September 12, 2018. Shanghai – Using data from this year’s China Business Survey which he co-authored, CEIBS Associate Dean & Professor of Management Juan Antonio Fernandez this evening provided solid advice on how to do business in and with China in the years ahead.

“The biggest change in the country has been social. The middle class is the future,” he said.

He was speaking to members of the European Union’s diplomatic community in Shanghai and business executives during a forum on Sino-EU Cooperation. The venue was CEIBS Shanghai Campus. The event is part of CEIBS’ efforts, on the 15th anniversary of the China-EU Comprehensive Strategic Partnership, to fulfil its role as a platform to further enhance China-EU communication and cooperation, both in business and culture, along with providing a window of China's reform and opening up in the education sector.     

Professor Fernandez began by sharing insights on today’s China, based on results of his annual survey of Chinese and foreign executives who do business in the country. The results have shown that the “good times” are over in China with increasing competition from domestic firms, rising labour costs and a slowdown in the economy.  Finding and retaining middle management continues to be a challenge, with their cost advantage eroded companies are now forced to be more innovative in order to compete, and foreign firms have a hard time getting their HQs to understand that China has changed and so should their approach to how they engage with the market.  

Pointing out that sections of China are ahead of the west in many aspects of the digital revolution ($790 billion in mobile payment transactions in 2016 vs $74 billion in the US and first in terms of the adoption of fintech), Prof. Fernandez spoke of the huge impact middle class generated consumption will have in the years ahead. “Global middle-class consumption will shift heavily toward China, India and other Asian countries (excluding Japan) as the high-income countries see their share decrease,” he told the audience.

The key is to be prepared for this shift.

He then spoke, in his capacity as Director of CEIBS MBA programme of how the school is preparing tomorrow’s leaders to do business with China of the future. The focus is on a combination of experiential learning and innovation. Through the school’s patented Real Situation Learning Method, MBAs gain insights into the China market through visits to companies used in case studies. They cover topics such as innovation, family business, healthcare and globalisation of Chinese companies with visits to companies in Shenzhen, Ningbo, Shanghai as well as Nanjing & Kunshan, respectively. This China Depth is complemented by overseas modules that provide Global Breadth and there is also a deep dive into the fast-paced digital revolution. There are courses, for example, on digital marketing, creativity & design thinking, modern marketing communications, and more. “We will need creativity and innovation to ‘robot proof’ our jobs,” said Prof. Fernandez.

A lively Q&A session followed his speech.

Today’s event was the first of two planned for the European diplomatic community in China. The next event will be in Beijing on September 21.