Local Wins Take Global Skills

China-for-China strategies still need leaders with multinational mindsets
Multinational executives crafting "in China, for China" strategies usually focus on the long-term benefits: reduced risk by easier local compliance and integration, access to indigenous talent and better response to local markets. But localised strategies will also inevitably create new risks and hurdles. Gabor Holch, East-West leadership coach and author of a new book on expat executives in China, explains how to prepare for these challenges.
Source: EU Chamber's magazine EURObiz online.

"China-for-China", sometimes dubbed "in China, for China" has become more than just a strategic crisis management tool for foreign firms caught in successive crossfires of trade wars, and political and technology showdowns, between China and its trade partners. For many companies, the strategy is becoming a corporate nirvana where foreign firms in China can finally forget politics and combine the benefits of their foreign-invested status with local business practices. It is possible to see where this positivity comes from: in a struggling world economy, China’s vast market represents a rare ecosystem of growth. Foreign firms have fought hard for their shares, and may pull half of their global profit from China, as German car-makers, European luxury brands and many others currently do.

But executives plotting China-for-China strategies at multinational companies (MNCs), in China and abroad, expats and locals, must realise the fleeting nature of the present situation. A few years ago, the pressure on foreign firms to localise their legal status serendipitously aligned with ongoing management localisation, a pandemic-time expat exodus, and finally a post-COVID business boost. This created a temporary sweet spot of local talent managing operations still strongly connected to global networks. In most China-based MNCs today, most managers are either locals or settled expats with long experience, assets, families and plans in China. Meanwhile, global supply chains stir from their beauty sleep, hoping to make profit in China before their governments interfere in the name of "de-risking".

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