Doing Business in China is still the same as 30 years ago
9.10.2017 - Bart Horsten
“Doing business in China is the same as 30 years ago!” This is what my late father used to proclaim when starting a speech about doing business in China during the period 2000-2008. He described his experiences in China from 1979 onwards when he was first working on the China project for Janssen Pharmaceutical, followed by helping other Belgian and European SMEs into becoming successful in China through his consulting company Horsten International.
Obviously this statement was a technique to shock the audience and get their attention, but deep down he meant what he was saying.
Many of the typical Chinese cultural aspects of doing business are often not visible on the surface , as is portrayed in one of our previous blogs, click here. Not only do big Chinese cities, such as Shanghai, Beijing and Guangzhou, possess modern infrastructure incuding new airports, brand-new roads, impressive high-rise buildings and efficient public transportation networks; but also will you meet with well-trained, highly-motivated and English-speaking Chinese professionals during your business encounters. Moreover, the Western media increasingly recognizes China as the new global superpower with huge investments in cleantech industries, artificial intelligence, e-commerce, etc.
As a result, first-time visitors may get the impression that doing business in China seems no different from doing business in the West. Consequently they incorrectly conclude that they can simply duplicate their strategy for other markets to China. Likewise, many foreign companies without experience in China believe they don’t need a China consultant’s advice and wonder why it is even necessary since they have been successful in many other countries. They don’t feel they need help.
However, the reality is quite different: due to this misunderstanding very often the wrong decisions are taken and foreign SMEs enter the China market with the wrong expectations. Any professional with experience in dealing with Chinese stakeholders or doing business in China will agree with me: doing business in China is different from anywhere else in the world. More than in any other country in the world, in China culture is still a key part of doing business - even in the biggest and most-developed Chinese cities. This is apparent through all levels of society and in different aspects of doing business, e.g. in contract negotiations, meetings, hiring and managing staff, team work, problem solving, decision making, leadership, dining with business partners, etc.
Maybe it’s wrong to state that doing business in China hasn’t changed in the past 30 years, but in a way I can also agree with my father’s statement: after being a China consultant and entrepreneur for 2 decades myself and having had the privilege to witness China’s rapid and widespread development, it is important for foreign companies to understand that the thousands of years of Chinese culture have not disappeared during the last 3 decades and that doing business in China still needs specific preparation and guidance from experienced professionals.
And herein lies my biggest challenge. During my daily encounters with Western companies or business people with plans to enter China, I often find it difficult to convince them why they need to get help from China consultants or other companies with experience in China. As a result my best customers are often companies which have had a previous negative experience in China and have learned the hard way…
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