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- Does China Business Have a New Strategy and How Does That Affect You? (Part 1) - Editor, 26 February 2008
- Does China Business Have a New Strategy and How Does That Affect You? (Part 2) - Editor, 26 February 2008
- The Changing Face of China Business (Part 1) - Editor, 19 February 2008
- The Changing Face of China Business (Part 2) - Editor, 19 February 2008
- Environmental and Social Accounting for China Business (Part 1) - Editor, 11 February 2008
- Environmental and Social Accounting for China Business (Part 2) - Editor, 11 February 2008
- Management Accounting for China Business Supremacy (Part 1) - Editor, 4 February 2008
“We are not just concerned about whether a bank is just cheap”. You could expect that kind of statement from the Nobel-Prize winning micro-credit pioneer of Bangladesh. However, this quote is from the Chair of the Industrial & Commercial Bank of China Limited! This could be a sign of new times in the China business world.
Does China Business Have a New Strategy and How Does That Affect You? (Part 1)
China Business Is Different From Other Emerging Country Peers
An Indian politician and economist has coined the term ‘Chindia’ to present his country and China as a blend. Other hopefuls use the acronym ‘BRIC’ to represent the phenomenon of Brazil, Russia, India, and China. Each of these countries is an influential world player of the future. It is attractive to think of emerging economies as a single block. This could mislead strategy making, because China business is more different than similar to its peers in a new world order.
There are two routes to making money out of the success of China business: one is to establish business or professional links within the country; and the other is to own stock. The latter could be listed or available with brokers in any stock exchange, or through on online stock trading web site.
The Changing Face of China Business (Part 1)
Life Insurance Stock as a China Business Entry Route
The China Life Insurance Company Limited is listed on the New York Stock Exchange as an Advance Depository Receipt (ADR). The stock trading symbol is LFC. (We have no financial interest in the stock, and mention the example here solely for the information of our valued browsers. Such a disclaimer applies equally to other stocks mentioned in this article). There have been reports in some stock market circles that the company may have incurred a net loss during the last quarter of 2007, but the management has denied this. The net income was certainly a healthy 23% for the quarter ended June 2007. The company has over 85 million policies in force, and is diversified in to health and accident insurance, apart from its core lines of personal and group life insurance.
Have you read our earlier piece entitled “Management Accounting for China Business Supremacy”? We find that accounting can do more than tote up the numbers. It all depends on how the figures are presented. Leaving out some aspects of an enterprise can also make a business look different. Environmental and Social Accounting can help China business work improve. The first results can be frightening! Perhaps there are groups of people who get hurt. A Kaizen approach helps us take a positive view of matters. No one is perfect. Everyone can take small steps towards doing things better. Environmental and social accounts next year can be better than they are now.
How China Business Can Protect Investors
It is always better to avoid extremes. The stakeholder concept should not make stock investors feel left out! China business can adapt management accounting systems to take care of particular investor concerns. The Trailing Twelve Months (TTM) concept of influential US business web sites is an important lead. China business should move away from quarterly comparisons alone. There could be many seasonal variations for quarterly changes. A TTM approach is more reliable. Sensitivity Analysis is uncommon even in the US. China business can stand apart by show-casing Net Present Value (NPV) under various assumptions. This applies to the Internal Rate of Return (IRR) as well. Who knows the future for sure? Even pay-back periods can change in adverse business conditions. Sensitivity profiles of pay-back, NPV, and IRR, will encourage investors. Everyone gains if investment analysis is complete!
This is a second piece in a series on the evolution of China business. This article is linked to an earlier one we have published at this web site titled, ”How Should China Business Manage Its Equity?”. 20th century Business Management is an overwhelmingly occidental way of thinking, organizing, allocating resources, and of evaluating outcomes. It has the stock market as a close ally, which has formed the vanguard of the advance of capital led influence over the affairs of people.
Recent Articles
- Praise for Trade Growth - Editor, Wednesday 28 July 2010
- China Strengthens Trade with France, Egypt - Editor, Tuesday 6 July 2010
- China - Abu Dhabi Relationship Develops - Editor, Thursday 10 June 2010
- Clean Energy Innovations Hampered By Policies - Editor, Tuesday 18 may 2010
- Expo to Strengthen Image of Swiss Companies - Bernard Hagen, Friday 30 April 2010











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