Concepts of "face" and "trust" will help you understand the complexity of Chinese behavior if you also consider that their decisions are guided by five concurrent, seemingly contradictory, realities. Keep them ever in your mind. The Chinese do.

Given the dearth of national leadership experience in China, companies are turning to expatriates to fill critical leadership roles, and promoting these leaders very quickly. The cultural dimensions of leadership developed by Hofstede help provide a foundation for business leaders operating in foreign territories. These dimensions of leadership include power distance, individualism, uncertainty avoidance, and masculinity. For an expatriate leading a national team in China, it is essential to understand the cultural dimensions of leadership to improve productivity, increase company profits, and improve interpersonal relationships.

Companies sourcing from China are reaping huge benefits but also encountering increasingly tough challenges, both internal and external. A recent BCG study reveals the nature of the challenges and summarizes ten key practices that separate the most effective China sourcing offices from their peers: defining a clear sourcing strategy; aligning the China sourcing organization with global procurement; enabling collaboration across regional and functional boundaries; integrating suppliers and R&D into design; systematically developing suppliers; recruiting, developing, and retaining the best people; gaining 100 percent transparency into sourcing volumes and savings; providing internal education to increse awareness and understanding; tying incentives to sourcing targets; and addressing real and perceived risks.

China is in the early stages of its economic development. This report describes the five phases of IP evolution that companies and nations pass through. Without strong international IP rights, Chinese companies may face exclusion from international markets, have to pay onerous royalties, or be otherwise penalized. While it is written for Chinese companies, the main messages of the report apply broadly to companies in other rapidly developing economies or any company trying to build competitive advantage through IP.

Most of China's 500 million consumers still shop at small markets and local department stores. These consumers, who are reaching threshold spending levels for many products, represent China's fastest-growing market. Yet only a fraction of Western companies have explored the traditional trade beyond the largest cities, primarily because of distribution challenges. Of the various methods for dealing with distribution, active management of the wholesale channel--an approach that has been under-leveraged by global companies--presents an opportunity well worth considering.

Success in China requires a flexible approach for a diverse market.

Companies that rush overseas in search of low production costs may be walking into a strategic trap, as gridlock hits ports and railways in the United States and Europe. It's easy to underestimate the hidden costs in long supply chains and their impact on profitability. The authors demonstrate how companies can get a handle on costs by comparing the economics of a typical North American domestic supply chain with those of a supply chain based in China.

In the world's fastest-growing economy, the last 10 years are not the best guide to the next 10 years.

By the time a company calls in its legal team, it's probably too late. The best corporations prepare an IP protection plan to keep their knowledge safe from the outset.

How to set up shop or sell your wares in this enormous, fast-changing market.

In this issue of Spotlight, Professor Henri-Claude de Bettignies speaks to editor Sarah Powell about the development of China as a world power and the opportunities and challenges this offers to western businesses.

China's 1.3 billion consumers are at a crossroads. They are embracing new economic ideas and habits, and devouring goods that have long been unavailable, unaffordable or forbidden. At the same time, they are part of a culture and an economic system that remain quite different from those of developed countries. In this special report, experts from Wharton and Boston Consulting Group offer insights on how Chinese consumers are evolving as the market develops; what companies need to know about navigating China's convoluted sales and distribution systems; and the advantages emerging Chinese companies have over Western competitors, even as these firms face their own difficulties in entering the global marketplace. Also, Deepak Advani, chief marketing officer of Lenovo, and Hal Sirkin, senior vice president of BCG and leader of the firm's Global Operations Practice, discuss the advantages of tailoring products and messages to local markets in China.

China is attempting to maintain a vast manufacturing base, develop a market of 1.3 billion consumers and create the capacity to provide the world with high-value goods and services-all at the same time. Companies that want to succeed in that country will need strategies that enable them to respond accordingly.

China's performance in meeting its key social challenges shows how far it has come and how far it has yet to go.

Many multinationals expanding into China's inland cities become caught in a "value trap." Mounting losses follow initial investments. Fragmented markets and immature distribution systems confront local managers. China experts Jim Hemerling and Hubert Hsu present options for avoiding this common pitfall including: a new business model grounded in cost reduction; a better perspective on China's non-urban consumer; and the opportunities creative partnering with local companies can offer. The authors based their research in China where they have extensive multinational experience.

The conventional wisdom says that China is the biggest story of our time. Now, as India goes through a similar process characterized by historically high rates of growth and further integration into the global economy, it appears that the path it follows will influence the global economy and business environment. Perhaps, then, India is the next big story.

Global business leaders believe that they must have a strategy for both countries. China and India, despite their massive populations and growing importance, are quite different. Their economic structures, sources of growth, areas of competitive advantage and the impact they have will remain different in the coming years. The question, then, for global companies is what to do in each country. China is commonly viewed as the place to produce or procure goods, while India is seen as the place to procure business and information technology services. Yet in the future, this discrete division of labor might not be so clear or even relevant.

This study offers some thoughts on the future direction of India and China, the risks and opportunities of doing business in each country and the likely impact they will have on global business.

Global players aren't in China just to pursue growth. They are also there to compete head-on with the Chinese. But the biggest challenges multinationals encounter in China are often self-generated, because they fail to commit themselves fully to the effort. To keep from getting sidelined, China-bound companies must prepare to do business outside the big cities, make sure the home organization is motivated to support the China strategy, and invest aggressively in the quality and quantity of the people they send.

This report sets forth the organizational practices and design principles of companies that are operating successfully in rapidly developing economies, particularly China and India. Whether global companies are currently engaged in sourcing, manufacturing, selling, or conducting R&D in these markets-or, very often, doing all four-they are finding the task of organizing their activities there a significant challenge.

With reliable data hard to come by, creating a winning marketing formula for China can be a head-scratching exercise.

Editor's Note: this is the first article in a special report on China. I also recommend the article, "It's Not What You Know..." and the PDF "Not All Markets Are Created Equal"

The world's biggest factory is also a fake goods hotbed. Here are 13 ways to protect your company. The second in a CSO series on counterfeiting.

Multinational corporations increasingly see China as a vital part of their global operational network, but opportunities for discussing the challenges this poses are few. In this special report, experts at the Boston Consulting Group and Wharton weigh in on such issues as developing management talent, R&D operations, sourcing of high-tech and traditional goods, and logistics. In addition, the CEO of TCL, one of China's largest global companies, discusses the problems his company has faced in going global.

Note: CEO Refresher articles are no longer free...

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This article takes you through a thought process which helps you narrow down your choices from thousands of possible sites in China to the one that will bring you success in the market place. It presents both the quantitative and qualitative food for thoughts and is designed to help in your decision making in doing business in China.

In this article, the authors discuss why the West still doesn't "get" China. They begin by discussing how multinational companies tend to manage China from the outside (Hong Kong and Singapore are close but not close enough). They also point out that the Chinese locals are becoming increasingly capable players and, therefore, more competitive.

Less visible reasons why companies languish in China are equally important. Most of these center on cultural differences. When conducting business in China, for example, foreigners want to believe that yes means yes, that the promised warehouse or factory is a pristine technological marvel, and that the resources and capabilities are more than implied-they are up and running. Although the truth is usually far from the reality, it is not because of any trickery; it is because we have not figured out how to read between the lines in China.

In exploring the nuances of cultural differences that continue to stump western companies, the authors offer ways to overcome miscommunications and create solid, successful relationships in China. The key lesson? With a new mindset, the East and West can get along.

Local companies are now the key competitors to beat in carving out a share of China's rapidly growing market. For foreign multinationals, it's time to try out some new strategies, because the old ones are running out of steam.

An interesting dialectic is currently being played out in China: The state is continuing its age-old tradition of preserving order while a much newer force, free-market capitalism, and a previously unheard of phenomenon, a middle class, are slowly creatin