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Ex-pat Kiwi analyst Michael Parker looks at whether the Chinese government understands that it has lost control of the economy

Ex-pat Kiwi analyst Michael Parker looks at whether the Chinese government understands that it has lost control of the economy

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Q: How sophisticated are China's decision makers?

Gary Romano says you can "take your pick" out of culture, governance, language and geography as reasons he resigned as chief executive of Chinese land investment company Hunan Dakang, but the job was never going to be long-term anyway. The Auckland-based dairy manufacturing industry and mining specialist said he "provided a stop gap" at Hunan Dakang, a China publicly-listed company, for Shanghai Pengxin group owner Jiang Zhaobai with whom he has a good relationship.

Romano was originally employed by Zhaobai in early 2014 as chief executive of Pengxin International, a subsidiary of the privately owned Pengxin group, to progress its agribusiness acquisitions and investments around the world. (Zhaobai had in 2012 controversially bought the former Crafar dairy farms in the central North Island for around $200 million and in 2014 bought a major interest in the 4400 hectare Synlait Farms estate in Canterbury. Today it controls the operation, now called Purata Farms.)

But later in 2014 Zhaobai took a majority stake in listed Hunan Dakang, which he wanted to become the vehicle for his agribusiness investments, and asked Romano to head it. "So I left Pengxin to be part of Dakang. It was never going to be a long-term arrangement running this company. "I was always going to be temporary, it (the appointment) was based on my relationship with the chairman.

"What Hunan Dakang needs is someone who is embedded in China and who is Chinese. The real future of Dakang I think is more around developing sales and distribution inside of China, far less than buying offshore assets." Zhaobai has gone on to invest in several more publicly listed companies as vehicles for specific sector interests, Romano said. When Zhaobai appointed a chairman to Hunan Dakang last year he said it made sense to start his exit............

........."I am reluctant to generalise but from talking to other people who work for Chinese companies (we conclude) the way decision-making gets done and the clear delegated authority we are used to in this country is not how it operates (in China).

"So it can be quite confusing. How exactly do you get a decision, how do you move forward and what are you accountable for? From a Western perspective, it's vaguer than what most people are used to." The language barrier was a challenge, Romano said. "Again I'm generalising but trying to establish relationships through interpreters is problematic." To the Chinese, relationships and trust developed over a long, long time and previous business dealings were very important, he said. ...…

A: Very, non?


Post project review
appendix 6. indicative of the above?…