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Doing Business in China – 6 Tips for Foreigners

Strategy

By David Thomas, Think Global Consulting

Over the last 10 years, I have led numerous delegations, study tours and client visit programs to China (and Hong Kong) and observed at first hand some of the mistakes that are often made when attempting to engage with the Chinese for business purposes. Here are my top 6 tips for Kiwis looking to succeed in China:

1. Listen more, talk less!

In western countries, we do have a tendency to talk too much! We’re passionate about what we do, we want to get results and, knowing that we don’t have much time to make an impression, we often start pitching our capabilities or products before we’ve spent enough time exploring the needs, desires and aspirations of the people we’re talking to. In China this can come across as arrogant, discourteous and even rude and, whilst it may not be apparent at the time, its likely to cut things off before they’ve even got started! It takes longer but you’ll get better results if you take the time to ask open questions, listen carefully to the answers, and tailor your products or capabilities to their needs rather than yours!

2. Prepare your pitch properly

When visiting a company or Government department in China it is very common to be given a beautifully presented bilingual document, with details of the company, city or industry you are visiting, which includes colours, photos and images in an expensively produced brochure. In comparison, our own documentation is often shabby and, worst of all, in English only, with no Chinese translation. If you want some clues as to how to present your capabilities to a Chinese entrepreneur or business, take great notice into how they present their credentials to you!

3. Use a professional translator

Translating professional documents into Chinese (or vice versa) is not as simple as asking a bilingual member of staff or friend to do it for you. This is a very common mistake. It may get the job done quickly, painlessly and at no cost, but how would you like your business described in Chinese as striving to “succeed when the horse arrives”. The process of translating a document from English to Chinese is an art as well as a science. Professional translators spend years perfecting their craft, a process of study, practice and observation. Not only do they need to be highly proficient in both languages, but they also need to learn the method of capturing the meaning, flavour and expression in the language, which is so much more than a simple translation of the actual words.

4. China is not one market

It’s absurd to think that you can treat the Greater China region as one single market. The differences, idiosyncrasies and complexities of dealing with companies based in Shanghai, Hong Kong and Taiwan (which could be considered as quite mature markets) compared with those in the ‘second tier’ cities of Chengdu, Chongqing and Xian are so diverse that you could spend a lifetime trying to understand them all. They even eat different foods, speak different dialects and compete with each other to be the best city in China! To be successful in China you need to do your research properly, settle on one (or maybe two) markets, seek a deep niche with many potential customers or business partners in it, and then work from there, For example, start in Hong Kong and work towards Taiwan and then Shanghai. Or build a strategy to target China’s emerging 2nd tier cities. It’s no different to how you would approach an entry strategy for Europe.

5. Focus on building relationships, not contracts

There’s a saying in China that you don’t talk business “until the third cup of tea!” In other words, you build the relationship first and only then should you focus on the business deal. This can appear tiresome, long-winded and unnecessary, but it’s the way business is done in China and you ignore this at your peril. Make the time to get to know your potential business partners, talk about their country, teach them about your culture, extend the hand of friendship and tell them about your interests, hobbies and passions. When you’ve exhausted every possible topic of conversation, and when the timing feels right, offer to start talking business! You’ll get a better result this way.

6. Send your best people

I have heard many stories and witnessed myself examples of foreign companies who have failed in China due to sending in ‘the B team” (i.e. their lower rated people) instead of the A team (ie their very best people). The theory goes that the most valuable executives are too important to release from their home market operations. This is an obvious but common mistake. There is a common saying that “the opportunity in China is complex but the prize is great” and that success in Asia will dwarf your current operations. If you’re serious about success in China, and you want to give yourself the best chance, send your brightest and best people to do the job!

BRIC Expert, Speaker, Entrepreneur and Thought Leader, David Thomas is well known in the Asia Pacific region for his experience, credibility and passion for identifying, building and facilitating business and investment relationships between developed and emerging countries. For more information: www.davidthomas.asia

To share your observations and insights on doing business in China please contact Luke Qin at luke.qin@nzcta.co.nz