. The 996 schedule was initially applied in order to improve overall productivity of companies by increasing working hours.

Source: Baidu

However, the notion of “996” has become somewhat controversial. Alibaba’s founder Jack Ma is a vocal supporter of the gruelling working hours commonplace in China’s tech and internet industry. He once said at an internal meeting that this is, “a huge blessing that many companies and employees do not have the opportunity to have,” according to a transcript published on Alibaba’s official WeChat account. Richard Liu, CEO of JD.com, a leading e-commerce company, responded to the recent layoffs saying that JD.com would never force employees to work in a 995 or 996 schedule, but every staff of JD.com must “have a competitive spirit!”

Besides the 996 schedule, many Chinese companies, including both state-owned enterprises (SOEs) and privately-owned enterprises (POEs), are actively seeking multiple ways of improving productivity. More and more companies, especially SOEs and some internet companies, are beginning to provide free meals to their employees in order to reduce the amount of time spent on purchasing and eating meals. Moreover, employees’ dormitories and free buses are also being offered as perks to simplify the lives of employees and make sure they can get to work on time. In some companies, a military-style management has also been deployed to improve the efficiency and productivity of their staff’s work.

The “working hard” culture of the Chinese businesses probably won’t go away any time soon.

Source: Baidu

These days, the news is dominated by the impact of the Coronavirus and how China is coping with this latest shock. Consumer demand for goods and services is declining in China; sectors such as retail, travel and leisure are the most directly impacted as businesses have closed or are semi-closed throughout the country. The Coronavirus has challenged China, exposing some crucial gaps, but it will also potentially create new opportunities. Attention will be focused on improving China’s entire public agenda, not only one or two vertical areas.

In the aftermath of the crisis, one would expect China’s governance system to become more transparent and there will be more accountability. In order to ensure its public agenda is advanced properly, a lot more effort and resources will need to be put in by the central government as well as local governments at the provincial, city and township levels. State-owned enterprises (SOEs) and non-state-owned enterprises, including both Chinese privately-owned enterprises (POEs) and foreign companies, will be able to better leverage their respective strengths and capabilities. As a case in point, two new specialized hospitals were built in Wuhan – one in 10 days and one in 14 – through the combined efforts of SOEs, POEs and foreign companies. That was quite a feat.

Comprehensive data has always been collected throughout China and surveillance too, was prevalent, and yet China wasn’t able to fully track those who might have contracted the virus. In the aftermath, surveillance and monitoring will become even more important for ensuring their utility for the people.

China’s socioeconomic pattern is also changing as consumer behavior shifts and technology continues to develop. Consumption is shifting increasingly from offline to online. New commercial applications of technologies such as 5G, AI and IoT are also developing faster because of the epidemic. We will see innovative business models and changes in the ways that humans interact with each other and with machines in the future.

Source: Baidu

What trends could possibly drive future business opportunities in the aftermath of the Coronavirus?

1. A major nationwide effort would be made towards creation of a safer and more health-conscious living environment.

2. For public health: early detection, prevention, advanced treatment, and diagnostics would receive much more attention and a more comprehensive public health management system would evolve.

3. There would be more Public Private Partnerships (PPP). Collaboration between private and public sectors to create solutions addressing public agenda issues going forward.

4. The development of a more ubiquitous, connected and intelligent society will accelerate, leveraging new disruptive technologies such as IoT, AI, 5G and blockchain.

5. Big data will become even more prevalent with more data sharing across the board for more effective public agenda management.

6. A rise of new modes of interactions will be imminent. Although human-to-human touchpoints will still remain, other forms of interactions, such as human-to-machine and machine-to-machine will grow exponentially.

7. While entrepreneurship and innovation have already been rising in China over the last several decades, they would further accelerate going forward for addressing the pain points that were exposed during the Coronavirus crisis.

The virus has exposed China’s many problems and created challenges. In the short run, it has added more uncertainty to businesses operating in and with China from manufacturing, supply chain and consumer demand perspectives. In the medium to longer-run, we can expect a huge potential shift as China re-invents itself, making the improvement of its public agenda management a top priority. Collaborations across governments, SOEs, POEs and foreign companies to foster synergies, while at the same time, new consumer patterns and innovative use of technology and business models will come along.