Jackson: Could you describe briefly what CEBEX Group and those affiliated brands do?
Eric: CEBEX Group is a business intelligence company, which I co-founded in 2003 that focuses on providing three key services to customers, mainly through business conferences that we hold throughout the year. We provide our customer base with educational opportunities, up-to-date information, and chances to make connections with fellow professionals through the networking segments of our events.
Originally our events were tailored to the needs of entrepreneurs and start-up companies, but we have expanded our programming behind its initial focus on entrepreneurship. Our brands China Entrepreneurs, CE Premier, China Cleantech Focus, CE Legal, and others each focus on different sectors. For instance, as clean technologies attracted more interest in China, the need for events on this industry became evident, so we created China Cleantech Focus.
Jackson: According to your company overview, you view China as one part of the global economy. What role do you think China is playing? How will China’s rise impact the global economy?
Eric: China has played a key role in lending to a number of countries, including the U.S. There is also a large amount of capital in China that is available for investment within the country and overseas. China is taking its place as a leader in international and economic affairs. It’s a cliché to say that with great power comes great responsibility, but recent events have shown that the world will now be looking to China for aid and relief. Accordingly, China is now in a position to establish itself as a magnanimous global leader or an isolated powerhouse, and only time will tell which role they will adopt.
Jackson: A lot of voices are talking about shorting China. What is your observation?
Eric: Overseas-listed Chinese companies have received a lot of negative press based on the actions of a few bad apples. Shortsellers have been relentless with their attacks, and while sometimes there is a legitimate basis for their maneuvers, allegations of wrongdoing on the part of Chinese listed companies can be used purely to manufacture investment gains for the shortsellers themselves. This was well illustrated very recently in the case of Sinoforest, a company dogged by shortseller allegations that was later cleared of all charges of impropriety.
Chinese companies over the last 10 years have come a long way in terms of their development, but in some ways they are still not as sophisticated as U.S. companies that have been in global markets for 50 years. Not that it’s any indication of what will happen in the future, but I remember a few years ago people were making similar comments about selling China short in general, and I would imagine that resulted in some misplaced investments. I fully expect that Chinese companies will catch up in the areas of corporate governance and compliance, and a number of our events are designed with the goal of helping them rise more quickly to international standards.
Jackson: China had some issues with Google, Unilever, and now Walmart. Does that mean it’s more difficult for multinational companies to do business in China? What lessons can we learn?
Eric: Multinational companies on the whole have been doing extremely well in China and in many cases this forms the reason behind why these companies’ growth rates continue to increase. I would say that there are sometimes political issues that intersect with business. This is always a risk of this when doing business in China as Google and Walmart have discovered in recent years. As a foreign business operating in China, you are confronted with a variety of issues that include conformity with international corporate governance standards and adherence to local business practices. These two concerns are not always perfectly aligned, and multinationals must work hard to strike an adequate balance.
Jackson: China is trying to change its economic structure from relying on exports to domestic spending. What opportunities do you sense from this movement?
Eric: China must continue to develop a more consumer driven society, and it is clear that consumer goods, luxury goods, consumer electronics and other products will continue to do well in China because of the rapid development we have witnessed. Additionally, people in China have begun to demand more from the government in terms of improved environmental conditions, and the general move away from manufacturing and exports will likely lead to more efficient environmental technologies within a more specialized and advanced sector.
Eric: What we do as a company is about education, information and connections. That said, “Guanxi,” or connections, are an essential part of life in China and without them it can be very difficult to get certain things done. You may miss out on many opportunities by not making necessary connections, and that is why I suggest that people use platforms like CEBEX to develop and maintain these relationships.
Jackson: The following two questions are common from our non-Chinese entrepreneur alumni. What’s the procedure from an idea to a business in China? How are non-Chinese entrepreneurs viewed in China?
Eric: Once an idea has been formed and researched it takes action and patience to ensure success. While this may not sound very different from the procedure in the U.S., the sheer number of competitors you will have here can’t be ignored. Also, a unique brand of resourcefulness is needed to capitalize in a place where you have natural disadvantages in areas such as language and culture. Foreigners, however, are generally treated well, and more foreign expertise is needed to continue to improve the Chinese economy. This results in an ever-expanding market of opportunities for foreign entrepreneurs to establish themselves in China.
Jackson: Any other advice to our fellow alumni who are interested in working or starting a business in China?
Eric: The first step is to formulate and idea and then get started. China is an exciting place to live and work, but be prepared for a level of commitment that you may not have been required to expend in previous efforts. You will be entering into an intense work environment and will have to adjust to a pace of business that moves faster than in most other places in the world. Opportunities exist for those who put in the time and who are quick to recognize what they must do to make the most of their ambitions.