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Book Review: The New Silk Road - Secrets of Business Success in China Today

by John S. Rhodes 

Quick Review

Introduction

The New Silk Road: Secrets of Business Success in China Today (Amazon link) by John B. Stuttard is a loose collection of interviews that were conducted with eleven foreign business leaders that are active in China. The author adds his own perspective to the book, which comes from years of global management experience. Recently he spent about five years as Chairman and Chief Executive of the China business of PricewaterhouseCoopers. Stuttard has worked around the globe and he has played a major role in helping multinational businesses. 

The book comes at a good time since many companies are starting to see that China is an important market to enter. Also, with the recent political and social changes taking place, now is a relatively good time to investigate doing business in China. Some companies have decided that they must enter China to survive so books such as The New Silk Road are important to business leaders. Other companies aren't sure if they need to be there and would like to know if the market is worth entering. Either way, this book is for those people seeking some guidance on doing business in China. 
 

The Secrets of Success in China

Chapter One of The New Silk Road seems to cover about 80% of the content of the book. In about 30 pages you learn what the book is about and most of the secrets are revealed. So, if you don't have time, you can read Chapter One and learn most of what the book has to offer. 

Below is a condensed list of secrets that I extracted from the book. 

• China is not one market; China is many markets (geographically, linguistically, culturally, and economically)

• Guanxi (connections and relationships) is important; focus on building long and trusting relationships.

• Control is important in Chinese society; structure, standards, and controls need to be in place.

• The various levels of Chinese government dominate the business environment; expect paperwork.

• Get the local Chinese involved as much as possible; put extreme emphasis on localization.

• Focus on long term success; be patient and don't try to rush; take things one step at a time.

• Focus on training people; transfer knowledge to gain trust and respect.

Of course, there are some other secrets but these are the ones that seem to be the most important. The secrets I mentioned above are also the ones that the executives mentioned again and again.

Here is another useful checklist of things to consider if you plan on establishing operations or doing business in China.

• Misunderstanding the market

• Quality of the management

• Bureaucratic hurdles

• Quality of production

• Supply of components

• Unwanted employees and social liabilities

• Title to property

• Reliability of accounting records

• Misstatement of inventory and receivables

• Misstatement of liabilities

• Valuation of fixed assets

• Quality of systems

• Quality of finance staff

Stuttard advises people to address these issues very early. Before you enter into formal agreements and contracts, you need to make sure that these things are resolved. This is especially important if you are entering into a joint agreement with a Chinese company or with the government.
 

Summary 

Stuttard's book is very short and easy to read. For the most part this is good. If you are busy, the book is valuable because you can digest it in just a few hours. Stuttard extracts important business knowledge from seasoned executives doing business in China in less than 150 pages. However, this also means that the book often lacks depth, background and historical perspective. There are many places where such context would have be appropriate.

Based on the interviews in The New Silk Road, it really does seem that there are secrets to success. The executives end up saying the same things over and over. The consistency from one to the next is remarkable. These are either real secrets or Stuttard is doing some interesting editing! 

While you might think that many of the points are common sense, be aware that they might only be obvious after reading the book. In other words, if you needed to make a list of things to worry about in China, you would probably do a poor job at capturing all of the right things. This is a lot like usability. Once the data reveals the problems it is too easy to think that the results are obvious. We can all predict the past. 

There might be better books on doing business in China but I thought The New Silk Road was pretty good. The author has a lot of experience in China and the executives he interviews seem like the kind of people worth listening to. The book is also inexpensive and easy to read. If you need to get a quick overview and you want to listen to some smart executives, buy the book. But remember, if you really need deep knowledge, this book will not satisfy you. 

Comments?  

Please send them to me:  john@webword.com  I want to know what you think about this report.

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