Doing Business in China

Doing Business in China

It is commonly renowned that China is “The Next Big Thing” in business.

Assuming that the most technologically advanced country in the world with the largest population of 1.4 Billion people is a potential market for your product and/or services is in fact a correct assumption.

However, there is a but.

Since I moved to China at a very young age “pretending” to be able to do business and playing my role as a foreign expert sourcing specialist, I was very fortunate and my thrive for success has blessed me in many ways.

Back in 1988, China was a very different place compared to now, but ever since the Middle Kingdom has shifted from a manufacturing to a consumer economy, I realized that nothing is as it was and things have improved a lot.

There Are No Shortcuts to Success In China!

Today, I keep meeting western entrepreneurs and business owners targeting China a their “Market to do” and failing miserably in what I consider Strategic Mistakes.

From small company owners to the largest corporation there still is this presumption that since it works in the west, the same thing/attitude/message/strategy can be done in China with the same good results.

So often they come in with the expectation that China is a magic box. Like it's like some kind of bottomless ATM machine. You put your card in and mountains of cash spit out.

In reality, China is the opposite. You put your card in and you don't even know if you're going to get it back.

There’s a complete disconnect between the brand’s expectations and the reality of doing business here. China is not for the heart fainted, early adopters, gold diggers, go-getters.

So, whether you are planning to go to China to sell products/services or source for products/services for your company, there are some important precautions that it would be good to remember:

1. TIME: in the West, the concept of time is linked to money, so reducing the time of execution is particularly necessary to optimize the works and maximize economic results.

In China, the same thing cannot be said, in fact, the planned times of all commercial projects and industrial products always and only depend on the ease of collection of the strategic information. The running time is just a mere detail that varies from the number of people involved in the performance - workforce that China does not lack.

Tip: arm yourself with patience and gather as much information about the market before getting to the point and discover your cards.

2. LANGUAGE: it is taken for granted that negotiations can be carried out with English of all kinds. In China, it is now common to always find an assistant who speaks English pretty well. This, however, cannot guarantee total transparency during the negotiation.

Tip: be assisted by a western interpreter who lives in China and knows well the language and the ways of doing things. It will be money well spent.

3. NEGOTIATION: speak exclusively with the persons in charge. Avoid talking with people who cannot make decisions. They will make you lose patience and, most probably to speed things up, you will disclose confidential information that may later be used from the other party.

Tip: Insist on meeting the Sales or Purchasing Director if not the company owner.

4. COPYRIGHT: China is always looking for brands or products to be included in their market. This is why before going to China to deal with a supplier and/or a distributor is always good to protect your brands, designs, and intellectual property in the Chinese market. In the case of trademarks, it is strongly recommended to register the corresponding name in Chinese language and characters.

Tip: relying on a trademark and patent registration studio is the best investment that you can make for your business even if you don't intend to enter the Chinese market.

5. LOGIC: in the West, it is normal to address a question directly to have one clear and comprehensive answer. We can define this as “Linear Logic”.

In China, on the other hand, it is very difficult to obtain direct and clear answers. Rather than a straight “yes” or “no”, Chinese will reply with half-answers or other questions as if it were going around the problem. I define this mode as “Circular Logic”.

Tip: Repeat the questions until you have the answers you consider exhaustive.

Bottom line: China is a great country and the Chinese offer great trade opportunities. However, be careful and never think of underestimating them.