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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 158

China Business Intelligence No. 158

Samsung Economic Research Institute Beijing Office

May 12, 2010

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I. Economy

Chinese real estate market recorded continuous growth and reached to a level which requires drastic adjustments. The government has made several efforts to contain the prices, discouraging investment or speculation in the market and imposing penalties for those who purchase more than one house, but no remarkable effects have been made to date. This time, it has introduced stronger measures and they are expected to produce good results. However, the effects remain to be seen, especially because the new policies fail to deal with supply and distribution issues. Containing housing market bubble is imperative for the economy. For the government to win public trust after a series of failures in the market and see a soft landing of the prices, the government needs to come up with effective follow-up measures considering changes in the situations.

II. Industry

The management of employees born in the 1980's (ba ling hou) has emerged as a new challenge to Chinese companies. As the ba ling hou generation has started to take up a large part of Chinese society, their presence has also grown both in size and importance in a corporate setting. Ba ling hou-generation employees have a very different set of values and ways of thinking from the previous generations'. They put a higher premium on self-aggrandizement and personal interests rather than on organizational goals. In addition, they think they should be on an equal footing with the management which is characterized by authority and the pursuit of organizational goals. Therefore, there are frictions between ba ling hou-generation employees and the management. However, Ba ling hou-generation employees' personality, energy, drive and flexibility can bring changes to companies with rigid systems. In short, Chinese companies need to adapt their authoritarian management styles to onboard their ba ling hou-generation employees in real terms.

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