URBAN CHALLENGES IN CHINA
Exporting urban solutions with support of the local government of Amsterdam
Urban challenges in China:
Exporting solutions with support of the local
government of Amsterdam
IB5X
500712263
October 2018
J.M. Van Amerom
S. Meents
1
,Title page
Title: Urban challenges in China: Exporting solutions with support of the Local Government of
Amsterdam
Name of the author:
Class and student number: IB5X, 500712263
Place and date of writing: Amsterdam, October 2018
Name of the educational institution: Amsterdam School of International Business
Name of the department: Trade Management Asia
Lecturer: J.M. van Amerom
Assessor: S. Meents
Organization: Gemeente van Amsterdam
Organization supervisor:
2
,Executive summary
This thesis is written for the local government of Amsterdam, more specifically for the Chief Technology
Officer, and researched in which ways the LGA can provide support, in terms of export support services
(ESS), to Amsterdam-based WWI SMEs to improve the export to China.
China has been going through rapid urbanization since 1978, meaning that at least 20 million people
migrate each year from the rural areas to the densely populated urban areas. As result, the cities in
China have to deal with a variety of urban challenges, but this thesis only took the following three
challenges into account: (1) water management, (2) waste and pollution, and (3) infrastructure. Due to
these growing challenges the Chinese Government and its cities are searching for solutions, meaning
that these challenges provide opportunities for Amsterdam-based companies due to the absence of
existing solutions in the country. Hence, Amsterdam-based SMEs in the water management, waste
management or infrastructure sectors can introduce their solutions in terms of a service, expertise or
product in China. Therefore, the local government of Amsterdam wants to know how they can provide
support to those SMEs to improve the export of water, waste and infrastructure solutions to China.
Based on this opportunity, the following main research question has been formulated:
“In which ways can the local government of Amsterdam provide support to water, waste and
infrastructure SMEs to improve the export of WWI solutions to China before the end of 2020?”
Due to the exploratory nature of this subject, primary research was used as the main data collection
method. Especially, because there is little known about this concept, where cities locally want to provide
export support to its companies. Thus, to gain an in-depth understanding about the topic, thirteen
interviews were conducted with companies who successfully exported their water, waste and
infrastructure solutions to China, companies who are interested in entering the Chinese market, and
experts working for the local governments of Barcelona and Berlin who are successful in supporting the
internationalization of its SMEs. Additionally, a questionnaire was used as well to increase the collection
of data, which returned 45 responses.
Furthermore, the results indicate that being patient, hiring local employees or finding a local partner,
building relationships and preparation are the most critical success factors of doing business in China.
Next, the local government of Amsterdam can facilitate the networking process for the Amsterdam-
based companies by introducing them to Chinese partners or clients. Because the Chinese counterparts
consider it more valuable if a connection is initiated by the local government of Amsterdam. Moreover,
the local government of Amsterdam can support the internationalization of Amsterdam-based SMEs by
providing the following ESS: (1) support in business networking, (2) trade missions, (3) workshops and
seminar, (4) signing crosslanding city agreements with other international cities, and (4) provide an
advisory service for SMEs which provides them with export information. Additionally, the indicators for
3
,measuring the success of the provided ESS were determined as well as a model which displays the first
three mentioned ESS and the corresponding timeline for execution and evaluation. In conclusion, by
executing the recommended ESS the local government of Amsterdam can support the Amsterdam-based
WWI SMEs with improving the export of WWI solutions to China before the end of 2020.
4
,Abbreviations
LGA Local Government of Amsterdam
LGBA Local Government of Barcelona
LGBE Local Government of Berlin
SMEs Small and medium sized enterprises
MNEs Multinational enterprises
CTO Chief Technology Office
B2B Business-to-business
WWI Water, waste and pollution, and infrastructure
ESS Export support services
5
,Table of contents
Title page ....................................................................................................................................................... 2
Executive summary ....................................................................................................................................... 3
Abbreviations ................................................................................................................................................ 5
1. Introduction .......................................................................................................................................... 9
1.1 Introduction ...................................................................................................................................9
1.2 Background of the research ...........................................................................................................9
1.3 Organization description ................................................................................................................9
1.4 Opportunity analysis ....................................................................................................................10
1.4.1 Urban challenges in China ....................................................................................................10
1.4.2 Urban solutions ....................................................................................................................11
1.4.3 The opportunity for the LGA and Amsterdam-based SMEs .................................................11
1.4.4 Undesired situation ..............................................................................................................12
1.4.5 Desired situation ..................................................................................................................13
1.5 Main research question and sub-questions .................................................................................13
1.6 Organization of the report ...........................................................................................................14
2. Theoretical framework ........................................................................................................................ 15
2.1 Introduction .................................................................................................................................15
2.2 Theoretical perspectives on the topic ..........................................................................................15
2.2.1 The Three P's of Building a China Business: Patience, People and Personal Relationships .15
2.2.2 Guanxi gates and the network gatekeeper ..........................................................................16
2.2.3 Local municipalities’ involvement in promoting the internationalization of SMEs .............18
2.2.4 The eight-phase model of successful planning of support services for SMEs .....................19
2.2.5 Evaluating export promotion programs: Trade missions .....................................................20
2.3 Conclusion ....................................................................................................................................22
3. Research methodology ....................................................................................................................... 23
3.1 Introduction .................................................................................................................................23
3.2 Data collection methods ..............................................................................................................23
3.2.1 Primary qualitative research ................................................................................................23
3.2.2 Primary quantitative research..............................................................................................25
3.2.3 Secondary research ..............................................................................................................27
3.3 Data analysis.................................................................................................................................27
6
, 3.3.1 Qualitative data analysis ......................................................................................................27
3.3.2 Quantitative data analysis ....................................................................................................28
3.4 Research methodology per sub-question ....................................................................................28
3.5 Validity and reliability of the research .........................................................................................29
3.6 Research ethics ............................................................................................................................30
3.7 Conclusion ....................................................................................................................................31
4 Results and analysis............................................................................................................................. 32
4.1 Introduction .................................................................................................................................32
4.2 Critical success factors for WWI SMEs doing business in China ..................................................32
4.2.1 Challenges of doing business in China .................................................................................32
4.2.2 Critical success factors for doing business in China .............................................................33
4.2.3 Conclusion ............................................................................................................................35
4.3 The role of the LGA as a network gatekeeper with building guanxi ............................................36
4.3.1 The role of the LGA in building guanxi .................................................................................36
4.3.2 Conclusion ............................................................................................................................37
4.4 How the local governments in Barcelona and Berlin are providing ESS ......................................37
4.4.1 Reasons for providing ESS at a local level ............................................................................37
4.4.2 The SMEs profile and provided ESS ......................................................................................38
4.4.3 Conclusion ............................................................................................................................39
4.5 Indicators for monitoring the success of the ESS .........................................................................40
4.5.1 ESS required by the WWI SMEs............................................................................................40
4.5.2 Indicators for evaluating the success of the ESS ..................................................................41
4.5.3 Conclusion ............................................................................................................................44
4.6 Conclusion ..........................................................................................................................................44
5 Conclusion ........................................................................................................................................... 46
6 Recommendations .............................................................................................................................. 49
6.1 Introduction .................................................................................................................................49
6.2 Recommendations .......................................................................................................................49
6.3 Cost benefit analysis.....................................................................................................................50
6.4 Implementation plan ....................................................................................................................51
6.5 Limitations of the research ..........................................................................................................52
6.6 Recommendation for further research ........................................................................................53
References................................................................................................................................................... 55
7
, Appendices .................................................................................................................................................. 58
8
Exporting urban solutions with support of the local government of Amsterdam
Urban challenges in China:
Exporting solutions with support of the local
government of Amsterdam
IB5X
500712263
October 2018
J.M. Van Amerom
S. Meents
1
,Title page
Title: Urban challenges in China: Exporting solutions with support of the Local Government of
Amsterdam
Name of the author:
Class and student number: IB5X, 500712263
Place and date of writing: Amsterdam, October 2018
Name of the educational institution: Amsterdam School of International Business
Name of the department: Trade Management Asia
Lecturer: J.M. van Amerom
Assessor: S. Meents
Organization: Gemeente van Amsterdam
Organization supervisor:
2
,Executive summary
This thesis is written for the local government of Amsterdam, more specifically for the Chief Technology
Officer, and researched in which ways the LGA can provide support, in terms of export support services
(ESS), to Amsterdam-based WWI SMEs to improve the export to China.
China has been going through rapid urbanization since 1978, meaning that at least 20 million people
migrate each year from the rural areas to the densely populated urban areas. As result, the cities in
China have to deal with a variety of urban challenges, but this thesis only took the following three
challenges into account: (1) water management, (2) waste and pollution, and (3) infrastructure. Due to
these growing challenges the Chinese Government and its cities are searching for solutions, meaning
that these challenges provide opportunities for Amsterdam-based companies due to the absence of
existing solutions in the country. Hence, Amsterdam-based SMEs in the water management, waste
management or infrastructure sectors can introduce their solutions in terms of a service, expertise or
product in China. Therefore, the local government of Amsterdam wants to know how they can provide
support to those SMEs to improve the export of water, waste and infrastructure solutions to China.
Based on this opportunity, the following main research question has been formulated:
“In which ways can the local government of Amsterdam provide support to water, waste and
infrastructure SMEs to improve the export of WWI solutions to China before the end of 2020?”
Due to the exploratory nature of this subject, primary research was used as the main data collection
method. Especially, because there is little known about this concept, where cities locally want to provide
export support to its companies. Thus, to gain an in-depth understanding about the topic, thirteen
interviews were conducted with companies who successfully exported their water, waste and
infrastructure solutions to China, companies who are interested in entering the Chinese market, and
experts working for the local governments of Barcelona and Berlin who are successful in supporting the
internationalization of its SMEs. Additionally, a questionnaire was used as well to increase the collection
of data, which returned 45 responses.
Furthermore, the results indicate that being patient, hiring local employees or finding a local partner,
building relationships and preparation are the most critical success factors of doing business in China.
Next, the local government of Amsterdam can facilitate the networking process for the Amsterdam-
based companies by introducing them to Chinese partners or clients. Because the Chinese counterparts
consider it more valuable if a connection is initiated by the local government of Amsterdam. Moreover,
the local government of Amsterdam can support the internationalization of Amsterdam-based SMEs by
providing the following ESS: (1) support in business networking, (2) trade missions, (3) workshops and
seminar, (4) signing crosslanding city agreements with other international cities, and (4) provide an
advisory service for SMEs which provides them with export information. Additionally, the indicators for
3
,measuring the success of the provided ESS were determined as well as a model which displays the first
three mentioned ESS and the corresponding timeline for execution and evaluation. In conclusion, by
executing the recommended ESS the local government of Amsterdam can support the Amsterdam-based
WWI SMEs with improving the export of WWI solutions to China before the end of 2020.
4
,Abbreviations
LGA Local Government of Amsterdam
LGBA Local Government of Barcelona
LGBE Local Government of Berlin
SMEs Small and medium sized enterprises
MNEs Multinational enterprises
CTO Chief Technology Office
B2B Business-to-business
WWI Water, waste and pollution, and infrastructure
ESS Export support services
5
,Table of contents
Title page ....................................................................................................................................................... 2
Executive summary ....................................................................................................................................... 3
Abbreviations ................................................................................................................................................ 5
1. Introduction .......................................................................................................................................... 9
1.1 Introduction ...................................................................................................................................9
1.2 Background of the research ...........................................................................................................9
1.3 Organization description ................................................................................................................9
1.4 Opportunity analysis ....................................................................................................................10
1.4.1 Urban challenges in China ....................................................................................................10
1.4.2 Urban solutions ....................................................................................................................11
1.4.3 The opportunity for the LGA and Amsterdam-based SMEs .................................................11
1.4.4 Undesired situation ..............................................................................................................12
1.4.5 Desired situation ..................................................................................................................13
1.5 Main research question and sub-questions .................................................................................13
1.6 Organization of the report ...........................................................................................................14
2. Theoretical framework ........................................................................................................................ 15
2.1 Introduction .................................................................................................................................15
2.2 Theoretical perspectives on the topic ..........................................................................................15
2.2.1 The Three P's of Building a China Business: Patience, People and Personal Relationships .15
2.2.2 Guanxi gates and the network gatekeeper ..........................................................................16
2.2.3 Local municipalities’ involvement in promoting the internationalization of SMEs .............18
2.2.4 The eight-phase model of successful planning of support services for SMEs .....................19
2.2.5 Evaluating export promotion programs: Trade missions .....................................................20
2.3 Conclusion ....................................................................................................................................22
3. Research methodology ....................................................................................................................... 23
3.1 Introduction .................................................................................................................................23
3.2 Data collection methods ..............................................................................................................23
3.2.1 Primary qualitative research ................................................................................................23
3.2.2 Primary quantitative research..............................................................................................25
3.2.3 Secondary research ..............................................................................................................27
3.3 Data analysis.................................................................................................................................27
6
, 3.3.1 Qualitative data analysis ......................................................................................................27
3.3.2 Quantitative data analysis ....................................................................................................28
3.4 Research methodology per sub-question ....................................................................................28
3.5 Validity and reliability of the research .........................................................................................29
3.6 Research ethics ............................................................................................................................30
3.7 Conclusion ....................................................................................................................................31
4 Results and analysis............................................................................................................................. 32
4.1 Introduction .................................................................................................................................32
4.2 Critical success factors for WWI SMEs doing business in China ..................................................32
4.2.1 Challenges of doing business in China .................................................................................32
4.2.2 Critical success factors for doing business in China .............................................................33
4.2.3 Conclusion ............................................................................................................................35
4.3 The role of the LGA as a network gatekeeper with building guanxi ............................................36
4.3.1 The role of the LGA in building guanxi .................................................................................36
4.3.2 Conclusion ............................................................................................................................37
4.4 How the local governments in Barcelona and Berlin are providing ESS ......................................37
4.4.1 Reasons for providing ESS at a local level ............................................................................37
4.4.2 The SMEs profile and provided ESS ......................................................................................38
4.4.3 Conclusion ............................................................................................................................39
4.5 Indicators for monitoring the success of the ESS .........................................................................40
4.5.1 ESS required by the WWI SMEs............................................................................................40
4.5.2 Indicators for evaluating the success of the ESS ..................................................................41
4.5.3 Conclusion ............................................................................................................................44
4.6 Conclusion ..........................................................................................................................................44
5 Conclusion ........................................................................................................................................... 46
6 Recommendations .............................................................................................................................. 49
6.1 Introduction .................................................................................................................................49
6.2 Recommendations .......................................................................................................................49
6.3 Cost benefit analysis.....................................................................................................................50
6.4 Implementation plan ....................................................................................................................51
6.5 Limitations of the research ..........................................................................................................52
6.6 Recommendation for further research ........................................................................................53
References................................................................................................................................................... 55
7
, Appendices .................................................................................................................................................. 58
8
