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Chinese family firms hold key to future of Asian economy.

Document Cited in Related
Vincent
AuthorTownley, Gemma
PositionAndersen Consulting and the Economist Intelligence Unit publish report - Brief Article

Multinationals must watch how Chinese firms adapt to globalisation, writes Gemma Townley

Chinese family businesses (CFBs) need to change fundamentally the way they work if Asia's importance as an economic region is to continue. Multinationals should watch the way these businesses, which control a huge percentage of Asia's economic wealth, manage the risks and possibilities thrown up by e-commerce, globalisation and liberalisation.

A new report from Andersen Consulting and the Economist Intelligence Unit (EIU), Beyond the Bamboo Network, says that the traditional strengths of CFBs -- the role of middleman and the reliance on personal relationships -- will matter less than their ability to build markets and acquire new customers. Radical change will be needed, with a focus on strategic thinking, marketing and effective management of human capital.

CFBs control an extremely large percentage of Asia's economic wealth and their success will have significant implications for their country's economy on the eve of China's potential accession to the World Trade Organisation (WTO).

"The elimination of trade barriers among the Asia Free Trade Agreement (AFTA) members will make Asia an attractive region for outside investors -- an understanding of how CFBs operate and are changing will be important for multinationals, should they decide to build...

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