30 Guidelines for Doing Business in China

For my first post of the year, I thought I would offer a useful list of things to consider when doing business in China or with a Chinese company. This is obviously not comprehensive, but I hope it is robust enough to help you consider some important issues that will arise in your international relationships.

1. Accept business cards with 2 hands

They will accept yours with 2 hands as well. If you are sitting, then it is polite to stand up, even if just enough to pull yourself off the chair slightly. Also, it is even more meaningful to hold the card firmly, so that the receiver has to rip it out of your hands ever so slightly. This is the beginning of the relationship and this is your chance to show your sincere desire to start the relationship off right.

2. Express admiration for their culture, food, or country in some way.

This gives them honor and “face”, which puts them in a much better mood and feeling good about the longterm aspects of the relationship.

3. Expect after hour activities, such as karaoke, dinner, or massages.

Chinese people don’t have credit reports. They have “guanxi” or relationship oriented business. This is changing and morphing into something different, but it is still vital. Just don’t do something you are uncomfortable with. Those massage and karaoke places can offer “special services”, so be clear about your intentions very early if a line of girls are brought out to sing with you and the host is choosing which girl will pair up with you for a special duet.

4. Only eat everything on your plate if you want more food.

This may cause your host to order more food, so keep this in mind because he/she won’t ask you, they will just order more.

5. Learn the language

Any amount, even a few sentences, will impress the Chinese. It really does mean a lot to them. Maybe in 10 years it won’t be such a big deal, but right now it will have an impact.

6. Treat sensitive topics with sensitivity.

Let them save face. If it doesn’t need to be brought up, then don’t bring it up. Let it go and move on to topics that make them look credible.

7. Don’t complain about the toilets.

The reply to “How do you like China so far?”, should not be your chance to be honest about the hygenic differences you have struggled with in the few days you have spent there. If you peed on your shoe because you didn’t know how to use the squatty potty, tell your spouse or co-worker, but don’t embarrass your host by calling his country under-developed and dirty.

8. It’s best to have bosses talk to bosses and techies talk to techies.

I have talked with Chinese CEOs who have canceled business relationships because the boss is talking to the engineers to solve problems in the relationship, rather than keeping his conversations at the boss level.

9. Don’t expect to put together a deal in one weekend.

Have patience. Set patient expectations for your superiors, especially in the beginning. It takes time for the Chinese to build relationships strong enough for them to even start business discussions.

10. Live in China for a time

This really opens your eyes to all the little things you should be paying attention to as you conduct business in China. The other expats will also be a good group to associate with as they have learned many of the unique cultural differences and similarities between the US and China.

11. Tell them something personal.

I always shared pictures of my family with my Chinese associates. It made them feel like they knew me. They want to know if they can trust you and sharing the sincere parts of yourself with them communicates that answer strongly.

12. Offer them the same level of treatment when they visit you.

This can seem a bit daunting if they went all out for you on your visit, but when they visit your offices, you must give them equal or better treatment. It can’t be a one-sided relationship.

13. Bring a gift

Nothing too lavish, but something unique to where you come from is usually a good idea.

14. Have a translator with you, especially when you start discussing agreements or contracts.

Our languages are very different and English is not as established in China as it is in places like Europe, so make sure the official stuff is handled with official translators. 

15. If you are Jewish, be sure to mention it.

Chinese people love Jews! If you tell them you are Jewish, they automatically identify with many of the Jewish stereotypes of being really smart with your money. I have personally seen it offer an initial advantage (obviously, I don’t claim this and you should be honest).

16. Create friends by doing favors.

Doing a favor for someone can be a part of their relationship “game”, but it can also accelerate a sincere and lasting business relationship.

17. Be careful what favors you let others do for you.

Remember that eventually you will have to respond with a favor of equal or greater value!

18. Steer away from politics and religion.

These are not topics that Chinese people are used to discussing. Even if they lure you into these topics, I advise you find a way to change the subject and focus more on culture, education, business, personal lives, and economics.

19. Try and have one-on-one talks with everyone in the constituency you are trying to work with at your level.

There are a lot of things that each person is thinking about and not saying because of Chinese culture and they don’t want you to lose face. The real issues can be initiated offline in a more personal setting.

20. Help them build a larger network. Introduce them to someone useful for them.

This can be one of the best favors you can do for someone. “Guanxi” is all about the power of their network and if you can increase that power, then you become very important to them.

21. Have something to drink in your glass at all times.

If you don’t drink alcohol, coffee, or tea and everyone else does, then you need something in your glass as a substitute. Otherwise they will pressure you to drink what they are drinking until you either give in or they lose face in front of everyone. I have made the mistake of not ordering a drink and the pressure begins only to have beer bottles thrown and shattered at my feet for making them think I was too good to drink with them.

22. Complement them on their English.

Yeah, even if it’s not good. Just give them props for trying. Our languages are very different and they have probably put in a lot of time to say those few sentences.

23. Take a lot of pictures with them.

The more official an event, the more pictures you should expect to take of the whole group.

24. Meals are for meetings and long conversations, not for eating.

Don’t eat too quick. Pace yourself or you will start gaining a lot of weight.

25. Watch out for the bones when you take a bite.

Much of the meat in China has bones. They cut the meat up with the bones still intact and you can be fooled very easily. My first bite was always a tentative test. You don’t want to go to a dentist in a foreign country.

26. Prepare for many toasts to future cooperation.

You should make at least one toast during your meal. Try and clink your glass to the bottom of theirs as a sign of respect. They will usually beat you to the punch and go lower than you.

27. Save disagreements for the right setting and the right timing (usually at an indirect time).

Save major disagreements for one-on-one conversations.

28. Typically, you should wear a suit or formal business wear to scheduled meetings.

29. Take off the tie for later activities.

30. Resist compliments.

Appropriate responses include, “You are too kind,” and, “I should have done more.”

Feel free to share your thoughts or other business practices you have found beneficial around the world.

New Posts On Their Way

As an announcement and stronger commitment to my blog, I will be publishing new blog posts every Wednesday, starting with the new year. I was holding off on a lot of planned posts over these past couple of months because I started a new job and I needed to differentiate what I was excited about at work and what I wanted this blog to be about.

This blog will focus on building stronger and more effective relationships between China and the U.S.A. Unfortunately, there are few news corporations in either country that provide such information. Too often, news companies are busy trying to sell fear, greed, and shock. I think there is value in perspective, friendships, partnerships, and trust.

I will also write posts on requested topics and hopefully as my blog blossoms, I will provide guest posts from other China experts. Thank you to all who take the time to read my posts and I hope to improve the quality of the content over this next year.

Thanks to everyone who has supported me, especially my superstar wife!

Jeremie

Is that all of China or just their Government?

Temple of Heaven in Beijing, China

How are you supposed to embrace the Chinese culture when they are fooling around with their currency, creating trade imbalances, stealing our jobs, undercutting our prices with unfair government subsidies, and squabbling with Vietnam and Japan about disputed regional sovereignty? When the Chinese government does something aggressive, do we automatically think something about all Chinese people or about their culture. 

I believe in the American spirit and know most of us will embrace our differences with the Chinese if we have a reasonable perspective. So, consider the following about ourselves… 

Are we our government’s actions? In America, we vote for our representatives and thus endorse the actions they promise to implement. However, we are not always happy with our government’s actions and so incumbents sometimes lose to up and coming stars. Many democrats were embarrassed by President GW Bush’s actions around the world. Many republicans are now embarrassed by the actions of President Obama. 

If we are not our government’s actions and we actually vote for our government, guess how disconnected the Chinese people feel from their government’s actions? Many of my Chinese cohorts did not even feel comfortable talking about politics. They were raised to not worry about the political process and its weaknesses or strengths. 

So, when you get frustrated with the Chinese government, just realize they are the minority in the country. Sure they are the most powerful minority in the entire Chinese nation, but they are definitely not always the majority view. Just as President Bush or President Obama do not fully reflect our individual American character or personality or culture, the Chinese government does not fully reflect anything about a people who haven’t had a say in who their government leaders would be over the last 60 years. 

Just a thought.

Quiet Nights of China Dreams

Vivid dreams can change the way you feel all day long. Some dreams can even change lives. I had a dream to work with the Chinese people one day. I remember looking up at the stars and just having a feeling that one day I would have something to do with China and its people. Since that quiet night, I have both forgotten my dreams for shallow blinding goals and renewed my passion with faith, guts, and blood.

Being a dreamer is no easy road, but it can be quite moving and thrilling. I have flown thousands of miles, met people who thought nothing like me, had beer bottles thrown at me, lived in an apartment by a beautiful river of skyscrapers and swarms of people, brushed shoulders with some of the most talented women and men golfers in the world, discussed opportunities with a billionaire in Mandarin, found new friendships that have changed my perspectives on life, eaten scorpions, frogs, and chicken heads, and come home with a new burning desire to share my life-changing perspectives with the world. (Well, at least life-changing for me).

I believe in sharing life’s lessons. It helps you remember. It helps you implement those lessons and with time that implementation just might help you live a little bit more than you could have. Sure, it still takes blood and guts and a whole lot more, but that’s because you are living new dreams and finding new adventures. So, share your life with someone who cares. Don’t think of yourself as a mentor, but as someone who just loved their life so much they can’t help but share it with others. Here’s to a thrilling life worth living and the sweet taste of adventure in the determination to live out our dreams as far as they will take us!

Mass Exercising – Try a new Culture on for Size

The Beijing Government is pushing mass exercising again to increase the health of the nation. Mao Ze Dong began mass exercising in the 1950s and many of my Chinese friends grew up doing such exercises in school.

http://online.wsj.com/video/beijing-suits-up-for-health-push/CACDB49C-F71D-4079-8CE8-8E1A8F3C95C7.html

While working at Kingold Group in China, we did mass exercises at 11am and again at 3pm. We did the same exercise everyday and eventually I was able to memorize it and do it without any aides or the need to clumsily mimic others. My Chinese coworkers thought it was hilarious to watch me because I of course wasn’t doing it with natural flow most of them performed with. It was kind of like watching Jay Leno doing a hardcore rap song about rollin’ through the rough part of town.

However, there was some camaraderie that I could feel and it was invigorating to get up in the afternoon and get my blood flowing. Some days I did feel like we were all being magically brainwashed as we moved in unison, but I don’t see how any existing technologies could be brainwashing me in those moments.

Overall, it was a very different cultural experience. I participated and was rewarded with greater trust, deeper friendships, moments of laughter, greater understanding of the benefits of Chinese culture, and I was able to skip the afternoon nodding off that typically happens after eating too large of a lunch.

I think we should be willing to participate in other people’s culture. Try it out. That doesn’t mean we have to try their religious ceremonies and worship other gods if we don’t believe it is the right thing to do. It just means we can try on cultural opportunities for size. We will start to realize that a different culture offers benefits our culture may not offer. We realize that our way doesn’t have to be the only right way. In fact, there might even be something better out there. And even if it turns out that such a cultural activity doesn’t fit us at all, at least we can understand just a little bit more what it means to be Chinese or Russian or French.  

Falling off the cultural bike

Old neighborhoods in Beijing are great for bike tours

Recently I was teaching my oldest daughter to ride her bike. She was very afraid that she was going to fall off her bike and somehow damage her body. Like me, she carries the belief that no pain = no pain.

As a fellow “no-painer”, I realized what my daughter was doing wrong. As her bike began to lean one way or the other, she would stare down at the ground where she was about to fall. As she stared at that point, her whole body fell into it and fulfilled her prophecy of impending doom. Instead of avoiding pain, she was focused on the thing that would cause her pain (the place she would fall).

Once I realized this, I told her to stop looking where she was about to fall and start looking forward. Once she started staring ten to twenty feet ahead of her bike, she was able to maintain her balance.

I think sometimes we focus too much on where we think things are falling and less on where we are headed. It’s easy to get caught up in the differences that knock us off-balance, but I believe we need to keep focused on where we would like to ride this cultural bicycle.

Where we would like our international relationships to develop is a question that most people may not even be asking themselves. We have become so worried about fixing short-term problems, which are throwing us off-balance, that we inevitably fall into the very problem we prophesied would come to pass.

I propose we assess what we want from the relationship and then think about how we would act and think differently if we wanted to actually achieve that relationship.

Most of us are good and wonderful people and if we are pointed in the right direction, we can learn how to develop a wonderful skill that will take us farther than we could have ever gone on our own two feet.

Chinese Perspectives Reveal Doubtful Hopes of an American Recovery

Exchanging Ideas with Chinese Students - All Smiles!

While living in China, I found attitudes about the US and its current economic troubles were sometimes shockingly pessimistic. One of the professors from the University of Sun Yat-Sen suggested our troubles were due to laziness. This Chinese professor of business development in China went on to say Americans had become a bunch of couch potatoes that didn’t know how to work hard anymore.

This underestimation of the American work ethic was not uncommon in my discussions with many of my graduate Chinese counterparts. They thought finding a job in America sounded like a horrible punishment when I would mention my eventual return. Statements, such as, “America is going to fail soon. You should just stay in china,” and, “America is on its way down in the world,” were common responses from fellow Chinese classmates.

I have been back in America now for the last 2 months and although I can see the foundation for much of what these educated Chinese people were talking about, I believe they are too far away from the problems that America is facing to even understand why and how we are in this current economic situation and what our future might be. That distance is not geographic, but more based on the inflow of information they are receiving on a daily basis about America.

The American spirit is much stronger than the world remembers. Our greatness and rise to great economic success came out of the depression and war. These are two things that are very apparent in today’s society. So, do we think the current economic recession and wars with the middle east will result in the same economic successes? Or are these signs that we are close to bankruptcy and mass failure?

I believe the world has become so interconnected that we will be able to build on China’s growth and Indonesia’s growth and India’s growth and so on. It’s hard to predict the future, but if the American spirit is anything like it has been over the past 60 years, then America has a long way to go before we will call it quits.

I look forward to being a part of a new generation of Americans that stand up and face the challenges of our time and work with the world as global citizens to create an even better and more balanced economic success for the world as a whole.  China and the rest of east and southeast Asia will be a great key for our successes to come and I am excited to be connected to such a movement of growth. Our world’s are getting closer and one day I hope both sides gain a better understanding through a more accurate and helpful flow of information and news.

6 Easy Ways to Stay Current with China on the Internet

Getting reconnected with China

Are you wanting to follow the latest news about China? Are there specific sectors, industries, topics, or areas of China you would like to keep up with on a daily basis?

Information is the key to being a thought leader in your industry and being a part of the game as well. If you want to remain at the top of your game, here are six things you can do on the Internet to stay connected with China.

1. Google Alerts (Free)

Type in the most specific criteria and google alerts will send you updated emails each day of posts in the news, blogs, general websites, and more that meet your desired criteria. You can always adjust the alerts if you are not getting the desired results.

2. New York Times (Free)

For the past 3 years I have been getting daily emails of the New York Times to my email address. Not only do I get the entire NY Times emailed to me, but I also get any articles dealing with China emailed to me as a separate email. I have read the headlines and many of the articles over the past three years about China and it has truly kept me updated on the politics and business of China. However, I caution that the New York Times is very biased towards what Americans think of China and other sources are needed to gain a more balanced view of this complex country.

3. Look at other newspapers like the Huffington Post, which provide great online services.

4. Follow other trusted China blogs.

I enjoy following http://ilookchina.net/, which is written by author Lloyd Lofthouse. He posts several times each day about historical facts, Huffington Post articles, current events, important current and historical figures of China, and offers a different perspective than the typical American. He is also a gracious blogger and responds to any posts you submit to his blog.

Also, while writing this blog post, I found a fantastic blog through Google Alerts. http://www.littleredbook.cn is written by a marketing veteren of China (Rand Han) that focuses on social media in Shanghai. He owns what appears to be 2 marketing companies, BA360 (Bloody Amazing) and Resonance China. I am very impressed by the information he provides about social media marketing in China and by the conversations he initiates on his blog. I am excited to continue following his posts in the future.

5. LinkedIn.com Groups

LinkedIn groups can offer a lot of insight from real professionals. I have made new connections with professionals in China as well as found great information from some of the more experienced China professionals. The only problem is when some of these groups are not managed well, then there is a lot of spam to scroll through.

6. Increase Your Personal Network in China

As mentioned above, use LinkedIn! It’s not blocked in China and you should be using it to join groups and meet other professionals and connect with friends and business associates in China. I have kept up with my old company in Guangzhou and stayed connected with coworkers who have already moved on to other companies.

These are just 6 easy ways to stay updated on what is happening in China. It’s important to make it convenient so that you will make it part of your daily habits.

So, how do you keep up with the latest and greatest in China?

China: A Firewall Away from Facebook’s Global Conversations

Social Interactions are a big deal in China, but not on facebook

Although some of my western friends in China have obtained access to facebook and other sites that are currently blocked by China’s great firewall, the large majority of Chinese citizens to do not have access to the same sites I am visiting on a daily basis.

While in China I realized Chinese citizens do have similar websites with many of the same features. In fact, they were quite savvy in their use of the Internet. Probably the most popular social website in all of China is QQ. When two individuals meet each other, rather than ask for a phone number, they usually ask for your QQ number.

Instead of www.youtube.com, the Chinese have www.youku.com, www.tudou.com, www.56.com, www.ku6.com, and many other video sites. On these sites you may not be able to see politically sensitive issues that China has censored, but you can find almost any movie or television show. Often, the movies are posted only days after being released in American theaters (usually poor quality video camera taping in the back of a theater, but still there. Later the higher quality versions are posted as the DVD is released). I was able to keep up with shows like Glee on Fox, even though none of the television stations were broadcasting the series.

Many of these videos are blocked in America because it is illegal. I wonder how American movie makers will be able to make money in China. I noticed 3D movies did get movie goers in the theaters, but it is extremely difficult to find a legitimate DVD anywhere in China because of all the high quality duplicates being sold on the street.

Almost any nationwide problem is going to be difficult to solve and the solutions won’t deliver timely results, but I fear that as China continues to increase its influence, the social influence will be stunted. No one has even heard of QQ in my circles here in the West. Global conversations are happening everyday and the Chinese are not a part of those conversations. There are other outlets, but let’s face it, facebook is the dominating conversation on the web right now. Therefore, the same old scenario continues, where the West only knows China by its governments actions and voice and have little to no contact with actual Chinese citizens, who will often disagree with their government’s activities.

China’s Real Opportunity for Growth

Street Shopping for frogs in China

Is it too late to find big money making opportunities in China?

If China’s currency evaluates enough, then the country’s low cost advantage will be in seroius jeopardy. Wage increases are beginning to make headlines of prophetic price hikes in the electronics industry. How long can China really go on as the world’s low cost leader? The Chinese government is slowing the process as much as they possibly can and yet they are facing major inflation and growth that is much too rapid.

Therefore, with the problems that lie ahead, what will be China’s advantage over the rest of the world when they are no longer the place for your company’s next factory?

The answer: China will have a multitude of advantages.

 China has huge surpluses of cash and they are investing those surpluses into their entire country. When I lived in Guangzhou, China, I counted over 30 construction cranes along the Pearl River and that was what I could see while standing in one spot! You could even say the crane is the national bird!

Only 20% of China’s population lives in the major metro areas of Beijing, Shanghai, Shenzhen, Guangzhou, and some of the other coastal areas. The rest of the population still needs modernizations and economic development. This process of growth could go on for many years. China will have growth income for a long time and the real strength of the Chinese market will be its increasing rates of domestic consumption.

So, if you want to start investing in future global trends, this is the biggest and most determined trend of all. Using China as a low cost leader to source products for American consumption is almost out of vogue.

The next big China opportunity will be selling products to China. It is time to start exporting and realize the importing will be a waste of time when all of the factories have moved on to places like Indonesia, Malaysia, and other low cost countries.

Don’t get me wrong, there are still great sourcing opportunities in China, but for how long? Certainly not as long as the opportunity of making money from a growing consuming giant of a country that the world hasn’t even the imagination to behold. In fact, scientists are scared of the global effects of China’s future consumption. It is going to change everything!