However, recent Accenture researchsuggests that although no companyin China will escape the eectso the downturn, some businessesare dramatically better positionedthan others to weather this storm.During the past decade, the country’sstrongest companies began to openup noticeable leads over others intheir industries (see “About theresearch,” above).Lately, their leads have widened.The research indicates that thechoices that put these companieson a path to high perormancebeore the crisis will also enablethem to ride out the current tur-moil and emerge even stronger.The rise o this new economicsuperstructure in China—eaturingcompanies that are already world-class in their successes today andtheir positioning or tomorrow—isone o two sides to the new Chinastory. The other side is the extentto which many other Chinese com-panies are struggling.The implications or global businessleaders are proound. On the onehand, they need to recognize justhow muscular China’s top perorm-ers have become and adjust their strategies accordingly. Yet theymust not generalize about ChineseZhejiang province, with its entre-preneurial spirit and small busi-nesses producing low-cost goods,has in many ways been emblematico China’s extraordinary economicgrowth. Following its own devel-opment model, the eastern coastalprovince became one o China’srichest; in 2007, it boasted a GDPo about $255 billion and per capitadisposal income or its urban resi-dents o $2,800.Then the global economy hit a wall.Today, China’s businesses stagger under the burden o rising costs,sinking demand, talent shortagesand tougher regulations. Asexport activity sags and Beijingencourages the phasing out o “backward production practices,”a major shakeout is well under way in many industries. And inonce-booming Zhejiang in thesecond hal o 2008, companieswere shuttered at a rate o morethan 200 a month.China’s companies nd themselvescaught in a kind o economicperect storm. The world is sink-ing deeper into recession just asthese enterprises are losing their traditional competitive advantageso low-cost labor, natural resourcesand capital.
About the research
To build up a comprehensive picture o high-perormancebusiness in China, Accenture applied its proprietary fnancialanalysis to examine 13 industries in the country—the secondyear running that we have done so. The latest candidate poolincluded 30 additional companies that now meet the criteri-on o being publicly listed or fve years or more. We createda detailed survey that was answered by nearly 100 seniorexecutives rom large, publicly listed Chinese companies. Wealso gathered valuable input by discussing our fndings andtheories with several board-level representatives o Chinesehigh-perormance businesses.Out o the pool o 200-plus companies, 36 met Accenture’sdefnition o high perormance—companies that are unequivo-cally outperorming their local peers in terms o returns toshareholders, revenue growth, proftability, consistency andpositioning or the uture.