Dodwell in APEC China CEO Summit at Beijing - Post 1

June 07, 2012

Refreshed from three shimmering days in the bazaar they call Istanbul, I flew Wednesday into Beijing on the last leg of a three week APEC odyssey – now for the China CEO Summit. Beijing was torpid under a blanket of pollution, and my light mood was quickly crushed under delays across the tarmac, and hour’s wait for luggage, and a breakdown of APEC meeting-and-greeting arrangements which forced a 40 minute bump and grind to the hotel in a grubby local taxi. But no matter, the hotel staff could not have been sweeter, and all I needed was a shower and a good night’s sleep.

If China’s Vice Premier Hui Liangyu took pride of place at the inaugural China CEO Summit as it began this morning (Thursday), the charisma sat with Kevin Rudd, the former Australian Prime Minister, who had the audience swooning with his ability and willingness to flip back and forth from Mandarin to English in his Keynote role at the two-day meeting. His analysis of the future of the Asia-Pacific region, as seen from the vantage point of Australia’s “creative middle power security”, was also acute for his mainly-Chinese audience. For  ABAC, his compliments for APEC were kindly taken (this was, after all, an APEC Summit): “If APEC had not existed, I wonder what would have happened in the region over the past 20 years,” he commented, recalling the traumatic decades that only came to an end in the mid-70s with the end of the Vietnam War.

He was also full of optimism for the Trans-Pacific Partnership that ABAC has been working on so hard: “The collapse of political will in Doha, and the resulting lack of progress in four years, is a tragedy. The more free trade there is, the better it is for the health of our region’s economy – so we need to encourage all the paths (to free trade) that exist.” But he left one sting in the tail: what about the plight of the Australia-China Free Trade Agreement that is still not concluded after six years of work?

In Q&A he was pressed on the potential for conflict in the South China Sea, and was characteristically blunt: would the region’s leaders be so stupid that they would the past 30 years of cooperation, development and wealth creation at stake for the sake of a few blue ocean rocks? But he added one intriguing idea: wouldn’t it be a good idea if our militaries, instead of dancing war games around each other, built a habit of collaboration by joint natural disaster security planning? Now there’s a neat idea to keep the hawks at bay.

The rest of the day was devoted to four main sessions – two weak ones on Green Growth and Energy Development in China, and two much richer sessions on Food Security and on the challenges accessing the China Consumer Market. The Food Security session was packed by a deputy Agriculture minister, and two members of the newly-inaugurated APEC Policy Partnership on Food Security (PPFS) that I attended in Kazan just a week ago – Frank Ning from Cofco, who chairs ABAC’s Sustainable Development Working Group, and Emery Koernig, from Cargill who occupies one of the US PPFS seats. Hot-foot from the PPFS discussions in Kazan, I was also able to chip in by emphasizing ABAC’s keenness to pursue the issue of food waste and post-harvest loss, and improving the efficiency of the food supply chain. The session was also quite a good primer on Chinese – and global – food security challenges. Koernig gave an excellent powerpoint, which would give ABAC Members an interesting presentation if Cargill were willing to come to a future ABAC meeting.

It was Kevin Wade from General Motors in China, who made the session on accessing China’s Consumer market. He raised three questions:

  • How is doing business in China different?

  • What can we learn from successful foreign companies in China?

  • How can you leverage the Chinese middle class market?

On the first, he made four smart points: first, that a company must be ready for a phrenetic pace of change – five times faster than GM have seen anywhere else in the world; second, be prepared to work in partnerships, and recognize that relationships are everything; third, that the government’s role is pervasive – as partner, consumer, and regulator; and finally, that because you are working in partnerships, you can’t push your weight around – you have to learn some diplomatic arts on how to get things done. On the second (lessons from successes): successful companies did not underestimate the potential for growth; they took a very long term view; and they built strong local capability: “You can’t fly in solutions.” And on leveraging the middle class market: this is vast, and growing at a giddying pace, but in a marketplace that is huge, opaque and diverse – “This is a country of many markets – the US has nine cities with a population of more than 1m people – China has more than 100.”; the greatest potential for growth is with personalized, fashionable, luxurious and foreign goods; and your primary challenge is going to be effective communication: in so vast a market, getting your product in front of potential buyers is challenging.

* Read Dodwell's latest blog post.

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