China Tip 32: Get started with starting - February 24, 2009
Getting started with starting Strategic vision, long-term plans are the foundation of a new business formula in the Netherlands. As a result of the limited budget available to starters, financiers will closely examine both the entrepreneur and the plan. The “Ltd in formation” is exemplary of such a start. It gives one the chance to prepare before starting the real work. The situation is quite the reverse for many Chinese. Their market changes daily and most of their investments do not come from banks, but from their own savings or that of friends or family. The faster you can get to work, the faster you will make money. Here, nobody has ever heard of an Ltd in formation. The main motivation is to make a profit as quickly as possible. “Surely you only register when the business is up and running? This process takes months. Moreover, when we are finally ready, the rules may well have changed again.” Being aware of the existence of this difference in insight may be of importance when starting up a Joint Venture. A compromise that can be made, may include a simulation where activities are temporarily categorized under an existing license. As soon as the combined juristic form becomes active, the activities can be transferred to the new Joint Venture.

China Tip 31: Uncompromising flexibility (2): Working hours - February 16, 2009
Uncompromising flexibility (2): Working hours One of thing that most strikes the eye of Western entrepreneurs when conducting business in China, is the level of flexibility. We referred to this before in relation to planning trading commissions and making appointments. The flexibility of the Chinese is not always the result of politeness and it is rarely a consequence of nonchalance. It is a survival strategy in a society where there is no meaning of the word ‘individualism’. Foreigners working in or with China are often surprised when they are expected to work on a Sunday or when they receive business calls at an inconvenient time. They have trouble accepting that this “flexibility” is expected from them as well.

China Tip 30: Masks for loosing face - February 8, 2009
Masks for losing face The Chinese are much less direct in their communication than Westerners. Indirect signals, avoiding confrontations; to Western entrepreneurs the experience is comparable continuously walking on eggshells. Situations such as price negotiations, an evaluation talk or the discussion of a problem with a Chinese partner seem like an impossible task. In the West we are used to freely expressing our opinion or giving our own interpretation of things. In China, however, it is customary to refer to existing rules or external factors. Referring to external factors and thus indicating that it is not your personal opinion, provides the Chinese party with an opportunity to retreat. “Our apologies, but we are bound to a maximum price.” “Accounting has charged me to only sign contracts when condition X is met.” “As a result of new company policies we are only allowed to act so and so.” Taking a personal position and not being able to yield will most likely be considered an insult. Contrarily, Westerners often consider the reference to an external factor to be bureaucratic or they come to the conclusion that they have entered into discussions with the wrong person. While, at the same time, the Chinese party is confident they are sending out a clear message!

China Tip 29: Everything is improving, nothing was wrong - February 1, 2009
Everything is improving, nothing was wrong Whether it’s a result of the history of censure or it is associated with losing face, in China it is uncommon to ‘lay ones fingers on the sore spot’. Contrary, Westerners tend to emphasize the weak points. People are constantly striving for the highest state of perfection by focusing on what is not going well. The Chinese have a tendency to stress the things that are going well and showing that there is still room for improvement. When considering the past 30 years, this approach is not so surprising. Where development is concerned, every new decennium represents a world of difference. A foreigner claiming that things are still not going well may well be considered as being insulting. The Chinese business world is very sensitive to direct criticism. In case you wish to remark on a (production) process, it is advisable to first enquire after the background. It is a possibility that your solution has been considered, but that it was not applicable to the local market. Should this be the case, be sure to stress the result of the improvements instead of the consequences of mistakes.

China Tip 28: Christmas gifts? - February 1, 2009
Christmas Hit The holiday season has arrived again and for many companies this is a good time to provide relations with an extra impulse. However, how this works with regard to Chinese relations is somewhat of an issue for many Western companies. Gifts are clearly exchanged during the Lunar Festival and Chinese New Year; so is something expected at Christmas as well or is sending 3 gifts each year too much of a good thing? You will not be alone in sending gifts during the Lunar Festival or Chinese New Year. Especially during Chinese New Year so many gifts are exchanged that they often end up being forwarded. In other words, the gift you send with Chinese New Year will be less noticeable. The right gift represents your (business) culture, the relation and the message of the holiday in question. Therefore, it is advisable for companies to send a card or gift for Christmas and something small, or an e-card for Chinese New Year. At Christmas you will be original, there are few distractions and therefore there is more attention for your gift so it can be more fulfilling. Of course, in reverse, the same also applies to Chinese companies. You are, after all, far more likely to appreciate a Chinese gift on a Chinese National Holiday, than a gift from a Chinese who is taking a shot at presenting you with a gift in “Western style”. We wish you a Merry Christmas!

China Tip 27: Concentrated Distribution - February 1, 2009
Concentrated Distribution In China it is also wise not to be completely dependent on one relation. Whether it concerns a client or supplier, a distorted relationship will often cause pressure. This will result in a weak negotiation position which, in some situations, will cost you dearly. Satisfaction with the current situation should not be an excuse to ignore other purchasing channels. Allowing assignments to circulate within a piggy bank of suppliers with the same abilities will provide greater flexibility to anticipate economic and regional developments. Aside from being better equipped to handle rush orders, the piggy bank will provide something to fall back on when a purchasing channel is lost. Of course, the real art is finding the right way to hint that you are not dependent on one particular party.

China Tip 26: More than one string to your bow - February 1, 2009
More than one string to your bow Finding the right person with the right responsibility can be a tough nut to crack for foreign business people in China. In the West it is common to immediately get round the table with the decision maker. In China it is often difficult to determine who is responsible for what. Due to the dominant hierarchy the ball is almost immediately passed to someone in the management top. However, this is not likely to be recognized by your Chinese conversation partner; it happens only too often that Western businessmen assume to be in direct contact with the person making the decisions, whereas the opposite is true. Speeding up negotiations is possible by introducing diverse suggestions rather than just one. Accordingly, your conversation partner will be enabled, to attune the Chinese management to several different positions on the long hierarchical path to the top.

China Tip 25: Concern or a lack of faith? - February 1, 2009
Concern or a lack of faith? Independence is a quality that is greatly valued in the Netherlands. When a little child falls and does not cry, we tend to let the child get back up on its own. Chinese act differently. They will immediately rush to the child’s side and ask if it’s alright. From a Western perspective the Chinese are, therefore, often deemed to be overly concerned, also where friends and colleagues are concerned. In China this display of concern is a way of taking an interest as well as a way to show respect. This can be extremely uncomfortable for Westerners. The repeated asking whether you need help may induce a feeling of lack of faith in your capacities. Further, the overly concerned Chinese host who spends every minute looking after his foreign visitor’s every need, is regarded as someone who draws all attention to him or herself. The best response is to thank the ‘relief worker’ in a friendly yet strong manner whilst assuring them that your tasks are entirely subordinate to theirs.

China Tip 24: Show your ID - February 1, 2009
Show your ID. The Dutch are very attached to their own identity, which includes outspoken opinions and a clear political vision. Others are judged based on knowledge or his/her attitude in certain situations. The Chinese have a radically different approach. Political visions are difficult to distinguish and opinions are only rarely openly announced. Persons are judged based on career, possessions and the position on the social scale is used as a point of reference. Individual contact whilst conducting business is valued more in China than it is in the West. The description of your identity in a Chinese frame of reference may be extremely qualifying for the relationship and, as such, its success. Make use of “I am” and/or “I have” instead of “I think” and/or “I believe” where your identity is concerned. These clear and powerful terms will help your Chinese partner to establish a certain image. In order for there to be trust, people first need to know who you are.

China Tip 23: Divided Unity - February 1, 2009
Divided Unity When talking about meetings in the Netherlands people tend to think about a continuous flow of opinions and the exchange of thoughts about specific subjects. People have meetings to ventilate their own viewpoint, to inform one another about processes or to endorse each other with comments and suggestions. The Chinese meeting culture operates somewhat differently. A meeting is often a one-sided flow of information, a top-down briefing from the management and an instruction for the work floor. The lively interaction and brainstorming sessions will occur sporadically in Chinese organizations. When you, as a Western enterprise, join a Chinese organization at the meeting table, you are expected to demonstrate unity. When having an appointment with your Chinese partner it is important that you refrain from giving a presentation containing numerous diverging opinions of colleagues, or what is even worse: open discussions. The key is to come across as univocally strong and powerful. During initial meetings it is recommendable to allot one speaker and only let your fellow colleague-expert to contribute where particular divisions or specific technical aspects are concerned.

China Tip 22: Locating Safe Suppliers - February 1, 2009
Locating safe Suppliers in China There are numerous negative stories circulating about doing business with Chinese companies. Some business people let themselves be influenced by these tales and based on the preconception formed they decide not to go to China, referring to the country as the “Wild East”. We have firsthand experiences with companies that have no intention of achieving a win-win situation. Unfortunately, it is difficult to achieve things via legal channels in China. In addition, the contact may, after seizing his chances, simply disappear. Taking great risks can be avoided by a more conservative attitude when meeting a new company. Firstly, it is of importance to analyze how the contact between you and the future partner came about. In case the contact was established via internet or a meeting at the stock exchange, instead of via an existing reliable relation, caution is advised. For most people, the first step towards analyzing reliability is a visit to Google. If the name of the company yields no results, there is always the possibility of basing the search on the company’s phone number. When this yields no results either, or when the website of the company is not convincing enough, a phone call to the general number is advisable. In this case, it is wise to let the call be made by a Chinese speaking individual. A reputable organization will, even in China, have a receptionist who, during normal working hours, can connect your call to different departments. In case the phone is not answered after consecutive attempts, it can be construed as a bad sign. Should you be able to make contact, ask after the sales department and explain your situation. General information, references, business licenses and payment processes are readily available in companies with nothing to hide. Finally, untrustworthy companies can easily be recognized considering that they are often (too) quick in offering an extremely attractive business proposal. If it appears to be too good to be true, it usually is.

China Tip 21: Specific Orientation - February 1, 2009
Specific Orientation Even though the world has fallen under the spell of the economic crisis, entrepreneurs realize that stagnation inevitably means going back. China has not, all of the sudden, become less popular as a business partner, and for some the current situation gives an extra boost to find out where and how money can be saved. For the companies that want to orientate themselves to do business with China, there are a diverse number of ways to organize a delegation. Possible options include joining a trade mission organized by your government or taking one’s chances with a business partner such as DragonDancers or, alternatively, to find your own course making your own appointments and plans. As a result of the enormous popularity of China and the great number of delegations, Chinese companies and public bodies have become more critical and selective where foreign visitors are concerned. China is no longer a country where every foreign businessman is received automatically and without exception as a ‘special guest’. Therefore, it is absolutely necessary to be well-prepared for your visit in order to reach a successful result. This preparation also means that the purpose and possible content of the visit must be agreed upon by both parties before the visit. Experience teaches us that most self-organized trips end in a complete debacle! The most important reasons for this are a lack of understanding of the language and culture which causes unnecessary and unintended communication problems for the visiting entrepreneur, who, without a clear target sets out on a fact-finding mission. Exploring and orientating doesn’t mean that the trip shouldn’t have clear-cut goals. Decide for each talk what the maximum attainable result is and divide this into a number of (sub)goals. Sharing your goals during an early stage of your trip with a possible partner helps to minimize the chances of a mismatch in China and this will make the visit more target-oriented and sufficient. A better tuning in advance will significantly increase the chances of success.

China Tip 20: Minimize the maximum price - February 1, 2009
Minimize the maximum price Most organizations have more suppliers than buyers. When purchasing a computer, printing brochures, hosting a website, booking a flight, in short, when bringing aids into action for daily management, you are the client. Negotiating is one of China’s national sports and it is almost surprising that it was not an official part of the 2008 Olympics. Most Chinese suppliers will present a maximum price, which is open for bargaining. These types of negations do not only take place at large conference tables or at a small retail level, it happens everywhere! Deals can be made even with renowned companies and exerting a minimum amount of pressure can work to your advantage. A good example may be how we once saved hundreds of Euros by negotiating with the post office. An unthinkable situation in Europe, where on this level price and processes are directed by the suppliers. During daily processes, a profit can be made by not by default agreeing with the initial price indications. In most cases, it soon becomes clear that the price can be lowered or that you can obtain more for the same price. Do, however, pay attention that the time invested is proportional to the maximum attainable result!

China Tip 19: Specific Orientation - February 1, 2009
Specific Orientation Even though the world has fallen under the spell of the economic crisis, entrepreneurs realize that stagnation inevitably means going back. China has not, all of the sudden, become less popular as a business partner, and for some the current situation gives an extra boost to find out where and how money can be saved. For the companies that want to orientate themselves to do business with China, there are a diverse number of ways to organize a delegation. Possible options include joining a trade mission organized by your government or taking one’s chances with a business partner such as DragonDancers or, alternatively, to find your own course making your own appointments and plans. As a result of the enormous popularity of China and the great number of delegations, Chinese companies and public bodies have become more critical and selective where foreign visitors are concerned. China is no longer a country where every foreign businessman is received automatically and without exception as a ‘special guest’. Therefore, it is absolutely necessary to be well-prepared for your visit in order to reach a successful result. This preparation also means that the purpose and possible content of the visit must be agreed upon by both parties before the visit. Experience teaches us that most self-organized trips end in a complete debacle! The most important reasons for this are a lack of understanding of the language and culture which causes unnecessary and unintended communication problems for the visiting entrepreneur, who, without a clear target sets out on a fact-finding mission. Exploring and orientating doesn’t mean that the trip shouldn’t have clear-cut goals. Decide for each talk what the maximum attainable result is and divide this into a number of (sub)goals. Sharing your goals during an early stage of your trip with a possible partner helps to minimize the chances of a mismatch in China and this will make the visit more target-oriented and sufficient. A better tuning in advance will significantly increase the chances of success.

China Tip 18: Fixing the best price - February 1, 2009
Fixing the Best Price When the complexity of a product increases, the complexity of the selling process increases proportionally. Especially in the business-to-business sector, the selling of products to Chinese buyers is a complicated and time-consuming business. Once negotiations start, we in the West want to know what kind of product we can get for what investment. Having a specified price index helps to motivate us and indicates why we need to pay a certain amount for some things. This is how we create an apparent world for the buyer, who via a number of necessary add-ons will almost always end up higher than the low basic price. Our experience has taught us that this does not work in China. In contrary, it will likely give the impression that he or she is saddled with all kinds of additional costs. Eventually, a discussion will follow about who was responsible for this and the buyer will aim to get, at least, the minimum price including all extras. It is best not to divide the total product into different parts and budget these separately, but to name the total price instead. This allows one to offer the add-ons as “give-away” during certain moments in the process without having to lower the price (!). Another tactic, to use in some scenario’s, is to undress the product and in doing so decrease the price a little. However, be sure that the product that remains meets the client’s demands! Going for the quick wins, doesn’t pay off in China as well.

China Tip 17: Rational Emotions - February 1, 2009
Rational Emotions People like to think of China as the country where one third of the world’s population lives and are, as such, referring to the unprecedented potential market. Indeed, the number of people sharing the same language in a single market cannot be compared to that in European countries. Location costs may be lower, but the different regions cannot, simply be approached with the exact same strategy. Nevertheless, it is possible to define some common denominators. One of these is the combination of decreasing trust in domestic products and the chauvinist attitude of Chinese consumers. This results in a unique decision making process when purchasing products. Without entering into an in-depth discussion of this process, it can be said that it appears as if Chinese consumers are sensitive to socially economical arguments. A product that, apart from contributing to quality also contributes to local economic arguments is easily motivated and promoted. A company can earn respect and prestige by concretely showing a desire to add surplus value to the local market. Aside from improving the sales arguments and positive publicity for the organisation, it shows the local government to its best advantage. Emphasizing the socially justified aspects of your enterprise may, eventually, lead to a smoother expansion of activities to other regions in China.

China Tip 16: The Art of Giving - October 13, 2008
China Tip 16: The art of giving Relation gifts are meant, by means of positive memories, to reinforce a relationship. This kind of association will increase trust and will cause the receiver to adopt a more flexible attitude in future business situations. Entrepreneurs operating internationally may experience difficulties finding the right presents for people with different cultural backgrounds. Aside from statutory regulations, there are also personal symbolical backgrounds that need to be taken into account. In China, for example, it is unconventional to bring a gift to the first meeting. People with experience in China are usually aware that presenting a clock, an umbrella or shoe may have an unfortunate undertone. Such presents usually give rise to a negative association. Even the colors of the wrapping paper can play a decisive role. Black and white are, for example, best avoided. Furthermore, relation gifts always have to be presented at the end of meetings and on behalf of the company. The most important gift is for the principal person, who, for that matter, is rarely ever the contact person(!) At Chinese meetings, there are usually more people involved than is customary in Europe. It is much appreciated when everybody is presented with, at least, a small trinket or when something is given that can be shared by everybody. Finally, a present with a nice story is better than a nice present without a story. Local delicacies such as sweets and alcohol may, for example, make very successful presents. The only exception to this rule is exceptionally strange flavors such as Dutch liquorices. This might have a miserable effect as many Chinese find the flavor comparable to that of traditional Chinese medicine.

China Tip 15: Diffuse Focus - October 13, 2008
China Tip 15: Diffuse focus The Chinese are particularly firm and patient during negotiations. A Chinese business partner approaches a situation or contract in a diffuse manner. Contrastingly, in the West, the custom is to consider negotiation points in a concrete and systematic manner. These differences in approach tend to give rise to frustrations in both parties. The Western interlocutor concludes that the Chinese party is going back on previously made appointments, and, at the same time, the Chinese may interpret the attitude of the Western party as obstinate and egocentric. As a result of the broad perspective of the Chinese business partner, Western entrepreneurs are often surprised by the new elements that keep being added to the deal. The resulting need for providing feedback to the supporting party can lead to the loss of precious time. One possible tactic is to establish the maximum results and more at the beginning of the negotiations. However, also try to keep a few consciously chosen giveaways in reserve to use as counteroffer for a turn of events that you consider unfavorable. Despite negotiations appearing to be considerably different in China from what Westerners are used to, the desired outcome should be the same everywhere in the world: an agreement that benefits both parties.

China Tip 14: Locating safe Suppliers in China - October 13, 2008
China Tip 14: Locating safe Suppliers in China There are numerous negative stories circulating about doing business with Chinese companies. Some business people let themselves be influenced by these tales and based on the preconception formed they decide not to go to China, referring to the country as the “Wild East”. We have firsthand experiences with companies that have no intention of achieving a win-win situation. Unfortunately, it is difficult to achieve things via legal channels in China. In addition, the contact may, after seizing his chances, simply disappear. Taking great risks can be avoided by a more conservative attitude when meeting a new company. Firstly, it is of importance to analyze how the contact between you and the future partner came about. In case the contact was established via internet or a meeting at the stock exchange, instead of via an existing reliable relation, caution is advised. For most people, the first step towards analyzing reliability is a visit to Google. If the name of the company yields no results, there is always the possibility of basing the search on the company’s phone number. When this yields no results either, or when the website of the company is not convincing enough, a phone call to the general number is advisable. In this case, it is wise to let the call be made by a Chinese speaking individual. A reputable organization will, even in China, have a receptionist who, during normal working hours, can connect your call to different departments. In case the phone is not answered after consecutive attempts, it can be construed as a bad sign. Should you be able to make contact, ask after the sales department and explain your situation. General information, references, business licenses and payment processes are readily available in companies with nothing to hide. Finally, untrustworthy companies can easily be recognized considering that they are often (too) quick in offering an extremely attractive business proposal. If it appears to be too good to be true, it usually is.

China Tip 13: Centuries-old modernization - October 13, 2008
China Tip 13: Centuries-old modernization Nowadays, anybody arriving at terminal 3 of Beijing Capital Airport disembarks at one of the largest and most modern terminals in the world. Due to the immensity of the building, passengers are transported to their terminals with trains and there is a subway connection to the other terminals. The situation in Shanghai is slightly different. Here people are suspended above the city as they travel into Shanghai with an average speed of 430 km/h in the only open to the public, magnetically driven Maglev train in the world. China’s infrastructure and economics are changing rapidly. Numerous Western visitors stare with their mouths agape at the passing landscape on their drive from the airport to the city. They are introduced to a China that is very different from the ‘mysterious China’ they expected to find. They may even discover some similarities to home. Whoever thinks that modernization is the same as westernization may possibly be terribly mistaken. Even though we can find many similarities to the Western world, the views, conventions and values are still a part of ancient Chinese culture. It is unlikely that they will change overnight. It may be true that doing business in China will get easier as time progresses. This is, however, the result of an increase in mutual insight and experience and not a consequence of a transformation of ancient Chinese culture. For that matter, it is not necessary to be a cultural expert to thrive at doing business in China. A little understanding and respect can go a long way.

China Tip 12: Better safe than sorry - October 13, 2008
China Tip 12: Better safe than sorry Many entrepreneurs still consider China as the Shangri-la of infinite possibilities. The immense population and the annual ‘double-digit’ economic growth result in a projection of flashy Scrooge McDuck dollar signs in the eyes of numerous businessmen. Of the ‘so-called’ 1,3 billion potential clients, an estimated 80% lives far away from the major cities with an annual income of EUR 600,=. It is unlikely, however, that they constitute your target group. This leaves about 260 milliard customers. In this group – according to Chinese standards – about 180 million people earn EUR 2,000.= up to EUR 4,000.= each year. This is sufficient to buy a car, pay for the children’s education and occasionally enjoy a holiday. Nevertheless, the salary is still less than the average salary in, for example, a country like Latvia (EUR 550.= a month) and is, therefore, insufficient to purchase the ‘Made in Europe’ products. The remainder is a group of roughly 80 million Chinese with the same purchasing power as us. This number equals to the population of Germany, but it is spread out over an area that is 20 times larger. The number of potential clients in China is unfortunately frequently overestimated. This inevitably results in companies taking far greater risks because the expected ROI induces visions of golden mountains. Of course, there are fantastical success stories of companies that managed to capitalize on the Chinese market. However, this usually concerns unique products such as the First Mover. China, with its fast-growing economy, certainly is a land of opportunity, but the only way to begin moving the golden mountains is by carrying away small stones. Therefore, investigate your target group and its purchasing power before coming to China. Better safe than sorry.

China Tip 11: Source of Information - October 13, 2008
China Tip 11: Source of Information China is hot news and articles can be found in the newspapers every day. For many companies, however this information is seldom industry related and rarely contains any research related figures. Mentioned in earlier articles, the difference between any preparation and none, can make the difference between success and failure! Preparation means more than answering questions like ‘What do I want in China’, and ‘Why should I go to China, specifically’. Having any knowledge about the Chinese economy or being informed about the domestic situation of your business field, will probably make you one of the best prepared business visitors in China. Much information can be found on websites of your embassy or governmental related institutes– there are several other sources of information. Many of these websites contain information that is gathered by and for foreigners. It is however as important to read information sources from and for Chinese eyes. This will help you getting hold on the Chinese way of thinking and valuing information. From various economic sectors, some good newspapers and magazines could be interesting to find general and industry related information. South China Morning Post First of all, the South China Morning Post. This paper is published in Hong Kong and has a wide variety objective article. Social demographic, political and cultural subjects are written on daily basis and are easy to read. China Economic Review In-depth information about industries can be found in The China Economic Review. This magazine is a good source of sector related trends and facts finding. China International Business Thirdly, the Chinese Ministry of economic affairs publishes the Chinese International Business Magazine. It covers almost every sector included the relatively under developed industries.

China Tip 10: Be prepared to improvise - October 13, 2008
China Tip 10: Be prepared to improvise China is much bigger then Europe. Most people are well aware of that. The country is also not just around the corner, this as well is common knowledge. Although we have quite some general knowledge about China, a lot of important business-related knowledge is not known. For instance the banking sector is still highly regulated, foreign currency exchange from RMB to any other currency is not so easy and business licenses are determined by business scope. Realize there is a strong preference policy to relocate certain industries to certain regions. If these policies concern your industry, it will have a big impact on future market developments. Information about cultural differences between the West and China is relatively easy accessible. But culture is only a part of doing business. Laws, governmental system, taxes, etc. are at least as important. Realize that the China’s governmental system lacks transparency. The unique system is decentralized and laws and regulations can differ on city level. Besides, the laws and regulations are complex and implementation of laws is ambiguous. Where to find your legal advice? While preparing yourself for a business trip, do not only focus on cultural and linguistic differences. Any additional information (whether general or branch related) does make a difference while achieving your goals. Some of the businessmen visiting China were not aware of the unique Chinese financial system. They just learned by hitting the wall. Even though it has been on the agenda of the WTO for many years. Entering the Chinese market is based on a strategic decision that requires more (financial) input than any market entry in Europe. By investing time in research you limit the chances being (unpleasantly) surprised once in China. Your in-depth knowledge and good preparation will optimize and accelerate your capability of doing business. Finding creative localized solutions when problems arise. Being able to improvise requires excellent preparation!

CHINA TIP 9: Stubborn Flexibility - August 11, 2008
Stubborn flexibility China is often referred too as the awakening dragon. People who have visited China acknowledge the dynamic atmosphere in the country and fully understand the definition of 24-hour economy. Receiving a production order at Friday 21.30, having a meeting with the production manager on Sunday and realizing delivery at Monday 8:00 common practice in China. The Chinese are experts when it comes to improvisation. An advantage if you are dealing with tight deadlines but challenging for scheduling delegations or for people who are addicted to punctuality. In most Western countries, confirming a meeting can be done months in advance with 1 telephone call. Operating in China, scheduling meetings can begin only 2-3 weeks in advance. Furthermore, this meeting has to be confirmed many times. Even at the day of the appointment, a final confirmation is conventional. Only by doing so, you and the other party are sure of no last-minute changes. Though this might seem unorganized or unreliable in many Western eyes, this flexibility of planning is generally accepted on every level in the society. The advantage is that you can do exactly the same. Especially planning trade delegations, dynamic organization skills are essential. When an appointment or event is cancelled, you must have a plan B in place without delay. In China making appointments on short-notice, is widely accepted. The people you meet will most likely suggest dates and times that cause conflicts in your agenda. Discuss possibilities with your delegation members and evaluate the pro’s and the con’s of changing your schedule instead of a blind commitment to your initial program. Most efficient and effective delegations are managed by a well experienced organization that can smoothly adapt any change in the schedule. Besides improvisation and organization skills, having a 24-hour economy mind-set is at least as important to realize success!

CHINA TIP 8: Family Matters - July 7, 2008
Family Matters CHINA TIP 8 (week 27, 2008) Every year in December the government announces the dates of national holidays, which vary each year. This year, the festivities in honour of the Dragon Boat Festival were an official day off in China. During these national holidays, the Chinese people tend to join for a family gathering. In this case, ‘the family’ refers to the parents from father’s side, sons & their wives, unmarried daughters and the grand children. During these gatherings food and banquet-like meals are savoured, people go out to parks or enjoy themselves watching television. Because most families live in different cities, gatherings last usually several days under one roof; quite exhausting in European eyes. In China as well as the West old traditions are being modernised. However the traditional family value goes strong as ever. This shows not only during the festivities but in day to day life as well. The family values are paramount. This emphasis on strong family ties finds its origin in the Chinese philosophical tradition and family values were even embedded in law during the imperial times. If one family member offended the law, the whole family was held responsible (and liable to punishment). The modern times made family relations not less important. It is one of few places in china one can relieve ones feelings without fear being prosecuted. Therefore the importance of family values and good family relations cannot be underestimated. The family is also a total natural subject of conversation in China; Like we would talk about the weather. A business conversation is often opened by asking after or telling about the family. Many Western businesspeople feel uncomfortable with these personal family questions. When talking about family show respect by listening carefully and asking appropriate questions. Your interest in your partners or colleagues family situation will be appreciated and will lead to better understanding, smoother contact and trust.

CHINA TIP 7: Profit optimization - June 27, 2008
Profit Optimization. CHINA TIP 7 (week 26, 2008) It is believed that China offers unprecedented possibilities for economic success in any sector. The country has a large well-educated population and employees work hard against competitive salaries. Roaring stories about business success follow one after another. City-life has improved dramatically and consumption is, after 20 years non-stop economic growth, still buoyant. This ever-optimistic approach has, however, it downsides. Many entrepreneurs forget to stay alert. The low salaries and seemingly low costs per product made many entrepreneurs lazy in controlling the overall production standards. A recent McKinsey study under 30 multinationals showed that managers taking their job to easy were responsible for loss of production productivity and rising costs. The study showed cases where net profit lagged 20% to 40% behind the possibilities. In the long run, missing out such a substantial part of the net profit will have devastating results. Try to reduce your production costs. Reduction of costs has nothing to do with less salary. On the contrary. Good and satisfied employees are the foundation of your success! A fair income and relevant training is as important in China as it is in Europe. The same applies to your production processes. Value and control these in China the same way as you would do in the West. Our advice is to be flexible on cultural differences but to stay a Western entrepreneur when it comes the process management, and cost reductions. The competitive advantages of high quality facilities, limited malfunctions, efficient warehousing, high labor productivity per working hour etc. all contribute to overall profit in Europe. There is no reason to believe that these characteristics of maximizing profit should not work in China.

CHINA TIP 6: Personal Coach or Chief in Command - June 18, 2008
Many Western Managers have difficulties with the low pro-activity level of their Chinese co-workers. The ‘lack of initiative’ frustrates them. This passive attitude is not related to motivation, it roots in the Chinese educational system. Western education is focused on values like independence and creativity. Exchanging ideas and discussing advantages and disadvantages of certain solutions are important parts of our education system(s). Taking initiative and asking questions are encouraged. The Chinese educational system is based on centuries-old traditions which still have an impact on today’s society. Facts are more important than questions. Questioning facts is seen as questioning the masters’ knowledge. A discussion of any sort between pupil and teacher is not-done. The level of perfectionism is measured by the accurateness of ‘imitating’ the master. The Chinese students are educated in a fact based program, while in Europe pupils are educated to approach a problem from different angles with different solutions. Needless to say this difference of education will have its influence in the working environment, especially in the relation between employer and employee. The Chinese employee will be dedicated on the job when instructions are given, deadlines are mentioned and expected results are set. This way of leadership could be highly offensive to any European trained employee. However, most of your Chinese employees won’t feel at ease with this Western style of ‘freedom leadership’. Your employee will not ask for instructions but waits for instructions. When no clear instructions follow from your side, you will be seen as a weak person without focus. In addition, Chinese co-workers might consider that doing nothing equals avoiding mistakes. Our advice is to instruct in a crystal clear way what should be done and avoid “learning by doing” leadership.

CHINA TIP 5: Not only friendship creates Guanxi - May 30, 2008
Not only friendship creates Guanxi. CHINA TIP 5 (week 22, 2008) One of the most widely discussed subjects about doing business with Chinese people is the phenomenon ‘Guanxi’. Litterly ‘Guanxi’ means “being closed into a system”. Not without reason, the term Guanxi often isn’t translated into English. In some occasions Guanxi is translated as ‘networking’, but that doesn’t reach the deeper meaning of the word. While networking is based on knowing which person does what, Guanxi is based on the right to ask a favour. Furthermore, Guanxi relates to someone’s background, work relations, family matters and relations that have nothing to do with friendship. Being aware a favour can be asked from the other party, is the foundation of Guanxi. Guanxi occurs when providing or requesting a favour. Friendship is just one out of many possibilities that enables asking favours. The criteria that defines a good friendship, is the possibility to rely and trust on each other. The friendship created by ‘Guanxi’ is not in the least comparable to ‘networking’ as we know that in the West. Having Guanxi purely based on friendship, will cover years to build-up. Businessman who expect creating Guanxi by having dinners or spend time in Karaoke bars might create goodwill, but not Guanxi. Guanxi will occurs when “person A” helps a relation of “person B" with his/her visa application. Or, providing a job for someone related to your business partner is also an example that creates ‘light’ Guanxi. The level of effort and difficulty determines the level of Guanxi. Needless to say, Western companies do not have a wide range of access possibilities for Guanxi at the first stages of doing business in China. Also many companies are not familiar with the requests of those ‘favours’ that often don’t match the social accepted values of doing business in Europe. Recruiting employees with the right Guanxi is the fastest way of establishing a Guanxi network. That is why certain persons from a social network with a specific family background are highly wanted regardless their capabilities and qualifications. Best is to leave Guanxi up to your Chinese partners and employees. They know the game and can find the right approach. For most foreign businesspeople being involved in general networking activities and relationship maintaining is more than enough.

CHINA TIP 4: Patience doesn’t always pay off - May 22, 2008
Patience doesn’t always pay off CHINA TIP 4 (week 21, 2008) Though this statement seems to contradict many books about doing business in China, this statement is not referring to the calm “getting to know each other rituals” or handling operational management issues. Informal meetings and endless banquettes are considered by many Western businessmen as a waste of time. They prefer to ‘cut the crap and do business before flying back home. Delaying techniques, however, are widely used for pressuring negotiations. The thought behind this is that the time-lacking party will be more open to concessions, to avoid returning home empty-handed. In this scenario pressure on the right spot can swift the situation into your advantage. Secondly, delaying can yet have another meaning. When at joint cooperation meetings, the future partner repeatedly shows no initiative, it might be as well a polite “no thank you” message. Your Chinese business partner rarely communicates openly that he is not interested in your cooperation for this moment. It will be indirectly communicated by a passive attitude in meetings and no initiative for follow-ups. In this scenario, the Chinese party tries to avoid that YOU are losing face by offering you an escape route. Always pay attention to the behavior and the willingness of your possible business partner. The explosive growth of the Chinese economy is not based on inefficient meetings. Actions can be taken by Chinese management surprisingly fast once the strategic advantages are acknowledged.

CHINA TIP 3: Constructive criticism or an insult? - May 13, 2008
Constructive criticism or an insult? CHINA TIP 3 (week 18, 2008) In the Western world and especially in the Netherlands, open exchanges of view and fair discussions are very common. This sort of verbal interaction has a positive positively interpreted connotation. It is a proof the discussion partner is interested in you and your opinions. How different this is in the Chinese society. Any confrontation directly showing disagreement or questioning the things said, will be interpreted as if you have second thoughts about the other’s personal experience or worst, about the person himself. Chinese counterparts feel attacked by receiving comments, this is a cultural issue. The term constructive criticism is therefore not very well known in China. So, introducing any contradicting opinion is a sensitive matter in China. Moment and situation are highly important factors that influence the outcome of your –probably- well meant remarks. When the expected result of a remark is uncertain or the timing isn’t perfect, we strongly advise to wait with providing feedback. Whenever when the situation is urgent and immediate action and criticism is unavoidable, some golden rules can help making the best out of the situation. Realize your position towards your Chinese partner. In China seniority is valued more important than in the Western culture. A junior party seldom provides any comments at all. Try to discuss any sensitive matters privately and avoid bringing comments during a meeting or when third parties are around. Highlight the improvement following out of your remarks and also stress the personal advantages for the person related. Most important of all: smile when providing constructive critics. A nice smile always works. Even when following these instruction it’s to be expected people will feel offended. A common reaction is denying responsibility or influence. The ‘circumstances’ are outside the range of the person abilities. Just go along this line of argumentation. Do not pretend these were all personal ideas, but try to find a connection with the (company’s) culture, laws, profit margins and topics that suit the situation. Although it may seem as walking on a thin line, a well considered pragmatic mentality in the Chinese society will get you much further than the Dutch no-nonsense attitude.

China opens largest bridge in the world - May 1, 2008
BEIJING (AFP) - - China on Thursday will inaugurate one of the world's longest bridges, which will provide an important new route into Shanghai, state press said. Presented as the "world's longest sea bridge", the 36-kilometre (22-mile) structure connects Jiaxing city near Shanghai to the port city of Ningbo in the eastern province of Zhejiang. It is slightly shorter than the 38.4-kilometre Lake Pontchartrain Causeway Bridge in the southern United States, which is often billed as the world's longest. The 11.8 billion yuan (1.7 billion dollars) bridge will cut the length of the road trip from Shanghai to Ningbo by 120 kilometres, the official Xinhua news agency said. Construction of the six-lane bridge started in November 2003 in an effort to reduce traffic congestion in the booming area, Xinhua said. An opening ceremony will be held on Thursday afternoon, it said, and the bridge will open to traffic on a trial basis at midnight.

President Hu to visit Japan - May 1, 2008
Hu Jintao to make landmark visit to Japan 30 April 2008 President Hu Jintao will visit Japan from May 6 to 10, the Chinese Foreign Ministry announced on Tuesday. According to state media, it will be the first visit to Japan by a Chinese president in a decade. Hu is expected to meet with Japan's Emperor Akihito and hold talks with Prime Minister Yasuo Fukuda. The visit is the clearest sign yet that the two countries are trying to put political tensions behind them. "We are ready to make joint efforts with Japan to further the relationship," said Foreign Ministry spokeswoman Jiang Yu. Premier Wen Jiabao's visit to the country just over a year ago appeared to draw a line under the frosty diplomatic climate that had dominated the tenure of former Japanese Prime Minister Junichiro Koizumi. Fukuda has so far avoided issues that have angered China in the past, such as Koizumi's visits to the controversial Yasukuni war shrine and disputed claims to East China Sea gas fields. Source: China Economic Review