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Interesting article about doing business in China.

Plenty of advice for those entering the Chinese market
Vancouver Sun
Published: Thursday, June 12, 2008

When it comes to doing business in China, there is no shortage of advice. In many courses, books, and seminars, there are all sorts of must-dos that illustrate how a western approach to sealing and keeping a deal is greatly different from what is expected in China.

One of the most basic concepts is known in Mandarin as "guanxi" - or the art of networking between individuals. More than merely picking up business cards on the cocktail circuit, guanxi is "deeply ingrained in the Chinese culture. It is expected, and has a hierarchical order and a 'process'," according to Think Asia China 2008, a training manual designed by the B.C. government to help exporters. "In North America, the model is to make a deal, make some money, and then build a relationship. The China model is to build a relationship first, then strike a deal, and profit is expected thereafter. Trust comes from friendship. . . . Chinese businesspeople prefer to do business with friends."

Roger Upton, president of a Richmond-based company that has exported and manufactured skin care products in China for 15 years, said that guanxi and "the road to doing business in China is a long and winding one. Some guys think that they have things all sewn up after that first dinner and handshake, and that they are on the path to success. They have no idea or ability to understand that the depth and breadth of doing business there is completely unlike anything in North America."

Said Upton: "You have to really spend time developing a two-sided trusting relationship. To do this, with clients or your partner, develop a friendship away from the focus on business. [Sometimes] the business has already been done, but you might not know it yet! You can't try to bully your way to the finish line or you will end up without your shoes."

Another key, but less well-known term is "baozhuang." This "refers to how you, your company, and your product are perceived by your Chinese partner, or customer, or government authority. The concept of 'face' is very critical in Chinese culture, and the translates readily into business," according to Think Asia.

Everything from how you act and what you do and how your product or service is labelled is important. Marco Mazzucco, vice-president of sales at Golden Bonbon, a New Westminster-based company that has exported nougat candies to Beijing and Shanghai for the past six years, explains that all of this comes through personal visits by senior management.

"The principal of the company or the head of export sales, someone who can make decisions, really has to be the one going on the trips, meeting people face-to-face," said Mazzucco.

Keeping up these appearances is critical, according to Think Asia. "Learn, through research, interviews and visits to China, what Chinese expectations are, how they view non-Chinese businesses, and what makes them comfortable. This includes who represents you, how you carry yourself, how you present your company, and what your company can do for the target partner/buyer."

This may sound vague and take a long time to master, but there are some practical ways to "package" your company too. For example, "broad western tag lines, such as 'imagine the difference' or 'product of the future' are too abstract for China. However, statements sometimes about prosperity, longevity, eternal health and youth can be well received in China," according to Think Asia.

Jack Liang of Fanny Bay-based Natural Glacial Waters, which sells branded bottled water into China, told Think Asia that "B.C. companies need to spend time with customer brokers dealing with China. The packaging, red tape, regulatory issues and import documents [in China] are very different to ours."

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