Amway China’s chairwoman, Eva Cheng, started at the company as a secretary in the Hong Kong office in 1977 and now oversees the company’s operations in Greater China and Southeast Asia, which was reportedly responsible for more than one third of its $8.4 billion in 2009 revenue. A decade ago direct marketing was banned in China for seven years, severely affecting Amway’s ability to operate in the country. NEWSWEEK’s Isaac Stone Fish talked to Cheng about the business climate in China today, the best way to deal with Beijing, and the role of women in China’s corporate culture. Excerpts:
There’s been a lot of press lately about China not being an easy place to work for foreign companies. How does Amway feel about the current business climate in China?
Even though it’s modern, dynamic, very developed in many respects, China as a whole is still a developing country; it has never really been a very easy place to do business.
Business culture in China in many ways is very patriarchal. How does that affect your standing and business dealings in China?
In the early days, if the boss makes a decision they’ll go with it without understanding why, or questioning; the boss is supposed to be this very enlightened leader. Today the younger generation wants communication, it’s not just you give a directive and you can expect them to do it without second-guessing.
What advice do you have for a Chinese woman on how to become a leader?
Women leaders have to beef up their own strengths and their own knowledge and experience to qualify for those positions. I don’t think they can expect the government or the society or someone from the outside to help them move up; they will have to fight for it themselves. They will have to prove it over time with their work, with their experience, with their own contribution that they merit the position in the upper echelons of government.
Amway had a lot of problems in 1998 because of government fear of cults and Falun Gong. What have you done to convince the Chinese government that Amway is not a breeding ground for cults, and do you feel that sort of suspicion is a problem going forward?
I think that kind of suspicion was around when the government did not have a very thorough understanding of the history of this industry around the world. The No. 1 task was communication: give the government the basic knowledge of differentiating between fraudulent pyramid companies and ethical, legitimate direct-selling companies. Another thing we did at that time was increase our transparency. In China in all the major cities we agreed to set up shop, a physical presence. We do everything we can to let the government know that we’re totally transparent to them, and that what we do is no different from any of the other major multinationals they know about in the country.
There have been some reports that foreign companies won’t publicly criticize China for fear of reprisal. Does Amway feel this way?
I see a lot of areas where I think the government can do more to help my business, or to help our trade or our industry, and we’re very vocal and we’re very active in expressing our views and our opinions. But the channel: do you express it through the media, or do you express it through repeated calls to the relevant government officials, repeated letters to the relevant officials? I think it’s a matter of choice, it’s a matter of what you believe is the better way to get to the end result.
What’s the worst thing that could happen to Amway’s business in China?
I really don’t spend my time thinking about what would be the worst thing that would come about. China is a big country; our business could have a business interruption because of forces outside of our control. You talk about natural disasters, it can be political, wars, revolution, whatever, but if you ask me if there is anything that would disrupt our business or cause grave damage from the inside, I cannot say so. I don’t think any crisis would hit and tear us apart. But if we don’t pay attention, don’t keep innovating and improving ourselves every day, I’m afraid this foundation will slip away without us even knowing it.