Another example where guanxi still matters
Here was a fascinating (paraphrased) exchange today we had with the CEO of a small pharmaceutical company that acquires most of its new products from universities and public research institutions...
Q: Do you expect most new products going forward to be created internally or acquired?
A: Definitely acquired.
A: Because it's much more effective and faster. We acquired for RMB 8 million a product from a university that took 10 years and RMB 10 million to develop.
Q: Why did they sell it so cheap?
A: Because they are professors. They are subsidized
Q: Why weren't there 100 companies lining up to buy this product at that price?
A: Because our chief researcher used to work at the university and they didn't tell anybody else they were selling it.
Q: Why not?
A: Because they wanted to tell their friend. You know, guanxi. We read your article.
I remain fascinated by this country, commerce here, and its many potential futures.