 Any country has a wide spread of practice and performance and you'll find bad practice in China just like you will here but there are some standout companies, stellar ones that we need to keep our eye on and find out how they're doing that and why they're doing that. One of the manufacturing firms in China that's done particularly well and in fact made money in their first year quite surprisingly for that time was a company called Ottobock. This is a German maker of prosthetics. There were industrial accidents going on around the world and in China and they entered the China market not to use low labor costs to export. They used it partly that manufacturing footprint to supply the market but they were there for a much bigger play which was to work out how they could take their model and take it to other parts of the world into other developing areas like Africa and South America where they are now. So what they did is set up a fabrication unit just on the outskirts of Beijing people would come with their limbs severed to different parts of the country to clinics in Sichuan province for example and be measured and then those measurements would be faxed to the Beijing operation this was back in the 1990s. They would make them on these three-dimensional layers and then distribute them by courier back to those particular parts of the country and that operations model has been something they've now implemented in other parts of the world. They also had remarkable human resource management in my opinion so the manager at the time who's still in China, Roger Dudden, a Kiwi was clearly very interested in his staff and their development, the eight with them was just a guy who really enjoyed being there and was interested in the development of his people. Second company is a much better known brand in New Zealand having purchased fish and pike appliances so higher you may think of as an appliance brand but it's far more than that, it's a distribution company so one of the holy grail of China is getting into the rural market how do you get products in there, how do you service them and Hire's had that platform and it's now developed to the extent to which it now rents it to competitors including foreign competitors so about 10% of the volume going through that is foreign or competitor products so they're now a distribution company and it's a new business model which a manufacturing firm has taken to expand its footprint in China and actually to stave off foreign competition in a way. Moving on from the manufacturing and distribution sector into the service field, one of the standout companies in my opinion is Ehaldian, translated means the number one store which began in Shanghai about 2008 and in the ensuing years they've been one of the fastest growing firms in Asia now about 10,000 employees sell about 5 million different products and they've just surpassed Amazon in terms of their volume per year they're not up there with Alibaba yet but they're very much an emerging player that's doing some great things in their distribution network many companies have started creating their own structure we don't have the likes of FedEx in China that are able to get to the door so they're doing last mile delivery and it's the last mile delivery and the customer satisfaction that comes from that which typifies their company performance and also how they reward their staff so all the staff members, even the back office people in IT are rewarded based on the customer experience which they monitor very frequently so here's a company which takes basically a single metric and puts it right up front and I often wonder about New Zealand companies and educational institutions and how they would do that to what extent we would take our employee remuneration and metrics and base it on something so customer centric so I think that's another firm that's done really well you could move further down into the restaurant trade I think there are companies like Gungho Pizza run by a couple of New Zealanders in Beijing that's doing some great things with people the way they train their employees coming in the way they go and visit long-standing employees, the parents of them back in the rural villages there's another company that does Sichuan Hot Pot now has about a hundred in their chain called Haidilao this company is now a Harvard Business School case study people all around the world are studying how this company does so well with their customers who wait several hours to have their meal because they're being entertained during this period and part of that is the staff members are being given a huge amount of discretion autonomy to make things right for the customer New Zealand companies can benefit by looking at and finding out about Chinese companies by considering the fact that they're now holding both very strict and strong cost competition models there around lean for example and automation they've done all kinds of things there to try and mitigate the very high costs as we find the same thing with the high New Zealand dollar but they're not only doing that they're now starting to move into innovation so that's again been the big thing for China not just to be the factory of the world but the design house of the world so you have the likes of Microsoft and Procter & Gamble setting up the R&D centres there pulling in these new graduates engineers and scientists and so on so those innovations are not just product like the Huawei and the Lenovo type innovations but they're around the process of the operations and also the business model and those innovations as we know don't come out of the boardroom necessarily they also come from the people that are in the companies so how Chinese companies stellar exemplary Chinese companies are treating their staff is in my opinion one of the key things we can be learning about their operations the models, the people behind it being able to compete on more than one dimension so if you're a New Zealand company sourcing from China, operating in China or as we're going to find more and more competing with Chinese companies abroad and in our own market it's incredibly important that you look at how those Chinese companies are doing well 20 years ago, 30 years ago we looked at Japan, we looked at Justin Time and Lean and the spotlight's gone off on Japan now but there are things going on in the Chinese market and in Chinese companies which means companies and individuals and students of business need to be starting to take notice of