Ten Things Every Business Must Know About China.

July 7, 2010 | By: Editor

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Source: China Law Blog

The All Roads Blog has an excellent post up, entitled, “20 Things I Have Learned About China.” This post discusses my favorite ten of those twenty. Go here for the other ten.

1. There is no “China”, and there is no “Chinese consumer”. This is a BIG country full of people and places that range in ways that are rarely appreciated. I hate listing this as one of my favorites because it is such a cliche, but I am listing it not so much from a marketers perspective, but to remind people not to stereotype the businesspeople with whom they deal in China. Broad generalizations about how “Chinese do this” or “Chinese do that,” while perhaps often true, never apply across the board.

2. There is no “Poorly Made in China”. There is only poorly understood, badly planned, and horribly managed. Amen. Quality Inspection Blog does an excellent riff on this one, in a post entitled, “The giant hole in China quality assurance programs.“

3. Legal documents and due diligence are necessary steps (some say boxes to check), but that is just the beginning of the journey, and at some point a firm will have to walk on their its own two feet.

4. Quality control is a hands on process, and that goes double for any platinum ranked supplier on the Alibaba website.

5. There are no deals of the century, and there is no one on the other line willing to pay 10% more. There are only suckers willing to pay a premium on bad deals. In other words, slow down and do not be afraid to just walk away.

6. It doesn’t matter how much money your company has invested, or if your company employees 7000 people in China. The policies have changed, and the mayor is busy. This may not be true for Intel, but this is true for you. Trust me on this.

7. Guanxi either (1)As my good friend Jay Boyel once said “retires or goes to jail” or (2) asks more of you than you will of it. Forget about it. You do NOT have it and your “friends” who claim to have it, do not have it either. And if you think you have it now, do you really think you will have it when your “connection” gets thrown out and replaced?

8. Entering China with the goal of “exploiting” China’s assets is an old, and failed, business model. Regulations are getting tighter, laws are being enforced, and NGOs are allowed to highlight the faults of foreign firms in China. Build a plan with a long term vision. Always be thinking about your worldwide reputation.

9. China actually may NOT need all the widgets the West is trying to sell it. That doesn’t mean China is closed for business. There are opportunities, some very lucrative, but it will take planning, investment, and execution to make things happen. Those companies that go into China correctly invariably seem to thrive. Those that go in incorrectly invariably stumble.

10. China’s rising ambitions and confidence will deflate when its economy meets sub-8% growth. Until then, just grin and bear it. Not only should you grin and bear it, but you should recognize it. The days of just slapping together a company registration and getting it approved are over. Now you must have a plan sufficient to convince the governmental authorities that your business will actually help China and not just pollute it.

What do you think? What’s missing?