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roger Chou: What about China Now? – PM Development amidst the Current Economic Situation in China

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RCRecently, quite a few friends asked me about the current economic situation in China and how does it affect the climate of the projects there. They also concern how the global economic situation is affecting project management in the country; Is the recent stimulus announcement in China going to be a good thing for projects and project managers? What industries in China will be booming for project managers?

Well, as some of our research data and interviews (www.pm-abc.com) indicate, as the global economic meltdown continues, with some of the European economies now slipping into recession, most of the countries in Asia are not so severely affected. This can be largely attributed to an environment of protectionism and conservative financial investment, especially in China and South Korea. However, regardless of how protective these countries have been, the dramatic plunge of export demands, from such countries as America, still affects these countries income directly. For China, the world’s largest producer and exporter, most of their industries have had to close down or drastically cut production, or cancel projects under development. However, this has been described as only a “20 second pause” in China’s long and continual development in the 21st century, by David Lee, the deputy of the Center for China in the World Economy (http://www.cenet.org.cn/article.asp?articleid=35691).This is particularly true of China’s recent rapid economy growth which has generated massive domestic capital. When China recovers, China will recover more quickly than any other Asian country.

A large reliance on project management has always underpinned China’s major successes. From Beijing’s Olympic Game in 2008, to the ‘Five Year Plan’ of 2001-2005 (similar to Taiwan’s Twelve Major Programs), the Chinese government have been running these national programs with the guidance of project management, and with the skills and knowledge offered by project management professionals. The demand for project management professionals has intensified as more and more bids, BOTs, or massive projects, wait to be undertaken, or from large investments from world banks, or wealthy countries, to stimulate China’s development. The Beijing Olympic Games alone created a demand for 15,000 PMPs. Last year, in 2008, the Chinese government launched a national “Household Appliances To The Countryside” program, despite the global economic meltdown, generating a business opportunity of over 18,000 Billion RMB (Chinese Yuan Renminbi). Such an ambitious program not only supports domestic growth, but also benefits neighboring countries. Many Taiwanese companies have taken the orders for the program, helping supply Chinese villages with a variety of goods, from HDTVs to washing machines. (http://biz.cn.yahoo.com/09-03-/43/sx8v.html)?http://www.028itpx.com/job/a/20071017/1224125989578304.shtml??
As well as the “Household Appliances To The Countryside” program there are also medical reform plans and the national, coordinated ‘Ten Construction Projects’ (including the steel, motor, ship, and petroleum industries), which were launched to boost domestic growth. Such national programs will lead to another surge in the demand for project management professionals. Actually, prior to taking on the Olympic Games, China had already started to train large number of project management professionals to cope with the needs of China’s predicted growth. So far, there are over 25,000 PMPs in China, and the government has made some global recognized project management credentials an equivalent to their own National Certification Exam. This means PMI’s PMP certificate upholders are eligible for China’s own project management credential. Basically, there has been a surge in demand for project management professionals in three of China’s industries. Firstly, demand from large-scale national activities, such as the 2008 Olympic Games and the Expo 2010 Shanghai, which have regulations requiring the suppliers to have project management credentials. Secondly, demand from major construction projects, such as high way construction. Thirdly, demand from the IT Industry, such as internet connection companies, programming and database companies. (http://www.028itpx.com/job/a/20071017/1224125989578304.shtml)

Therefore, due to the government’s investment in projects, the PMP credential should be the most demanded certificate in China. The government’s requirement for gaining management credentials will lead to a reform in Chinese companies’ organizational structure. Traditional project manager’s role in a weak matrix structure will be transferred to a strong matrix structure, and so their positions and roles can be more and more influential. Trained project managers will become very important and powerful in an organization.

These days, Chinese project workers, with the aid of modern technology, have many ways of enhancing their abilities. From the options open to them, more and more have chosen to study project management to improve their career. In the past, many project managers were promoted to their position due to the achievements of their projects, whether it was sales or technological development. However, this could lead to the promotion of those who may be good workers – but not necessarily good managers. This has led them to the famous ‘Peter Principle’, “In a hierarchy every employee tends to rise to their level of incompetence … in time every post tends to be occupied by an employee who is incompetent to carry out its duties … Work is accomplished by those employees who have not yet reached their level of incompetence.” Right now, Chinese project managers are just starting to learn to manage projects, so as to make themselves more capable of properly fulfilling the role of management.

Presently, three types of project management qualifications are available to Chinese project managers; America’s PMI, Holland’s IPMA, and China’s National Qualification Exam. In addition to this, senior managers, such as CEOs, General Managers, Chairmen, can seek advanced portfolio management knowledge like the American PMI’s Program Management Professional (PgMP). This credential is especially designed for senior managers, offering evaluations of success case studies to encourage integrated management and strategy. With the PgMP as a compass, they can navigate toward ‘blue sea’ opportunities for their enterprises, far from the ‘red sea’ that many Chinese senior managers face – a tough market full of intensive, hostile competition. Such an advanced credential is only for those senior managers who have been overseeing large, long-term projects.

Many industries in China are still waiting for the properly trained project managers to help them become effective. Until now, China’s coastal regions and administration centers, such as Shanghai and Beijing, have prospered, while inland, especially far from away from regional centers lacking of infrastructures, prosperity have lagged behind. As mentioned earlier, industries such as transportation and construction, which the Chinese government is investing in heavily through major developments, will cause everyone involved to focus on ensuring these projects are properly managed. Industries such as Education and Information Technology will also expand in response to supporting all these new projects. Therefore, project managers in China have an opportunity to serve for their country’s development whilst advancing their own professionalism. Learning more efficient project management will allow Chinese managers to help their government carry out these large programs and projects successfully. This will be crucial to China’s future development.

By roger Chou, PgMP

PMI R.E.P. 2510 PM-ABC Director


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