Korea Should “Stop Deluding Itself About How Well It Knows China”
February 25, 2015

It’s a statistic that the US has been reluctant to acknowledge, but, according to Dong-Sung Cho, an emeritus professor at Seoul National University and one of Korea’s representative scholars of business administration, China already ranks as the number one energy-consuming country in the world, after surpassing the US in 2009. Cho is now working in China after retiring from his position at SNU last February, and has given numerous lectures in China since 1990. This interest and passion naturally led him to China, and, last June, he started the second chapter of his life as a full-time professor at CKGSB.

Prof. Cho referred to China’s energy consumption as the ground of his claim. He claimed energy consumption is a reliable index. “In 2009, China ranked as the number one energy consuming country surpassing the US’. However, the US is reluctant to acknowledge the fact.”

China is considered as the growth driver of the global economy. According to Prof. Cho’s diagnosis, since Korea’s economy is increasingly dependent on China, appropriate knowledge about China is necessary. To do this, his advice was: “Stop deluding yourself about how well you know China. Because Korea and China are geographically close and there have been historical exchanges, we tend to make the mistake in thinking that we know China well. So we treat Chinese people as if they were Korean, but that is not how the concept of ‘guanxi’ (关系) works.” Consequently, an effort to understand and study China must come first. “Rather than being based on the Korean notions of kinship, regionalism and school relations, ‘guanxi’ is based on trust. Promises must be kept, and it is important to show sincerity over a long period of time,” said Dr. Cho.

Prof. Cho’s work in China led to a request from China’s State-owned Assets Supervision and Administration Commission (SASAC) to help reform the management assessment model for Chinese SOEs. Because 113 SOEs account for 38% of China’s GDP, if the management assessment model is a success, it would naturally be expected to expand to private companies. The management assessment model was established by applying Prof. Cho’s theory that a company is built on the dynamic mechanism consisting of a CEO’s role, the environment that companies confront, technology, capital, and other factors. This year, the second phase of simulation will take place using one SOE and one listed company.

To view the original article in Korean, please click here.

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