Interview with Margaret Chen, Honorary President of China Club Spain and member of EADA’s International Advisory Board
Perseverance, achieving new goals and her commitment to the Chinese community living in Spain are the hallmarks of Margaret Chen’s successful professional career. She is a member of EADA’s International Advisory Board. Loyal to her culture, Chen defends open discussion, personal relationships and trust, values that need to be strongly upheld nowadays more than ever.
‘Miracle’ and ‘Chinese challenge’ are the most repeated headlines in the international press to describe China’s transformation. Would you apply the same terms?
I too think that China’s spectacular economic growth over the last 30 years (at a 9% annual rate) has been a miracle. Although this percentage has currently gone down to a 7% annual rate we cannot speak of economic deceleration, as some analysts have noted. The Chinese economy continues to grow at an optimal rate.
“The government exerts some power over companies so that the wealth generated remains within the country”
One of the main criticisms about the Chinese economic model made by the West is excessive government control. Do you agree?
It is true that there is strong state intervention in the country’s key sectors, although it is also true that this control is becoming lighter and China is evolving towards a market economy. In any case, this government centrality has been key for China becoming the world’s leading economy. For example, the government exerts a certain power over companies for the wealth they generate to stay within the country and to encourage internal consumption. This centrality has also made it possible to speed up the construction of a great number of roadways, ports, airports, rail networks and telecommunication networks.
Has China ceased to be the factory of the world?
China has gone from ‘made in China’ to ‘invented in China’. In this way China has managed to overcome the prejudice that had dragged it down for years that associated it with cheap labour and low quality products. Nowadays, on the other hand, China is associated with innovation, scientific research and entrepreneurial spirit. It also has higher labour costs given that salaries have doubled over the last few years. In China, if you have a good business idea you can benefit from public incentives. Hence the success in recent years of technology and science parks where a large number of foreign capital joint ventures are concentrated. In addition, new start-ups do not aspire to copy existing models but to create patents.
“China is associated with R&D and entrepreneurial spirit”
Aside from innovation, what other factors have led China to becoming the leading world economy?
One of the most important factors is its population. China is the most populated nation in the world today. Any innovation or product has a greater impact than in a smaller country. To this we must add the increase in qualified workers. For example, every year there are two million new engineering graduates. This is where the success of companies like Huawei lies: it has 15,000 people developing innovative solutions and in the digital communications sector it leads the patent request ranking –in 2015 it presented a total of 1,197 patent registrations. Many Chinese people dream of working in cutting edge companies like Huawei, Alibaba, Lenovo, Tencent, Baidu, Haier or Xiaomi, where in many cases they can become shareholders.
What is the international impact of the technological revolution China is living?
I would highlight its capacity to generate standards that can be exported to other countries. In the IT sector we have several examples, such as the popular app MyIdol, which allows us to scan our face and create a virtual avatar, or WeChat, a Tencent app which has reached 549 million users in over 200 countries in its first quarter. We cannot ignore Alibaba’s foray into the profitable market of virtual reality, whose developments have sparked the interest of important technological companies across the globe. The same goes for the latest developments in biomedicine, given that Chinese researchers have been the first to use gene editing to modify human embryos at an in-vitro fertility clinic.
What role will China play in the powerful Asia-Pacific axis?
China is leading this axis, which will be the new world economic and financial centre. Proof of this is the 21st Century Silk Road, what has been called One Belt, One Road, an ambitious project to connect China with the rest of Asia, Europe and Africa by means of land-based routes (railways, airports, roads and financial networks) and maritime routes (new ports and commercial maritime relations). It is a Chinese government strategy to establish new international alliances and promote trading, financial and communication links. In order to develop this initiative China has created The Asian Infrastructure Investment Bank, which already has over 60 countries adhering worldwide –among them Spain and United Kingdom–, and which has approved an investment fund specifically for the Silk Road.
What country can overshadow China?
In my view, Brazil is the best placed country to compete with China, mainly because it has a large population and its economy is growing at a good rate. I would also highlight India, one of the fastest-growing emerging countries, although it is still developing. In India the investment in infrastructures is not worth mentioning and there are few government incentives for creating new technology-based companies. I would also add that although it is true China has achieved certain world leadership, it must face the challenge of opening up to the world, of seeking international partners, in order to maintain this position.
As a member of EADA’s International Advisory Board (IAB), how are you living the opening up of the business school to the Chinese market?
Well, with lots of enthusiasm and high expectations. With Jordi Díaz, Director of Programmes at EADA, we have entered several agreements with prestigious Chinese universities, such as Shanghai International Studies University (SISU), the School of Economics and Management Tongji University and the International Business School Suzhou (IBBS), which is part of Xi’an Jiatong University of China and the University of Liverpool (XJTLU). We have reached several collaboration agreements that include student and staff exchanges, joint academic research projects, networking and internships in both countries.
“Chinese executives are more interested in developing international businesses, especially in South America”
What kind of opportunity does this increasingly close relationship with such prestigious Chinese universities represent for EADA?
Opening up EADA to the Chinese market responds to the increasing interest of Chinese executives and senior managers in developing international business ventures, establishing bilateral relations with other European countries and making use of the new opportunities offered by South American markets. In this sense EADA’s academic programmes, which are very business focussed, fit perfectly the demands of this type of profile. Besides, EADA is very well positioned in the main international rankings, something that is highly valued in China.
We started this initiative five years ago, the brainchild of twenty people who decided to improve the image of Chinese professionals living in Spain, who were feeling isolated and faced difficulties in reaching management positions at the time. Over time, not only have we succeeded in this challenge, but we have also succeeded in creating other important initiatives such as establishing constant communication with the Spanish government on business matters, attracting Chinese investors, organizing networking events in both countries, and guaranteeing our members preferential treatment in the admission process for any MBA or Master’s degree at EADA. Additionally, China Club has promoted Corporate Social Responsibility (CSR) values among Chinese professionals in Spain.
“When I started in Telefónica I remember that at many technical meetings I was the only woman”
Finally, we would like to ask you about your position as Asia Manager for Telefónica. Did you find it difficult being a businesswoman in a man’s world, and particularly in such a competitive industry?
Fortunately, this industry has changed a lot and nowadays there are more women; however, when I started in Telefónica I remember that at many technical meetings I was the only woman. It was not easy, especially because I had to juggle a position that required great dedication with my family responsibilities. The secret to getting this job? Working hard to get a promotion and being lucky. I had been working for different company subsidiaries for nine years. And when they decided to open the Chinese market, I was there and I had the experience. If it had been ten years earlier I would not have got it.
Investors seeking Chinese entrepreneurs
The new challenge Margaret Chen has just taken on is the China Spain Innovation & Ventures platform, located in Barcelona and created with the dual goal of promoting entrepreneurship among Chinese people living in Spain and presenting innovative ideas to Chinese companies competing in R&D&I. According to Chen, “in recent years a new generation of companies have been appearing in China whose added value is innovation, so they demand creative projects that will enable them to continue progressing in a very competitive environment”. At the same time, she adds, “there is a growing interest within the Chinese community living in Spain to start businesses based on innovative and ground-breaking ideas”.
This platform, which is supported by EADA’s Entrepreneurship Centre, has been created as an ecosystem where entrepreneurs, investors, as well as academics and experts, can converge and follow-up on the full process for constituting a company.