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Feb 5, 2013

Protests in Shenzhen, China: Rumble in the Jungle - Have an Exit Plan?

I have been writing for many years on the changes that have occurred here in the Jungle.  I have seen China  and specifically the Pearl River Delta undergo dramatic changes since I first arrived ten years ago and counted 80 construction cranes outside of my hotel room window.

Many of the changes have been positive and I often congratulate the government here for the work they have done in improving education, infrastructure and of course the rule of law.   I leave the criticizing for the pundits and observers who don’t have to operate here and travel freely in support of their clients.

However, the Jungle continues to develop and at the governments’ behest it is moving from a manufacturing economy to a consumer economy, much like its Western predecessors, and with that change comes growing pains and tidal waves. This week has seen some big waves that have affected some of our clients whose government is at odds with the government here (we’ll let you figure that one out) over island and territorial disputes.

It seems that while the governments do their thing to resolve the matter, the inhabitants of the Jungle have taken matters into their own hands and destroyed their businesses, attempted to destroy their brands and forced them to close just because their government is at odds with the Chinese government.

At least eight cities here in the Jungle have seen not so friendly behavior which includes the destruction of private property and looting. We have been called on to help their management and employees deal with the threats and the stress involved and will undoubtedly be asked to help clean up the aftermath and deal with the various governments and the police as we are often asked to do when foreign companies in the Jungle run into angry inhabitants.

While your company or operation is chugging along and your business is operating without any problems, this is a good time to start thinking about what you will do when there are problems – and there will be problems. I don’t know how many times I have come across prospective clients who are shocked that the people they are doing business with in the Jungle don’t share the same morals as they do.

Now is the time to review your risk management plan, your exit strategy (if you have one) and to review your overall business and short and long term objectives here in China. We understand business first and we know how to help your business survive and profit here in the Jungle and we also know how to help you exit.   Better to be safe than sorry.

By Frank Caruso

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.