Companies doing business in China face several challenges today.*  On the macro level they face the ongoing global financial instability, questionable consumer demand for their goods (especially in export markets), price pressure from competitors, and the uncertainties of government policy.  Weighing these factors, the dynamic market in China is still a vibrant place to do business today.

That presents its own problems.  Because the market is growing and the activity level is high, there is plenty of competition among companies for scarce resources.  Attracting and retaining talent in the form of qualified employees and managers is a top concern.  Maintaining morale and high productivity is clearly another.  The competition for raw materials or inputs for the business challenges the ability to maintain healthy margins, while all of the uncertainty makes forecasting results very difficult, if not impossible.  Inaccurate forecasting causes inefficiencies and hits productivity and morale, which shows the interconnected nature of today’s challenges.

Organizations that are able to attract the best talent and that have the culture to retain and develop this talent will clearly be the winners over time.  Those that manage in a reactive mode or who focus on the short-term and neglect their people/talent practices will suffer from self-inflicted injuries.  Talent is fairly mobile in China.  Top talent is very mobile, and capable leaders will go where there are both opportunities and their own contributions are valued.

Good talent management and leadership development practices are in their early stages in China, so capitalizing on this area will create a competitive advantage for firms that get it right.  Leaders that can shift from reactive to proactive management will integrate this into their strategic vision and execute relentlessly until they get it right.  The competition for talent in China is already hot, and the temperature is only going to climb in the coming days.