(Aug. 29, 2008) — If the Western executive is to succeed in China selling products, sourcing vendors, or building a production facility, he or she must realize business isn't playing checkers as in the U.S. but rather 3-D chess, where every angle must be observed and evaluated, move by move.
After 10 years of business experience in China, I have coined a few highly relevant sayings:
* What you think you see is not what you see. The motivation for a given business decision is often very different from Western thinking. Profit might be the least important motivator from one decision to the next.
* 2 + 2 = 5. If you or your company's presence does not bring something to the table that the Chinese MUST have, you are dead weight.
* Partnering with a Chinese counterpart is like having sex with a Black Widow spider. Both your counterpart and the female Black Widow have one focus: devouring their partner at their earliest convenience. This is the Chinese business model for joint ventures.
Desperation is the Chinese way of life. Everyone you speak with today lives with this in the back of their minds.
A signed contract is where negotiations begin. In the Chinese business model, everything is fluid. If you were guaranteed that a specific type of steel would be used in your product, but that material can't be located this week, any steel will do as long as you don't catch the switch. That's reality.
Quality control is how many parts pass spec today. In the Chinese manufacturing plant, the parts that pass spec are the ones sold to the Western company, and the rest go to Africa or the local market.
The Chinese factory has no control over the quality of anything, including the equipment it buys. Parts and service are almost nonexistent, so having a machine make parts “in spec” is expecting the moon. Instead, a Chinese firm finds the 10 good parts available today and ships them to the West.
Any successful business venture in China requires such Eastern business savvy. There are no exceptions. Prudent, long-term commitment can guarantee success in this arena. Anything less is an open checkbook for your Chinese opponent.
Gaining Chinese business savvy can come in unexpected ways. One of the greatest knowledge gainers I have enjoyed over the years is flying on Northwest Airlines. Each and every flight is filled with stories of corporate woe waiting to be told.
To sum up, I encourage doing business with China, but please, please ... “get your Bobby Fischer on.”
Bob Adams is a business professional working in the plastics industry in Iowa City, Iowa, and has worked in various manufacturing positions in China, including working as an international business representative for the Chinese government.