Final Project on Chinese Management Style

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Introduction to Country.......................................................................................... 1

Main Facts about China ............................................................................... 2

Structure of Government ............................................................................ 6

History of China...................................................................................................... 7

Time Line of China’s History.................................................................... 10

The Chinese Republic.............................................................................. 10

Major Historic Dynasties........................................................................... 11

Revolution of 1911.................................................................................... 16

People Republic Of China: (Independence).............................................. 17

China’s Control over Hong-Kong (1997).................................................. 18

Major Chinese Religions........................................................................................ 20

Buddhism.................................................................................................. 20

Taoism & Its Philosophy........................................................................... 22

Confucianism............................................................................................. 22

Economic Scenario................................................................................................ 27

Major Economic Figures ........................................................................... 27

Agricultural Sector.................................................................................... 29

Communication Sector.............................................................................. 33

Construction Sector................................................................................... 35

Technological Structure............................................................................. 37

China’s Foreign Trade........................................................................................... 44

Policies on International Trade and Economic Cooperation..................... 48

China’s Foreign Trade Policy.................................................................... 50

Management Philosophy of Chinese Govt............................................................ 70

Major Management Reforms During 80s.................................................. 70

Chinese Culture .................................................................................................... 55

Relationship between Religion & Culture................................................. 56

Chinese Society & The Family Life Style................................................. 58

Organizational Management.................................................................................. 61

The Evolution Of Chinese Management .................................................. 69

Organization Structure.......................................................................................... 74

Organizational Culture.......................................................................................... 83

Impact of Culture on management............................................................ 86

Chinese Leadership Style...................................................................................... 87

Chinese Entrepreneurs............................................................................... 87

Mao Zedong.............................................................................................. 90

Training & Development....................................................................................... 92

Education.................................................................................................. 92

Professional Education.............................................................................. 94

Training & Development in Chinese Organizations.................................. 95

Training Expatriates Working in China.................................................... 96

Strategic management........................................................................................... 98

Generic Aproaches ................................................................................... 98

Strategies to Be Successful..................................................................... 100

Four Guideline for Working in China..................................................... 101

Problems In Living And Working In China........................................................ 103

Comparative Management................................................................................... 108

Japanese Culture:....................................................................................... 108

American Culture...................................................................................... 116

Comparative Management......................................................................... 119

Case Studies........................................................................................................ 123

Microtek International Inc. (Mii)............................................................... 125

China Motor Corporation (CMC)............................................................... 135

Conclusion........................................................................................................... 144

Sources of Data................................................................................................... 146

Organizations Visited.......................................................................................... 146

Journals Searched................................................................................................ 146

Bibliography........................................................................................................ 147

China is one of the world’s major countries. It’s situated in central and East Asia. It’s known because of its rich population, a rising economic super power and its different style of management. China is a country with golden history. Especially, its Chinese Revolution brought a lot of progress in all its sectors. . World politics is becoming even more dynamic and different blocs are emerging in the world. These blocs are of multiple nature, among them are the countries, which are although included in developing countries, but they are trade winners. Their G.D.P rate is increasing continuously. So is the case with china. China is an emerging nation. Experts say that its GDP rate will cross the GDP rate of America until 2001.

With more than 4000 years of history, China has the oldest civilization. In Ancient times, Xia Tribe, establish a state in the area of the Hvanghe River (Yellow River) basin. The tribesmen, believing that this was the center of the world, called this state the “Middle Kingdom” and regarded the surrounding areas as peripherals.

Thus China has been known by this name even after the 1911 Revolution which abolished the feudal monarchy and gave birth to the Republic of China. Further again in 1949, after a long struggle, the Chinese communist party under the leadership of chairman Mao Zedong led the Chinese people of all nationalities to over throw the rule of imperialism, feudalism, and capitalism, gaining victory for the new democratic revolution and establishing the “People’s Republic of China”. From then Chinese people took control of their country’s fate and became its masters.

Official Name People's Republic of China (in Chinese, Zhonghua Renmin Gongheguo)

Major Ranges: Himalayas, KunlunShan, TianShan, Yin Shan; Qin Ling Shan; Nan Ling Shan.

Major Peaks: Everest, 29,028 feet (8,848 meters); Namzha Parwa & Gurla Mandhada

Over two-thirds of China is upland hill, mountain, and plateau. Highest mountains are in the West. The Tibetan plateau rises to average altitude of 4000 m/13 000 ft ("the roof of the world'). Land descends to desert/semi-desert of Xinjiang and Inner Mongolia (NE). Broad and fertile plains of Manchuria (NE), separated from North Korea by densely forested Changpai Shan uplands; further East and South, prosperous Sichuan basin, drained by Yangtze R; heavily populated S plains and E coast, with rich, fertile soils.

In terms of climate, China may be divided between the humid eastern region and the dry west. The humid east may be further subdivided between the warm and humid south and southeast and the temperate-to-cool, moderately humid north and northeast. Much of the humid eastern region of China exhibits a monsoonal pattern of temperature and precipitation. In a monsoon climate, the warm summer months are typically the months of maximum precipitation.

1. Northeast China. Known for cold winters with strong Northern winds, warm and humid summers, unreliable rainfall

4. Southwest China is known for summer temperatures moderated by altitude. Winter is mild with little rain. Summer is wet on mountains. .

5. Xizang autonomous region is the next division. It has high plateau surrounded by mountains. Winter is severe with frequent light snow and hard frost. Summer is warm but with cold nights.

6. Xinjiang and West interior consists of desert climate. Cold winters and rainfall are well distributed throughout year.

7. Inner Mongolia is known for extreme continental-type climate, cold winters, warm summers; winter temperatures similar to (1), strong winds in winter and spring, summer temperatures 14—28°C (Jul) with a little rainfall.

The major agricultural products include wheat, sweet potatoes, corn (maize), cotton, tobacco, sugarcane, potatoes, soybeans, barley, peanuts & tea.

It includes Coal, iron ore, petroleum and natural gas, tin, tungsten and manganese ore, antimony, bauxite, & copper.

It includes Iron and steel, textiles, fertilizers, pharmaceuticals, transportation equipment, machinery, electronics, paper, sugar, cement, motor vehicles.

It includes Crude oil, textile yarn, fabrics, chemicals, coal, soybeans, vegetable oil, rice, small machinery.

Standing Committee The executive, elected by National People's Congress; consists of chairman, vice-chairmen, and members

State Council. Cabinet consists of premier, vice-premiers, and ministers, all appointed by National People's Congress.

Judiciary Supreme People's Court is the highest judicial organ of the state--consists of one president and one vice president with 4 years term. Other courts include Special People's Courts, Local People's Courts.

Political Divisions 21 provinces; 5 autonomous regions; 3 special status municipalities (Beijing, Shanghai & Tianjin)

China is one of the world’s oldest historic remains. Earliest Chinese cities are documented 3500 BC ago. The Chinese civilization is the most important living culture, which can be traced, back in an unbroken line to the Stone Age. In the earliest times China was a very small area indeed compared with its present extent. The earliest Chinese of all had no seaboard. They were confined to a comparatively small district now absorbed into the border districts of Shansi , Shensi and Kansu provinces.

As the Chinese people grew in numbers they encroached more and more upon the aboriginal territories and by a double process of conquest and absorption, they incorporated some of the aborigines into their stock. Gradually they reached the coasts of the Yellow Sea and spread their settlements towards the south and the north.

Earliest Chinese cities are 3500 BC old. Documented Chinese history starts from 16th-BC. First recorded dynasty as stated before is the Shang (1523—1028 BC) in North China and Northeast China. It had capital near Anyang. Zhou dynasty (1027—256 BC) was also mainly in North China and in Northeast. Expansion were to West, North, and Southwest under the Han dynasty (206 BC—AD 220). Then came the period of Six dynasties (221—581). Then came the Period of partition into Five Dynasties (907—60). All the dynasties were then united by Mongol Yuan dynasty. Genghis Khan established it in 1279—1368. Europeans visited China from 13^th to 14^th century. Marco Polo also visited in this era. Strong central authority was established under the Ming dynasty (1368—1644). Manchus dynasty ruled until 1912, and who extended control over Taiwan, Outer Mongolia, Tibet, Burma, Nepal, and East Turkestan.

Two wars (1839-42, 1856-60) between China and the Western powers, especially Britain, fought over the question of commercial rights in China, specifically relating to the opium trade. Imports of opium from Bengal were dominated by the British East India Company, and Chinese payments in silver helped to finance British India. When the Chinese attempted to stop the imports (1839), a British force besieged Guangzhou (Canton), occupied Shanghai, and imposed the Treaty of Nanjing (Nanking) in 1842.

This opened Guangzhou, Nanjing, Shanghai, Fuzhou (Foochow), and Xiamen (Amoy) to Western trade. The Second Opium War, or Arrow War, began when Chinese boarded a Hong Kong ship (The Arrow), flying a British flag but suspected of piracy (1856). British troops occupied Guangzhou, and an Anglo-French army marched on Beijing.

The Treaties of Tianjin (Tientsin) in 1858 between China and Britain, France, Russia, and the USA opened 10 more ports and legalized the opium traffic. Beijing was subsequently sacked by allied troops (1860). These 'unequal treaties', not abrogated until 1949, established a strong, threatening Western influence in China, and helped stir up nationalist sentiments which led to the 1911 revolution and the rise of political radicalism.

Then came the period of nationalization and collectivization. It emphasized on local authority and establishment of rural communes. Cultural Revolution initiated by Mao Zedong followed it. In 1966 many policies reversed after Mao's death (1976), and a drive towards rapid industrialization, some capitalist enterprise, and wider trade relations with the West; governed by a president, an elected National People's Congress of 2978 deputies, and a 47-minister State Council under a prime minister.

A movement in China, initiated by Mao Zedong in 1958, which aimed at accelerating industrial expansion through mass participation in industrial activities such as iron smelting. Simultaneously, agricultural production was to increase following socialistic reorganization into communes. Both initiatives seriously impaired China's economic well being. Mao was the leader who gave birth to the modern China and from here the old history was transformed into a modern history.

With this short view of China’s early history we take a small look on its major dynasties in the next section.

A long times ago the country have been ruled in the shape of different dynasties. The first recorded dynasty is the Shinju dynasty (1523—1028BC). This is the oldest record of dynasty. After that a number of dynasties came. In the beginning these were scattered but after that they kept on centralizing to give it a shape of modern china. Here is the brief view of major dynasties.

A dynasty which began the first great imperial phase of Chinese history, and established many of the ingredients of traditional China. Originally one of the later Zhou warring states, the Qin, from their capital on a Yellow River tributary near modern Xian, extended imperial authority over substantial areas of Central and South China beyond the Yangtze. The dynasty collapsed shortly after the death of Shihuangdi ('First Emperor'). Its achievements included the standardization of the Chinese script, weights, and measures, and the construction of roads, canals, and the Great Wall.

The second historical Chinese dynasty accounts of its origins are a mixture of history and legend. It is traditionally held to have been founded by King Wu, who overthrew the last tyrannical ruler of the Shang dynasty, Zhouxin. Its capital was at Hao (near Xian) until 771 BC, and at Luoyi (near Luoyang) until its occupation by the Qin in 256 BC.

A form of feudal monarchy, the Zhou saw the first flowering of Chinese historical, philosophical, and literary writing. The Book of Songs (Shi Jing) gives fuller detail on ordinary life than is known for any other ancient civilization.

Major Chinese dynasty, commonly divided into Early or Western Han. It had its capital at Changan (modern Xian). The dynasty was founded by Liu Bang. A dynastic territorial expansion occurred in the reigns of Wudi (141-86 BC) and Han Yuan (48-33 BC), including the conquest of what is now North Korea, North Vietnam, Kyrgyzstan, Uzbekistan, and Xinjiang.

The Han period saw important economic and urban development, and major developments in education, science, technology, astronomy, and public health. During this period Buddhism was introduced to China, and trade links developed with Europe via the Middle East. The Han period was contemporaneous with Rome, and of comparable significance to world history. Much is known from archaeology and contemporary texts.

A short ruling Chinese dynasty founded by Kublai Khan, who took the name Yuan in 1271 and conquered the Song dynasty in 1279. The period facilitated two-way cultural diffusion, since China was part of a great empire from the Pacific to the Black Sea.

There were significant developments in astronomy, medicine, shipbuilding, and technology; a vernacular literary genre evolved, with new dramatic forms; and major mathematical and geographical works were published. After Kublai's death in 1307, Yuan power rapidly declined. Civil war between Mongol princes broke out in 1328, and the dynasty was eventually overthrown by a Chinese uprising led by Zhu Yuanzhang, the first Ming emperor.

Major Chinese dynasty, established by Hongwu (r.1368-98) and consolidated by Yongle (r.1403-24). Its orderly government, social stability, cultural homogeneity, and grandeur surpassed even the Tang and Song periods. In 1421, its capital was shifted from Nanjing to Beijing, which was rebuilt, as was the Grand Canal, and a 600-mi extension was made to the Great Wall.

The army increased to at least 3 million, there was much annexation of neighboring territories, regular Western trade began, and a new legal code was issued (1373). The period is known for its philosophical, historical, and literary writing, its porcelain, lacquer, and cloisonné, its opulent life style, and its developments in manufacturing (e.g. steel production) and medicine (e.g. smallpox immunization). Economic chaos and political confusion under later emperors led to dynastic collapse. The last Ming hanged himself as rebels entered Beijing; the Manchu took over, and Qing rule began.

The last imperial Chinese dynasty. Originating from the Tungusic tribes to the Northeast, and the Jin dynasty which ruled the Noth in the Song period (12th-13th-c), they took the appellation Manchu in 1635, and the dynastic title Qing in 1636. Building a power base in Manchuria, Mongolia, and Korea, then invited (1644) to suppress rebellion in China, they subsequently extended supremacy over all China, especially under the Kangxi Emperor (r.1662-1722).

Rule was by an unequal Manchu-Chinese partnership - for example, cities had Manchu garrisons - but gentry support was ensured through non-intervention in land ownership, producing an administration seen by Europeans as a model of stability (especially since Christianity was tolerated). The 17th-19th-c saw a rapid increase in prosperity and cultural richness. It was a major period for art, porcelain, philosophy, literature, and science.

Taiwan, Outer Mongolia, Turkestan, Tibet, Burma, and Nepal were conquered. Serious reversals took place in the 19th-c. China was defeated by Britain and France in the Opium Wars (1840-2, 1857-60), forcing ports to be opened and leading to the sack of Beijing. Defeat by France in 1884 lost China control of Indo-China; defeat by Japan in 1894 lost Korea and Taiwan; and the Boxer Rising provoked a second sack of Beijing and huge indemnities.

There were revolts in China proper, such as the Taiping Rebellion, and efforts at reform were negated by Ci-Xi. A revolutionary government was established in 1911, and the last emperor abdicated in 1912.

The modern china, which we see now, started emerging in the beginning of this century. Following were the main phases of it.

The modern state started emerging in 1911. Sun Yat-sen was major Chinese leader at that time. At that time country was under the control of Qing Empire. Sun was republican and anti-Qing activist who became increasingly popular among the overseas Chinese and Chinese students abroad, especially in Japan. In 1905 Sun founded the Tongmeng Hui in Tokyo with Huang Xing, a popular leader of the Chinese revolutionary movement in Japan, as his deputy. This movement, generously supported by overseas Chinese funds, also gained political support with regional military officers and some of the reformers who had fled China after the Hundred Days' Reform. Sun's political philosophy was conceptualized in 1897, first enunciated in Tokyo in 1905, and modified through the early 1920s.

Sun Yat-sen gave three major principles. They were "nationalism, democracy, and people's livelihood." The principle of nationalism called for overthrowing the Manchus and ending foreign hegemony over China. The second principle, democracy, was used to describe Sun's goal of a popularly elected republican form of government. People's livelihood, often referred to as socialism, was aimed at helping the common people through regulation of the ownership of the means of production and land.

These ideas started a major revolution in the country. The republican revolution broke out on October 10, 1911, in Wuchang, the capital of Hubei Province, among discontented modernized army units whose anti-Qing plot had been uncovered. It proceeded by numerous uprisings and organized protests inside China. The revolt quickly spread to neighboring cities, and Tongmeng Hui members throughout the country rose in immediate support of the Wuchang revolutionary forces. By late November, fifteen of the twenty-four provinces had declared their independence of the Qing Empire. A month later, Sun Yat-sen returned to China from the United States, where he had been raising funds among overseas Chinese and American sympathizers. On January 1, 1912, Sun was inaugurated in Nanjing as the provisional president of the new Chinese republic. But power in Beijing already had passed to the commander-in-chief of the imperial army, Yuan Shikai, the strongest regional military leader at the time. To prevent civil war and possible foreign intervention from undermining the infant republic, Sun agreed to Yuan's demand that China be united under a Beijing government headed by Yuan. On February 12, 1912, the last Manchu emperor, the child Puyi , abdicated. On March 10, in Beijing, Yuan Shikai was sworn in as provisional president of the Republic of China.

On October 1, 1949, the People's Republic of China was formally established, with its national capital at Beijing. "The Chinese people have stood up!" declared Mao as he announced the creation of a "people's democratic dictatorship." The people were defined as a coalition of four social classes: the workers, the peasants, the petite bourgeoisie, and the national-capitalists. The party was under Mao's chairmanship, and the government was headed by Zhou Enlai 1898-1976) as premier of the State Administrative Council (the predecessor of the State Council).

The Soviet Union recognized the People's Republic on October 2, 1949. Earlier in the year, Mao had proclaimed his policy of "leaning to one side" as a commitment to the socialist bloc. In February 1950, after months of hard bargaining, China and the Soviet Union signed the Treaty of Friendship, Alliance, and Mutual Assistance, valid until 1980. The pact also was intended to counter Japan or any power's joining Japan for the purpose of aggression.

For the first time in decades a Chinese government was met with peace, instead of massive military opposition, within its territory. The new leadership was highly disciplined and, having a decade of wartime administrative experience to draw on, was able to embark on a program of national integration and reform. In the first year of Communist administration, moderate social and economic policies were implemented with skill and effectiveness. The leadership realized that the overwhelming and multitudinous task of economic reconstruction and achievement of political and social stability required the goodwill and cooperation of all classes of people. Results were impressive by any standard, and popular support was widespread.

On June 30 at midnight, Hong Kong was returned to Chinese rule after 156 years under British control. The territory will be referred to as the Hong Kong Special Administrative Region, and will be ruled by China under the "one country, two systems" policy proposed by the late communist leader Deng Xiaoping.

At least 500 Chinese soldiers added a conspicuous flavor to the hand-over, as Britain had given in to Beijing's demands to allow People's Liberation Army (PLA) troops to enter Hong Kong before the official hand-over at midnight. Accordingly, five hundred PLA troops joined the two hundred troops already in Hong Kong making it clear who was taking over. Another 4,000 were also effectively in attendance as Hong Kong's future chief executive, Tung Chee-hwa, announced that 4,000 PLA troops would enter Hong Kong as it returned to Chinese rule at midnight .

The new Hong Kong Government was sworn in at a colorful ceremony. Speaking after the ceremony, the Chinese President, Jiang Zemin, welcomed Hong Kong's return to the "motherland", urging all patriots to strive for the return of Macau, the resolution of "the Taiwan question", and the peaceful reunification of the Chinese people in accordance with the "one country, two systems" principle.

Britain and the United States, who were earlier represented by officials at the swearing-in ceremony for Hong Kong's Provisional Legislative Council, also attended the hand-over, despite leaders of both countries warning they would boycott the ceremony. This warning was given to show their disapproval of China's decision to remove the elected legislature and replace it with an appointed one after the hand-over.

Hong Kong's new Chief Executive, Tung Chee-hwa, announced reforms to improve education, help the elderly, address housing shortages, and curb property speculation. Mr. Tung maintained that economic vitality and growth will be Hong Kong's greatest defenses against threats posed by high inflation, social problems, and employment dislocation. Martin Lee, leader of Hong Kong's Democratic Party, called for democracy and announced that campaigning for the promised elections in May next year would begin immediately. United States and Britain also called for China to maintain Hong Kong's freedom. Britain's Foreign Secretary, Robin Cook, warned that Britain would consider referring any Chinese breach of the Joint Declaration on Hong Kong to the United Nations. Mr. Cook rejected accusations of British intervention, insisting that while Britain cannot turn its back on Hong Kong, a working relationship with China was also very important.

Although Tung Chee-hwa had rejected claims that he would restrict demonstrations and political groups once Hong Kong came under Chinese rule, thousands of people protested against his proposals to place restrictions on marches and political groups.

These restrictive measures were confirmed by Hong Kong's new Provisional Legislative Council, appointed by Beijing to run Hong Kong, which approved legislation to restrict demonstrations, public protests, and foreign financial support of political parties. Donald Tsang, Hong Kong's Finance Secretary, named a committee to advise on the management and investment of official funds transferred from the former British colonial government, a boost in funds which will make Hong Kong the world's fourth or fifth biggest holder of foreign exchange.

Religion plays a very important in Chinese style of management. Religion has a great impact on every day activity of the Chinese people. Following are the major religions, which are followed in china.

It is one of the major religions that are followed by Chinese people. Buddhism is a tradition of thought and practice originating in India c.2500 years ago, and now a world religion, deriving from the teaching of Buddha (Siddhartha Gautama).The teaching of Buddha is summarized in the Four Noble Truths, the last of which affirms the existence of a path leading to deliverance from the universal human experience of suffering.

The Philosophy has a central tenet is the “law of karma”, by which good and evil deeds result in appropriate reward or punishment in this life or in a succession of rebirths. Through a proper understanding of this condition, and by obedience to the right path, human beings can break the chain of karma. The Buddha's path to deliverance is through morality (sila), meditation (samadhi), and wisdom (panna), as set out in the Eightfold Path. The goal is Nirvana, which means 'the blowing out' of the fires of all desires, and the absorption of the self into the infinite. All Buddha’s are greatly revered, and a place of special importance is accorded to Gautama.

There are two main traditions within Buddhism, dating from its earliest history. Theravada Buddhism adheres to the strict and narrow teachings of the early Buddhist writings: salvation is possible for only the few who accept the severe discipline and effort necessary to achieve it. Mahayana Buddhism is more liberal, and makes concessions to popular piety: it teaches that salvation is possible for everyone, and introduced the doctrine of the bodhisattva (or personal savior).

As Buddhism spread, other schools grew up, among which are Ch'an or Zen, Lamaism, Tendai, Nichiren, and Soka Gakkai. Recently Buddhism has attracted growing interest in the West. The only complete canon of Buddhist scripture is called the Pali canon, after the language in which it is written. It forms the basic teaching for traditional Theravada Buddhism, but other schools have essentially the same canon written in Sanskrit. Mahayana Buddhists acknowledge many more texts as authoritative.

Underlying the diversity of Buddhist belief and practice is a controlling purpose. The aim is to create the conditions favorable to spiritual development, leading to liberation or deliverance from bondage to suffering. This is generally seen as involving meditation, personal discipline, and spiritual exercises of various sorts.

This common purpose has made organization, ceremony, and pattern of belief to different social and cultural situations. Reliable figures are unobtainable, but there were over 320 million Buddhists estimated in 1997, and over 1000 million people live in lands where Buddhism is a significant religious influence.

The Tao is the 'way' governing all human existence. Taoism developed (1st-c BC) as a cult, its idealized dream world readily absorbing primitive mystical and shamanistic beliefs. In Taoist terms (unlike the human-inter relational harmony of Confucianism) lies in harmony between the individual and the natural world. Rapid expansion occurred from the 3rd-c AD, and headquarters were established in Jiangxi province from 748 to 1927. Favored as a court religion under the Sui and Tang dynasties (590-906), Taoism came into conflict with Buddhism, and the latter was suppressed (845). In 1281, Taoism itself was suppressed by Kublai Khan, and many books destroyed, but rose again to favor under Ming emperors (1368-1644). It has been important in its close connections with alchemy, its influence on Chan Buddhism, and its impact on Chinese.

A major system of thought in China, developed from the teachings of Confucius and his disciples, and concerned with the principles of good conduct, practical wisdom, and proper social relationships. Confucianism has influenced the Chinese attitude toward life, set the patterns of living and standards of social value, and provided the background for Chinese political theories and institutions. It has spread from China to Korea, Japan, and Vietnam and has aroused interest among Western scholars.

Although Confucianism became the official ideology of the Chinese State, it has never existed as an established religion with a church and priesthood. Chinese scholars honored Confucius as a great teacher and sage but did not worship him as a personal god. Nor did Confucius himself ever claim divinity. Unlike Christian churches, the temples built to Confucius were not places in which organized community groups gathered to worship, but public edifices designed for annual ceremonies, especially on the philosopher's birthday. Several attempts to deify Confucius and to proselyte Confucianism failed because of the essentially secular nature of the philosophy.

The keynote of Confucian ethics is jen, variously translated as "love," "goodness," "humanity," and "human-heartedness." Jen is a supreme virtue representing human qualities at their best. In human relations, construed as those between one person and another, jen is manifested in Chung, or faithfulness to oneself and others, and shu, or altruism, best expressed in the Confucian golden rule, "Do not do to others what you do not want done to yourself." Other important Confucian virtues include righteousness, propriety, integrity, and filial piety. One who possesses all these virtues becomes a chün-tzu (perfect gentleman). Politically, Confucius advocated a paternalistic government in which the sovereign is benevolent and honorable and the subjects are respectful and obedient. The ruler should cultivate moral perfection in order to set a good example to the people. In education Confucius upheld the theory, remarkable for the feudal period in which he lived, that "in education, there is no class distinction."

Confucianism branched out into two schools of philosophy. The foremost exponent of one school was Chu Hsi, an eminent thinker second only to Confucius and Mencius in prestige, who established a new philosophical foundation for the teachings of Confucianism by organizing scholarly opinion into a cohesive system. According to the Neo-Confucianist system Chu Hsi represented, all objects in nature are composed of two inherent forces: li, an immaterial universal principle or law; and ch'i, the substance of which all material things are made. Whereas ch'i may change and dissolve, li, the underlying law of the myriad things, remains constant and indestructible. Chu Hsi further identifies the li in humankind with human nature, which is essentially the same for all people. The phenomenon of particular differences can be attributed to the varying proportions and densities of the ch'i found among individuals. Thus, those who receive a ch'i that is turbid will find their original nature obscured and should cleanse their nature to restore its purity. Purity can be achieved by extending one's knowledge of the li in each individual object.

During the Qing (Ch’ing) dynasty (1644-1911) there was a strong reaction to both the li and hsin schools of Neo-Confucian thought. Qing scholars advocated a return to the earlier and supposedly more authentic Confucianism of the Han period, when it was still unadulterated by Buddhist and Taoist ideas. They developed textual criticism of the Confucian Classics based on scientific methodology, using philology, history, and archaeology to reinforce their scholarship. In addition, scholars such as Tai Chen introduced an empiricist point of view into Confucian philosophy.

Toward the end of the 19th century the reaction against Neo-Confucian metaphysics took a different turn. Instead of confining themselves to textual studies, Confucian scholars took an active interest in politics and formulated reform programs based on Confucian doctrine. K'ang Yu-wei, a leader of the Confucian reform movement, made an attempt to exalt the philosophy as a national religion. Because of foreign threats to China and the urgent demand for drastic political measures, the reform movements failed; in the intellectual confusion that followed the Chinese revolution of 1911, Confucianism was branded as decadent and reactionary. With the collapse of the monarchy and the traditional family structure, from which much of its strength and support was derived.

In the view of some scholars, Confucius will be revered in the future as China's greatest teacher; Confucian classics will be studied, and Confucian virtues, embodied for countless generations in the familiar sayings and common-sense wisdom of the Chinese people, will remain the cornerstone of ethics. It is doubtful, however, that Confucianism ever again will play the dominant role in Chinese political life and institutions that it did in past centuries.

Early Chinese thought has a strongly social, non-speculative emphasis. Three early schools were particularly influential. Confucians stressed the importance of the cultural heritage - at best as humanists and at worst as pedants. Taoists stressed the tao 'way', underlying and sustaining the natural world as a surer guide than human institutions; Legalists stressed the ruler's need to promulgate laws, setting out rewards and punishments to mould his kingdom into an effective power against his rivals. Legalism created the Chinese empire, but Confucianism sustained it, though the decline of empire from the 2nd-c AD onward allowed more mystical philosophies based on the surviving Taoist texts to flourish, paving the way for the acceptance of Buddhism.

The rejection of Buddhism in favor of Neo-Confucianism from the 11th-c onward marks a major turning point. Buddhism was accused of denying the reality of the world of our experience, which for Neo-Confucians was composed of ch'i, the material element, ordered by li, abstract norms patterning this material. Comprehension of these norms was for some, following Chu Hsi (1130-1200), a matter of studying the cultural heritage; for others, following Wang Yang-ming (1472-1529), and a matter of looking within the mind.

Neo-Confucian debate provoked a shift from the 17th-c onwards towards the more philological study of the authoritative early texts. The wholesale rejection of traditional thought in the early 20th-c has now yielded to attempts at defining a modern Confucianism in parts of East Asia, even as Marxism remains the official philosophy of the homeland of Confucius himself.

Under this head we will be discussing some of the major economic aspects of the Chinese Economy. We will start it with some facts and figures about the Chinese economy.

GDP: $4.25 trillion (1997 estimate as extrapolated from World Bank estimate for 1995 with use of official Chinese growth figures for 1996-97; the result may overstate China's GDP by as much as 25%)

GDP—per capita: Purchasing power parity—$3,460 (1997 EST.) GDP—(sectorwise). Agriculture: 20% Industry:49%

By occupation: agriculture and forestry 53%, industry and commerce 26%, construction and mining 7%, social services 4%, other 10% (1995)

Unemployment rate: Officially 4% in urban areas; probably 8%-10%; substantial unemployment and underemployment in rural areas (1997 EST.)

Industries[25]: Iron and steel, coal, machine building, armaments, textiles and apparel, petroleum, cement, chemical fertilizers, footwear, toys, food processing, autos, consumer electronics, telecommunications

Agriculture—products: Rice, wheat, potatoes, sorghum, peanuts, tea, millet, barley, cotton, other fibers, oilseed; pork and other livestock products; fish

Commodities: Electrical machinery, clothing, footwear, toys, mineral fuels, leather, plastics, and fabrics

Commodities: Mechanical appliances, electrical machinery, mineral fuels, plastics, iron and steel, fabrics, cotton and yarn (1997)
partners: Japan, Taiwan, US, South Korea, Hong Kong, Germany, Singapore (1997)

The Chinese agricultural system provides sustenance to nearly one billion people and is the main source of livelihood for some 800 million agricultural workers and their dependents. On either count, the system is by some margin the largest in the world agricultural economy. Historically a leader in agricultural technology, Chinese agriculture is renowned for its intensive use of arable land based on exstemely high man/land ratios. Thus, China’s agricultural sector accounts for less than 8% of the world’s arable land but provides enough food for about 22% of he world’s population. Among the developing countries, China accounts for more than 30% of the total farming population, roughly matching the combined totals for India, Indonesia and Brazil.

AGRICULTURAL RESOURCES: China had a population of 1 billion, with the arable land per capita being about 0.5 hector. of which 0.1 hector is agricultural land, 0.12 ha. Forest and 0.3 ha. Grassland. The value is lower than the world average. The annual run-off rivers in China totals 270 million meters, ranking third in he world.

Major Agricultural Products Rice, wheat, potatoes, sorghum, peanuts, tea, millet, barley, cotton, other fibers, oilseed; pork and other livestock products; fish

Evidence from Eastern China indicates the existence of an agriculture based on cereals dating from at least 7000 BC. And an agriculture based on sustained field cropping from 1000-700 BC thereafter, the gradual extension and development of agriculture were the essential underpinnings of a civilization whose artistic and scientific accomplishments span some three millennia of human history. The first recorded land tax dates from 594 BC, and large quantities of land were being bought and sold by 400B.C. by which time substantial works for irrigation, drainage and flood control had already been constructed.

There was further rapid development of agricultural technology between 800 and 1200 AD, particularly in southern and eastern China. For lowland rice, sophisticated land preparation and transplanting techniques were introduced, and a considerable variety of improved seeds suited to local climatic and soil conditions were developed. During this period mechanical methods of lifting water, as well as improved gravity flow irrigation and flood control systems, became widely used. Thereafter, the historical records suggest that these technological advances were improved relatively little during the next several centuries. Rather, there was a progressive expansion in the arable area (including extensive cultivation of marginal areas for dry land farming) coupled with some intensification by means of double cropping and irrigation, with change dominated by demographic expansion. This pattern persisted up to the end of the pre socialist era in 1949, although opening of China to Western influence and commerce brought about some changes. e.g. maize and groundnut cultivation in northern China, improved strains of cotton and tobacco, and market gardening to serve the growing industrial centers of eastern China. Agriculture in other parts of the world benefited from access to Chinese crops and technology, for example soybeans, tea cultivation methods and sericulture.

Agricultural production has improved rapidly since the founding of new China, following land reforms in rural areas and the abolition of the feudal system all over the country and the establishment of a socialist system. Main reforms are as follows.

After the third plenary Session of the 11^th Central Committee of the communist Part of China held in 1978, a series of reforms were undertaken. A responsibility system of production at the household level was instituted. Meanwhile, the procurement price of farm produce and sideline products was increased and some food grain were imported to reduce the purchases from the rural areas, so that the farmers could recuperate from having to fulfill unreasonable targets. A policy of developing a diversified economy while never slackening efforts for food grain production was practiced. The implementation of all the policies has effectively aroused the enthusiasm of millions of farmers.

The gross income of rural areas was 451 billion-Yuan showing an annual increase of about 12% for the last five years. The gross agricultural output in 1985 was estimated at 357.5 billion Yuban showing an annual increase of 10% on an average for the last five years.

The problems of food and clothing are the primary task of China. China’s food grain output (including cereals, pulses and tubers was 304.77 million tons in 1978, 407.31 tons in 1984 registering an increase of 33.5% while the average per capital food grains availability increased from 300 kg to 400 kg. The cotton output in 1984 was 6.258 million tons providing each person with 6 kg of cotton on an average.

Though the food grain output in 1985 was 28.33 million tons less than the output in the previous year due to reduction of cultivated land and severe natural calamities, it still exceeded the target set in the Sixth five-year Plan.

Animal husbandry and fisheries has also developed rapidly in recent years. In 1985, the output of meat (pork, beef and mutton) was 17.55 million tons showing an annual average increase of about 6.5% during the past five years. While the average per capita increased from less than 9 kg in 1978 to 16.7 kg. Aquatic products were 6.97 million tons showing an annual average increase of 7.6% and the average per capita increased from 4.8 kg to 6.6 kg.

The improvement of productivity in agriculture enhanced the development of rural industry and enterprises, which employ 60 million persons (17% of the total population of the rural areas) and showed a gross output of 230 billion Yuban. The living standards of rural people were improved with the development of production while the per capita income increased from 133 Yuban RMB in 1978 to 397 Yuban in 1985.

Postal and telecommunications were very backward in old China. Long distance communications just relied on a small amount of overhead open-wire lines for audio circuits and 1-channel and 3-channel carrier telephone transmission equipment. Most urban telephone switching equipment were magneto systems and common battery type manual switching equipment, and only a few big cities were provided with the now obsolete stronger and rotary automatic switching equipment. The post and telecommunication facilities were even more backward in vast and rural and remote areas except towns in a few coastal areas. Though incessant efforts over the past 36 years, since, the founding of the people’s Republic of China in 1949, China has achieved a great development in posts and telecommunications. China established a vast public telecommunication network, with the capital Beijing as its center, linking up cities and towns all over the country.

Since the implementation of the open door policy, the national economy has developed rapidly the average annual growth rate of the post and telecommunication and traffic was 10%. Although posts and telecommunications has developed rapidly, the communication capability is much below the needs of national economical development and other fields, due to the lack of a good foundation to start with. For example, due to lack of adequate transporting and handling capacity, postal items cannot be dispatched and transported in time, which often leads to delay of mail. The telephone density in China is 0.6% almost equivalent to one telephone set per 200 population, much lower than the world’s average density (13.0%).

The government has considered posts and telecommunications as one of the strategy focal points of economic construction during the Seventh five-year Plan period giving priority to P&T and the development of P&T business. Therefore, the development of posts and telecommunications will surely be speeded up. According to a forecast, the P&T capabilities and total amount of P&T traffic should be increased by a factor of 8 by the year 2000 in order to ensure that the gross annual output of industrial and agricultural production can be quadrupled.

Construction is development of fixed assets. It includes the Construction of all kinds of industrial and domestic houses and buildings, the installation of equipment for the enterprises, the removal and repairs of buildings, geological prospective and designs. In China the above mentioned tasks are mainly carried out by the Ministry for Urban and Rural Construction and Environment Protection. For the sake of the building construction projects about 70% of he total amount is to be made as investment. Therefore, building construction is the main thrust area of construction. Amongst building construction projects, domestic construction formed about 56% of built up floor area till 198, industrial construction about 12%, public construction about 17% and other construction about 1%. Domestic constructions will sill form a major part in construction in the future according to an estimate. Therefore, the management of domestic construction is an important for the construction trade.

The need for all kinds of building construction will be quite great according to the demands of the Seventh five-year Plan and for the economic vitalization of the 190s. China will build about 2.5 billion square meters of urban residential buildings in order to reach a comparatively well off level of a float per family. The construction will be 12.3 billion a square meters due to the rapid development of the rural economy. Construction of workshops and warehouses will be 0.8 billion square meters excluding the construction and expansion of industries and public construction such as places for business, travelling, culture and education, etc. will be 1 billion square meters. The total building construction amount should be 16.5 billion square meters for the next 15 years. With the increase, there will be a greater demand for improved quality and functions.

Due to rapidly increase in population of China the building construction in China is changed i.e. for residence area it is different from that of complicated buildings. Low standards are adopted for residence areas. While for large buildings complex technology is adopted.

The basic principle for progress of China is that economic construction must depend on science and ethnology and science and technology must be oriented towards economic construction. Resources such as land, material, energy and manpower must be rationally applied. New techniques, technologies, materials, and equipment must be developed in accordance with local conditions for the development of the construction trade. The production structure, technology structure and organization structure at various levels must be regulated and developed in accordance with the socialized production method.

For the last several years, China has developed many advanced and appropriate technologies for the light, textile, food, consumer electrical equipment and some other industries. China has also mastered the technology of atomic energy production. From the time of the successful launch of the first satellite in 1970, China has launched 18 satellites successfully so far, and has become one of the few countries in the world to master the technologies of satellite recollection, multi-satellite launching with one rocket and synchronous satellite launching. China has already successfully developed a computer with a computing speed of 0.1 billion times and an all-digital simulation computer system. China has also produced 16 K large-scale integrated circuits and established effective fiber communication system.

However, there is still a long way to go compared with the developed countries in the production technology. There are many aspects that should be looked into. Many equipment that is still being used are outmoded, energy wasting and inefficient. The total capital expenditure from 1950 to 1981 was 750 billion yuan which is equivalent to the gross output of industry and agriculture in 1981.

Chief Manufactured Products Iron and steel, textiles, fertilizers, pharmaceuticals, transportation equipment, machinery, electronics, paper, sugar, cement, & motor vehicles.

The reasons for China’s technological backwardness in past was its lack of a clear and unified technology policy. It was not until 1983 that attention was paid to the study and formulation of a technology policy. In 1983 Chinese Government (the State Council), the Chinese State Science and Technology Commission, the State Planning Commission and the State Economy Commission engaged many specialists and undertook a comprehensive research and formulation of a technology policy relevant to the main fields of the Chinese national economy.

Following is the extract of china’s policy related to the technology, foreign technology trade and the milestones on which China intends to build its technological base.

This part of policy emphasizes on learning the advanced technology and experience of other countries so as to promote domestic economic development. It encourages the active exploration of technology export market and extensively participates in international division of labor in an effort to gradually make China's technology-intensive industries one of the important links of the international industrial technology chain.

China believes on developing foreign technology trade in various flexible manners. In terms of technology introduction, various ways may be adopted such as licensing trade, cooperative production, cooperative design, technological service, consultant and importing key equipment and complete plants. While the specific method of introduction are also adopted according to the specific situation. The key point of importing technologies is to renovate the existing enterprises and to encourage the import of techniques of the products designing, processing, and manufacturing and production management. In terms of technology export, China encourages the export of mature industrialized techniques.

China believes on speeding up the work of combining trade with scientific research and industrial production so as to establish a new type of scientific research and development system. China wants to accelerate the integration of trade with scientific research and industrial production, increase the capital input and scientific research and development and enhance digesting, absorptive and innovative capabilities of the introduced technologies. In this way, scientific research and development can be gradually transformed from being mainly managed by the state to managed by the enterprises. R&D system are made in such a way that they are conducive to the industrialization and commercialization of the introduced technologies so as to give the best play to the introduced technology.

China pay’s attention to the sophistication and the applicability of the imported technologies so as to yield better economic and social returns through digestion and absorption. Sophistication of the technologies means the sustainability of the technologies and the competitiveness of the products, while the applicability means that the level technologies is commensurate with the general technical level in the country, which can be quickly mastered and implemented.

In the field of technology import, China strives to make use of foreign governmental loans, mixed loans, export credit, loans from international financial organizations and commercial loans. The state places priority on financial arrangement and offer preferential interest rate so as to safeguard the construction of these key projects in urgent need by the nation's economic development. In the field of technology export. The state applies the internationally prevailing credit policy in supporting technology export by establishing seller's credit and buyer's credit for the export of technologies and complete plants. Banks, based on the principle of granting loans, place priority on the financial arrangement for technology export and offer preferential interest rate.

Preferential taxation policies are granted to the enterprises engaging in technology trade. In technological introduction, the policy of pegging the introduced technology to technological contents is adopted. The strategy of introducing technologies mainly for leading industries (machine building, electronics, chemical industries and so on) is practiced. Exemption on the customs duties on the equipment in the contract in accordance with the technical content in the technology import contract; import with high technical content enjoys more tariff reduction. With regard to the provision of advanced technologies in some important areas such as industry, agriculture, forestry, fishery and animal husbandry by foreign countries, the reduction or exemption of enterprise income tax is granted. In the field of technology export, those companies and enterprises which import raw materials, components and spare parts needed for technical upgrade and for the export of complete plants and new and high technologies enjoy preferential treatment.

The state mainly relies on legal and economic means to exercise macro control over technology trade and classify the technology trade projects as prohibited, restricted, allowed and encouraged. The state only applies the guidance plans to major technology import projects which have a bearing upon the economic development and technology export projects which involve significant interests of the country.

Foreign enterprises, when making investment in China and at the same time bringing in sophisticated technologies, may enjoy various preferences in accordance with relevant laws and relations. It is still in the trial stage for China to make overseas investment and provide the recipient countries with advanced technology. However, China enjoys a promising prospect to develop technology trade in the way of making overseas investment.

So these are some major aspects of Chinese Technological Structure. China believes of technological development but not on the cost of its principles as it can be viewed from their clear-cut definitions of technological development.
Over View of Chinese Economy Since 1978[36]

Beginning in late 1978 the Chinese leadership has been trying to move the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented economy but still within a rigid political framework of Communist Party control. To this end the authorities switched to a system of household responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods.

On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy, lassitude, and corruption) and of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central controls at intervals. In 1992-97 annual growth of GDP accelerated, particularly in the coastal areas—averaging about 10% annually according to official figures.

In late 1993 China's leadership approved additional long-term reforms aimed at giving still more play to market-oriented institutions and at strengthening the center's control over the financial system; state enterprises would continue to dominate many key industries in what was now termed "a socialist market economy."

In 1995-97 inflation dropped sharply, reflecting tighter monetary policies and stronger measures to control food prices. At the same time, the government struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, most of which had not participated in the vigorous expansion of the economy and many of which have been losing the ability to pay full wages and pensions. From 60 to 100 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres has weakened China's population control program, which is essential to maintaining growth in living standards. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development; furthermore, the regime gives insufficient priority to agricultural research. The next few years may witness increasing tensions between a highly centralized political system and an increasingly decentralized economic system. Rapid economic growth likely will continue but at a declining rate. Hong Kong's reversion on 1 July 1997 to Chinese administration will strengthen the already close ties between the two economies.

China has made a very swift performance in foreign trade and foreign relations due to its strict and stable foreign policies. Following are the main principles of China’s foreign trade policy. These are extracted from official web site of The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) of China.

Following is the extract of the major principles that are followed by the Chinese Govt. in order to control its international trade. These have been Clearly defined on the official Chinese web site.

I. “Stick to the policy of opening up in all directions and expanding foreign trade in all forms.”

The first principle relates to speeding up the pace of opening to the outside world, fully utilize the international and domestic markets and these two resources. It also emphasizes the need to continue to move ahead with the opening drive in the special economic zones, coastal open cities, coastal open areas and key cities along borders, rivers and in inland areas, and fully bring into play the influencing and driving role of the open areas. It encourages speeding up the development and opening of areas along major transport lines. It also Encourage the mid-western areas to expand opening both externally and internally.

II. “Stick to the policy of deepening the reform of the foreign trade and economic cooperation regime and, with the momentum of the reform, promote the sustained, rapid and healthy development of the foreign trade and economic cooperation sector.”[38]

This reform calls for compliance with the requirements of establishing the socialist market economic system and adaptability to international economic and trade norms in the course of establishing an operating mechanism satisfying globally prevalent economic rules. China sticks to the reform direction characterized by uniform policies, liberalized operations, equitable competition, self-responsibility for profits or losses, combination of industry and trade and pursuit of the agent system. The State will mainly resort to such economic tools as the exchange rate, tariff rate, taxation and credit in regulating foreign-economic activities.

III “Stick to the principle of equality and mutual benefit and " Honoring Contracts and Standing by Reputation"”

In all foreign trade and economic cooperation activities, China has always upheld the principle of equality and mutual benefit and made consistent efforts to respect each other and consult with each other on an equal footing. China opposes the attachment of any unfair and unreasonable conditions. China believes on maintenance of pricing that should be as fair as possible and beneficial to both parties. All economic and trade activities must meet the needs and capabilities of the parties concerned. This principle opposes any party to use certain advantages to gain unreasonably huge profits. Trading terms and conditions, methods of payment, commodity inspection, customs, transport, insurance and arbitration should follow international norms and practices. While placing importance on the development of economic and trade relations with the developed world, China also actively forges economic and trade ties with the developing world and work with these developing countries towards the establishment of a new international economic order. The Chinese government requires all departments, enterprises and individuals engaged in foreign trade and economic activities to follow the principle of Honoring Contracts and Standing by Reputation¡ and set up sound regulations and rules to ensure the implementation of this principle.

This principle means that all foreign trade and economic cooperation activities must center around the idea of quality first in order to attain a good reputation on international markets. It mean that China will choose well-performing enterprises as designed ones, organize production, perfect quality check and acceptance system, implement total quality management, improve the quality of export goods, and realize economic benefits by way of quality and variety. Projects with foreign investment should comply with the State's industrial policy, increase the percentage of technologically advanced and export-oriented enterprises and the ratio of success of these projects. In contracting overseas engineering projects, it is imperative to execute the quality standards as stipulated in the contract so as to foster a bigger number of quality projects; it is also necessary to enhance training of labor services personnel to improve their quality.

Since the adoption of the reform and opening policy, China's foreign trade and economic cooperation sector has gradually formed a multi-channel, multi-layer and multi-modality pattern combining commodity, technology, capital and labor services. China adheres to the principle of combining bilateral economic and trade relations with multilateral economic and trade relations to tap the international marketplace in different forms so as to facilitate the sustainable, rapid and healthy development of China's foreign trade and economic cooperation.

The legislation system for foreign trade and economic cooperation applies on all types of foreign trade and economic operations. All trade is to be administered in accordance with laws and regulations. Foreign trade and economic departments, enterprises and professionals shall enhance their legal awareness, level of law enforcement and consciousness of abiding by laws and regulations. A uniform nationwide foreign trade and economic policy is also necessitated by the objective requirements of the establishment of a unified domestic market and is in line with the international norms.

Following are the main points of the china’s policy on international trade and its policies on international economic cooperation.

Ø With regard to the relations with international organizations for multilateral economic and trade cooperation, China’s principle is to strengthen trade and economic contacts with all members of international multilateral organizations on the basis of mutual respect, equality and mutual benefit so as to promote common development. China is of the of the view that economic development and common prosperity can not be achieved without constantly strengthened cooperation and coordination as well as exchange of needed goods and complementing each other on the basis of equality and mutual benefit. China believes on strictly abiding by this principle in the relevant activities in GATT, WTO, UNCTAD and APEC.

Ø .With regard to the development of regional blocs in the world economy, China’s view is view that regional economic blocs should be open rather than exclusive and be conducive to the establishment of a new international economic order. Given the different conditions in the countries and regions, it is impossible to have just one form of cooperation, the countries and regions concerned may choose a suitable mode of cooperation in the light of their actual conditions.

Ø With respect to the resumption of china's GATT contracting party status, China is willing to enjoy the equal rights that it is entitled to and to perform the obligations commensurate with the level of economic development. Main purpose is participation in multilateral trade system, introduce proper competition mechanism into our country and to deepen the reform of the domestic economic and trade system.

Ø The Asia-Pacific region is the most dynamic region in the world economy today. As a member in APEC, China attaches great importance to the activities of this Organization. In November 1994 at the informal meeting of APEC leaders held in Bogor, Indonesia, President Jiang Zemin clearly stated that diversity and interdependence were the reality of the Asia-Pacific region. Based on this perception, he put forward five principles for the future development of economic cooperation in the Asia-Pacific region which are as follows.

These five principles are also China's principles for dealing with other regional economic organizations. China's principal for bilateral and multilateral assistance is "give and take". In 1982, China began to receive the economic assistance from some developed countries and international organizations. China Takes into account the capacity of the donor countries and priority needs in the economic construction and does utmost to obtain more grants and advanced technologies so as to promote the economic development in our country.

China has a very clear view of its foreign trade objectives. Following is the main contents of china’s foreign trade policy, which are floated on Internet by the MOFTEC (Ministry of Foreign Trade & Economic Cooperation.)

It is the fundamental policy of China's foreign trade to maintain a balance between import and export. The export expansion is aimed at importing the advanced technology and equipment needed in the economic construction, the materials in short supply domestically and necessary consumer goods. Under the circumstance of too rapid increase in import, anemic growth of export and the emergence of trade deficit, Balance is attained through the active export expansion instead of passive import reduction.

Enterprises are encouraged to constantly raise the quality and grade of the export products by means of deeper processing. In the optimization of export composite, the shift from mainly exporting roughly processed products to finely processed products is be promoted in a bid to export more high value-added products.

Attempts are taken to promote export growth and improve the export tax refunding system to ensure adequate and timely rebate with simplified procedures. A credit policy favorable to export development Is adopted so as to give priority guarantee for the export loans of various foreign trade enterprises and to ensure the growth of loan scale match with export growth. And also a state import and export bank needs to be set up to provide credit support and risk guarantee for export.

While increasing foreign exchange earnings through export to ensure necessary foreign exchange reserves, actively expand export according to the principle of striking a balance between import and export. The priorities for import are:

1.To import important materials required by national economic development and the import of advanced technology, equipment and important raw materials in short supply domestically.

2.To protect infant industries according to international trade practice and adopt necessary trade safeguard measures.

3.Exercising statutory inspection of some imported goods by using the advanced inspection facilities and improve the inspection methods so as to facilitate import and export. Necessary quota and licensing administration is adopted for a few important imported products. China does not intend practice trade protectionism and China market will be open to countries and regions all over the world. Foreign commodities, so long as they are competitive and conform to China's industrial policy, are blessed with abundant opportunities to enter China market.

Import and export trade is liberalized under macro control. Joint companies are established to exercise unified and joint transaction over a few especially important commodities that concern state economy people's inclined to be monopolized in international markets. Administration commodities subject to aggregate quantity control are exercised in accordance with the principle of efficiency, impartiality and transparency, with the quotas subject to bidding, auction or standardized allocation. The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) is responsible for the formulation of relevant regulations and the supervision over the implementation, whereas the specific procedures are organized by import and export chambers of commerce concerned. In meeting with the requirements of economic system and reforms of foreign trade regime, import and export trade shall be regulated mainly by economic means while supplemented by necessary administrative measures, with interest rates, exchange rates, tariffs and so on as the major leverages.

China follows the principle of diversification of trade practices and methods. Flexible and diversified trade measures and practices are adopted according to different market situation. At the same time when cash trade is being expanded, Attention is also paid to the development of barter trade, entreat trade chartering and leasing trade, counter trade, multilateral trade and border trade with other economic and technological cooperation activities and boost such businesses as processing with imported materials.

Following are the main points of the policies that China follows while making international contracts.

1.China follows the guideline of equality and mutual benefit, pursuing practical results, adopting various ways and seeking common development in developing overseas contracting projects and labor cooperation undertakings.

2.Enterprises which satisfy the following conditions are eligible to apply for the rights in dealing with overseas contracting and labor cooperation:

1-Economic entities which exercise independent management, assume independent accounting and be solely responsible for profits and losses.

2-Economic entities equipped with relevant personnel, adequate funds and technology in conducting overseas business activities

3-.Economic entities blessed with the track record and credibility of conducting cooperation with those enterprises already granted with the said rights to develop business activities abroad.

3.China practice an organized manner in dispatching its personnel to undertake overseas contracting projects and labor cooperation. People return to China after the fulfillment of the contracts and therefore and expected not to bring social problems or employment pressure to the host country. The government has established the training and examination system for these people and requests departments and enterprises concerned to examine the ethics, technical level and health condition of these dispatched people so as to raise their quality and the government strictly prohibits illegal emigration and unlawful activities by using the channel of official labor service provision.

4.The government constantly improves the coordinating administration mechanism, and strengthens the coordinated service for the enterprises engaging in overseas contracting and labors cooperation via intermediate organizations such as chambers of commerce.

5.The Chinese government actively supports and encourages the development of overseas contracting and labor cooperation undertakings and has formulated corresponding preferential policies and measures in providing preferential loans, tax exemption or reduction and guarantee.

6.The Chinese government actively supports and guides the enterprises which undertake overseas contracting and labor cooperation to develop various forms of international economic cooperation.

China's principle in making overseas investment and setting up enterprises abroad is equality and mutual benefit , pursuing practical results , conducting various forms and seeking common development .

In establishing overseas enterprises. China sticks to the principle of equality and mutual benefit, respects the sovereignty of the host country. China does not interfere with the internal affaires of the country and attaches no political conditions. Overseas Chinese-invested enterprises and staff working abroad abide by the local laws, respect local customs and habits. The Chinese take full consideration of the possible conditions and the actual needs of both sides and fully exploit their respective advantages and potentiality..

Chinese culture is one of the most rich and unique cultures prevailing in the world these days. Following are the main points of Chinese culture.[47]

Ø In Western culture, people view man as a master of nature, and naturally tend to extend into future prediction by logic, sequential thought-process. Chinese view man as subservient to nature, and might well take more ‘fatalistic’ view of the future, and be less prone to fine calculation. Therefore, in the technology of decision analysis, Chinese are less concerned about the application of an accurate method of measurement. Chinese mangers tend to use intuition or subjective judgment method to make a decision. The reaction to an uncertain environment for them is ambiguous.

Ø For Chinese time has always been associated with events. In Buddhism, since events are illusory, time is illusory. As such it moves on but will come to an end in Nirvana (an absolute lad eternal happy society). In Taoism, time travel in a circle, since a thing comes from non-being ad returns to non-being (Chan, 1967).

Ø In Buddhism society, people are more concerned with Universal self (big ego) rather than self-ego (small ego). In this society, if the self wants to pursue his self-actualization or self-goal, then his self-actualization requires the general acceptance by society, otherwise, his actualization would have no meaning to the Chinese.

Since Chinese societies have been experiencing the cultivation of Confucianism for 5000 year, most of people have internalized thoughts of Confucianism into their personality. The code of Confucianism has become a criteria or standard of behavior. Confucianism concerns “Zen”, that is transcendental wisdom, love and compassion, on the cultivation of self-morality. Under the “Zen”, people are concerned with “justice” than the material than the material-pursuits, ignoring innovation and research activities. Confucianism also emphasizes the five cardinal social relationships:

From the meaning of five cardinal relations, it implies an authority-obedience relationship. These relationships are internalized into the personality of Chinese through a socialization process. It tends to create an authoritarian personality in this kind of socialization. Under an authoritarian personality, subordinates are prone to obey their superior, to be passive, to be concerned with the hierarchical authority and vertical relationship.

On the other hand, the master-apprentice relationship in Chinese societies is still playing an important role in social learning and educational process. The main question in this relationship is that teachers are unwilling to teach or instill their knowledge to the student as possible as they can because teachers are afraid of their students who will become more master than they are. Therefore, apprentices tend to lack in searching for knowledge ad teachers always discourage innovation. Authority, thus, replaces the judgement of right or wrong.

Under the influence of Confucianism and master-apprentice relationship, an authoritarian personality of superiors contributes to the following characteristics of organizational behaviors.

Traditionally the family has been the most important unit of society, and this is still true. The family is also an important economic unit. In rural areas, where about 74 percent of China's people live, the traditional family consisted of the head of the household, his sons, and their wives and children, often living under one roof. Common surnames gave families membership in a clan. In some villages all families had the same surname, or four or five surname clans might account for most of the villagers.

Land, the main form of wealth in traditional China, was divided equally among all the landowner's surviving sons when he died. Thus, as China's population grew, the landholdings became smaller and smaller, and many people were very poor. In the first half of the 20th century the family as a social unit came under severe stress. Rural conditions were bad, income was low, and food was often scarce. Health care was poor or nonexistent for most peasants, and mortality rates were high. Civil unrest, warfare, and foreign invasions added to the difficulties.

Urban family life is different from that in rural areas. In the cities, families usually are smaller, often composed only of parents and children. Since both parents work, the children are left in day-care centers or schools. Sometimes couples are split up if their work units are not close together, and husband and wife may see each other only rarely. Despite such problems, family life for most people in the cities is stable, and family ties continue to play a major role in the lives of both parents and children.

The underlying social and cultural values that influence Chinese can be broken into four fundamental elements.

By life extension, we mean a deeply felt connection to ancestors and future generations. Deeply felt connection not only involves wanting your children to carry on your name and preserve your reputation. But it also evolves passing to them the worldly goods you might have accrued so that their journey toward immortality to be easier and their status higher. These are the values, which were given by the ancestors to their children. China’s per capita rate of saving is very high. One of the important reason for such high saving is inheritance.

It is due to inheritance that Chinese are always concern for ling-term planning and long-term viability of goods and services expressed in terms of quality and durability.

Chinese use the term “Qu Tong Xing” to describe the Chinese characteristics of blending in with the crowd. Older generations are expected to wear dark, somber clothing. All business people are expected to carry cellular telephones. People follow the tastes of their group. The challenge for marketers is to determine which groups or influence cluster people belong to Family, neighborhood, school, work and so on.

One’s conduct in society always is informed by their status. In China wealth, power and knowledge are the three attributes of status. Any product or service that clearly expresses status or position will be successful. For example in China cellular phone suggests you are a busy entrepreneur or professional. Like all “ cosmetic consultant of “ Mary Kay”. One of the most successful marketers in China are equipped with eye-catching pink telephones.

This is a nation that embraces rather than rejects that which is different. China is a nation with a strongly entrenched identity and cultural values. The process of assimilation is a trap for international companies. Companies must remain sensitive to consumer needs and changing tastes.

Chinese management has its roots in ancient thinking and practices, especially with regard to values, performance evaluation, personnel selection, and quality control and project management. It is characterized by teamwork, orientation around relationships and multi-level regulations. Public ownership is the mainstay of the economy, although four types of ownership exist:

Historically, China has tested several models of management system, from “ three-men management”, through “ one-man management” and “ director responsibility under Communist Party committee Leadership” to the “ director responsibility system. Approaching the twenty-first century, under the program of economic reform instigated in the early 1990s China is moving towards a more decentralized, market-oriented, innovative and international stage, with a resultant need for changes in management.

The development and practices of Chinese management have been heavily influenced by the cultural traditions of the country. Many ideas regarding the work ethic, performance evaluation, personnel selection, accounting systems management production and quality control have been applied for centuries in Chinese work and business situations. Their origins are described below.

Early Chinese management was influenced by several ancient Chines philosophies including Confucianism, Taoism, Buddhism and Legalism. Confucius (551-479 BC), who most affected thinking on administrative behavior during later periods, emphasized that benevolence should be regarded as the basis of administrative power. Taoism denied the hierarchical administrative style and showed less social responsibility, while Buddhism emphasized equality, kindness and commitment. Han Fei, a Legalist representative around 230 Bc, noted four management principles:

3. Established practices for responsibility and authority within organizations; and

In China the concept of accounting originated with the Chou Dynasty around 1027-800 BC. It consisted of “ Counting”- the daily checking of expense and income- and “summing”- the comprehensive periodic evaluation of the economic situation. The formal Chinese accounting system was established around 475-221 BC and functioned primarily as a performance evaluation system, with indicators for promotion and demotion. During the Tang Dynasty the formal Chinese Auditing system was set up. By the time of the Sony Dynasty there existed comprehensive volumes of accounting records listing and analyzing economic data.

According to the Rites of the Chou Dynasty (Yang 1984), a classic of ancient Chinese literature, the first Chinese bureaucratic system was formulated as early as 1200-1100 BC with management responsibilities for 360 positions in six categories of official rank. Int eh Art of War, an ancient Chinese military text, Sun Tzu stressed the principle of “ understanding counterparts for every success”, advocating the importance of understanding the characteristics of subordinate, task and situations in management. Then, China established the world’s first comprehensive national system of personnel examination and selection, the imperial examination systems, for the civil service, a system that lasted over 1300 years. The emphasis was on multi-level screening, public recruiting and competitive selection, with examinations on both basic knowledge and problem-solving abilities. With examinations all three levels- country, provincial and state the system included essays, oral exams and performance texts. During the Ming and Ch’ing Dynasties, the personnel examination system became more complicated, incorporating four aspects of assessment:

In ancient China mass movement was the primary means of organizing and managing large projects such as the building of Great Wall, which involved more than 300,000 laborers, and the opening of the Great Canal, which involved nearly one million people. Prior to this MO introduced the idea of labor division, while more recently Dong tried to reduce unnecessary time lag in order to shorten the production process and raise work efficiency. Another well-known example of Chinese ancient systems management was the implementation of the Dujiang Dam project during 306-251 BC.

A dominant principal in Chinese management is the team approach , including group decision making, group reward, group responsibility and team management through the “ excellent group evaluation campaign” and “ optimization through re-grouping”. The team approach has been especially effective in the field of quality management, which is characterized as “ expert-worker joint quality control”. In relation to this approach, good interpersonal relationships within teams is emphasized as crucial to a successful management. Linking individual interests with group and organizational interests has been greatly encouraged to facilitate higher organizational commitment and effectiveness. Loyalty is further encouraged via the provision by organizations of housing, medical care, children’s daycare and services for retired employees.

The Chinese labor system is undergoing reforms to allow enterprises more power over recruitment and placement. The labor contract system was introduced throughout the country as a solution to the problem of the “ three guarantees as iron’ (guaranteed job assignment, pay irrespective of performance and tenure). In addition, labor markets have been established with some form of unemployment insurance plans. Within enterprises, since 1978 various kinds of reward systems have been implemented as a supplement to the fixed and structured wage system. Most of these include multi bonuses and are linked to an enterprise’s economic efficiency. Finally, in late 1993 China began implementing a new civil service system nationwide.

Vocational training has also been established throughout China, greatly raising the skills and competence level of the Chinese workforce. The nationwide management educational programs running since the early 1980s have trained million of managers and supervisors for large and medium-sized enterprises. The Chinese State Economic Commission and respective ministries of industries now require managers to take short training programs on general management and organizational behavior. Distance learning and on-the-job training are also major strategies for managers and workers, with the Chinese Enterprise Management Association setting up a network of “ business school” type programs, in consultation with international schools, to train top managers.

Since 1978 a series of organizational reforms have taken place and four “ special economic and development zones” including fourteen coastal cities have been opened up to foreign investment an joint ventures. By 1993 there were more than 140,000 joint ventures in China, giving them a significant role in Chinese management.

In relation to organizational change, innovation and the transfer of technology is of great importance within Chinese enterprises, especially with regard to new management information systems. Wang (1989 a) formulated a theory of human computer interface hierarchy from studies on systems development. This theory views computing skills or expertise, system link or networking and participation as three facets of an interface hierarchy among people, the computer system and an organization, interaction among which influences the effectiveness of technological innovations. On the basis of action research among Chinese enterprises Wang (1992) also formulated three strategies for organizational reform and technology transfer:

1. Personnel strategy, which focuses upon the quality of skills, knowledge, expertise, attitudes and motivation.

2. System strategy, which deals with the reform of organizational structure, regrouping, vertical and lateral coordination, communication channels and management networks; and

3. Participation strategy, which emphasizes participative management styles, joint planning and user involvement for better management transparency and a more democratic management climate.

These strategies have been applied to the transformation of management both in state-owned companies and joint ventures.

Since 1984 leadership assessment has been a growth area in China. Assessment centers are now used to select top managers with the aid of group simulation tasks. Analysis of jobs has shown seven categories of management functions in Chinese enterprises:

Other research has revealed a three-dimensional structure to Chinese leadership:

The study of scientific and democratic procedures for organizational decision making was another major growth area during the mid-1980s, surveys reporting the positive effects of participative decision-making upon management effectiveness. Research also revealed different patterns and strategies of organizational decision making and influence-power sharing within management, dependent upon the type of management system and decision tasks.

The decision-making powers of State-owned enterprises has been delegated to the management prior to it in certain areas management have to take permission from the ministry of trade Corp. State Council for such Decision-making.

Management has expanded the decision-making power of enterprises in 10 areas. Enterprises could plan their own production and operations; market their products; determine prices for their products; purchase their own materials; manage their own funds and handle their own production systems. Enterprises also had the ability to establish departments, including those for the administration of personnel and labor management, and to distribute salaries and awards. Greater authority was also extended to domestic operations that were jointly managed by two or more domestic enterprises on the basis of a contract, though separately licensed.

At the enterprise level, these changes were accompanied by a move from participatory management in the Yan’an tradition to a new structure of collective leadership and democratic management by worker under the direct leadership of the factory director. Modern enterprises have a minute division of labor, a high degree of continuity in production, strict technological requirements and complex relations of cooperation. It is therefore necessary to establish a unified, authoritative and highly efficient system to direct production and conduct operations and management. This calls for a system of the managing director assuming full responsibility. This document also prescribes that enterprises must specify in explicit staff member and must establish various forms of the economic responsibility system with contracted jobs as the main content so as to invigorate the urban enterprises, raise the sense of responsibility of workers and staff members and bring into full play their initiative, enthusiasm and creativity. The system as a whole, though somewhat more flexible at the plant levels, still retains a high degree of centralization and control.

Nationwide decentralization and the introduction of participative managerial decision making have enhanced the new organizational structure of Chinese enterprises. The reform of the management system took place over four stages:

1. The experimental stage ( 1978-83), decentralizing some management power to enterprises;

2. The expansion stage (1983-5), trying out various management responsibility systems in some large and medium-sized enterprises and handling over to enterprises decision-making power in areas such as production, sales, pricing of non-quota products, disposal of assets, organization, personnel selection and staffing and monetary incentives;

3. The management systems reform stage (1986-91), implementing management responsibility contract systems in about 90 percent of large and medium-sized enterprises;

4. The management structure transformation stage (1992-4), implementing 1992 state regulations on changing management and the 1993 “ Communist Party decision on establishing a socialist market-economy structure”, namely to delegate fully various managerial decision-making powers and responsibilities of state-owned enterprises in areas including import and export, investment, after-tax profit distribution, joint venture, merging, recruitment and wage systems.

These reforms have resulted in significant increases in output values, profits and taxes. Specific management reform initiatives have included separating management power from ownership and splitting management into shareholding, contracting and internationalizing functions.

China had a major boom in its economy during the last decade (1980-1990). Major changes were brought in the management style. New goals and new directions were set for the Chinese economy. Great Chinese leader Deng Xiapong was the person who showed a new way to Chinese management. He initiated some major reforms in 80s, which became a strong backbone for a prosperous future of China.

Reforms during 1980-88 are one of the main milestones, which helped the country to boost even further. Great Chinese leader Deng Xiapong as stated earlier initiated these reforms. Following were its major aspects.

The areas to be Reform were the Chinese Communist Party and its political activities, reform of government organization, reform of the economy, military, cultural and artistic, indeed China's post-Mao Zedong leaders called for reforms of every part of Chinese society.

Ø The leaders of the People's Republic of China saw reforms as the way to realize the broad goal of modernization of industry, agriculture, science, technology and national defense. The goal was to bring China into the community of advanced industrial nations by the start of the new millennium.

In the reform movement, concerted efforts were made to bring about fundamental changes in administrative methods while keeping the overall institutional framework intact. Thus, the reform movement of the 1980s--which has been attributed largely to the insights and determination of Deng Xiapong, the most important figure in the post-Mao Zedong leadership--took its place in the broad spectrum of Chinese history.

Ø In a rejection of the time-honored concept of "self-reliance," China entered into the milieu of international bank loans & joint ventures.

Ø Self-proclaimed successes of the reforms of the 1980s included improvements in both rural and urban life, adjustment of the structures of ownership, diversification of methods of operation, and introduction of more people into the decision-making process. As market mechanisms became an important part of the newly reformed planning system, products circulated more freely and the commodity market was rapidly improved.

Ø The government sought to rationalize prices, revamp the wage structure, and reform the financial and taxation systems. The policy of opening up to the outside world (the Chinese eschew the term open door, with its legacy of imperialist impositions) brought a significant expansion of economic, technological, and trade relations with other countries. Reforms of the scientific, technological, and educational institutions rounded out the successes of the Deng-inspired reforms.

Ø For the first time in modern Chinese history, the reforms also were being placed on the firm basis of a rational body of law and a carefully codified judicial system. Although reform and liberalization left the once more-strictly regimented society open to abuses, the new system of laws and judicial organizations continued to foster the stable domestic environment and favorable investment climate that China needed to realize its modernization goals.

Ø A realistic pricing system that reflected accurately levels of supply and demand and the value of scarce resources had to be implemented. The tremendous demand for consumer goods and the lack of effective controls on investment and capital grants to local factories unleashed inflationary pressures that the government found difficult to contain.

Ø Efforts to transform lethargic state factories into efficient enterprises responsible for their own profits and losses were hampered by shortages of qualified managers and by the lack of both a legal framework for contracts and a consistent and predictable taxation system.

So these were the major areas in which reforms were made. All of these reforms took time to be implemented but gave a solid ground to country for a firm a concrete progress for the near future.

As Chinese management undergoes systematic reform, there has been a significant move towards holistic means of coordinating subsystems of management. Chen (1988) adopted the concept of macroeconomics as a broader framework and called for holistic management to integrate individual and organizational functions, short-term interests and long-term potentials, and material incentives and moral development. The holistic approach has also been used to integrate culture, organizational reform and management principles.

Chinese organizations are the formal types of organizations. Here are some of the major properties of Chinese Organizations.

Ø As there is formal hierarchy and centralization decisions in the organizations, so the objectives are said by the top management and then implemented throughout the organization. The top management set the clear defined goals, so that subordinates put their efforts to achieve these goals in the positive manner. As there are defined goals, so management put their best efforts to achieve these goals.

Ø As there is formalized organizational structure so top management makes the decisions in the hierarchical manner. So there is concept of centralization of decisions in the organizations. Meanwhile the State enterprises also have the upper hand over the decisions of the other organizations.

Ø Each worker or manager is expected to be independent and not rely on anyone else. The tendency, therefore, is toward simple line organizations and broad spans of control.

Ø The decision-making power of State-owned enterprises has been delegated to the management prior to it in certain areas management has to take permission from the ministry of trade Corp. State Council for such Decision-making.

Ø In Chinese culture feed back is given indirectly, for example through the withdrawing of a favor, or via an intermediary person trusted by both superior and employee.

Ø In the State owned enterprises, the policies are said by Giant State enterprises with the help of State economy trade commission, while in the private sector firm it said the policies keeping in view the policies of State owned enterprises.

Ø Many companies have offered employees lifetime employment in China, however, the effect that these employees have on the overall operations of a company is very critical when one of these employees joins a company, and they actually become part of it. They have planned of them including the method of advancement. This trend is currently changing due to the reason that many organizations in China are privatized. The workers or other members of these organizations have been laid off.

Initially, in the beginning of this century the China adopted a Stalinist system industrial management modified by the special Chinese revolutionary traditions of the Yan’an era. The main Characteristics of this system included a high degree of centralization with clear, detailed plans and standard operating procedures for their implementation. Risk aversion and adherence to formal rules dominated. Within the enterprise a pluralistic structure was adopted. This structure consisted of the Director, the Enterprise Party Committee, the Worker’ Congress, and the Trade Union Committee. Though the balance of power among the four institutions shifted over time, a tradition of limited participation of workers as part of the formal structure has remained.

Since 1978, a process of experimentation with organizational reform has led to several important modifications of the economic system. As part of these changes, the reforms introduced a new motivational system officially promulgated by the State Council in 1984 as the ‘responsibility system’. The basic principles of the system were a combination of ‘responsibility’, authority and benefit or simply a performance-oriented organization. The new imperative is to ‘calculate prior to action’ rather than ‘action before calculation’. Rationalization of management techniques with a strong emphasis on the introduction of means-ends analysis characterized the normative basis of these reforms.

In 1984, by reforms in the following dimension have been brought in the organization design in China.

These reforms thus modified the mechanism for worker participation norms in the design of business organizations, introduced the values of teleological structures, emphasized formality of authority structures, and promoted the value of adaptiveness and flexibility within a rigid structure. In terms of leadership, the reforms emphasized values of innovation and experimentation. The importance of general managerial skills such as interpersonal and rational decision-making skills was also upgraded. The reforms, however, did not involve a basic change in the totalitarian nature of the government or the intensive use of both incentives and coercion to ensure implementation of government policies.

The Chinese have always had a proclivity for business and trade. As a result, most of the small business activity in both Singapore and Malaysia uses Chinese management approaches. Chinese enterprises vary in size from independent street hawkers to larger firms such as the rubber, tin mining firms, and a number of mercantile import-export firms. These firms are generally owner-managed and built around the family unit. It is usually difficult to separate the Chinese family as sociological unit from the family as a business enterprise. In the Chinese business unit, the following Characteristics are predominant:

Ø The head of the family is the chief executive of the business Unit. the eldest son is next in the organization hierarchy. The younger sons and daughters are encouraged to further their education and often are sent to foreign universities.

Ø The Chinese-managed enterprise develops capital by limiting consumption and through family savings. It is not unusual to find a wealthy Chinese family living on the premises of the firm in every modest housing. All members of the family are expected to contribute to the family enterprise. Long hours and hard worker traditional.

Ø The Chinese businessmen place a high value on independence, seldom welcoming outside help or investment, and on family solidarity and loyalty. They raise the funds from saving and other resources.

Ø The Chinese firm maintains only minimal financial records. The abacus is widely used, and much financial data exist only in the minds of the chief executives. For this reason, an income tax is very difficult to administer.

Ø Authority is based on age and is usually absolute. Subordinates are not expected to question the viewpoints of superiors. Group decision making plays a minor role.

Ø Secrecy is a major element of the Chinese approach to management. Chinese firms have difficulty using outside consultants because of their tendency to avoid trusting outsiders. Even the identity of the owners of some Chinese enterprises may be kept secret.

Ø The Chinese have a cool and calm personality. They do not understand outsiders who speak loudly or tend to “fly off the handle.” The Chinese businessman has a tendency to withdraw into himself without giving any outward indication of disagreement.

Ø Centralized decision making by a dominant chief executive who is also an owner.

Ø A paternalistic view of human resources of power and of mutual vertical obligations.

Ø A relatively low level of formal system, structure and procedure, but an intense concentration on efficiency in the firm’s main function. Few support or non-line functions.

Ø Weakness in incorporating complex activities which require extensive professionalization, decentralization of decision power and sophisticated coordination, as in successful bran marketing internationally.

Ø A tendency to stay in familiar industries where the accumulated knowledge of the chief executive is a strategic weapon.

Ø The use of networks of external relations in pursuit of business opportunities, reliable information and capital. Not legalistic in approach: interpersonal trust is very important.

Ø Highly sensitive to the efficient uses of capital, for example a high inventory turnover, careful debt management, and an astute use of borrowing.

Ø Often linked into a network of stable supplier and customer relations and concentrated on one component of a total system, especially in manufacturing.

As there is formal hierarchy and centralization decisions in the organizations, so the objectives are said by the top management and then implemented throughout the organization.

The top management set the clear defined goals, so that subordinates put their efforts to achieve these goals in the positive manner. As there are defined goals, so management put their best efforts to achieve these goals.

In the State owned enterprises, the policies are said by Giant State enterprises with the help of State economy trade commission, while in the private sector firm itself said the policies keeping in view the policies of State owned enterprises.

As there is formalized organizational structure so the top management makes the decisions in the hierarchical manner. So there is concept of centralization of decisions in the organizations. Meanwhile the State enterprises also have the upper hand over the decisions of the other organizations.

In the State owned enterprises there is dual management system. Beside of the management of the enterprise there is interference of State, Provisional, Municipal government in the operations of the organizations. Which make it difficult for the State owned enterprises to manage their operations in the effective manner, so in this way greater chances of risk are involved.

The current pattern of organizational structure in China can be traced back to the “ Three-men Management System” in the factories of revolutionary area in the 1930s. It consisted of the director, the Communist Party secretary and a worker representative. In the 1940s this system was replaced by the “ Factory committee meeting” attended by the director, party secretary, and trade union leader, technician and worker representatives. After the founding of the People’s Republic of China in 1949 the Soviet “ One-man Management System” became the major Chinese management model, lasting until the early 1960s. Under this system the director had almost total power in the management field. However, this structure was inconsistent with the Chinese tradition of group approach as well as the leadership of the Communist Party in industries. Thus, in the 1960s it changed to the “ Director responsibility under Communist Party committee leadership” in which party organization, management team and trade union were together responsible for management tasks but the party played a more important role. During the Cultural Revolution ( 1966-76) the “ Revolutionary committee” and ideological indoctrination formed a kind of management in most organizations. Political norms and egalitarianism were dominated.

In 1978, China began a new era. Economic reform and an open policy were introduced and a new system of management, “ Director responsibility”, was adopted. The latter is now a major part of the Chinese management structure. The reforms have meant great changes in areas such as reward systems, responsibility contract systems, personnel management, teamwork, leadership, managerial decision making, joint-venture management, technological innovation and organization structure. There is a new emphasis on work efficiency, individual and team responsibility, work competition and democratic management which has forced management to modify existing organizational strategies and structures.

The Chinese Communist Party’s decision in 1993 to establish a socialist market-economy structure has as its goal a modern enterprise system with Chinese characteristics. This decision has several implications for China. Managing international joint ventures has become a major issue in management reform, with a resultant need to introduce management expertise from outside, to enhance organizational culture, to improve investment and the business environment and to facilitate organizational development. Other future needs include clearly defined property rights relationships, independent management with full responsibility, market-based production and management, effective leadership and organizational systems, a viable wage increase, increased teamwork and an adaptive macrorelative governmental system.

Chinese management is formally based on a top-down command structure with multi-level regulations. In reality, however, the management system operates on an informal basis through personal contact, loyalty and obligation. The most influential management principle is the “ two-way participation, own reform and three-in-one combination”, which developed from a popular nationwide management practice of the 1960s. Two-way participation represents the participation of workers in top management and cadres (managers and supervisors) in daily shop floor operation. “ One reform” is to change unreasonable management regulations and improve management systems.

“ Three-in-one combination” is to encourage cadres, technicians and workers to work together closely in technical innovations and management. This nationwide practice was successful in enhancing efficiency and morale and became the main part of the constitution of the Anshan Iron and Steel Company, a socialist management principle stressing the importance of mass mobilization, participation and Communist Party leadership in management and production.

Economic reform has resulted in a new ownership structure within China. While public ownership is still the mainstay of the national economy, many enterprises are under mixed ownership. Four types of ownership exist:

1. State-Owned, where the properties belong to the State and management is undergoing transition from the state planning system to the market system; this is the case for the majority of enterprises;

2. Collective, where the properties belong to a collective of workers and management is relatively autonomous, as in township enterprises;

3. Joint-Venture, enterprises co-owned by Chinese and foreign partners and managed by the “ general manager responsibility system under the board of directors”;

Ø The organization culture in China is process-oriented. They emphasize more on process rather then result. The reason of being emphasizing on process to produce quality products and to increase of activeness of employees.

Ø Chinese organizations are employee-oriented. They also emphasize on the well being of the employee and their family. All state owned as well as private owned organization gives much attention about the well being of their employees. These organizations give unemployment funds and pensions to employees after their retirement.

Ø The culture of Chinese organization is closed culture. No one can get information about the policies and strategies form the management. Overall a Chinese culture is closed culture. To establish a business in China have to follow a difficult process from the State Commission of economy and trade.

Ø There is much degree of formality and punctuality within the organization. The employees have their schedule for their work directed by the upper management.

Ø Collectivism in the degree to which individuals are integrated into groups. As Chinese are the followers of Confucian and Confucian provide the concept of groupism. Chinese work in groups and people team. Birth onwards are integrated into strong, cohesive in-groups, often intended families which continue protecting them in exchange for unquestioning by loyalty.

The Chinese organizational Culture can be understood by looking at the following major aspects.

The organization culture in China is process-oriented. They emphasize more on process rather then result. The reason of being emphasizing on process to produce quality products and to increase of activeness of employees.

Chinese organizations are employee-oriented. They also emphasize on the well being of the employee and their family. All state owned as well as private owned organization gives much attention about the well being of their employees. These organizations give unemployment funds and pensions to employees after their retirement.

The culture of Chinese organization is closed culture. No one can get information about the policies and strategies formulated by the management. Overall a Chinese culture is closed culture. To establish a business in China have to follow a difficult process from the State Commission of economy and trade.

There is much degree of formality and punctuality within the organization. The employees have their schedule for their work directed by the upper management.

Collectivism in the degree to which individuals are integrated into groups. As Chinese are the followers of Confucians and Confucian provide the concept of groupism. Chinese work in groups and people team. Birth onwards are integrated into strong, cohesive in-groups, often extended families which continue protecting them in exchange for unquestioning by loyalty.

A long-term orientation is mostly found in East Asian countries. In particular China, Hong-kong, South Korea, Japan and Taiwan. The Chinese organizations

The authoritarian personality, which is formulated by Confucian socialization, contributes to centralization of power in Chinese organizations. The superiors with personality often disrespect their subordinates. They are hard to believe the capability and ability of subordinates. Therefore, the superiors in Chinese organizations often fail to delegate powers down to their subordinates and fall into the trap of doing by themselves. They often complain of work overload, but they are unable to delegate power to subordinate.

High centralization of decision making is a main factor of low degree of participation. Conservatism and “Silence is golden” also limit subordinates to participate in decision-making. Thus, supervisors tend to a marrow span of control in order to maintain or enhance performance. However, narrow span of control may contribute to organization units expanding.

The prime distinction between Chinese and Western cultures appears to be the collective orientation of the former and the individualistic orientation of the latter. A collective orientation implies an emphasis on relationships, harmony, order, and discipline. These Confucian values support a formal and clearly specified organizational structure, unambiguous authority relationships, low internal competition, harmony in management /labor relationships, and centralized authority vested at the top. In terms of leadership. Chinese values would place greater weight upon ascribed rather than achieved status and upon diffused rather than specific status. In addition, Chinese values would focus upon the formal authority and the interpersonal abilities of the manger.

There may be little doubt that Chinese culture affects the functioning and performance of organization and management. Some of Chinese cultures affect the development of economic growth, such as fatalism and passive work attitudes block the way of Research & Development, innovation, and technology transfer.

In China the style of leaders is democratic (participative) Chinese leader consults with subordinate on proposed action and decision and encourages participation from them. Some important Characteristics of the Chinese leaders are

Ø Make decisions after bargaining/negotiating among managers of different units.

The Chinese have always had a proclivity for business and trade. As a result, most of the small business activity in both Singapore and Malaysia uses Chinese management approaches. Chinese enterprises vary in size from independent street hawkers to larger firms such as Lee rubber, tin mining firms, and a number of mercantile import-export firms. These firms are generally owner-managed and built around the family unit. It is usually difficult to separate the Chinese family as sociological unit from the family as a business enterprise. In the Chinese business unit, the following Characteristics are predominant:

The head of the family is the chief executive of the business unit; the eldest son is next in the organization hierarchy. The younger sons and daughters are encouraged to further their education and often are sent to foreign universities.

The Chinese-managed enterprise develops capital by limiting consumption and through family savings. It is not unusual to find a wealthy Chinese family living on the premises of the firm in every modest housing. All members of the family are expected to contribute to the family enterprise. Long hours and hard work.

The Chinese businessman places a high value on independence, seldom welcoming outside help or investment, and on family solidarity and loyalty. They raise the funds from saving and other resources.

The Chinese firm maintains only minimal financial records. The abacus is widely used, and much financial data exist only in the minds of the chief executives. For this reason, an income tax is very difficult to administer.

Authority is based on age and is usually absolute. Subordinates are not expected to question the viewpoints of superiors. Group decision making plays a minor role.

Secrecy is a major element of the Chinese approach to management. Chinese firms have difficulty using outside consultants because of their tendency to avoid trusting outsiders. Even the identity of the owners of some Chinese enterprises may be kept secret.

The Chinese have a cool and calm personality. They do not understand outsiders who speak loudly or tend to “fly off the handle.” The Chinese businessman has a tendency to withdraw into himself without giving any outward indication of disagreement.

The suggestion system is the collection of processes used to solicit, collect, evaluate, and adopt or turn down suggestions. According to Bob Scharz, author of The Suggestion System: A Total Quality Process, a good suggestion system meets all of the following criteria:

Ø Performance of each department in generating and responding to suggestions is monitored by management.

From these criteria, it can be seen that operating a suggestion system involves more than having employees toss ideas into a box, accepting some, and throwing the rest away. The best suggestion systems require that ideas be submitted in writing on a special form. Such forms make it easier for employees to submit suggestions and for employers to give immediate and formal responses. The forms easy the job of logging in suggestions and tracking them through the entire life of the idea until it is either adopted or rejected.

Here we proceed with the great Chinese leader Mao. He was a great political leader and leading theorist of the Chinese communist revolution, born in the village of Shaoshan, Hunan Province, China, the son of a farmer. He graduated from Changsha teachers' training college, then worked at Beijing University. He took as leading part in the May Fourth Movement, becoming a Marxist and a founding member of the Chinese Communist Party (1921).

During the first united front with the Guomindang (Nationalist Party), he concentrated on political work among the peasants of his native province, and advocated a rural revolution, creating a soviet in Jiangxi province in 1928. After the break with the Guomindang in 1927, the Communists were driven from the cities, and with the assistance first of Zhu De, later of Lin Biao, he evolved the guerrilla tactics of 'people's war'.

In 1934 the Guomindang was at last able to destroy the Jiangxi Soviet, and in the subsequent Long March the Communist forces retreated to Shanxi to set up a new base. This established Mao's supremacy in the Party.

When in 1936, under the increasing threat of Japanese invasion, the Guomindang renewed their alliance with the Communists, Mao restored and vastly increased the political and military power of his Party. His claim to share in the government led to civil war; the regime of Jiang Jieshi was ousted from the Chinese mainland; and the new People's Republic of China was proclaimed (1949) with Mao as both Chairman of the Chinese Communist Party and President of the Republic.

He followed the Soviet model of economic development and social change until 1958, then broke with the USSR and launched his Great Leap Forward, which encouraged the establishment of rural industry and the use of surplus rural labor to create a new infrastructure for agriculture.

He died after a prolonged illness, which may have weakened his judgment. A strong reaction then set in against 'cult of personality' and the excessive collectivism and egalitarianism which had emerged during his time in power. A political, military, social, and economic essayist, he was also a significant minor poet.

Under the training & development we will discuss education system, professional education system, Organizational training and expatriate training aspects.

Beginning in the Western Zhou dynasty (c. 11^th century BC 770 BC) government-run imperial colleges were established in China. During the spring and autumn and Warring States periods (770-207 BC) scholar sages, such Confucius and Mencius, gave private lessons to groups of selected disciples.

In 1840, after its defeat in the Opium War, China became increasingly exposed to Western educational practices. The number of missionary schools directly controlled by foreign powers increased rapidly, gradually forming an independent educational system within the country. By the late 19^th century, the tottering Qing government started to implement educational reforms by transforming some of the traditional educational reforms by transforming some of the traditional educational academies into modern government-run schools offering Western subjects as part of their curricula. After the 1911 Revolution, China began to develop a Western style system encompassing all levels of education from primary school to college. Prior to 1949, in addition to government-run educational institutions, there were a great number of missionary schools and privately run institution.

On the eve of Liberation, the entire nation had only 200 institutions of higher learning, 4,000 middle schools and 289,000 primary schools. Only 20% of all children of primary school age were enrolled in school and 80% of the population was illiterate.

After the founding of the People’s Republic in 1949, the People’s Government made fundamental changes in the old educational system. It took over all the public and private schools of the former regime and incorporated all former missionary schools into the national education system. The government also implemented a policy of facilitating enrollment for the children of workers and peasants, and established organizations for carrying out political and ideological work throughout the entire educational system.

After 1952, the Chinese government made necessary adjustments in its educational system with regard to the universities and their departments and commenced the implementation of united system of universities admissions and work assignment after graduation. After 1957, the Ministry of Education commenced implementing the policy that “everyone who receives an education” should be enabled to “develop morally, intellectually and physically and become professionally competent socialist-minded workers”. After 1960, the ministry continued to effect reforms throughout the entire educational system in terms of curricula, teaching, scientific research, productive labor and ideological education. The ensuing five-year period witnessed a notable improvement in many spheres. However, with the commencement of the “Cultural Revolution” in 1966, unprecedented harm was wreaked on the educational system, reducing much of it to a shambles. Many schools were closed throughout the nation and majority of teachers were maligned and subjected to ruthless persecution. Throughout China the quality of education dropped precipitously.

After the overthrow of the Gang of Four in 1976, the Chinese educational system underwent a four-year period of reforms and by 1980 it was once again back on the path of healthy development. By 1981, there were 704 universities and institutions of higher learning, 112,505 secondary schools (including junior middle schools and technical secondary schools), and 894,074 primary schools. Approximately 93 percent of all children of school age were enrolled.

Chinese state owned as well as in Private Organization management development programs are emphasized as necessary to reinforce and upgrade the core knowledge, technical skill and individual attitudes that guarantee a firms competitiveness. These programs need to provide high potential employees with both the hard and soft tools of management, from advanced functional knowledge and techniques to strategic awareness and leadership qualities in the case of Chinese. Therefore, only organizations offer on-the-job management training in a number of formats: in-company programs, consortium programs and open courses. As frequently as possible this training will take place in foreign country setting. Besides this in order to learn about the modern technology, engineers and other technical staff are abroad to Japan, U.S.A by the state or organization.

The management development in Chinese organizations designed for specific mix of various post graduate programs. In principle, the postgraduate education courses for executives can be divided into:

The management education development start with in subjects wide, short for the attendants cheap or cost less Informative Programs. This phase is considered very important for promotion of the market economy concept and the process of management education in China.

Basic Management Program, in one to two weeks duration, inform and educate the attendants with a chosen sector of management (strategic management, financial management, marketing, investments, management information systems etc.). BMP courses are designed to teach the employees how to tackle with the routine problem in the management. “On the job training” programs has main characteristics is to Sharpen their performance within the battery limits of an enterprise.

Training aspects include a very deep moral program as Chinese give more attention to immaterial aspects of the individual such as his interest, loyalty with the business. Morale programs within Chinese firms are primarily designed to show interest in the employees. Exercise programs, special interest programs, family orientation seminars, company schools, company stores, and family outings sponsored by the company are some prime examples. All members of a family are involved with the company, and this emphasizes that employees have strong relationship with it.

Wile it is true that no amount of preparation could sensitize the expatriate to all the contingencies that may arise in China, there are several types of training programs which can better prepare the person for the position to China. We will focus on those programs, which are designed to prepare personnel for cross-culture encounters. They are presented in ascending order of rigor with which the program seeks to impart on the candidate knowledge and understanding of a foreign country.

These include environmental briefings and cultural orientation programs designed to provide the trainee with factual information about China’s sociopolitical history, geography, and stage of economic development and cultural institutions.

The culture assimilator is based on the critical incidents method—incidents judged (by a panel of experts, including retiring expatriates) to be critical to the situations between members of two different cultures. Through such culture assimilators, trainees are sensitive to the different kinds of situations that may arise in China and how they can cope with them.

The candidate is taught the Chinese language. It involves months, sometimes years, before a person gains fluency in the language.

These programs focus on learning at the affective level and are designed t develop and attitudinal flexibility within the individual so that he can become aware of and eventually accept that unfamiliar modes of behavior and values systems can also be valid of acting in a different culture. Although the effectiveness of sensitivity sessions has been questioned, her is some indication that they “may well be a powerful technique in the reduction of ethnic prejudice, particularly among those who are low in psychological anomie”

Prior to actual assignment, the candidates are sent to China on short trips to see how well they can adjust to the local circumstances.

Under this head we will be discussing some of the major strategies that went successful for doing business in China. These are mainly the results of the expatriates who have been doing business in China.

The essential ingredient for success in the China market is to focus on one specific niche. Both domestic and international companies have applied four generic niche approaches in the China market.

The idea is to target the market with a well-conceived product or service and to push it to all possible geo-markets and customers segments. The product advantages must be clearly differentiated from those of its competitors. This is the most powerful option for companies entering a market place rich in product choice and categories and where competitors marketing campaigns are highly aggressive, such as in pharmaceuticals.

However, the rapid diffusion of knowledge makes it increasingly difficult for companies to develop any product or service that is truly from any other. Companies may enter the market place with this approach, but they may have to explore other approaches to maintain positive growth.

In this situation, a company targets a geographic region with a substantial but unfulfilled demand for products or services that are already available elsewhere. This approach allows smaller companies a chance to establish themselves in a marketplace with fewer resources and without overwhelming competition. However, less-developed regions often have lower purchasing power and less developed infrastructure. Strategic planners must be prepared to commit more time before realizing significant concerns.

A Company identifies a consu8mer segment with a significant demand and brings its product or service to that particular segment.

Companies using this approach, such as the Walt Disney Company, rely on a strong synergy between individual consumers within a segment, as well as a strong synergy among the products they produce. However, since the market in China is still in its infancy, consumer-niche approaches can only be applied to broadly defined segments such as children, women, and the elderly.

The company offers he product with additional value added such as easier access, lower price, more prestige, and the like. The experience of purchasing becomes as important as the product itself.

Chinese consumers are being drawn by intangible qualities such as ambience and status. Hard Rock Cafes in Beijing and Shanghai are successful examples of this approach.

This is significant market trend and companies offering continuously upgraded value in their products and services should see sustained growth. However, this approach requires significant operational control over production quality, delivery, and any other value-added element.

To succeed in China, companies need to do many things well. Aside from the four generic approaches a number of specific critical factors can spell success in China’s current consumer-driven marketplace.

The China market presents more challenges—including unfamiliar culture, rapidly shifting consumer tastes, and less developed business infrastructure—at a faster than any other environment your organization is working in. To make a business work in China, business executives need to multi-talented. They need to play the role of a diplomat, strategist, manufacturing expert, and distribution expert all at the same time.

Everything in China moves fast. Strategist must learn to see past the typically dramatic symptoms of trends and aim for the underlying trend, and constantly renew their products and services to suit the sustainable underlying trends. Companies must be proactively prepared for rapid change. Coca-Cola is one example within decade of market entry into China. Coca-Cola had already sensed the limitations of its carbonated drinks for the increasingly health-conscious Chinese consumers. So the company brought out a line of natural juice-based, non-carbonated drinks with a local joint venture partner—a move that took Coca-Cola almost a century in North America to make.

Bristol Myers-Squibb has been very successful selling vitamins in China, in spite of the fact that China is the world’s largest vitamin manufacturer. The key is the galenic formulation of the vitamin, which assists in the absorption of the medication’s chemical component. China is still behind the rest of the world in its galenic technology.

The consumption behaviors of Chinese consumers are far more determined by their social and cultural background than any influences from outside. For example, the Japanese manufacturers dominate the color television market in almost every country around the world. However, in less than 20 years after the introduction of color TVs from Japan into China, the market is now dominated by Chinese domestic brands.

Many aspects of doing business in China can be highly stressful, especially if a company’s expectations are not in line with what the economy is able to support. To keep the Chinese business environment in a proper perspective, adhere to four overall guidelines suggested by MERCER MANAGEMENT JOURNAL.

In China expect to make tradeoffs. A general manger may be forced to ask; “Will I have excellent manufacturing or excellent distribution?” Or “Will I have national market coverage or no major distribution headaches?” Establish your priorities at the highest order of business needs, and then stick to them.

The most successful multinationals in China, such as Coca-Cola or Procter & Gamble, have been in the country for more than a decade. As successful as they have become, they are still confounded by basic issues in distributing their products from plants to consumers.

The competitive environment is no less intense in China than anywhere else. In fast-moving consumer goods, Procter & Gambler, Kao, Unilever, and others have raised competition to the point where they now face shelf fees and advertising fees to secure access to retailers.

When selecting practices to adopt or technologies to utilize, managers need to consider those, which are most appropriate to the existing infrastructure; joint venture partners objectives; and the current skill level of the work force, including supplier and consumers’ employees.

While Working in China following are the main problems faced by foreigners. By overcoming these problems, a company may lead to road of success.

Unlike French and other West European languages, which are derived from the same common root as English, Chinese is totally different. In Paris, for instance you can try to guess what a French word stands for. In China, however, a Pakistani does not have the slightest clue on what is being said or written. So we totally dependent on a translator for even th4 simplest tasks such as hiring a taxi or making a local telephone call. This is very frustrating for someone who was independent back home.

The cramped offices and living quarters in china often appear unsightly to the foreigners. The slowness of pace with which the massive bureaucracy proceeds is both confusing and frustrating. Furthermore, many Chinese habits such as spitting appear uncouth from the Western standpoint.

Lack of understanding of social norms and cultural preferences in another country could mean that well-intentioned activities might sometimes insult or antagonize the party on the receiving end. In the area of gift giving, for example, the purpose is to cement a friendly relationship with a Chinese partner. However, if you do not know what gifts are inappropriate, there is a danger of straining this relationship.

Despite all the experimental changes towards market socialism, China remains a centrally planned economy where most activities are still directed. Because of the massive bureaucracy and the complexities of doing business in a socialist country, a Western executive has to exercise an inordinate amount of patience not only in the area of business negotiations but also with regard to the most elementary transactions, such as changing an airline reservation or making photo-copies if he did not have the foresight to bring some along. The simple task of changing a flight reservations, which would entail only a two-to-three-minute telephone call in the United States, could turn out to be a day’s adventure in China. Similarly, photocopying several pages, which would take a few seconds in this country, can turn out to be a four or five-day ordeal.

THE EARLIEST DYNASTY

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