Business in China - 001 It's the Government, stupid :)

Other Discussions design in asia
1

Since people keep asking me my thoughts on doing business in China, I am going to create topics in this forum. Why? Mostly because I do not have time to learn how to do a blog :slight_smile: Plus, this will easily allow others to comment at a central location.

Hope this is interesting. I am sure I will hear if it is not.

Tim

2

I spend a lot of time in China in different provinces and with people from all over the world. Typically we will be having dinner with government officials of the city or province and one of the visiting designers will say “Why are we here. When do we get to meet the CEO’s?”

This happens so much that I have to try to explain the cultural gap going on here.

You need to make these government officials like you before you will ever see the CEO’s. In China the government has very close ties to business. After a few dinners with the government officials, and if they feel you have something to offer, they will introduce you to the companies in their jurisdiction. This introduction acts in two ways. One it means the government official has vetted you for your personality, professional acumen and importance to china. Second, by this introduction the government official is giving “face” to the relationship, so they will only introduce someone they feel will not cause them to lose face. This makes the CEO feel much more comfortable with not only meeting you but also working with you, as he and the government official have a very close relationship.

So if you have met with a CEO in the past and there were all smiles and interest, but the minute you left their office nothing more happens, then a big problem is that you have not built the relationship in the correct way (government buddy first, CEO second).

More topics to come later.

3

The introduction to government officials also involves throwing-back quite a few beers/wines/cognacs. I’ve been through that drill. It’s typically a big mutual admiration society by the end of the night.

There is also Taiwan Chamber of Commerce in Dongguan. A very high percentage of the better factories in Shenzhen / Dongguan are owned by Taiwanese. If you can get recommendations within this community it spreads like wildfire.

It always comes back to “relationships”.

4

Yes, also the rice liquor. It is called Mao Tai. Some one once described it as “like kerosene and lighter fluid, but not as smooth at that sounds”.

In Qingdao they have a 70% alcohol version that with every glass, the burning sensation moves lower and lower in your throat. If you succeed at this one they will say that “you are a Shandong man/woman” which is the ultimate compliment as people from Shandong province are known to be able to hold their liquor.

But yes, it is all about relationships and in-groups. it takes a while to become part of an in-group but once you are there, and don’t embarrass anyone you are golden.

5

Hi Tim

Are you working the government angle via HK school related activities, or IDSA sponsored events in CN (ah, a reason to renew my membership…)

Thanks

David

6

franfris,

The short answer is yes on both accounts.

  1. Obviously with the Hong Kong Polytechnic University I have to build relations with the government in China.

  2. Through my IDSA position (International Liaison Officer - Asia) I have been building strong ties in China for IDSA. We are already exhibiting at many design conferences all over china, I have been setting up US tours for Chinese manufactures to meet with US consultants, etc… Hopefully within a month I will have really big news in regards to IDSA and China.

I am sure you will wait and see but get your membership money together :slight_smile:

7

So interesting here to hear these image to China from you guys!

I’m Chinese and long time no login here…Cause I’ve been a international trader for my career now. And Design will always be my love.

Thanks Tim, I appreciate your wonderful explanation about such things like RICE LIQUOR and RELATIONSHIP.

You are right. RELATIONSHIP in business is very important in China, and also most other Asian countries. But we are learning westen society to built a democratic and prosperous society under the law.

Any question about China you wanna know can I help?
happy to know world friends here, add my MSN: renfee@hotmail.com

8

partly, if you wanna woth the goverment related companies, but if it’s private owned company, things will differ. you can talk with the ceos directly, even no dinner no beers, just conversation.

9

I just got back from a quick trip to Dong Guan. The news is not good there.

  • Since the beginning of the year over 1.6 million people in just Guangdong Province have become unemployed.
  • Crime is starting to become a problem as people need money.
  • The bigger cities are starting to empty out as people migrate back to their home towns because the factories are closing.
  • The China government is dragging their feet to change any tax laws or currency valuation to help the factories. They are just watching them die.

Until the economy in the western countries picks up the “world’s workshop” is in trouble. Only the strong will survive.

10

I heard recently that the govt is increasing rebates to manufacturers of plastics, and up to %14 for toys. Think this will help?

11

I was in Shenzhen about two weeks ago and even there it felt a bit “slow.” As if there are less people on the streets. Cab drivers complaining about no business. Stuff like that. While waiting for a friend to meet me, I chatted with a girl next to meet who just got off the train from Dong guan (she works at a factory there) and she basically said almost the same thing as you - almost word for word (except for the tax thing which I am sure she knows nothing about).