Asia-Pacific Research Center

Established in Hong Kong in 1999, the Asia-Pacific Research Center (APRC) was the first of the School's international Research Centers. The APRC is an essential part of the continuing HBS effort to influence the practice of management education, while creating world-class educational experiences for MBA students and business leaders alike. Through its ongoing work, the APRC has developed important links with governments, academic institutions, and corporations within a region that is assuming an increasingly vital role in the world economy. Since its inception, the center has been instrumental in helping to enhance the breadth and depth of HBS research and to facilitate HBS faculty in developing case studies. To further support research being carried out in this region, two senior researchers were placed in Shanghai and Beijing.

In July 2008 Dean Jay O. Light and William C. Kirby, T. M. Chang Professor of China Studies and Spangler Family Professor of Business Administration at Harvard, and Chairman of the Harvard China Fund, announced the opening of
a Harvard office in Shanghai.


Viva Macau (A)

Roscini, Dante, and G.A. Donovan
March 2014

A fast-growing Macau-based airline backed by private U.S. investors faces a dramatic expropriation in the wake of the first change of head of government since the former Portuguese colony became a Special Administrative Region of China. The case allows students to explore what Foreign Direct Investors can do to foresee a possible expropriation event and what options they might consider to protect themselves ex-ante or fight the outcome ex-post.

Transitions Asia: Managing Across Cultures HBS Note

Chua, Roy Y.J., Sharon Mozgai, and Dawn Lau
February 2014

No abstract available

Donfeng Nissan's Venucia (A)

Reinhardt, Forest, Mayuka Yamazaki, and G.A. Donovan
February 2014

The (A) case describes the launch of a new passenger vehicle in China, produced jointly by Nissan of Japan and by Chinese automaker Dongfeng. Early sales results following the April 2012 launch were disappointing, and the joint venture's managers had to decide how to respond. The case includes information on the structure of the industry, on government regulation, and on the preferences of Chinese purchasers of automobiles, including information about environmental considerations.

Donfeng Nissan's Venucia (B)

Reinhardt, Forest, Mayuka Yamazaki, and G.A. Donovan
February 2014

The short (B) case, designed for distribution in class, describes further complications, as an international dispute between the Japanese and Chinese governments created further uncertainties for Chinese consumers and hence for the carmakers.

Donfeng Nissan's Venucia (C)

Reinhardt, Forest, Mayuka Yamazaki, and G.A. Donovan
February 2014

The (C) case concludes the story; it too can be distributed in class.


Wanxiang Group: A Chinese Company's Global Strategy (B)

Kirby, William C., Nancy Hua Dai, and Erica M. Zendell
December 2013

Supplements the (A) case 308-058. With an almost forty-year history as a business in China, the Wanxiang Group has navigated through the significantly different political and economic changes in China to succeed as a global leader in the auto parts industry and to develop into a broad business conglomerate. Beginning in 1994, when it first began its operations in the United States, Wanxiang started to expand its role as a parts supplier into a discerning acquirer of distressed companies in the U.S. While it saw acquisition as an exciting means for growth, company strategy at its Hangzhou, China headquarters also included vertical integration with a goal of developing a full-on electric car. Were these two goals divergent or complementary, mutually supportive or exclusive?

Hubei Lantian (A)

Hawkins, David F., Michael Shih-ta Chen, and Nancy Hua Dai
November 2013

No abstract available

Hubei Lantian (B)

Hawkins, David F., Michael Shih-ta Chen, and Nancy Hua Dai
November 2013

No abstract available

Beijing's Terminal 3: Building a New Gateway to China

Fearing, Douglas, Ananth Raman, and G.A. Donovan
September 2013

No abstract available

Value Partners and the Evergrande Situation

Healy, Paul M. , and Keith Chi-ho Wong
July 2013

In June 2012, Cheah Cheng-Hye and his colleagues at Value Partners, a Hong Kong-based investment firm, received a copy of a short-seller report alleging that Evergrande, one of China's largest property developers, was using fraudulent accounting and paying bribes to secure business. Evergrande's stock plummeted, and Value Partners, which had a sizable holding of Evergrande stock, had to determine how to respond to the allegations. The case provides an opportunity to review Value Partners' research approach to investing in Chinese companies and to assess the merits of the Evergrande allegations.

Transitions Asia: Managing Across Cultures

Chua, Roy Y.J., and Dawn Lau
May 2013

The director of an interim executive search firm, Chee Lung Tham, faced a clash of culture and management styles when his mainland Chinese client threatened to fire the American interim manager that Tham had assigned. The client, Wong Lung, ran a family-owned garment manufacturing business along with his younger brother, as well as his two overseas-educated children. While Wong needed the American manager's technology expertise, his own brother and his team of middle managers were showing resistance to the new changes. Meanwhile, the American manager found himself caught in the web of family and company politics, and completing his assignment without the cooperation of the middle management was impossible. How should Tham approach the conflict and bring all sides into a productive working relationship?

Austal, Ltd. (A)

Shih, Willy, Margaret Pierson, and Dawn Lau
April 2013

Austal, Ltd. was an Australian builder of high-speed passenger ferries. It had translated that expertise into a foothold in the defense market on the U.S. Navy Littoral Combat Ship (LCS) program with an Alabama assembly facility. In January 2009 it had just completed the construction of its first LCS, but the global economic crisis put the company in a difficult position. Its commercial order book had dried up, yet it needed to preserve capabilities in its Australian workforce in now underutilized facilities near where its design capabilities were centered. Was this a short-term problem, or had the commercial market changed forever? The (A) case examines possibilities that company might pursue to bridge the presumed gap until market conditions improve and the (B) case recounts some of those choices. The case focuses on the question of the importance in Austal's maintaining manufacturing close to its design center and how it will do this as its center of gravity increasingly shifts to other regions?

Austal, Ltd. (B)

Shih, Willy, Margaret Pierson, and Dawn Lau
April 2013

No abstract available

CLP: Powering Asia

Serafeim, George, Robert G. Eccles, and Dawn Lau
March 2013

No abstract available

SANY: Going Global

Lal, Rajiv, Stefan Lippert, Nancy Hua Dai, and Di Deng
February 2013

April 17, 2012, was a special day for SANY Group and for its founder Liang Wen'gen. Headquartered in Changsha, SANY Group had transformed itself in two decades from a small welding material factory in 1989 to a leading global construction equipment manufacturer with 5 industrial parks in China; 5 R&D and manufacturing bases in America, Germany, India, Brazil, and Indonesia; and 21 sales companies worldwide. SANY Heavy Industry Co., Ltd. (SANY), SANY Group's major subsidiary, engaged in the construction equipment business and was number six on International Construction's 2012 Yellow Table, a ranking of the world's largest construction equipment manufacturers.

CSIRO: The Light Metals Flagship Decision

Shih, Willy, Margaret P. Pierson, and Dawn Lau
January 2013

This case explores the challenge of investing in basic research as a public good. CSIRO was Australia's leading science and research agency, and it was chartered to enhance national prosperity through R&D. Its Flagships program was designed to align research interests with national priorities, with a strong focus on the adoption of research outputs. The Light Metals Flagship (LMF) was one of six flagships established in 2003, and its goal was to help the nation capture more of the added value of its resources by developing and commercializing downstream technologies in the processing and fabrication of products made from aluminum, magnesium, and titanium. While the LMF met with technical successes, Australian industry was reticent to co-invest. This lack of industry enthusiasm was in many ways unsurprising, as governments often found it important to fund long-term basic research that was outside of the horizon of firms. But what kind of a signal would stopping the program send? Was CSIRO prepared to let short-term thinking in light metals firms drive its agenda? The case examines the technical decision-making process.


Urbanizing China

Iyer, Lakshmi, and G.A. Donovan
November 2012

In 2012, China attained a historic development milestone with more Chinese citizens living in cities than in the countryside. China's rapid urbanization, and the accompanying conversion of agricultural land to non-agricultural uses, raised a number of economic, social, and political concerns. Could China maintain its food security in view of the sharply rising demand for land for urban development? How could it ensure the sustainability of local government finances? Was the growing number of land protests the harbinger of major changes in China's political institutions? How would the challenges of urbanization affect the business environment for private firms? The success and viability of China's overall growth strategy depended crucially on managing a successful urban transition.

CNBM: Rolling Up China's Cement Industry

Bower, Joseph L., and G.A. Donovan
September 2012

The Chinese government has charged Song Zhiping with the job of rationalizing China's cement industry. He has acquired 200 plus companies, but the industry is still fractured. Can he succeed?

ATR KimEng Financial Corporation

Jin, Li, Michael Shih-ta Chen, and Dawn Lau
August 2012

ATR KimEng is a Philippino asset management business. It is making an important decision on its own strategy going forward: should it stay independent or be taken over by a large bank in the region. Through this case, we discuss the financial service industry in Southeast Asia and study the opportunities and challenges presented by the changing global market dynamics.

Chairman Zhang and Broad Group: Growth Dilemmas

Marquis, Christopher, Nancy Hua Dai, and Lynn Yin
March 2012

Zhang Yue, founder and chairman of Broad Group, had developed a series of innovative products aimed at solving China's environmental problems. Broad Group's products, services, and management were guided by values that prioritized morals, responsibility, environmental protection, and energy conservation over company growth and profit. Zhang's current focus was Broad Sustainable Building (BSB), a unique prefabricated building technology that was significantly more environmentally friendly than traditional building methods, as well as much less expensive. In order to obtain the capital and talent that BSB's development required, Zhang realized he may need to publicly list the company, despite publicly saying he never would do so. Would scaling the new businesses result in compromises to the mission and values that guided the company? If so, was the overall environmental impact from the new building technology worth the cost?

Hengdeli: The Art of Co-existence

Deshpandé, Rohit, and Nancy Hua Dai
March 2012

In October 2011, Zhang Yuping, founder and chairman of Hengdeli, the largest Swiss watch retailer in the world, wondered how to work more closely with its key suppliers-Swatch Group, Richemont Group, LVMH Group, and Rolex Group-to maintain strong growth in the Greater China region. Specifically, how could Hengdeli manage the relationship with these suppliers to ensure getting more supply in a market where demand outgrew supply? How could Hengdeli balance the needs of these competing suppliers without being overreliant on one or two suppliers? How could it continue to expand its retail network to enhance its value and position? How could Hengdeli rationalize the portfolio management to maximize the return in the long-term?

Ctrip: Scientifically Managing Travel Services

Garvin, David A., and Nancy Hua Dai
March 2012

Ctrip is a $437 million Chinese online travel services company with a scientific, data driven approach to management. The case explores Ctrip's founding and early growth; its expansion into multiple market segments including hotel reservations, air ticketing, leisure travel, and corporate travel; and the sources of its competitive advantage. The firm's culture, organization, and call center operations are described in detail, as are its decision-making and business processes. At the end of the case, executives are considering whether Ctrip should actively pursue either the budget or luxury travel segments, which would mean shifting attention from the company's core customer base of Frequent Independent Travelers.

Li & Fung 2012

McFarlan, F. Warren, Michael Shih-ta Chen, and Keith Chi-ho Wong
February 2012

Midway through its current three-year plan, Li & Fung stop to assess the path it is taking in extending its distribution network business in Asia.

CARD Group: Mutually Reinforcing Institutions

Montgomery, Cynthia A., Michael Shih-ta Chen, and Dawn Lau
January 2012

CARD (Center for Agricultural and Rural Development) is a Philippines-based microfinance organization that began as an NGO and has since expanded into eight related entities providing services to the poor. Under founding director Dr. Aristotle Alip's leadership, CARD has become one of the top microfinance institutions in the world. More recently, larger commercial and financial institutions are seeking a slice of the microfinance market. The main dilemma Dr. Alip faces is as follows: Should he partner with commercial institutions to reap benefits from their larger sources of capital and technology expertise? Would that mean compromising his original mission of elevating people from the base of the pyramid?


China or the World? A Financial Reporting Strategy for Hong Kong's Capital Markets

Ramanna, Karthik, Gwen Yu, and G.A. Donovan
October 2011

Set in 2010, the case discusses the strategic directions Hong Kong could pursue, particularly vis-a-vis China, as it seeks to preserve its preeminence in the region. In 2010, the Hong Kong Exchange announced that it would allow listed Chinese companies to report using Chinese GAAP without reconciliation to IFRS. The exchange was responding to the demands of its largely Chinese clientele and also coping with increased global competition to attract listings from Chinese companies. However, there were concerns around whether this change would undermine Hong Kong's position as a financial center in the long-term. Hong Kong's position as a global financial powerhouse was due in part to its rigorous emphasis on compliance and enforcement-allowing companies to report under Chinese GAAP, the practice of which was highly variable, could compromise Hong Kong's high corporate governance standards.

Dongfeng Passenger Vehicle Company: Marketing Challenges for the 'Underprivileged Latecomer'

Shih, Willy, and Nancy Hua Dai
October 2011

As Mr. Li Chunrong visited the new assembly line for the Dongfeng Passenger Vehicle Company in Wuhan, China, he contemplated the position his business unit found itself in: a latecomer. As a state-owned enterprise, Dongfeng had entered into numerous joint ventures to produce automobiles under foreign brands, but its foray into selling vehicles under its own brand had only started recently, and now the unit faced a crowded market filled with fierce competition. As he walked back to the office, he reflected on the time it was taking to establish the Dongfeng brand. Would his business unit grow strong enough in its five-province geographic focus before other hungry competitors looking for growth piled into these market areas? Or should it go more aggressively to attack the coastal areas with its new 2000 cc model to be launched in late 2011?

Oriental Fortune Capital: Building a Better Stock Exchange

Lerner, Josh, and Keith Chi-ho Wong
July 2011

When ChiNext opened in October 2009 as the second tier market of the Shenzhen Stock Exchange (SZSE), it aimed to provide Chinese entrepreneurs with equity capital and to facilitate the exits of venture capital firms and other investors that had previously relied on the New York, London, and Hong Kong markets for public offerings. A year into ChiNext's operation, Dr. Wei Chen, chairman and founder of Oriental Fortune Capital, one of the fastest-growing venture capital firms in China, met with an SZSE research fellow to discuss how the rules governing the market might be adjusted to allow more firms to list and, more importantly, to improve efficiency and transparency in order to make ChiNext a better stock exchange.

China Environment Fund: Doing Well by Doing Good

Marquis, Christopher, and Nancy Dai
May 2011

In early 2010, cleantech investment pioneer Tsing Capital was planning for the China Environment Fund IV and considering how to maintain its commitment to social and environmental practices. Tsing Capital embraced its philosophy of "Doing Well by Doing Good" and developed a proprietary system to manage social and environmental functions throughout the investment process. Some of the specific questions examined in the case are as follows: With a more diversified investor base, how could the firm balance the different expectations of investors and continue to achieve "Doing Well by Doing Good"? Despite the increasing importance of social and environmental practices, they also had a cost for the firm and its portfolio companies. How could the firm most effectively motivate its portfolio companies to actively integrate social and environmental practices with their strategies?

International Agribusiness in China: Charoen Pokphand Group

Kirby, William C., Michael Shih-ta Chen, Tracy Yuen Manty, and Yi Kwan Chu
April 2011

The world's leading Thai agribusiness corporation and largest agribusiness investor in China, CP Group, is facing another crossroads in China as the country starts to undergo rural reform. The issues at hand for Chairman Dhanin Chearavanont is how CP can balance its place as a key investor in China's burgeoning agriculture market with its unstated obligation to provide guidance and expertise in food safety, technology, and jobs for rural farmers while still competing against the growing cadre of international and domestic companies vying to grab share from its operations in China. Was rural reform going to help or hinder CP's position in China, and was CP doing all it could to take advantage of these changes?

CNOOC: Building a World-class Energy Company

Bower, Joseph L., Nancy Hua Dai, and Michael Shih-ta Chen
March 2011

Fu Chengyu is the fifth CEO to lead China National Offshore Oil Company-an SOE founded in 1982 to exploit Chinese offshore deposits. In 2010 he is trying to decide how to drive further growth in a company that has grown 556 times in less than 30 years, with profits grown 2,600 times. He believes that the way CNOOC has been managed, a blend of market orientation and concern for employees and the nation has contributed importantly to the success. His challenge is to allocate resources among new areas to explore for petroleum and new sources of energy and to develop managers with the capability of leading those businesses in the face of world-class competitors. Both technical talent and the ability to integrate the efforts of non-Chinese leaders are involved.

Rebranding Gallagher

Deshpande, Rohit, and Keith Chi-ho Wong
March 2011

Steve Tucker, the Deputy CEO of Gallagher Group Limited (GGL), the world's largest electric fence company, was about to present a new branding strategy to the company's senior managers and Bill Gallagher, Jr., CEO. After spending more than 18 months with brand consultants, Tucker devised an umbrella brand strategy that would instill a uniform brand across all three business units: Animal Management Systems, Security Management Systems, and Fuel Pumps, which marketed themselves under the respective brand names of Gallagher, Cardax, Powerfence, and PEC. However, Tucker knew that the unit heads believed the differences in their clienteles, product categories, and distributor relationships made it impractical to adopt one single brand. GGL's overseas distributors had also raised concerns about a uniform brand. In many cases, GGL only owned minority interests in these distributors and retained limited control over their activities.

The Tzu Chi Foundation's China Relief Mission

Leonard, Herman B., and Yi Kwan Chu
February 2011

A faith-based organization from Taiwan has made considerable inroads in being able to operate effectively in mainland China. Is further expansion too risky?


Hang Lung Properties and the Chengdu Decision (A)

Macomber, John D., Michael Shih-Ta Chen, and Keith Chi-Ho Wong
October 2010

A residential real estate developer competes in a heated auction for a prime retail development site in the interior of China during the 2009 boom. Total project cost might be in excess of $1 billion U.S. for over 4,000,000 square feet of building. Hang Lung Properties has enjoyed success in residential building in Hong Kong but has focused on very limited projects in China, notably two retail properties in Shanghai. After a decade in Shanghai the firm decides to enter second-tier Chinese cities including Chengdu, a city of 11 million in interior China. The case covers Hang Lung Properties' due diligence and thought process with respect to anticipated rental income, construction costs, and land costs. The auction includes many other well-capitalized firms and the price escalates. Hang Lung's team must decide whether to participate or withdraw. Students need to use judgment with respect to estimates of key variables including stabilized income, construction cost, and minimum expectations for return on investment in order to prepare their bids.

Hang Lung Properties and the Chengdu Decision (B)

Macomber, John D., Michael Shih-Ta Chen, and Keith Chi-Ho Wong
October 2010

Second phase of auction for a prime retail development parcel in Chengdu, China. Competition forces the firm to revisit all of its land purchase criteria. Hang Lung Properties is known for rigorous due diligence, for discipline in buying property, and for good understanding of market cycles. The (B) case reveals the firms assumptions in the Chengdu situation, as compared to what students had to derive on their own in the (A) case. The (B) case also reviews strategic focus with respect to asset classes and geography, as well as best practices for what to look for in cities that will be attractive for superblock mixed-use projects.

From Imitation to Innovation: Zongshen Industrial Group

Shih, Willy, and Nancy Dai
July 2010

As Zuo Zongshen drove the transformation of the Zongshen Industrial Group from an early imitator in the motorcycle business to a company that increasingly focused on innovation as a way to get out of the hyper-competitive commodity business, he continually faced new challenges. The company had become a leader in gasoline powered motorcycles and small gas engines, but increasing taxes and restrictions on the use of motorcycles in congested urban areas had spawned a new industry, electric motorbikes, which posed a threat to the company's core business. Sourcing the technology for these e-bikes, and hiring and retaining the management and creative talent the company needed, were continuing challenges. The case traces the development of capabilities in the Zongshen Industrial Group, how it used the early imitation phase to foster rapid technological learning and upgrading, and how it used a unique corporate structure and listing strategy to finance the acquisition of important technologies.

Mirae Asset: Korea's Mutual Fund Pioneer

Khaire, Mukti, Michael Shih-Ta Chen, and G.A. Donovan
June 2010

Park Hyeon-Joo, the founder and chairman of Korea's earliest and largest mutual fund company, plans to expand internationally. After first offering emerging market funds to its Korean customers, the company then began selling local-currency funds in India and Brazil. Now Hyeon-Joo has to decide his next steps. Should he build on his emerging market expertise and focus his business expansion in developing countries? If so, where should he concentrate his efforts-India, Brazil, China, or other countries? Or should he instead focus on expanding into developed markets through operations in New York and London?

Toward Golden Pond (A)

Retsinas, Nicolas P., G.A. Donovan, Nancy Dai, and Justin Ginsburgh
May 2010

The Rong-D companies must decide whether to build a luxury senior housing development in Chengdu, China. Demographics are very encouraging for this new product type, but there are numerous cultural, market, financial, and political risks that they must assess before moving forward.

Toward Golden Pond (B)

Retsinas, Nicolas P., G.A. Donovan, Nancy Dai, and Justin Ginsburgh
May 2010

Supplements the A case. Provides an additional dilemma for the Rong-D companies with regard to building luxury senior housing in China.

IFRS in China

Ramanna, Karthik, G.A. Donovan, and Nancy Dai
January 2010

In 2005, China announced plans to "converge with," but not completely adopt, IFRS. China also began to lobby for changes to specific IFRS provisions, such as for related party disclosures by state-owned firms, to bring them more into line with Chinese interests. China's accounting system had already undergone significant reforms during the two decades when its economy had grown to become the fourth largest in the world. However, enforcement of accounting standards remained weak, the financial system was relatively immature, and large state-owned firms still dominated many sectors of the economy.


Noble Group

Foley, C. Fritz, Michael Shih-Ta Chen, Matthew Johnson, and Linnea Meyer
November 2009

What role does trade finance play in facilitating global supply chain management? Richard S. Elman, founder and CEO of Noble Group Ltd., a global commodities trading company based in Hong Kong, must raise capital to support the firm's working capital and investment needs. In evaluating by which means Elman should raise capital, students must consider issues relating to the payment terms and financing arrangements used in world trade, as well as the risk management and operating decisions of a trade intermediary.

CapitaLand Ltd: CEO Selection

DeLong, Thomas J., Michael Shih-ta Chen, and G.A. Donovan
October 2009

In September 2007, the Group President of CapitaLand has to select a new CEO for a key subsidiary. The case presents the profiles of three candidates-two internal and one external-and ends with the senior management team debating the candidates' merits.

Appellation Shanxi: Grace Vineyard

Kirby, William C., Michael Shih-ta Chen, and Keith Chi-ho Wong
May 2009

Grace Vineyard was a rare family-owned, private winery in China that was set on establishing itself as a world-renowned, quality vintner. Judy Leissner, the second-generation company leader, was at a crossroads in how she wanted to grow the business that her father founded in 1997. Their wines were rapidly growing a strong following and had won international awards. How could the company capitalize on this success? Should Grace expand its operations to multiple Chinese provinces? Should Grace continue as a premium boutique winery serving a growing but ultimately limited niche market in China, or should it seek to make a mark internationally? Or should Grace respond to buy-out offers?

Xi'an International University: The Growth of Private Universities in China

Kirby, William C., Michael Shih-Ta Chen, Keith Chi-ho Wong, and Tracy Yuen Manty
May 2009

Huang Teng founded Xi'an International University (XAIU) as a private institute of higher education in 1992. Throughout its ensuing years, the school filled a niche and met the demand of students who did not test into one of China's public institutions. In 2008, it was seeking to grow by aggressively pursuing opportunities in other provinces and municipalities. Huang's plan was to franchise his university throughout China. However, in pursuing this strategy in Beijing, Shanghai, and Guangzhou, China's largest cities, Huang was not receiving warm responses. Local officials feared XAIU would jeopardize the survival of locally run private universities, and competition among private universities was heating up as institutions from the United Kingdom and Hong Kong partnered with public universities to form joint-ventured "independent colleges." Buoyed by the success of XAIU, Huang was confident that despite these setbacks, his franchise model would work. But was an alternative plan of expanding into second- or third-tier cities compromising too much of the groundwork that had already been laid, would it jeopardize XAIU's funding opportunities, and finally, would it hurt the academic quality and integrity XAIU had built up at home?

From xiaonei to hainei: The Quest for the Social Networking Service Market in China

Lassiter, Joseph B., Michael Shih-Ta Chen, and Keith Chi-Ho Wong
May 2009

Wang Xing, the founder of, one of the fastest growing social networking service (SNS) providers in China, was preparing to raise funds from venture capitalists. Since late 2003, Wang had established several Internet startups in China., which he founded in December 2005, had been the most notable in China and around the globe for its resemblance in website design and marketing strategies to those of Facebook. The market landscape of SNSs in China had changed drastically since Wang founded, with domestic and local competitors flocking into the market. With all his experience and knowledge in the SNS market, Wang had to convince the potential investors that his new venture could warrant sustainable growth and profitable returns.

Baosteel Group: Governance with Chinese Characteristics

Paine, Lynn Sharp and G.A. Donovan
April 2009

The new outsider-dominated board of directors of China's state-owned Baosteel Group must decide whether to modify the Group's structure. With the completion of a pending acquisition, the Group will control four publicly listed steel-producing subsidiaries, and board members are concerned about competition among the subsidiaries and about the subsidiaries' public shareholders. Selected by the Chinese government as the first company to take part in a pilot project on corporate governance in state-owned enterprises, Baosteel and its board are under intense scrutiny by Chinese and overseas investors in the listed subsidiaries as well as by China's political leadership and the media. The case provides background on Baosteel, China's SOE reform, the Chinese government's pilot project on corporate governance, and the functioning of Baosteel's newly constituted board of directors.

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The Hong Kong & China Gas Company Ltd.: Negotiating Joint Ventures in China

Sebenius, James K., Michael Shih-ta Chen, and Medha Samant
December 2008

To deliver 5-6 major new Chinese joint ventures annually, Hong Kong China Gas executives began extracting cross-border negotiating lessons from their 80 existing Chinese JVs. Chairman Alfred Chan and CEO Peter Wong knew that HKGC's growth strategy required significant mainland expansion through negotiating joint ventures to run gas and water distribution systems in diverse urban and rural locations throughout mainland China-often in the face of entrenched local interests who could have blocking power. Discussions with HKGC's negotiation teams revealed an increasingly sophisticated negotiating approach from target identification and party mapping, to "social mapping" and building guanxi, to creative deal design and tactics, in order to most effectively work out issues of equity, management control, territory, and exclusivity.

The Chubb Corporation in China

Jin, Li, Michael Shih-ta Chen, and Aldo Sesia Jr
December 2008

The Chubb Corporation, headquartered in the U.S., was the holding company for a number of property and casualty insurance companies which operated in 29 countries. In 1979, the Chinese government, as part of its "reform and open" policy invited a delegation of Chubb executives to discuss insurance issues. In the mid-1990s, Chubb opened representative offices in Beijing, Shanghai, and Shenzhen to do market research and assess the potential of the Chinese insurance market. In 2000, China authorized Chubb (one of only three foreign insurers) to sell insurance in the country. During the next five years China's non-life insurance industry grew from $8.3 billion in 2001 to $15.9 billion in 2005. Yet in 2007, domestic insurers continued to dominate market share and, Chubb had not realized the profits it had anticipated. The case provides an overview of property and casualty insurance, the Chinese insurance market and the challenges that foreign-based insurers have in entering an emerging market. Students are asked to decide what Chubb's China strategy should be moving forward.

PCCW now

Hagiu, Andrei, and Waishun Lo
August 2008

In 2007, PCCW had to formulate a strategy for growth of its successful NOW TV platform and its quadruple play implementation outside of Hong Kong. Launched in September 2003 by PCCW (Hong Kong's largest telecommunications operator), NOW TV had swiftly become the world's most successful commercial IPTV deployment. By the end of June 2007, the service had an installed subscriber base of almost 820,000 and offered a choice of 143 TV channels, 71 of which were exclusive. However, opportunities for growth were inherently limited to Hong Kong (7 million inhabitants), which meant PCCW had to find ways to expand its NOW platform or seek to license parts of it internationally.

Chunghwa Telecom Co., Ltd. (A)

Marshall, Paul W., Michael Shih-ta Chen, and Keith Chi-ho Wong
August 2008

In late November 2000, Chunghwa Telecom Co., Ltd., the once-monopolized telecom operator owned by the Taiwanese government, was on its way to privatization. Mr. C.K. Mao, Chairman of the company, who headed the job only three months earlier, after its prior chairman resigned unexpectedly in the midst of chaos brought by the resistance of its staff who feared losing their civil servant status after privatization. Also facing Mao was the forthcoming deregulation of the telecommunication industry on the island which would bring about new competitors on fixed-line services, in addition to the already competitive mobile communication segment where the company's once dominant market share was heavily eroded. Mao had to decide on the pricing strategies for the company's various product lines, including fixed line, mobile services, as well as data communication. He also needed to ponder on how to revise the company's compensation system to better motivate its staff in a deregulated market and communicate all these changes to the unionized labor force.

Wanxiang Group: A Chinese Company's Global Strategy

Abrami, Regina, William C. Kirby, F. Warren McFarlan, Keith Chi-ho Wong and Tracy Yuen Manty
June 2008

With an almost forty-year history as a business in China, the Wanxiang Group has navigated through the significantly different political and economic changes in China to succeed as a global leader in the auto parts industry and to develop into a broad business conglomerate. Beginning in 1994, when it first began its operations in the United States, Wanxiang started to expand its role as a parts supplier into a discerning acquirer of distressed companies in the U.S. While it saw acquisition as an exciting means for growth, company strategy at its Hangzhou, China headquarters also included vertical integration with a goal of developing a full-on electric car. Were these two goals divergent or complementary: mutually supportive or exclusive?

Taiwan Semiconductor Manufacturing Company Limited: A Global Company's China Strategy

Kirby, William C., Michael Shih-Ta Chen, and Keith Wong
June 2008

After fifty-five years in the semiconductor industry, Morris Chang, founder and Chairman of Taiwan Semiconductor Manufacturing Company (TSMC), was seeing a change. After four decades of regular double-digit growth the industry was still growing-but now at a much slower pace. In 2004, TSMC entered the China market, the world's second largest for semiconductors, by building a fabrication plant in Shanghai. Was China the market opportunity in which TSMC could bet on for expansion, or should its strategy be to focus on new product development and innovation?

Inner Mongolia Yili Group: China's Pioneering Dairy Brand

Abrami, Regina, William C. Kirby, F. Warren McFarlan, and Tracy Yuen Manty
May 2008

Setting up the goal to become one of the top 20 enterprises in the world dairy industry by 2010, the Inner Mongolia Yili Group had ambitious plans. As one of China's biggest national dairy companies, its main challenge was competing as a local company against joint-venture rivals who benefited from perks granted to "foreign" companies. To set itself apart, Yili focused on research and development and innovative ways to improve the industry. Proving that it could shift industry standards and lead a country not accustomed to dairy consumption, to a point where demand is outpacing supply, the Yili Group is making its mark to go global. As an Official Sponsor of the 2008 Olympic Games in Beijing and the Official dairy supplier of the games, it is betting that the brand can go further beyond China. Will the day that tykes from Topeka have a bottle of Yili milk in their hands be coming soon?

Fiyta-The Case of a Chinese Watch Company

Abrami, Regina, William C. Kirby, F. Warren McFarlan, Luc Wathieu, Gao Wang, Fei Li, and Tracy Yuen Manty
April 2008

Fiyta had long been one of China's foremost watch brands. However, as China's economy began to improve and the livelihood of many Chinese rose with it, their tastes began to change. Exposed to more luxurious foreign brands, many Chinese strived to purchase a Swiss or Japanese watch. How could Fiyta build up its brand image to a more sophisticated Chinese consumer? What marketing activities should it undertake to reinvigorate its brand? Is it meeting the needs of all segments of Chinese consumers? Should it?

China Netcom: Corporate Governance in China (A)

Abrami, Regina, William C. Kirby, F. Warren McFarlan, and Tracy Yuen Manty
April 2008

With its dual listings on the Hong Kong stock market and New York Stock Exchange, state-owned enterprise China Netcom was mandated to meet the listing requirements of these exchanges. From this initial step, China Netcom's Chairman, Zhang Chunjiang, began a program that sought to further develop the company's corporate governance practices to meet international corporate governance standards. The company hoped that its commitment in developing a globally-accepted governance structure would help the capital markets and potential investors understand that the company was a true, modern corporation, even with the state as a majority owner.

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Will RacingThePlanet Ltd. Reach the Finish Line?

Isenberg, Dan, William C. Kirby
November 2007

Mary Gadams, founder and CEO of RacingThePlanet is facing one of the many logistical crises that her young Hong Kong-based venture faces as it stages its popular 4Deserts(tm) adventure marathon series in Atacama Chile, Gobi Desert Mongolia, Sahara Desert Egypt, and Antarctica. How can a small company in Hong Kong continue to effectively coordinate such a far-flung, complex, global operation?

Gome: Going Public

Jin, Li, Li Liao, Ruoran Guo, and Jielun Zhu
November 2007

Gome, China's largest electronics retailer, is plotting the best course to go public. Unlike many high-growth businesses in China, Gome has only moderate financing needs. Its charismatic and ambitious chairman Wong Kwongyu has built an expansive retail network in China and successfully used trade credits by suppliers and banks to make Gome a highly cash-generative business. The decision to go public has three inseparable components: why, where, and how. Does Gome really face substantial funding shortages for its operations? If so, are there any alternatives other than going public? If not, what are the other potential motivations to go public? Given these considerations, financial and otherwise, which stock market is the best one to list Gome's shares on? And between an IPO and a backdoor listing, which option suits Gome the best in terms of timing, costs, feasibility, and risks? Assuming Gome chooses to go public via a backdoor listing, what is the process.

Gome Electronics: Evolving the Business Model

Abrami, Regina, William C. Kirby, McFarlan, F. Warren, Gao Wang, Fei Li, Tracy Yuen Manty, and Wai Shun Lo
September 2007

After 20 years of expansion, Gome Electronics has become China's largest consumer electronics retailer. It has opened stores in almost every province in China, acquired some of its competitors, and went public in Hong Kong. However, it has begun to experience a slowdown in growth as sales per-square-meter have declined. The company is now being challenged to develop new ideas for growth, including experimenting with its product mix, renegotiating its relationships with suppliers, and developing new business models to maximize profitability.

China Merchants Bank

McFarlan, F. Warren, Chen Guoqing, Zhu Hengyuan, Bin Yang, Michael Shih-Ta Chen, Wai Shun Lo, and Yan Yang
August 2007

Founded in 1987, China Merchants Bank (CMB) is a pioneer in the use of technical innovation and IT as a competitive tool in the rapidly evolving Chinese banking sector. With a relatively small branch network when compared to its larger competitors, CMB uses an IT-driven strategy to introduce an "all-in-one" card, which integrates a suite of financial products to drive its personal banking business enabling CMB to be ranked 6th among China's commercial banks and 2nd among the other national commercial banks in terms of total assets as of June 2006. Underlying its excellence in personal banking is CMB's leadership in developing its credit card business. By April 2006, CMB had issued a total of over 5 million credit cards, capturing one-third of the Chinese credit card market. In September 2006, CMB's IPO in Hong Kong fetched about $2.4 billion and, given deregulation in the banking sector in China, CMB's President was presented with new challenges and opportunities concerning how such funds should be productively allocated to ensure CMB's competitiveness.

BYD Company, Ltd.

Huckman, Robert S., Alan D. MacCormack
July 2007

Considers whether BYD Co., Ltd., the largest Chinese maker of rechargeable batteries, should enter the Chinese automobile industry by acquiring Qinchuan Auto, a state-owned car manufacturer. Set just after BYD's initial public offering on the Hong Kong Stock Exchange in 2002, it describes the development of BYD's labor-intensive approach to battery manufacturing-an approach decidedly different from its more capital-intensive Japanese competitors and one that took advantage of the abundant supply of low-cost labor in China. Highlights the unique benefits and challenges created by BYD's operations strategy and asks students to determine whether the capabilities developed by the company in battery manufacturing can productively be applied to the automobile sector. Asks students to consider which, if any, aspects of BYD's operations constitute sources of sustainable competitive advantage for the company.

Chiaphua Group Vietnam

Retsinas, Nicolas P., and Michael Shih-Ta Chen
April 2007

As part of its expansion and diversification strategy, the Chiaphua Group explored real estate investments in emerging markets. The Group was one of the largest privately held company groups based in Hong Kong, with international investments in a variety of manufacturing and property development. A family member, Raymond Cheng, had narrowed the list of potential markets to Singapore, Malaysia, Indonesia, and Vietnam. Notwithstanding a history of instability and conflict and substantial government control of markets, Raymond concluded that Vietnam was the best option. Revolves around how to assess the market in the absence of hard data, and what would be the appropriate entry points. Illuminates how relationship-driven investments can be the foundation of a long-term investment strategy. Issues also involve how, by working with government through a structured forum (along with personal relations), laws and regulations can evolve to facilitate real estate investments.

WildChina (A)

Isenberg, Daniel J., and Shirley Spence
April 2007

WildChina (A) tells the story of Mei Zhang, a Chinese-born HBS alumna, and her pursuit of a dream: to share her passion for travel, her appreciation of China's beauty and culture, and her desire to start her own business. Describes the startup of WildChina, a tour company targeting a high-end clientele with unusual and high-quality products, and its survival of two business crises. The focus is on Zhang's decision to bring in a COO, transition him to CEO, and assume the position of Chairperson. Also describes communication and control challenges faced when Zhang moves to Los Angeles with her family, and tries to remain involved in her Beijing-based business. The decision Zhang faces is how to proceed when, in the midst of sales and operational problems and financial pressures, her CEO announces that he will be leaving the company in a matter of months.

Li Ning--Anything is Possible

Wathieu, Luc, Gao Wang, and Medha Samant
April 2007

A leading sporting goods company in China competes aggressively against global brands Nike and Adidas, with marketing strategies adapted to geographic segments. In the main cities, where competition takes place at a very conceptual level, Li Ning has chosen to adopt a very controversial "oriental theme" for its brand, while becoming at the same time a major sponsor of international athletes of the highest caliber.

The Challenges of Launching a Start-Up in China:

Kirby, William C., F. Warren McFarlan, and Tracy Yuen Manty
March 2007

After graduating from Harvard Business School in June 2006, Ken Pao and Bill Li were ready to fully commit to the Internet start-up they had been working on since they first stepped foot on the business school campus. They moved to Beijing, rounded out their management team, received venture capital investment, developed joint-venture partnerships, and set key milestones to create a full-impact product launch for their social networking Web site catering to the college market. On the day of their launch, they faced a setback from China's Ministry of Education and were forced back to square one. Discusses the pluses and minuses of partnering with China's government ministries, the highs and lows of entrepreneurship, and the numerous opportunities available to entrepreneurship in China today.

Li & Fung 2006

McFarlan, F. Warren, William C. Kirby, and Tracy Yuen Manty
March 2007

Describes the opportunities and strategy facing one of the most innovative global supply-chain companies, and the strategy it has chosen to deal with the expanding demand for its services. Li & Fung links thousands of factories in India, China, and elsewhere to nearly a thousand large retailers, primarily in the U.S. and Europe. It basically does the supply-chain job faster and more accurately with the aid of a sophisticated information system than anyone else.

Li Ka-Shing

Bridget Gurtler, Nohria, Nitin
March 2007

From his humble beginnings in China as a teacher's son, a refugee, and later as a salesman, Li provides a lesson in integrity and adaptability. Through hard work, and a reputation for remaining true to his internal moral compass, he was able to build a business empire that includes: banking, construction, real estate, plastics, cellular phones, satellite television, cement production, retail outlets (pharmacies and supermarkets), hotels, domestic transportation (sky train), airports, electric power, steel production, ports, and shipping. Teaching Purpose: To examine leadership.

Li Ka-Shing and the Growth of Cheung Kong

Nohria, Nitin, Anthony J. Mayo, and Mark Benson
March 2007

Events in the history of Cheung Kong's growth reveal how Li Ka-Shing applied his skills as a "first-class noticer" to complex political and socioeconomic environments. While Li's determination to succeed is legendary, so are his skills in reading and responding to the policies and norms of the People's Republic of China, British colonial Hong Kong, and the post-World War II international system. Since Li became the taipan of Hutchison Whampoa in the late 1970s, he has adjusted his ownership shares in a vast portfolio of businesses--including ports, energy, real estate, retail, telecommunications, and new media. Illustrates how Li applied his business acumen and his ability as a first-class noticer to decisions about raising or lowering his stake in these businesses, and whether to acquire new ones. After starting Cheung Kong Inc. in 1950, at age 21, Li built upon his knowledge and contacts in the plastics industry to become Hong Kong's King of Plastic Flowers. In the 1960s, amid political turmoil and labor unrest on both the mainland and in colonial Hong Kong, Li purchased rights to properties on Hong Kong island that were selling at distressed rates. Li's successes in industry and real estate continued, and he cultivated contacts and built a strong reputation that set the stage for his purchase of the hong Hutchinson Whampoa, thereby becoming the first Chinese taipan. As taipan, Li reorganized and reallocated his various financial holdings in the 1980s and 1990s as conditions were in flux due to the Westernization of China after Deng Xiaoping succeeded Mao Zedong, and amid concerns about the transfer of Hong Kong from Britain back to China in 1997.

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Ayala Corporation

Villalonga, Belen, Raphael Amit, and Chris Hartman
December 2006

Ayala Corporation is the oldest conglomerate in the Philippines and has been controlled by the Zobel de Ayala family for seven generations. Over the past 25 years, Ayala has evolved from a real estate family business into a highly diversified and professionally managed business group, with a significant number of non-family shareholders. Between the holding company and its four largest subsidiaries, the Ayala group accounts for a quarter of the market capitalization of the Philippines Stock Exchange. Provides data to assess the value created for Ayala's stockholders in the ten years leading up to 2006, when the transition to the seventh generation of the Zobel de Ayala family culminated.

Medco Energi Internasional

Villalonga, Belen, Raphael Amit, and Chris Hartman
October 2006

In late 2004, Hilmi Panigoro, CEO of the publicly traded Indonesian oil company Medco Energi Internasional, is striving to regain majority control of the company his brother Arifin founded in 1980. The Asian financial crisis of 1999 led to a major restructuring that left the Panigoros with a 34.1% equity stake in Medco. Two other large shareholders are now looking to sell their combined stake of the 50.9% and have selected Temasek, the Singapore government's investment arm, as their preferred bidder. The Panigoros have a right of first refusal, but only a four-month window to raise the capital needed to head off Temasek's bid. The Panigoro brothers are considering a two-stage plan: a leveraged buyout to be followed by a secondary equity offering at a share price high enough to enable them to repay the loan and maintain majority control of their company. As attractive as the plan seems, they worry about the high cost of the loan and the risk that the offering might fail. In January 2005, with no time left to consider alternative financing plans, the Panigoro brothers have to decide whether to go ahead with the plan or lose control of Medco to Temasek.

Cathay Pacific

McFarlan, F. Warren, Fred Young, and Waishun Lo
September 2006

Explores the various aspects of information technology that can be outsourced. Cathay Pacific outsourced a significant part of its vital operations from Hong Kong to Sydney, Australia.

World Wide Licenses Ltd.: From Disney to Polaroid

Tripsas, Mary
September 2006

World Wide Licenses (WWL) was a low-technology firm that licensed famous brands, which it then applied to timepieces, stationery, and back-to-school products. It transformed into a digital imaging company and landed worldwide rights to the Polaroid brand name. Explores how it made the transformation and how it should proceed.

China: Building "Capitalism with Socialist Characteristics"

Spar, Debora L., and Chris Bebenek
June 2006

Describes China's phenomenal development from a poor, communist country to a global powerhouse. Provides background on China's history and culture, details the reforms launched in 1978 by Seng Xiaoping, and describes the situation as of 2006, focusing on the government's attempts to equalize China's financial markets without giving up the reins of central control.

Chrysanthemum and Dragon: JAFCO Asia in China

Abdelal, Rawi, and David Lane
May 2006

In the autumn of 2002, JAFCO Asia, a subsidiary of JAFCO Co., Ltd., became the first foreign private equity firm to open an office in Beijing's Haidian Science Park. JAFCO was the only Japanese private equity firm operating in China. As such, Managing Director Vincent Chan observed, "JAFCO is the bridge between Japan and China." Yet, under that bridge the waters appeared increasingly choppy. While the economic relationship between Japan and China had grown increasingly close, their political relations had not and some Japanese firms had begun to reassess their commitment to China. Would capital-rich Japan and capital-poor China find a way to transcend their troubled history? Could JAFCO Asia be a catalyst for cooperation, or would its managers find their own operations affected by rivalry between Asia's two most important countries? The mix of formal rules and informal practices that governed foreign private equity firms in China was complex. Opening an office in Beijing signified a renewal of JAFCO Asia's efforts to master these challenges and coincided with an acceleration of the firm's investments. But JAFCO's first years of engagement with China had not been notably successful, and without some fundamental changes, there was little reason to believe that the addition of a physical presence there would yield better results now.

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Haier: Taking a Chinese Company Global

Khanna, Tarun, Ingrid Vargas, and Krishna G. Palepu
December 2005

In 2005, Haier, China's leading appliance manufacturer, had over $12 billion in worldwide sales and was the third-ranked global appliance brand behind Whirlpool and GE. Describes Haier's rise from a defunct refrigerator factory in China's Qingdao province to an international player with nearly $4 billion in overseas sales. Haier had followed a nontraditional expansion strategy of entering the developed markets of Europe and the United States as a niche player before venturing into neighboring Asian markets. Facing intense competition and price wars in the domestic market, in 2005 Haier was redoubling its efforts to build a globally recognized brand. Could Haier complete with the likes of Whirlpool and GE in their home market? Could Haier successfully defend against Chinese and multinational challengers in China while building a brand overseas?

Red Flag Software Co.

Felix Oberholzer-Gee, Tarun Khanna, David Lane, and Elizabeth A. Raabe
December 2005

In 2005, just five years after its formal launch, Beijing-based Red Flag Software was the world's second-largest distributor of the Linux operating system and was expecting its first annual profit. On a unit basis, Red Flag led the world in desktops (PCs) shipped with Linux and was No. 4 in installed servers. On a revenue basis, Red Flag was fourth overall. Within China, Red Flag held just over half of the Linux market and ran key applications for the postal system, large state-owned enterprises, and more than a million PCs. The Chinese government supported Linux as an alternative to Microsoft's Windows operating system to avoid royalty payments to foreign firms and dependence on foreign technology. Even so, Red Flag President Chris Zhao felt the same pressure many start-ups faced: How could Red Flag compete against a giant like Microsoft? And what competitive advantages could Zhao bring to bear against an experienced Linux veteran like Red Hat, a U.S.-based software company that had just announced its plan to invest to capture market share in China? Zhao worried that government support would evaporate if Red Flag performed poorly.

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