A colleague of mine recently returned from a MBA class trip to China.  I was curious about his on the ground observations of the combined capitalist/communist economy

Although a hard discussion to have without some political considerations creeping in, my own focus was on the difference between private and state owned enterprise.

Freedom to Get Rich

One of the intereting aspects appeared the key incentive of a capitalist model, the freedom to get rich, was offset somewhat by restrictions on your capital.

That is investing/reusing within China was okay but investing internationally (unless specifically to China’s benefit had some restrictions.

Moving your wealth out off the country, along perhaps with yourself is a freedom kept in check.

Making Everything at Home

A key aspect of China (from what my colleague observed) was the enormous manufacturing capability.  He toured a number of factories and while his gruop was somewhat guided in what they were shown, it was impressive.

This  manufacturing mightiness, an obvious abundance of capital and the political will to build the needed infrastructure  was clearly on display.

Working with Chinese Businessmen

Of course a key objective of the trip was to build knowledge around Chinese business practices and gain a sense of the best ways to collaborate.

An interesting observation about business negotiations was they stared with getting to know one another.  The social aspect was critical to building a business relationship and was not to be avoided, without negative effect.

It is an interesting concept, get to know who you are dealing with, before beginning to deal.