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China’s Recipe for IT Success

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A recent discussion at the Atma Jaya Catholic University in Jakarta by the Global Indonesian Network focused on how China has successfully absorbed Western economic principles. It featured two business experts who lived and worked in China, Mulyono and Hora Tjitra, bearing witness to a historical period when the country’s IT sector took off. Mulyono, BAce Capital managing director, and Hora Tjitra, consulting company Tjitra & associates managing partner, said Indonesia could learn a lot from China to boost its information technology (IT) sector.


Despite its controversies, globalization has helped many emerging markets learn from best practices across the world in order to propel their economy forward.

China is one of the best examples for this. Ever since it adopted a market economy in 1979, it has absorbed Western economic development principles — particularly those originating in the United States. Now, China is on the verge of surpassing the US in the IT sector.

A McKinsey & Company report reveals that China is the world’s largest e-commerce market, accounting for more than 40 percent of the value of worldwide e-commerce transactions with major global players like Baidu, Alibaba, and Tencent.

Chinese telecom company Huawei, meanwhile, recently reported a 50 percent year-on-year increase in its smartphone shipments, while at the same time, Apple’s shipments dropped 30 percent.

China’s accelerated success story is traceable to 2002. China’s then-president Hu Jintao — who was in office from 2002 to 2012 — developed a “scientific outlook on development”, marking China’s transition from a low-cost manufacturing economy into a high- tech engineering one.

This translated into an increase in scientific research budgets, both for academia and think tanks. Chinese elementary education’s strong curriculum with its emphasis on mathematics and physics had laid fertile ground for this initiative.

The initiative places strong faith in science and technology development because these two things have proven to be accelerators of progress in rich Western countries.

This was actually not the first time that China learned from the West. In 1999, Huawei started transforming its business radically by adopting American management principles with the help of American consultancy company Accenture and its tech giant International Business Machines (IBM).

The learning process intensified during the Hu era, when China also widened its door to the West by purchasing a lot of IT industry equipment from Germany while learning from German scientists on how to best leverage these machines.

Since then, Chinese youngsters have more than ever aspired to become engineers and technology scientists, as Hu’s initiative already boosted the prestige of the two fields dramatically.

The policies supporting Hu’s blueprint have not only increased the financial compensation of scientists and engineers, the government has also boosted their social status by recognizing their contribution through various awards and prizes.

More scientists also get interviewed by various media outlets; their fame further increases their pride in their scientific endeavors.

The outlook turned out to be a pivotal point for China’s economy. When a global financial crisis

hit much of the world in 2008, China managed to survive. It would not have done so had it not transformed into a high-tech economy, according to Mulyono and Tjitra.

Furthermore, China is not merely world-famous for the cheap knickknacks and accessories it produces, but also for its IT innovations. Who does not recognize brands such as Alibaba or Huawei?

Aware of just how promising China’s IT sector has become, the Chinese government has recently provided additional catalysts for it. For instance, it subsidizes the electricity bills and rent of Chinese individuals who launch digital start-up ventures.

In 2015, the Chinese government transformed Hangzhou city, the capital of China’s Zhejiang province, into the Dream Town, an incubation center for digital entrepreneurs that stands 213,000 square meters of space and boasts free coworking spaces.

By the 2018, more than 720 enterprises in technology and smart solutions had been founded in the compound by Chinese overseas returnees.

Government policies aside, China’s success can also be attributed to the psychological makeup of its people, who are very ambitious and thereby set very high benchmarks for themselves, making them more courageous in pursuing a global career.

This trait, however, also has its downsides. “Many Chinese people are lonely. When they play basketball you can see that most of them are natural-born shooters, meaning they are unwilling to pass the ball to others,” Mulyono said to illustrate the situation.

Hora pointed out that this tendency is also reflected in the classroom and the workplace. Chinese students and employees often struggle to refine their teamwork skills.

Speaking about global learn- ing, in this aspect, China can learn from Indonesia.

With their emphasis on social harmony, Indonesians are very well-versed in teamwork and musyawarah (deliberations for a consensus).

Many foreign coworkers convey their admiration of Indonesians for bringing these skills into a global workgroup context, according to research conducted by Tjitra and his colleagues Juliana Murniati and Hana Panggabean from the Atma Jaya’s School of Psychology.