We’re not in Kansas any more!
The people of China are wonderful and we always enjoy the opportunity to travel to our offices in Beijing, help clients, and learn more.
But to think that business practices and customs are the same in China as they are in the West is a fools dream. To reiterate, 50% or more of the time spent in western nations embassy is devoted to untangling business “issues” that would have been avoided through the foreknowledge that comes from the exercise of due diligence. This figure came from a China specialist with the IMF. While this appears to be an exaggeration to some degree, the damage done to those who have their “China Stratagem” blow up in their face is not.
“I have spent too much dissecting the fetid corpses of business persons’ Chinese Stratagems.” This wonderful word picture of the troubles of foreign business owners floundering in China is from a senior government official who inherits the messes when they fail, which they do with startling regularity.
Why does this happen? Each failure has its specific reasons, but all have the common thread. A failure happens when a business strategy does not work up to your expectations. The higher and more unrealistic your expectations, and the poorer your planning and due diligence, the more likely it is that you will fail.
You are leaving you home country not because you wish to, but because you industry has competitive pressures. Often, labor costs and regulations in your home country are killing your operation, to the point you soon will be, or are currently, no longer competitive. You have a problem, and your expectation is that a trip or two to China will solve the problem. After all, you say, many others have done it so why can’t I?
However, you cannot share in their learning curve: You have to create part of your learning curve. But not all of it!
Learning from scratch is what most entrepreneurs tend to do, and it is expensive and often self-defeating. A saner alternative is to work with a professional firm, with roots in China, which can help you avoid some of the pitfalls of the new country, and also help develop custom solutions to your custom problems.
Expectations, when going into China – or for that matter anywhere other than where you are intimately familiar – are often very high. You have landed upon what you believe a solution to your problem and maybe even a new opportunity or two. But ….
China has an economy of favors. As with any other centrally planned economy where government plays a strong role, whom you know and how you can get to them is part of the currency of favors that keeps the economic engine rolling.
