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Ramping up its export juggernaut and taking full advantage of WTO entry, China’s economy in the first decade of the new millennium was “boom with no bust.” The information revolution fed more growth, as hundreds of millions of Chinese came online. But the Internet also became a forum for discontent, and the new leadership team of Hu Jintao and Wen Jiabao acknowledged growing environmental and social justice concerns with their call for a more harmonious society. Then, as the credit crisis in the US spread into a global economic crisis, China’s export-dependent growth appeared in jeopardy, and fears of a Chinese crash surfaced. But, as in 1998, China weathered the storm, and emerged in 2010 as the world’s largest exporter, largest foreign creditor, and fastest growing major economy, poised to soon surpass Japan and eventually eclipse the United States as the biggest economy on the planet.

Chinese Companies React Faster

Period: Overdrive (2000s)

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  • WTO Was a Tool to Accelerate China's Growth

    Charlene Barshefsky

  • 2001 Marked a Change in China's Quality of Growth

    Trevor Houser

  • The Export Boom was Due to Dollar's Depreciation

    Brad Setser

  • The CCP Retains Strong Influence over the Economy

    Susan Shirk

  • Change in Leadership Causes a Change in Policy

    Li Cheng

  • China Needs to Bring The Environment Back in Sync

    Elizabeth Economy

  • This is a Great Moment Given All of That Legacy

    Robert Oxnam

  • The Olympics Was a Strange, Surreal Nightmare

    Ai Weiwei

  • The Internet Facilitates Social Mobility

    Michael Anti

  • China Needs to Innovate

    Isaac Mao

  • Listen to Outside Voices

    Rose Luqiu

  • Nobody Trusts The Chinese Government

    Mao Yushi

  • Olympic Epiphany

    Cai Guoqiang

  • Internet and Mobile Helped The Boom of Information

    Bruno Wu

  • A Blind Man Riding on The Back of Blind Tigers

    Jack Ma

  • China Has a Big Employment Problem

    Thomas Rawski

  • China's Reserves are Worthless Because They Can't Use Them

    Carl E. Walter

  • Chinese Companies React Faster

    Edward Tse

  • Generation Gaps

    David Zhang

  • It’s Not Just About Economics

    Frank Hawke

  • The Early Days of China’s Internet

    Chen Qi

  • No Dispensation from The Laws of Economics

    Stephen Roach

  • US-China Symbiosis Fed the Boom

    Federico Rampini
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Meettheexpert

Edward Tse

Chairman, Greater China, Booz & Company

Edward Tse is senior partner and chairman for Greater China for consulting firm Booz & Company (Shanghai, Beijing, Hong Kong and Taipei). He has over 20 years of management consulting and senior corporate management experience and is widely known as one of the pioneers in China’s management consulting profession.

Dr. Tse has held a number of leadership positions ranging from being managing partner, China for the Boston Consulting Group, to being a member of the Consultative Editorial Board of Harvard Business Review Chinese Edition. A recognized thought leader, Dr. Tse has authored numerous articles and is author of two books: Direction – What Chinese Enterprises Should Learn (in Chinese; Winter 2007) and The China Strategy – Harnessing the Power of the World’s Fastest-Growing Economy (Spring 2010).

Dr. Tse holds a Ph.D. in Engineering and an MBA from the University of California, Berkeley where he received the Converse Prize for being the most outstanding graduate student. He also has a MS and BS in Engineering from the Massachusetts Institute of Technology.
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Broadly speaking there are two types of Chinese companies. there is one type which is owned by the state, so state-owned enterprises, and then there's another type that is privately owned, so owned by, normally, private entrepreneurs. The way that they operate is quite different.

The state owned enterprises, the most successful state owned are typically large enterprises. They operate in industries that are somewhat protected, if not entirely, protected by the Chinese government, so they can be large and quite powerful in their own right. I'm talking about companies in, for example, telecommunications and energy, and utilities and so on and so forth, and banks and so on. And these are some of the largest enterprises in China, but they're SOEs, they're state-owned enterprises, so they have to follow a certain way that the Chinese state dictates to them.

The other type, the privately owned companies are, in my opinion, much more interesting, because they are… Many of them actually start with nothing, they start as very small companies, but the very successful, privately owned companies, they have been growing very fast. And, typically, they are led by one entrepreneur, or a small group of entrepreneurs, and these people are, typically, they are very flexible, they are very ambitious, they are quite visionary, typically, and they usually make decisions very fast, because they see the market, both in China, as well as, the relevant market outside of China moving very fast, so, they themselves, are very fast in making decisions.

They are a believer in a lot of experimentation. They don't necessarily want to get everything sort of precise and right. They'd much rather try something, if it's 80% right, try something and see how the market responds and then adapt. So, they work at a rhythm that is much faster than the usual competitor in western multinationals. Whereas typical multinationals would typically operate in this manner, the Chinese would typically operate in a much faster rhythm. So, by the time the multinationals are ready to make decisions, the Chinese have already made cycles of decisions and have learned a great deal through their experimentation. So it's very dynamic, but we've seen more and more Chinese companies who are able to leverage this kind of model to grow very fast and more and more of them have become bonafide competitors to the multinationals. And the multinationals actually have found it, in many cases, very surprising to see this kind of new competitor which operates in a very different way than the traditional multinational competitor.

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Cite this Source >>
“Chinese Companies React Faster | Edward Tse | Overdrive | The China Boom Project.”
The China Boom Project.
The Asia Society Center on US-China Relations.
1 June 2010.
Web.
09 May 2025.
<https://chinaboom.asiasociety.org/period/overdrive/0/236>.
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