Some entire industries are about causing problems which they then offer to solve. They’re like the kids who offer to “watch your car, mister?” or the strong-arm gangsters right out of Goodfellas demanding “protection” money. That loan to tide you over until payday? A sweet 4214% APR, thanks. Is your computer running a bit slow? MyCleanPC claims to find viruses and software, but will do so even on a newly-installed operating system – the sole aim is to then sell you anti-virus software you can get for free. Some of the books on business in China, sadly, are similar. They postulate vast differences in the methodologies and particularly the etiquette of conducting business in China, then suggest that their connections or guanxi or consultancy is just what you need to navigate your way through the thorny thickets of Chinese commerce.
This book by Stanley Chao takes the exact contrary position. Aimed squarely at small and medium sized enterprises (SMEs) doing business in China, Selling To China illuminates the real issues and gives solid, grass-roots advice. The business card and KTV and chopstick-handling and gift-giving and connection-building and face-saving side is addressed, but only to the extent that Chao shows that it’s often really not important. Most often SMEs will be dealing with Chinese SMEs, and not handling business cards in exactly the right fashion is never going to get in the way of a good deal. Similarly, the extensive connection-building emphasized in some Chinese business literature is shown as less important in a society with decreasing bureaucratic hold over distribution of goods and services (and basic social functions).
Chao repeatedly emphasizes is that business in China is not some mysterious alchemic process. Agreements and partnerships which are mutually beneficial will succeed. This is not to say that it’s actually easy. On the contrary! For SMEs without the clout to make threats to withdraw from China worth attending to, operating here is stuffed with potholes and quagmires. Contracts, which the rule-bound Western mind thinks the last word on agreements, to Chinese should be updated on any change in market conditions. Negotiations will play on the fact that visiting businesspeople are necessarily time-bound and will desire to make the deal, at almost silly lengths. Independent translation – by which Chao means your own trained translator, not someone picked off the internet – is crucial. Choose partners with great care, after numerous visits to plant and office. Sweat the details – cover all the angles where you might be shafted, have a Plan B, and remove all the assumptions implicit in your business plan.
Chao also makes a useful, if perhaps oversimplifed, distinction between the “Mao” generation and the “Me” generation. The Mao generation lived – survived, rather – through the several disasters of the post-revolutionary era. They made it through famine, poverty, war, ideological purges and more. They are – not to put to fine a word on it – often deeply scarred. For the Me generation, born after 1978, they are accustomed to rising living standards, and are generally more open, more trustworthy and better educated. They have been spared the horrors of the Great Leap Forward and the Cultural Revolution. Naturally, to them the world is a more positive place, and they do not feel that the world owes them redress, or that fraud, backstabbing and theft are necessary to making a living. The schema is useful, but one should beware of rigidly following it – there are still many young well-educated Chinese for whom making a fast yuan is the only thing that matters, and many honest older Chinese.
Selling To China is very well organized, with handy chapter reviews, a sensible progression through the material (from personal relations to the complexities of JVs and WOFEs) and a summarizing final thirteen rules for doing business in China. Chao – MD of a consulting firm assisting companies make it in China – clearly knows his stuff, and peppers the narrative with anecdotes and hard-won experience. Unlike the obstructionist types referred to above, this book simplifies and clarifies. For this, and its common sense, street-smarts and savoir-faire, this is a great book for anyone interested in entering the Chinese market.
Published in Agenda Beijing