Complain….. or join possibly the only game in town.

“No other country shocks the global economic hierarchy like China.” This statement is from the book China Inc. by Ted C. Fishman, written in 2005.

With my extensive experience in the Chinese market, I know how important it is for you and your business to understand the ramifications of the Chinese influence on the U.S. and global economies and vice-versa. A clear understanding of some of the key issues will help you make sound decisions if you are doing or considering doing business with a Chinese enterprise, directly or indirectly.

In this second of my four part series, we begin the review of the importance of learning how to work in the Chinese business market (for access to the first article in this series, go to www.lourdesgant.com/what-you-need-to-know-about-the-chinese-economic-picture#more-284

China, no matter how much you complain about how their lower prices, isn’t going away. More than that, with the US economy pulling round achingly slowly from recession and Europe teetering on the edge of a banking collapse, China could be the only game in town.

Understanding a few simple concepts and their implications can be the beginning of a deeper relationship — the difference between complaining that jobs and businesses are taking a fast plane to China, and having a part of the fastest growing economy in the world.

So it makes sense to know the rules, the plays, and the probabilities – and they’re very different from our western norms.

For instance: there’s a saying that Americans base business on transactions, Indians on projects, and the Chinese on knowing where you live – which isn’t quite as worrisome as it might sound. It means the emphasis is on developing and maintaining relationships rather than sticking rigorously to every dot and comma in a contract.

Historically, this relationship approach is generally believed to have developed from businesses working exclusively with local people. And it would seem reasonable to think that not having a particularly contract-oriented approach might be somewhere in the mix when it comes to what is often referred to as ‘manufaketuring‘ – mass pirating and flouting of intellectual property rights, rife in China.

From grasping just that single idea and its implications, it’s clear how understanding the Chinese market can give you the tools to help you establish a profitable relationship. Finding out about the country and it’s non-western way of doing business, and going beyond the normal market research will – literally – pay dividends.

There are other questions about China you’ll need to bottom out, such as:

  • the government policy trends that will affect your sector (and it is policy, rather than law)
  • how to protect your intellectual property. Microsoft opened their codebase for MS Office to the Chinese in order to stay in the market. It’s an ongoing issue.
  • Where the macro trends are going – is the property bubble burst? Is the recent slowing in the rate of growth for the Chinese builders the first glimmer of harder times?

These are starter steps on how you can adapt to the new economic realities. Still another is to ensure that you are working with business consultant and auditor who KNOWS and has experience with the international, and in particular Chinese, business practices.

REFERENCES
http://www.businesspundit.com/7-deadly-perceptions-about-doing-business-with-china/
http://www.nytimes.com/2005/01/09/magazine/09COUNTERFEIT.html

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