Hong Kong accountant Laurence Lipsher remembers Shenzhen when the special economic zone was little more than a Chinese fishing village with 350,000 residents. The commute from the outskirts of town used to take him four hours on rainy days. Today the same trip takes 10 minutes on a modern subway, which came with other developments as the region’s population swelled to 13 million people in less than 25 years.

“The descriptions you might have read about Shenzhen do not truly express what it feels like to be there and witness and participate in double-digit sustained economic growth for a quarter century,” Lipsher told an audience of about 125 Thunderbird alumni gathered Nov. 6 at a global reunion in Macau.

Lipsher, a 1965 Thunderbird graduate, says the growth will continue until Shenzhen blends into Hong Kong, and the two regions amalgamate into the first super megalopolis of the 21st century.

Lipsher says China will need to repeat the miracle of Shenzhen again and again as the nation’s rural poor leave the countryside and move to big cities looking for new opportunities. Currently, China has about 700 million rural poor but can only support about 300 million of them.

“People will do anything to get out of the countryside and go to the city, which can’t support them,” Lipsher said. “We discovered Shenzhen, which grew from nothing to 13 million people in a quarter of a century. China has to develop a half dozen cities like this over the next 50 years, plus take 100 million more people and put them into the current existing cities.”

For now, Lipsher says, China is betting on four new special economic zones. Two of these zones already have been announced, and Lipsher expects two more announcements in the near future.

The Binhai economic development zone, announced in 2008, falls within the jurisdiction of Tianjin. Lipsher says the trip from Beijing to Tianjin used to take more than four hours, but a high-speed rail system has cut the commute dramatically.

“It now takes a half hour with a train system that is up and functioning and going very smoothly,” Lipsher says. “That makes Tianjin a suburb.”

The second economic development zone, announced in 2009, is Haixi west of the Taiwan Straits. Lipsher says China has set up the zone to take advantage of Taiwan’s economic problems in the global recession.

“Economically, Taiwan is so intertwined with China, that within a decade you’re going to find some form of loose amalgamation,” he said.

Even if these zones and others all go according to plan, Lipsher says the accommodation of China’s rural poor remains the country’s biggest challenge of the 21st century. But he remains optimistic about China’s future.

“How they’re going to do this, I don’t know,” he said. “But if anybody can do it, China can.”

Lipsher, author of The Tax Analects of Li Fei Lao, is a 1965 Thunderbird graduate. Learn more in the Thunderbird Knowledge Network video below:

Podcast: Laurence Lipsher on China’s vision for the 21st century (15:50)

Opportunities abound in China, but not for entrepreneurs who enter the country unprepared. Timothy Lamb, a 2002 Thunderbird graduate, has seen plenty of Western companies fall flat in the emerging market. As director of foreign direct investment services for The JLJ Group in Shanghai, his job is to help clients succeed.

But Lamb says this won’t happen if companies try to enter China without having their executives fully on board. He said companies also need knowledgeable project managers on the ground, ample resources and reasonable timelines for success.

“Companies missing any of those elements tend to fail,” says Lamb, a U.S. citizen who discovered a passion for China in 1994 when he first came to visit his sister, who was teaching English at a Chinese university.

Lamb says many small and medium-sized companies hear the buzz about China and decide they need to come simply to keep up with everybody else. Then they lack the stamina to persevere when roadblocks appear.

“They often think everything is going to happen tomorrow,” Lamb says. “But in developing countries, particularly China, timelines need to be more flexible.”

Part of the reason is the Chinese government, which is specific about the foreign direct investment it wants to attract. Lamb says the economy relies on state-owned enterprises and favors market growth from within.

“China has a tendency of attracting a lot of entrepreneurs,” Lamb says. “The problem is, China doesn’t always want foreign entrepreneurs.”

Lamb says many companies try to circumvent the government by entering the market illegally or ignoring regulations, but people who look for the right opportunities can succeed without cutting corners.

“There were a lot of opportunities in 2009 that companies missed,” he says, referring to the global economic crisis that slowed foreign direct investment.

Lamb says he found his own opportunity in China in 1997, when he returned as an English teacher at Qingdao Chemical University. “I realized when I visited my sister that this was a place I wanted to come back to,” he says. “It was an entirely new world.”

Lamb followed his first assignment in Qingdao with a second teaching job at Sichuan University. Then a friend told him about Thunderbird, and he made plans to enroll in January 2001. “I only applied at one school,” he says.

After finishing his MBA, Lamb interned at the U.S. Department of Commerce and then took a job with a test preparation company in Shanghai. After a short stint, he moved to his current position at the JLJ Group.

Lamb says his office in downtown Shanghai puts him in the middle of the action as China emerges as a global powerhouse. “I’m living in the center of it all,” he says. “I not only get to see it happen, but I’m involved in it.”

Cummins general manager Amit Soman had to adapt quickly when his company transferred him from Wisconsin to Beijing in 2008 and put him in charge of engine emissions business for China, India and other emerging markets.

“The key is nimbleness,” Soman told students Nov. 19 at Thunderbird School of Global Management during a presentation organized by Thunderbird’s Emerging Markets Business Association.

Soman shared a list of “strategic insights” for expatriates entering these markets.

1. Go native

Many expatriates working in China and India expect special treatment or accommodations, but Soman said things usually work out better for people who immerse themselves in their new environment. “Even if you’re only visiting for six months,” Soman said, “don’t act special in any way.”

2. Accept nuances

Expatriates might not like everything about their new cultural environment, but Soman said they need to accept certain things that can’t be changed.

“Deal with it,” Soman said. “Otherwise you’ll just end up getting frustrated.”

For example, confidentiality and privacy might mean something different in China than the United States. Soman said Chinese customers routinely ask him blunt questions about his age, salary or even company secrets.

They also ask him to defend the value of Cummins’ role in the global supply chain. “You get about 30 seconds to articulate your contribution to the value chain,” Soman said. “It’s your elevator speech, and you need to have that ready.”

3. Anticipate diverse reactions

Soman said he struggled at first to interpret the reactions of Chinese customers in business meetings and other settings. “The Chinese are closed in terms of expressions,” he said. “It is very difficult to read a Chinese interaction.” He said the opposite is true in India, where people like to argue and share their views openly.

4. Develop relationships

Business relationships matter in every market, but Soman said this is especially true in China and India. “If you’re able to call an individual on a Sunday morning and say, ‘How’s it going?,’ then you’re getting there,” he said.

Soman said this concept began to sink in after a client called him one day and asked him out to dinner. “It took me a while to realize how important that event was,” he said.

5. Learn the language

Expatriates can survive in most markets without learning the local language, but Soman said this creates a handicap. “If you don’t get the language, they will talk about you in the meeting,” he said. “That discussion will occur on the side, right in front of you.

6. Keep your connections

Some expatriates lose contact with upper management when they take an overseas assignment. Soman said this can hurt a person’s career. “You need to keep your connections with upper management,” he said.

7. Pay attention to retention

Hanging on to talented workers can be difficult in China and India, where other companies routinely offer pay hikes to lure them away.

One result is wage compression, where young workers who switch companies every few months or years end up with higher salaries than more experienced workers who stay loyal to one company. “It’s a very vicious cycle,” Soman said.

He said one strategy at Cummins is to focus on things such as corporate social responsibility and building a friendly workplace environment. “These things can create an incentive for your best workers to stay,” he said.

Chinese government investment in education, health care and social security will help turn a nation of savers into a nation of spenders, but Hong Kong accountant Laurence Lipsher said Nov. 6 that the changes won’t happen overnight.

“Twenty-five or 50 years from now, you’re going to see a lot of impact and change,” Lipsher told an audience of about 125 alumni at the Thunderbird Global Reunion in Macau. “But 25 or 50 years isn’t even a blip on the radar screen of Chinese civilization, which goes back 5,000 to 7,000 years.”

Lipsher, author of The Tax Analects of Li Fei Lao, is a 1965 Thunderbird graduate. Learn more in the Thunderbird Knowledge Network video below:

Chinese efforts to develop Africa have led to a new era of colonialism that sometimes stirs resentment on the continent, two Thunderbird alumni said Nov. 6 during a panel discussion at the Thunderbird Global Reunion in Macau.

“Instead of employing Africans, they’re bringing over thousands of Chinese,” said Chris Fussner, a 1982 Thunderbird graduate who lives in Singapore. “Africans are greatly resenting this new Chinese colonialism.”

Fussner said Chinese investors have spent billions of dollars in Africa developing telecommunications, hydroelectric systems and other forms of infrastructure. “A lot of this infrastructure used to come from France, Britain and the former colonial powers,” he said. “Now it all comes from China.”

Thunderbird Professor Mary Teagarden, Ph.D., moderated the panel discussion, which included 1965 Thunderbird graduate Laurence Lipsher, a Hong Kong accountant and author of The Tax Analects of Li Fei Lao. Fussner is founder and president of Trans-Tec, a high-technology equipment supplier with facilities in China, India, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Lipsher said China takes economic development in Africa seriously, which is why leading Chinese economists gathered Oct. 31 north of Beijing to talk about foreign aid, balance of trade and other African issues.

“China is very cognizant that it must develop Africa,” Lipsher said.

This is why China has 84 government workers assigned to its embassy in Seychelles, a chain of islands between Asia and Africa with 83,000 residents. “Seychelles has natural deep sea ports, which makes it very important logistically for China because of Africa,” Lipsher said.

Watch excerpts from the panel discussion in the Thunderbird Knowledge Network video below:

Thunderbird Professor Roe Goddard, Ph.D., sat down this month with Thunderbird student reporter Darien Carroll and discussed China’s emergence from the global financial crisis. Goddard teaches a course on the regional business environment of Asia, and he follows China closely. Overall, he has made 49 trips to the country. His most recent visit was Oct. 19-25 with 23 students in Thunderbird’s On-Demand Global MBA program. Watch highlights of the Goddard interview in the following videos, or listen to a podcast of the entire conversation.

Pay no attention to talk of China and India growing together as a unified Chindia. That won’t happen. What the world will see instead is the emergence of two economic powerhouses that will feed off each other as natural trade partners. To survive and thrive in this new global economy, multinational companies in the West will have to engage with these dragons and tigers of Asia. It’s simply a matter of numbers.

Almost 40 percent of the world’s population lives in China or India, which gives these countries a competitive advantage through the sheer size of their markets and talent pools.

College is beyond the reach of most people in China and India, but that doesn’t matter. Collectively, the two countries graduate about 12 times as many scientists and engineers as does the United States.

As Microsoft points out, if you’re one in a million in China, there are 1,300 people just like you. In India, there are 1,000 people just like you.

>> To learn more on this topic, enroll in Thunderbird’s online certificate program, “Doing Business in China” or “Doing Business in India.”

The countries are close geographically and share other similarities. Both countries struggle with class divisions and extreme gaps between rich and poor. Both are ultramodern and rustic at the same time. And both experienced dramatic GDP growth in the decade leading up to the current global recession.

But China and India also have key differences that draw the countries together as reciprocal trade and investment partners. China excels at the tangible, while India excels at the intangible.

These differences developed over decades. China pursued foreign direct investment and export growth while India pursued domestic entrepreneurship and domestic consumption. When you bring these models together, you have the opportunity to produce extraordinary results.

Consider, for example, the way China’s competitiveness in computer hardware manufacturing complements India’s competitiveness in software development and information technology support.

The global recession has taken its toll in China and India, but the countries will continue to grow together in power, size, impact and global reach. There’s no putting the genie back in the bottle.

Mary Teagarden, Ph.D., is a professor of global strategy at Thunderbird School of Global Management and editor of Thunderbird International Business Review. She has lived and worked in 11 Latin American countries, five European countries and eight Asian countries –- in addition to the United States and Canada. She has a doctor of philosophy in business administration strategy from the University of Southern California.