Banter Without Borders

Cultural Upheaval: Will Canada be the New China?

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“Oh, how things have changed.”  Thus began a recent Bloomberg Business Week podcast on China. The vexing question of whether to tackle the ins and outs of doing business in The Middle Kingdom started long before the recent and wrenching Google saga, but China's increase in power and, now, boldness on the world stage are more apparent than ever. Ongoing talk of Beijing’s ‘decoupling’ China and the U.S. is clear evidence of such a dramatic and unsettling development. For Western companies, red carpet treatment has now been replaced by red tape. The heady days of rushing to China and its untapped resources are over. Businesses are thinking far more carefully now, wary of the new and increasing risks of entering a market whose great wall of restrictions, regulations and requirements is steadily rising. As those of us who work with clients on improving their ‘intellectual capital’ vis-à-vis overseas business know, cultures and their values allegedly don’t change, yet even this holy grail of global coaching and consulting is thrown in doubt, with China’s apparent personality shift providing one huge exception to the cultural rulebook.  When it comes to China, myths and realities are on murky ground.

With China and even Asia no longer automatic destinations for companies in expansion modes, and with recession tightening everyone’s belts and changing thoughts of how to proceed with globalization, where are companies to go when seeking to expand beyond domestic markets?

One answer may well be Canada, which is looking like a really viable choice at the moment.  Many in retail would seem to agree, as a WSJ article* indicates. U.S. companies in the clothing industry, from J. Crew to the Limited to the Gap, are all taking the plunge into Canadian waters ever so carefully, and so far, so good [Interesting that Gap, which didn’t fare very well in its earlier overseas attempts in China and European markets and is now trying to set up an online presence there, is an enthusiastic participant in Canada].  There is no question that the Canadian market will present some very different challenges in terms of its market and culture – its higher end focus, emphasis on the outdoors, historically more discriminating and slower-moving consumer, not to mention the sizable number of cultural nuances overall. The time, though, seems just right, and the notion of expanding a business to Canada certainly carries much less psychological weight than is now the case with so many other destinations. I’m sure at least Google and GoDaddy would agree.