The Negotiation

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We are excited to bring you not one but two guests for this special episode. Our first guest is His Excellency, Dominic Barton, Ambassador of Canada to the People’s Republic of China. Our abridged discussion covers topics like major trends he’s witnessed in his 20 years in China; lessons the West could learn from China’s drastic growth over the past two decades and discuss Ambassador Barton’s book China Vignettes and the main takeaways from it.

We then welcome back Sarah Kutulakos, the COO & Executive Director at the Canada China Business Council. We discuss China’s most promising business sectors; how business relationships have changed between the West and China; whether China has an emerging issue of too many white-collar professionals and not enough blue-collar; and lastly some interesting pivots that have taken place in response to the pandemic. Enjoy!

Show Notes

Ambassador Barton Topics Discussed and Key Points:
●      The major trends witnessed by Ambassador Barton in China since the early 2000s
●      What lessons should the West learn from China’s drastic growth over the past two decades?
●      Why Ambassador Barton wrote China Vignettes in 2008 and the book’s main takeaways
●      Key thinkers and thought leaders in China and the broader APAC region that Ambassador Barton follows

Sarah Kutulakos Topics Discussed and Key Points:
●      The most promising sectors in China today
●      What the West can learn from China
●      How business relationships between China and the West may change
●      Whether China is experience an over supply of white-collar workers
●      Interesting pivots that have taken place in response to the pandemic
 
Episode Summary:
Dominic Barton, Canadian Ambassador to the People's Republic of China.
Previously, he spent close to 20 years working for McKinsey & Company with a focus on China, at first serving as Chairman of Asia for the firm before taking the helm of Global Managing Director from 2009 to 2018 amid China’s rising prominence on the world stage.
Other leadership roles that Ambassador Barton has held in the business world include Chairman of Teck Resources and as Non-Executive Director at the Singtel Group in Singapore and Investor AB in Sweden.
Speaking on the trends he has personally seen play out over the past 15 years in China, Ambassador Barton notes that urbanization, infrastructure and logistics, education and the bolstering of human capital, and technocratic leadership have all been top priorities for the country, and will continue to be through to 2030 and perhaps even beyond.
There are many lessons that the West can take away from China’s drastic growth over the past two decades, the most important of which, according to Ambassador Barton, is to not treat China as a “monolith”.
Rather than looking at it as “China Inc.”, operated solely by its government, the U.S., Canada, and Europe would benefit from acknowledging the different layers that influence the Chinese economy, which also include small to large businesses, consumers, and regional differences between each.
Ambassador Barton goes on to touch on the main insights he covers in his 2008 book China Vignettes and why he decided to dedicate the work to the country’s human element.
Finally, Ambassador Barton shares his favorite key thinkers and thought leaders on China and the APAC region. Noting the importance of “balancing the macro with the micro”, he lists a wide range of resources, including works of fiction that offer unique perspectives on the Chinese people that one would not be able to find in any textbook.

Episode Summary:
Sarah Kutulakos, COO & Executive Director of the Canada China Business Council
Sarah talks about her conversations with Western organizations in China regarding current market conditions and where the business world is headed in a post-pandemic society.
Canada’s exports to China have only continued to grow in 2021 since the onset of the COVID-19. In particular, the raw materials, consumer, and energy sectors have seen favorable conditions in the past year-and-a-half. In the long-run financial services should also fare well.
Sarah describes the most enthusiastic Western organizations in China in this way: “If you are aligned with China’s policies—which would include things like the five-year plan, increasing consumption for their new economic model, etc.—then you’re probably more excited about the market.”
“The ability to turn on a dime—that flexibility in business,” is the top quality that Sarah believes every company should try to emulate. Applying this to CCBC, Sarah always encourages Canadian companies to embrace speed and “be more aggressive in going after China.”
In a very short period of time, China has transformed its market into a leader with regard to its big data capabilities, and in its emphasis on the consumer as king.
Another reality that came about relatively recently is that improved education—not to mention greater access to universities today—has resulted in countless qualified Chinese nationals that are highly sought after by multinationals.
 
Ambassador Key Quotes:
“I think there’s too much of a view in the West of treating China like a monolith: It’s China. It’s the government. When we do that—and we all tend to want to simplify stuff as humans—we should first think about our own countries, whether that be Canada or the United States. What is an American? What is a Canadian? We’re all different. And I really think that that gets lost in the haze of ‘China Inc.’”
 
“[I wrote China Vignettes because] I felt I was being too economics-driven or macro-driven [...] and not really thinking deeply enough about the people: What is the consumer like and how might they be changing?”

Sarah Key Quotes:
“If you are aligned with China’s policies—which would include things like the five-year plan, increasing consumption for their new economic model, etc.—then you’re probably more excited about the market.
 
“[Chinese] companies don’t get married to a particular business model and they move fast to meet opportunities in the market.”
 
“One of the things we’ve tried to do with CCBC is to keep going at that clock speed and to encourage Canadian companies to be more aggressive about going after China, because they tend to sometimes be a little complacent and that puts us at a disadvantage versus Americans or Europeans that might be more energetic in the market.”

What is The Negotiation?

China is the 2nd largest economy on the planet, yet it's the most difficult to enter and manage well for foreign brands. However, success stories are starting to emerge as brands begin to rely on experts in China market-entry to build and execute new strategies and end-to-end China consumer digital experiences. The Negotiation delivers interviews with those who understand how to be successful in China, teasing out the nuances and digging into the details that can make expansion to China a winning proposition for any company.