Doing Business with Chinese

I just returned from China's International Seafood Show in Qingdao.  It has been a real interesting trip, and I have witnessed some "culture shocks". 

After this trip, some people hate it, while some people love it.  The ones who love it usually the ones who like challenges.  One thing I hate yet laugh a lot is the craziness the traffic there and how people drive.  So much for the rules, but so little for obeying the rules. 

We didn't go to the big city like Beijing and Shanghai.  Qingdao is a secondary city, with population 700-800 million.  Within 20 years, there has been world-shaking changes.  The first day we went out to do some "Christmas shopping", and our eyes were popping out of our heads.  The price tags were just shocking.  One jacket was priced at ¥15,880; that's about $2,600.  A regular T-shirt can run over ¥2,000.  We decided that our lobster price just went up 5 dollars.

Ok, get back to business.  The number one riddle doing business in China is about "guanxi", which means relationship.  Almost everything boils down to this word.  I like to describe their business strategy as "Taiqi", slowly build up verses Western culture's gun and bullet, aim and shoot.  You've got to have patience with them.  My boss hasn't got it I imagine, because she kept saying how come they said they were going to order, but then the process would last forever. 

Building THE relationship with Chinese businessmen usually happen at the dinning table, usually in the fancy restaurant to be exact.  Even though after all day's show, I usually wiped out, I still had to go just so they felt being respected, which is a very serious issue, the "mian zi" (face) issue.  As a girl sometimes it can be tough because they will make you to drink, so mastering the skill by rejecting some drinks yet without offending your customers is critical.  A deal usually forms after a few drinks. 

But if you assume a contact can gain the respect, you're dead in the water. If anytime you made them lose face, all work will be in vain.  The only thing can save it is you have some special person that has special relationship with that person who's willing to put in some good word for you.  We had an incident happened on the last day of the show.  The previous night we were out for dinner with our customer, and we agreed upon a deal.  The next day he was offended, so everything blew up.  I called a guy he respected most, and he called him for me.  A few hours later, the customer called me back, and we resume the deal. 

Another important thing to keep in mind is if you underestimate the role of the Chinese government in creating demand and fostering enterprise growth, you are dead in the water again. If you underestimate the importance of the regulatory regime in China, for example, getting your permits, licenses, and operating documents in order, you are dead in the water. I don’t think corporate America really knows that yet.

If you want to do business in China, you have to earn their respect. Do this by being open, flexible, realistic, having a sense of humor, and being a human being rather than a corporate functionary. Be someone they want to have a relationship with, not just the mercenary of a transaction. You have to prove to them that there’s some advantage in working with you. Don’t just take for granted that there’s some built-in incentive.