Northeastern University (NEU) EMBA trip - April 2012

For six years, Runckel & Associates has helped the Executive MBA program at Northeastern University to develop and execute a 10 day trip to Asia.  The trip is the culmination of the schools Executive MBA program and generally the students graduate shortly after their return to Boston.  The trips have followed a similar route each of the years but the actual visits have changed.    The trip always has started out in Hong Kong generally on a Saturday in April and then spent several days in Hong Kong, a one-day visit to Shenzhen, several days in Shanghai and ended with a visit to Beijing for a mix of sightseeing and a day and a half to two days of final visits and speeches that help the Executives to structure their observations and better understand China and the opportunities there.      This year I am not going to talk about the actual trip but more about my observations and conclusions gained over the 10 days.  First, I must say that I am proud of our company’s work in helping to arrange all speakers and the logistics of the trip.  Each year I believe we have worked successfully with NEU management and Dr. Ravi Ramamurti to improve the trip and I believe that 2012 was the best trip so far.  Arranging all the speakers and ensuring flawless logistics is highly time consuming and takes work over many months.  Often I will e-mail or otherwise contact a speaker 8-10 times to ensure that he or she remains available, covers the issues agreed and that he or she arrives on time and keeps on schedule.  This is not easy but I find that I always have gained a lot from these trips. For the executives who are mostly in their late 30s and 40s often this is their first exposure to Asia and to China.  In Hong Kong their lack of knowledge and experience is hard to miss but for me the greatest satisfaction is the chance to see how each of these students gains in knowledge and insights during the trip and how many of them become highly astute observers and much more knowledgeable in international business by the end of the trip.  Seeing people grow and mature in a program you helped to arrange and oversee is truly satisfying and I thank NEU for the experience to work with such thoughtful faculty and motivated business executives. In the course of the 2012 trip we saw how Hong Kong has been able to continue to evolve and accommodate the changing landscape in China.  Hong Kong remains a great place to help oversee China operations and to run the higher cost technical functions like design, engineering, financial controls, logistics and other parts of a worldwide operation with manufacturing in China.  As companies move their factory operations further into the interior of China or into SE Asian countries this will create new challenges but it is hard to not conclude given Hong Kong’s continued adaptation over the last six years that the city won’t continue to evolve and keep its special relationship as a hub for  technical functions and for functions that need Hong Kong’s rule of law, access to banking and finance and other functions. During the trip, we again visited Now TV, part of the PCCW group.  For six years we have seen the bottom line on the company improve and the size of its market grow.  All of us each year are impressed by the management of the company and their sense of focus and hard work.  Now TV in my view remains one of the true success stories in the pay-per-view and cable TV landscape and next year they will surely have many new developments to show us. In China starting in Hong Kong and Shenzhen and then continuing in the Shanghai Delta Region and Beijing, we continued to hear from many companies how salaries had been rising 20 percent or greater at the lower levels yearly and how it was expected to have similar increases for the next 3 years.  We also heard how the country’s currency the Yuan had risen and how the cost of utilities and many other costs were also rising.  China is no longer the lowest cost country for production and we heard from many companies how they are moving operations to SE Asian countries like Vietnam and Indonesia and even how some operations were being returned to the U.S.  We also heard how Chinese companies are more and more buying through merger and acquisitions, companies in the U.S., Canada, Europe and other locations to expand their operations, particularly in the commodities and energy sectors but now even beyond these areas into general manufacture. In China at EMC and Honeywell, we heard from leaders at both companies how they are creating technology and research centers in China and how in most cases these centers are proving to be great locations to better understand China and the region and to more quickly respond to new market opportunities.  We also got a chance to meet in Shenzhen the Chinese healthcare company Mindray; at the Shanghai KIC (Knowledge and Innovation Center) overseen by Shui On the Chinese online game start-up Five Minutes; in Kunshan, a little more than an hour and a half outside Shanghai, the German hightec welding company EWM and in Beijing at Baidu and Lenovo.  Each of these companies is succeeding in building their sales and new products and each is becoming more and more successful in competing worldwide.  China is no more primarily a nation of small outdated manufacturers working in out of date facilities and with limited intellectual property or innovation.  China is now a country of business excellence in many areas and this trend will grow and accelerate in the years ahead.    Not everything on the trip was perfect.  The weather and the pollution were particularly bad.  Many of the executives marveled at how expatriates and everyday Chinese can bear up under the air and water pollution which we noted at every stop.  In two weeks, I saw blue skies only once on the day I flew back to the U.S. after a particularly heavy rain and wind storm.  China has much to be proud of but many challenges.  One of the students very astutely observed to me that she found it interesting that most of the Chinese who spoke with us were less optimistic about China’s future and ability to tackle problems like pollution, corruption, weak rule of law and other factors than the expatriates we had met.  I must agree that China’s meteoric rise will probably is likely to be more challenged than western observers often note but I am hopeful that in the not too distance future all Chinese will have the quality of life and the freedoms that their hard work and sacrifice surely deserve.   About the Author:   Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School. He served as Deputy General Counsel of President Gerald Ford’s Presidential Clemency Board. Mr. Runckel is the principal and founder of Runckel & Associates, a Portland, Oregon based consulting company that assists businesses expand business opportunities in Asia. (www.business-in-asia.com) Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel lived and worked in Thailand for over six years. He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War. In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations. Follow us on Twitter: @InsightNewsAsia Back to Homepage