The forum attracts political leaders, government officials, business leaders, and scholars to discuss issues related to Asian development. The opening plenary was attended by heads of state from China, Brunei, Kazakhstan, Myanmar, Peru, Zambia, Finland, Mexico, Cambodia, Australia, and various other high-level officials from Mongolia and Algeria. Modeled after Davos, the discussions that followed were far-ranging, dealing with issues of trade, debt, investment, “going abroad” strategies, property and property rights, social enterprise, and a special session with Bill Gates on investment for the poor. All supporting the overall theme of “Asia Seeking Development for All: Restructuring, Responsibility, and Cooperation.”
My panel, which focused on M&A, was dominated by Chinese banks and funds all encouraging companies to look abroad. While there was some discussion of the US, there was a much bigger focus on Australia and Europe as destinations of choice. My role on this panel was to talk about the nonfinancial aspects of M&A. We all noted that 70% to 80% of acquisitions fail, and we spent quite a bit of time talking about why they fail.
What was most interesting to me was the universal agreement that differences in corporate culture, lack of integration, and insufficient communication were primary causes of failure – much more than the economic aspects. It was interesting for me to hear the heads of some of the largest financial institutions in China (CIC, ICBC, Citic Securities, and others) talk about the value and importance of dialogue, communication, and cultural understanding to the success of the deals in which they are involved.
Many examples were given, but the strong point was made that the skills and contribution made by our profession was essential to the success of those deals that succeeded. It was an affirmation from the other side of the world of the importance of the work we do every day and the growing appreciation for the value we provide as a cultural bridge. It also reinforced how our role as facilitators of dialogue has an intrinsic value that can sometimes be the difference between success and failure.
It is a point that was not lost on these world-class bankers, and we should make sure it is not lost at home.
There were about 2,000 people in attendance, and it was a very high-quality crowd. The attendance was definitely enhanced by the presence of President Xi Jinping of China. This was his first public meeting with business, and there was a lot of curiosity about how he would deal with the rising concerns from foreign multinationals in China. The businesses attending were not disappointed. While his opening remarks were pretty standard, he did something very rare for a Chinese leader. He agreed to a meeting on the “sidelines” of the event for 32 foreign and domestic business leaders where he pledged to provide a level playing field and a more open domestic market for foreign companies. There was a lot of respect both for his words and the fact that he agreed to this meeting, and he seemed very comfortable in the exchange. This is a break with the past and is a welcomed signal for those doing business in China that the concerns about backsliding in reform and fair treatment might be truly different under his administration.
The Boao Forum also provided a chance to hear from some of the leading thinkers in the region on topics of interest to business, but as most forums of this kind, the real action was in the bilaterals that took place on the sidelines. The spirit throughout was one of cooperation and good will.
There were a couple of things that really struck me about the forum. While the forum was established over a decade ago as a regional forum to facilitate trade among the markets of Asia, the meeting itself was really China-centric. Perhaps it is because of its size or the location, but some of the larger markets in the region were not really in the mix. Little was said about and there was little participation from Korea, Japan, Malaysia, Indonesia, the Philippines, India, and other high-potential markets.
As if to underscore the point, I shared a car to the airport with a delegate from Nepal who had been at every forum since the first. I asked him what he thought of the event. He was pleased to be there, but disappointed that there was little opportunity to hear from the smaller countries in the region. It was almost as if they did not exist, especially since the theme of the conference promised "seeking development for all."
Another observation, which I have noticed more at international forums, is that discussion about the US seems to be more irrelevant. The growth of the region, the increased influence of China, and the absence of senior US officials all focused the discussion on creating a more dominant trading block for the region to better compete with the markets of the West.
Margery Kraus is the founder and CEO of APCO Worldwide.