Ten Tips for Starting a Business in China
Ten Tips for Starting a Business in China
Tip 1 What do you want?
In any business venture it is important that you figure out what you want. But in China this becomes even more crucial. Having a clear strategy which defines what you expect of your adventure in China makes every step you take easier. Especially in negotiations with Chinese, knowing what you want is the difference between success and failure.
Tip 2 Take your time
Whenever you figure out what you want in China, take your time. Chinese will always test your endurance in negotiations or other business talks, be sure to do so too. People in a rush have a high chance of failing in China.
Tip 3 Bring an interpreter, not a translator
Sounds exactly the same? It actually is not. A translator is someone who literally translates what you say, which will have a negative effect on your negotiations. You need someone who understands Chinese culture and Chinese manners. When you say no to your Chinese supplier, your interpreter will change this in something like: Is there a possibility to talk about the offer you made?
Tip 4 China does not exist
China has over a billion people living in 32 provinces and 658 cities with all big differences in Industry, Culture, Development, Wealth and other aspects. If you want to go into China, think carefully where you want to go.
Tip 5 Practise drinking
Negotiations with Chinese companies go hand in hand with dinners, karaoke and sauna visits. What do you do at all these locations? You toast, drink and get drunk. Make sure you are prepared to drink with them.
Tip 6 When you don’t want to drink (much)?
Bring a random medicine box and blame it on your doctor. This is generally accepted as a good reason. However make sure someone else joins you who can drink for you. Other options are to carefully toss it when no one looks. Be careful that they do not catch you doing though!
Tip 7 Pay your own hotel
If you let them pay your hotel they expect the same from you when they visit your company and or country. This will not be one or two employees. They generally bring a lot of staff which you then have to pay in return. Besides this they will respect you for paying your own bill.
Tip 8 Bring a typical cultural present
Expect them to have prepared a very Chinese gift. They like to show their culture to you and want to create a, sometimes false, sense of trust. Chinese respect culture, when you bring a typical gift from your home country they will respect you for it and trust you just a bit more.
Tip 9 Quality control is key
Quality control will always pay itself back in time. It might be higher initial costs but it shows that you expect good quality. They will not try and trick you by sending great samples and then send you bad actual shipments full of errors. This will mean loss of lead time, problems with stock, issues with your clients and in the worst case loss of an entire order.
Tip 10 Penny wise, pound foolish
Saving money in the beginning on consultancy might be good for your wallet on short term but mostly creates situations in which you end up paying much more for your failures. Someone who knows the culture and traditions can save huge amounts of money in negotiations, prevent you from making silly mistakes and will secure long term consistency. You do not let a sales manager do your accounting right?
Written by Michael Pronk
Michael got acquainted with China when his sister was adopted in 1996. His first trip to China was in 2008, visiting the Olympics and his parents, who live in Beijing. In 2011 Michael joined the team of 1421 Consulting Group, as Business Development Manager Europe. He has helped to establish 1421 Consulting Group in the international market as a respected consultancy assisting western companies doing business with China. Since October he became the group CEO.
What happened in the year 1421?
From 1421 to 1423, during the Ming Dynasty of China under Emperor Zhu Di (朱棣) the fleets of Admiral Zheng He (鄭和), commanded by the Chinese captains, discovered Australia, New Zealand, the Americas, Antarctica, the Northeast Passage; and circumnavigated Greenland.
Due to this endeavour we can conclude that “1421 is the year that the Chinese discover the world”.