In this episode of The Negotiation, we talk with Ann Lee, author of What the US Can Learn From China and Will China’s Economy Collapse. We talk about her background with China, why she left Wall Street, and how predicting the economic crash of 2008 garnered her the respect of Chinese policymakers and US Academia alike. We talk about her book What the US can learn from China and why it was so popular in China as well as dozens of other nations around the world. We also talk about a few myths and misconceptions involving China, including tech transfer policies that have been widely misconstrued for several years now, a conversation that should hopefully alleviate concerns for foreign brands going into China. We talk about whether companies need to be extra careful doing business in China and segway into discussing her second book, Will China’s Economy Collapse, including why she wrote the book and how the obviously bombastic title came to be. Lastly but perhaps most importantly, we discuss the coronavirus and the potential impact it will have on business not just in China but globally, as this is a difficult time that will, in one way or another, affect us all. Enjoy!
Today on The Negotiation, Todd speaks with Ann Lee, author of What the U.S. Can Learn from China (2012) and Will China’s Economy Collapse? (2017). Having risen to fame for predicting the market crash of 2008, today she is a leading authority on international finance and economics.
Ann worked on Wall Street soon after graduating from business school, but made the transition to academia in 2006 once she foresaw the credit crisis. In 2008, she was invited to teach on credit markets and credit derivatives as a visiting professor at Peking University in Beijing. Chinese policymakers quickly caught wind of Ann’s expertise in this area once the market crashed, and she was subsequently approached to help them navigate the financial crisis which followed. She published her first book a few years later, which received worldwide acclaim and instantly gave Ann a global following.
When asked what readers can expect to learn from What the U.S. Can Learn from China, Ann says the message is to “stop demonizing [China]. As wonderful and as powerful as the U.S. is, it does not have a monopoly on good ideas.” She adds that the book is not meant to endorse one country as being better than the other. Rather, it is meant to help readers open their mind to cultural nuances present in the way each country approaches different issues.
Ann was able to predict the global financial crisis thanks to her experience working on Wall Street. To her, the biggest problem was that there was too much power in the hands of the federal reserve, big banks, and other prominent financial institutions of the time. In other words, innovation was nowhere near as important as money. China, on the other hand, approached finance as a tool for nation-building, similar to the attitude displayed by the Founding Fathers of the United States.
“Doing business in China is like doing business anywhere else.” The important thing is to do your due diligence before making any sort of investment or negotiating with a local business. China is actually ranked as one of the most open countries to do business with. Hypercompetitiveness is the only factor that Ann highlights—there is a lot of ambition in the country. At the same time, there are fewer regulations in China than there are in many Western countries. Ann goes as far as saying that “it is almost too capitalistic in China.”
Ann also touches on the attention-grabbing title of her second book, Will China’s Economy Collapse?. In 2015, many on Wall Street believed that China was on the verge of collapse due to a highly volatile stock market and rapidly shrinking currency reserves.
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Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.
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