Myths about doing business in China

Frontmatter

Introduction

Abstract

China has always been a land of myth, mystery and exaggeration for the West.

Harold Chee, Chris West

Myth 1. One market: 1.3 billion people

Abstract

China is the most populous nation on earth: its 1.3 billion people out-number Europe and the United States twice over. This, of course, is not a myth. But are they ‘one market’?

Harold Chee, Chris West

Myth 2. The Chinese market will grow forever

Abstract

China has been defying economic gravity for a number of years now, confounding the doomsters. This will continue. Labour costs will remain low: there is an almost endless supply of surplus labour out there in the countryside to ensure this. At the same time, a middle class is developing, which will, first, save; second, provide ever-increasing demand for more sophisticated goods; and third, provide ever-improving leadership in both civic and commercial sectors. The government will not back down from its free-market stance, because it knows this is the only way it can generate the ever-increasing wealth that will keep people content (and itself in power).

Harold Chee, Chris West

Myth 3. The market is easy

Abstract

China’s decision to open up its markets has attracted Western companies in droves. Everyone seems to be setting up expensive offices in Shanghai and Beijing; airlines fly daily to China with business class cabins full. China is hosting its first Formula One race this year (2004), the Olympic Games in 2008 and the World Exhibition in 2010. All you need is a good idea, several million dollars in capital handy and a ticket to China. Your products have been a success in home or similar export markets: China must be next …

Harold Chee, Chris West

Myth 4. China is Westernising

Abstract

Take a walk round Beijing or Shanghai and you are in a Western environment. This is the future of China!

Harold Chee, Chris West

Myth 5. Guanxi is a time-consuming sideshow to the real business of business

Abstract

We all need contacts, especially to get things moving. But they are not at the heart of business, which is about long-term value — recognising it, providing it. This is a universal truth, which over time the market will enforce, as ‘cronyist’ businesses fail to keep up with modern ones that use objective criteria of value.

Harold Chee, Chris West

Myth 6. The Chinese are irrationally xenophobic

Abstract

Chinese people don’t really like foreigners however polite they may be on the surface. The old view of ‘yang guizi!’ (foreign devils!) remains in the psyche. You can’t do anything about this — just put up with it.

Harold Chee, Chris West

Myth 7. The mask of Fu Manchu: the myth of inscrutability

Abstract

The Inscrutable Oriental is an old myth. Modern managers, eager to dispense with such creaky old stereotypes, enter China with open minds …

Harold Chee, Chris West

Myth 8. Rules are rules: negotiating in China is like negotiating everywhere else

Abstract

Negotiation is about objective benefits. If you get subjective, you lose. At the same time, there are rules: for example, a deal is a deal. There may be people who duck and dive, renege on contracts and behave unethically in the name of ancient culture, but over time the market will find them out and isolate them.

Harold Chee, Chris West

Myth 9. Chinese business people are not trustworthy

Abstract

‘You can’t trust the Chinese. They’ll steal intellectual property, welsh on negotiated deals and many of them are corrupt.’

Harold Chee, Chris West

Myth 10. The Chinese are difficult to manage

Abstract

Chinese employees lack imagination, are inefficient, stupid (etc.). They have been featherbedded by years of Communism, which flattered their collective class vanity while at the same time smothering any capacity any particular individual might have had for initiative and responsibility.

Harold Chee, Chris West

Afterword

Abstract

Writing this book has been demanding emotionally. I have had to face up to a number of unattractive aspects of my own culture, including xenophobia and corruption. Business in China is hard.

Harold Chee, Chris West

Backmatter