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January 22, 2001

MBA Students Take First-Hand Look
at Business Prospects in China

China is expected to enter the World Trade Organization in the next year, but what are the implications for U.S. multinationals? To explore this question, 24 UConn MBA students met with industry and government leaders in Beijing and Shanghai during an intensive nine-day study trip in November sponsored by UConn's Center for International Business Education & Research (CIBER).

The first conclusion reached by the group is that China is working hard to join the world economic community. Richard Stanley and Bell Chong of Citigroup detailed the financial, accounting and securities changes already underway.

"Right now China is a challenging place to do banking," Stanley said, "because non-Chinese banks are prohibited from taking deposits or making loans nationally. But that is changing rapidly." The group visited two economic development zones - already home to such corporations as Coke, Johnson & Johnson, and Hewlett Packard.

The second conclusion is that many global companies are already in fierce competition in the China market. Richard Yeung of Alsom took the group through the competitive challenges of getting the turbine contracts on the premier Three Georges project.

"As the leading electrical power generating company in the world we felt we had to be on this project, the largest infrastructure project in the world. But everyone else also wants to be in China, so it is a tough, very tough, place to get business."

The third conclusion is that the rewards are significant. As UConn MBA students learned through executive briefings from the relevant companies, Pepsi has achieved significant success in the consumer marketplace, and Ingersoll Rand is posting solid profits now that it has restructured itself as a WOFE (wholly owned foreign enterprise).

Overall, the group's assessment is that China is an essential ingredient in any globally oriented company strategy.

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