Creating the Chinese Google

Back in 2002, Chinese billionaire Li Ka-shing, Asia's most successful entrepreneur, founded the Cheung Kong Graduate School of Business in Beijing to turn out a new kind of Chinese global leader. Cheung Kong has since become the country's top business school, with graduates like Alibaba chairman Jack Ma and CNOOC president Fu Chengyu. Here the school's dean, Xiang Bing, tells NEWSWEEK'S Rana Foroohar why China needs to move beyond entrepreneurship.

There is state-run business education in China. Why was there a need for this school?
Our founder, Li Ka-shing, felt that China was lacking managerial skills and that there was also a lack of character in executives. We need business leaders who are not only good at generating shareholder value, but people who have heart and soul—people who are not only focused on metrics and on gdp growth but on issues like the environment, culture, sustainability.

There's a lot of talk right now about the need for innovation in China. Why hasn't there been a Chinese Google?
Partly, it relates to our way of thinking. Ever since the Opium Wars, China has always looked to the West for new paradigms and new solutions. Even Marxism itself is a Western concept. But that sets up a situation for China in which, even in an ideal world, you have no possibility of really leading. I tell my executive M.B.A. students (some of whom are already billionaires), "Forget that you are Chinese. Forget that you run a Chinese company, because that can limit your thinking. Just shoot for the moon!"

Beyond that, we need to reform our system. We need more liberalization in the strategic sectors still controlled by the state—if that happened I think you'd see a rush of innovation. We need to get beyond the notion of companies either as large state-owned enterprises or insular family businesses, in which there's too much thinking about which son or daughter will take over, and not enough efforts around developing outside talent. We need more teamwork, like a great football team. We want to be able to compete with Real Madrid and Manchester United!

You've also mentioned that you see China as too entrepreneurial. How can that be?
Entrepreneurialism is in our blood, and that makes us open to new ideas and new people. But it means we can also be impatient, and without focus. In Chinese companies, middle managers are always trying to figure out how they can ultimately take over the company, or start their own company. This may also be because Chinese companies aren't as good at taking care of their employees. Compare China to Japan in this respect. It's difficult to imagine a Chinese company creating the next Toyota, let alone the next Google.

What do you think about recent Chinese government efforts to push innovation? Is it actually possible to mandate it, top down?
If the Chinese government sees it as being important, that's good, because it means that they'll pour money into it, and change policies to make it easier to innovate, and possibly encourage education that's more creative [and less rote]. But you need more than all this—it requires a mindset shift on the part of businesspeople.

There are now hundreds of billionaires in China. Are you seeing an increasing interest in philanthropy among your graduates?
The idea of corporate social responsibility is gaining steam, but if you look at the amount of money that individual Chinese give to charitable causes, versus wealthy counterparts in the U.S. or Europe, it's much less. We know how to create wealth, but less about how to manage it. Still, it's becoming more important, in part as a way of garnering respect from your peers.

What do you think the lasting impact of the financial crisis will be in China?
Everyone thinks that China has managed the financial crisis so well, and that this has proven how solid our model is. But I think, in many ways, it's also uncovered how risky the export-led model can be, and that there are still a lot of problems with it. Perhaps if people start to think more seriously about that, it will ultimately be a good thing for China's development.