In 2008, I had the pleasure of experiencing massive stomach pain one night in Shanghai. Not knowing how the Chinese medical system worked, I was taken to a local hospital in downtown Shanghai. To be honest I did not know what to expect…all that I knew was it was probably going to very different terms of the service and quality that I would receive compared to American hospitals. My low expectations were instantly dashed when I was ushered into an almost completely empty lobby. I was quickly attended to do by a doctor and with some rapid exchange of Chinese I was put on an IV drip and told that I had the stomach flu. It turns out this hospital was especially for foreigners but the level of service and apparent quality was impressive. Fast forward a couple of years and another visit to a hospital showed another side of the very unique nature of the Chinese healthcare system. This time the experience was less than comfortable with 100’s of people crammed into the lobby and different rooms. But this was more than offset by the mere 50 RMB ($8 USD) I had to pay to see the doctor and the efficiency of getting my tests and diagnosis in under 30 minutes.
Although far from being perfect the Chinese Healthcare system has advanced by leaps and bounds in the last 10 years. In 2004 only 23% of the population had any form of reimbursable health care. In 2015 over 95% of the population is now covered. This rapid modernization is just one of many examples of the unique characteristics of the Chinese government which for the last 2000 years has taken many forms from empires to communism to socialism but with one common thread….top down control and management. The central government is obsessed with 5-year, 10-year and longer plans. These plans are meticulously laid out, furiously debated and skillfully executed. The healthcare system was just one of many on the list in the year 2000 and when these objectives are put in place, all forms of government from the top government officials down to the township mayors are measured and rewarded by their support of these objectives.
One of the classic objectives of the Chinese government over the last 30 years has been the industrialization and modernization of the country. Before 2010, you can see the result in the simple metric of industrial output where cities and district government officials are awarded and careers advanced based on GDP growth. In fact, in the city of Jiading they would award companies with different levels of prizes and prestige based on their contribution to the tax base and employment. Anybody that supported these objectives were looked on favorably. Today though, industrial output is now longer a key driver from the central government. Priorities such as health care and the environment are now being driven from the top and being executed by local government.
Although it may seem odd that the government still has so much control and influence over the economy their management style is actually no different than Google. Google’s OKRs (Objectives and Key Results) and many Fortune 100 company’s other popular styles such as MBO (Management by Objectives) are just flavors of focus that allows a lot of people to get behind some common goals. Foreign companies that enter the Chinese market would do well to heed these governmental top-down goals because that could make a big difference in the access to resources and good-will that is generated by the Chinese consumer, businesses and government.