I see it all the time and there is very little I can do about it beyond suggesting that maybe they be tougher.

The “they” are my law firm’s clients and the “it” is entering into a service contract with a Chinese company based on the belief that “it will all work out in the end, once we start working together.”  That “it” rarely if every happens.

Let me explain a bit more.

My law firm has written a large number of service contracts for American companies providing services to Chinese companies.  In the past, most had been for for technology or architectural services, but in the last few years, we have been writing quite a number for media and film and luxury service companies.  What nearly all of these service companies and the contracts we write have in common is that there has to be some degree of trust between the service seller (the American or European company) and the service buyer (the Chinese company) for the contract to work.  Take IT outsourcing.  I have had many a sophisticated in-house lawyer for an IT outsourcing company tell me that there really is no way to write a contract that covers every situation that will come up in a massive, complicated, multi-year outsourcing contract.  In IT outsourcing contracts between American companies, the two parties figure out how to handle any unforeseen situation. Typically, if it turns out more work is required, the vendor/seller gets paid more than contracted — which is what the contract very generally provides.  There is a huge element of trust in these sorts of agreements but the trust is usually warranted because for the project to succeed, the buyer cannot “squeeze” the vendor too hard.

In our experience, Chinese companies will squeeze and they will keep squeezing, without any regard for “the relationship.”  I know personally to the extent that I always check in with our clients 6-10 months after the contract has been signed and the project has commenced and pretty much invariably, I hear something along the lines of the following:

Not well.  Not well at all.  We did a great job for them but they keep asking for more.  Things that clearly were not part of the contract they are demanding of us and claiming that if we don’t provide those things, they will never use us again.  Frankly, I don’t care if they never use us again and I am not even sure if we will ever do a deal with China again and certainly not for what we charged this time.

So what is a service provider to do?  I tell our clients to charge at least 20% more than normal, so as to factor in for the invariable problems and always be careful not to let your work get too far ahead of payments.  Problem (advantage?) with this is that it likely will mean no project at all.

China negotiation expert, Andrew Hupert has his own spin on what to do.  His advice, set forth in Chinese Business Negotiation – Guarding Your Virtue, is that you need to stop bargaining like an American and give away nothing for free:

You’re the Cow.

Are you a withholding, passive-aggressive manipulator who makes promises he can’t or won’t keep? Well, maybe it is time to start — at least in China. No one buys the cow when they can get the milk for free. In China, technology, IP and business methodology is the milk of profitable transactions. If you’re giving it away too early or too cheaply, then you are the expensive cow no one buys. Sorry.

Good Will is not a Bank in China
Americans new to Chinese negotiation think that they can build up a bank of good will and trust by “front loading” their benefit package. Novices think that doing business in China is about having Chinese partners owe them favors. They are kidding themselves — and forcing conflict. If the Chinese side of the deal feels that it is ahead of the game, their best move is to terminate the partnership and lock in their gains — not wait around for you to collect on what you feel is owed to you.

He is 100% correct.  According to Hupert, Americans seek to demonstrate their good will be over-delivering, hoping to build up a goodwill bank that will be reciprocated by the Chinese side.  The Chinese side often encourages this by talking up the importance of the relationship.  I have found that Korean and Japanese companies value “the relationship” considerably more than the typical Chinese companies, but far too many Americans think China and Korea and Japan are pretty much the same on this, but they most certainly are not.  Hupert explains China “relationships” in the real world:

American Intent
Win-Win type negotiators often feel that the best way to approach a negotiation is to demonstrate their good will, trust and value by “over-delivering”. They feel that if they provide the Chinese side with what it wants now (technology, brand, product designs), that the Chinese side will feel obligated to reciprocate later (distribution, execution, quality control). The western side has read up on guanxi and harmony, and believes that this is the way to develop loyalty and respect.Chinese Reaction

Chinese Reaction
The Chinese side may lock in gains by ditching you as soon as they are ahead. You see profitable transactions as the main goal, but your Chinese counter-party may care more about acquiring technology, designs and know-how so that he can operate independently. He’s willing to put up with you and cooperate as a means to an end. If you start off by satisfying his long-term goal, then you are simply shortening the life-cycle of a deal that was always supposed to end with you going home alone.

Hupert sees the solution as “understanding the value of your skills and technology — and being able to articulate and measure what you want them to deliver. Don’t let them set the agenda or determine benchmarks.”  He then sets out the following five ways to guard your assets in China:

1. Determine his real needs, and have a business response. Don’t project your desires on your Chinese partners. Find out what he really wants. Assume nothing.

2. Know what you want. Profiting from your IP, technology, brand and other Western super-powers depends on two things — having something he wants and knowing what you want from him. Withholding is easy. Knowing what you want from him is tougher. Good negotiators in China are able to articulate a graduated list of goals and demands. Prepare for a “YES” when you negotiate.

3. Deal with the “exclusivity” dilemma.The Chinese side will generally angle for some form of exclusivity or guarantee that restricts your access to his competition. DON’T address this with vague promises you don’t plan on honoring.  Instead, ask for a specific plan for your future together — and negotiate the specifics of what he is offering. Your position on exclusivity — it is the product of a strong relationship, not the prerequisite.

4. Grow your deal — tap into his ambition. What does he really want? Chinese negotiators often ask for assets and technologies that they don’t really know what to do with, while ignoring variables that might really benefit them. Does he plan on expanding to western markets, developing his own brand or climbing the technology ladder? It might be possible to enlarge the scope of your proposed deal — and thus get more in return. But to do that, you may have to help him develop his own business plan — particularly if it involves international expansion.

5. Walk away smiling — if you have to. Some Chinese negotiators are too grabby for your own good. If all he cares about is your technology and your benefit is obviously a secondary consideration, you may have to withdraw and reassess. Don’t stick around hoping things will magically get better on their own. They won’t. If a China deal is going to die, than quick & clean is the best way. Don’t hang around to get abused and battered, praying that they’ll eventually see what a great partner you could be. Get the hell out of there now.

I completely agree. What do you think?  China negotiation stories sought.

For more on how to negotiate with Chinese companies, check out the following:

 

 

Just saw an Inc. Magazine article entitled, “How to Partner in China in 2013.”  The article makes a number of good basic points about what it takes to succeed in doing business in China today and I am saying that not just because I contributed two of them.  The article’s premise question is “How can you take advantage of [China’s] lower costs and the prospect of over 1 billion new consumers while minimizing risk? The following were proposed:

Start Small and Tough.  Arie Lewin, professor of International Business and strategy at Fuqua School of Business at Duke University advocates testing your China partner with “a small, low-risk project to set a high bar for quality and timing.”

Get everything in writing. The article quotes me as saying that ten years ago, the “typical entrepreneur would not have had a written contract with their Chinese suppliers” but now “it’s foolish not to have a written contract,” since most Chinese businesses, especially in places “like Shanghai and Shenzhen” are accustomed to them. The article then advocates making sure that the contract is “spelled out in both English and Chinese, and clearly states the product specifications, the quality requirements, the trade secrets policy, and so forth.”  I disagree a bit with this in that we strongly advocate doing China contracts in only one language, usually Chinese.  For our reasoning behind single language contracts, check out Dual Language China Contracts Double Your Chance Of Disaster and China OEM Agreements. Why Ours Are In Chinese. Flat Out.

Realize a contract is just the beginning of the conversation.  Andrew Hupert talks of the importance of Americans realizing that in China a contracts is “an exercise meant to help the two sides understand the dynamics and expectations of the relationship—not to determine a hard and fast set of deliverables.”  I agree with Andrew, but the problem here is that the Chinese side expects to be able to make changes but it also complains when the American side seeks to make changes. In other words, the flexibility goes only one way and it is up to the American side not to allow that, which leads into the next thing….

Don’t let them get away with things—even if you let them get away with things.  Even if you plan to let one bad shipment slide, it’s important to let the partner know you noticed. “Let them know you know what’s going on,” says Harris. “And if it happens again, you’ll need a new agreement on that.”

Get to know them—and their friends.  “There’s an old joke in China,” says Hupert. “If your partner doesn’t have a picture of your family on their computer, then you’re just a transaction. And that doesn’t count for much.” Reach out to local government officials, and make them aware of you and how you’re helping their economy, says Lewin. “If you’re creating employment, they’re very interested.” By gaining importance as a community member, you gain importance as a business partner, too.

What would you add?

This is part four of our three part series on how to negotiate with Chinese companies.  Yes, you read it right. Part four of three. How To Handle Chinese Negotiating Tactics, part one is here, part two is here, and part three is here. We originally planned a three part series, but when a reader alerted me to a post by Andrew Hupert on how American negotiators are viewed by their Chinese counterparts, I could not resist piling on a part four.  So here goes.

In Hupert’s post, entitled American Negotiating Culture – Through the Eyes of the Chinese Counterparty, Hupert writes on how Chinese companies see their American negotiating counterparts. Hupert has taught Chinese negotiating tactics at NYU’s Business School, conducted extensive research on the subject, and recently wrote a book on it, entitled, The Fragile Bridge: Conflict Management in Chinese Business. In other words, when it comes to negotiating with Chinese companies, he knows whereof he speaks.  And his speaking says that how Chinese companies view American companies influences negotiations between them.  So if American companies can better understand their own negotiating tendencies, and more importantly, how their negotiating tendencies play out to a Chinese audience, they can better handle negotiating with Chinese companies.

Hupert’s article sets out the “American cultural quirks” with which Chinese companies have to deal when negotiating.  Remember that the below is how Chinese companies view American negotiating tactics; it does not mean that their views are accurate.

  • “First and foremost – we are the only negotiating culture that leads with the lawyers. Europeans consider negotiation to be an exercise in diplomacy while Asians consider it the province of paternalistic company leaders to build lasting relationships. American negotiators – even when they are salesmen or purchasing managers – are fixated on contracts and legal institutions (like courts and regulations). Whereas traditional Asian negotiators feel that relationships are the key to business and that contracts are merely written records of agreements between individuals, Americans put more weight on the document than on the human bonds between business leaders.”  We wrote about this in The Lawyer’s Role In China Business Transactions.
  • We are the only negotiating culture that believes that liability can be assigned in advance through a contract. This is one of the many aspects of international negotiation that has become “normal,” but it still strikes traditional Asian negotiators as crazy that Americans consider contracts binding even as the market environment changes. Asian negotiators in general, and Chinese in particular, feel that as the external situation evolves, so must a business relationship. Many Chinese partners have been bewildered and disappointed when their American partner stated waving a piece of paper in their face instead of responding fairly and maturely to new market realities.
  • Americans believe that negotiations end. To Chinese, the negotiation is part-and-parcel of the business relationship. As long as the counterparties are still engaged in business, the negotiation is supposed to continue. What’s the point of taking the time to build a connection if you aren’t going to grow the relationship through continuous give and take?
  • Americans want to decide everything in advance and put procedures ahead of human decisions. Chinese (and most other Asian) negotiators understand that conflict and differences of opinion are inevitable, and their business agreements usually assume that the leaders or concerned parties from each side will work things out informally. American contracts, with their penalty clauses and rigid requirements, are not only insulting and arbitrary, but seem designed to undermine any kind of positive relationship.
  • Americans love deadlines, timetables and schedules, even when there is no business rationale for them. They can be arbitrary and illogical.
  • Most disturbing of all, American negotiators are adversarial and rude. We insist on running everything and taking control of situations that we don’t understand. We are famous for coming to China and trying to sell inappropriate products or services at ridiculous prices. Our technology and designs are nice enough, but we expect people to pay over and over for the same thing – even after their people have figured out how to make the same thing.

According to Hupert, American companies should at least recognize that Chinese companies are “struggling just as hard as you are to successfully manage the yawning gap between your cultures.” Okay….

What do you think?

Twice in the last week, clients told me that their China sales had greatly increased in the last few months due to (not in spite of) China’s economic and other problems.  One of these companies sells a high end (but definitely not top of the line) home item.  The other sells industrial testing equipment. Both have been doing business with China for years.  Both are getting not only seeing increasing sales, but they both are getting all sorts of new (and real) offers to distribute their products.

Why?

I think it is because Chinese companies and consumers are starting to focus more on quality and value (defined as cost to quality/durability), as opposed to just price. I (and both of our clients) also think China’s new-found desire not to buy from Japan is also playing a major role.

Co-blogger Steve Dickinson recently wrote an article for Stratfor on how to negotiate with Chinese companies in which he talked of how our law firm’s China licensing practice has been growing at warp-speed:

We have been drafting an increasing number of contracts for foreign companies licensing their concept or technology for use in China. In the old days, this type of licensing was primarily in the industrial sector. These days, most of our work has been on licensing agreements in the services sector in China. Much of this licensing is for operations in China that are prohibited from direct participation by foreign companies, such as in publishing, media, telecom, insurance and finance.

I would add that our writing of all types of China licensing agreements has increased and this too I attribute to an increased desire of China buyers for American goods and services.

Needless to say, I am not the only one seeing this impressive uptick for American companies.  China negotiation expert Andrew Hupert (and author of an excellent book on Chinese negotiations) asserts in his post entitled, How I Learned to Stop Worrying and Love the Rocky Landing that “the bargaining position for US negotiators in China hasn’t been this strong in years”:

1. USA is the calm, steady safe haven again.    Remember back to 2008 when all the globo-pundits were talking about the end of the American Generation? The Asian Age? The China Generation? The Bo Dynasty? They were predicting riots and unrest in US cities as chaos forced anyone of means to flee for his life. We may have our issues, but we’re still standing. China, however, has been a little quick to hit the panic button. At least our rich kids keep their passports.

2. The China middle-class market is no longer a lock-out that you can’t touch. In the post-crash days, it was briefly cool for well-heeled Mainlanders to buy local – but as China Inc. stumbles, confidence is down and investment has dried up. Even if the trend shifts from ostentatious super-lux brands to low-profile value buying, Western labels are still the first choice.

3. Brands, brands, brands. In China, the low cost model has crapped out, and the SOEs are drowning in their own inventory. Climbing the tech ladder is a long, slow slog. Chinese companies from automakers to oil companies want to build or buy name brands that they can take global. Western names and know-how are in demand again.

4. A new wish list for China business owners – export markets and international presence. What’s old is what’s new as Chinese look for Western expertise to keep their economy churning. It’s not capital or manufacturing technology this time – branding, international sales and process R&D are the deal points that count.

5. You’re (relatively) rich again.The local flippers are pulling up stakes. Chinese who made money in real estate or from cheap labor are cashing out and heading for the exits. Banks are cutting back and international investors are getting nervous. The China Miracle is looking a little risky for the first time in recent memory. American expanders have traction again for the first time in half a decade. But this time, don’t play the sucker game of driving prices to the bottom – pay a fair price but find ways to push quality up.

What are you seeing out there?  Ignoring how China continues to step up its weeding out of any foreigner or foreign company that is not in China completely legally, are happy times for American companies really here again?

One of the best things about my blog “job” is that I am constantly getting asked by publishers to review new China books.  One of the worst things about my blog “job” is that I am constantly getting asked by publishers to review new China books.

I love reading books on China, especially good ones.  And I am now at the point that I turn down the review copy if I think the book is not worth my reading time.

But I hate hate hate writing the reviews.  I think it is because I never know really what to say beyond, “great book, read it if you are interested in ….”  Or maybe it is because my father is a retired English professor and I know there is no way any review I write could match those to which he has become accustomed from his multi-decade addiction to the New York Review of Books.

So I read the books and then delay the reviews.  Sometimes though my delays pay off when some other far more literate blogger reviews the book and then I can simply link over and say something like, “yeah, I read the book and I agree.”  That is what has spurred this post today. But I am going to take it even further and very briefly review all of the China books I have read and enjoyed in the last few months.

  • I start with an e-book written by my friend Andrew Hupert.  The book is entitled The Fragile Bridge: Conflict Management in Chinese Business and I am going to liberally borrow from G.E. Anderson’s blog post on it to describe it. Anderson describes it as providing practical advice on structuring agreements and contracts with Chinese businesses and as providing necessary “warning signs of future conflict.”  As Anderson so aptly puts it, many behaviors that come naturally to a Western businessperson are viewed as red flags by their Chinese counterparts, “and avoidance of these behaviors are a real key to setting up a partnership for success.”  Anderson goes so far as to say that if you are serious about doing business in China, you need this book.  Yeah, I read the book and I agree.
  • The next book, believe it or not, is a case book.  For those of you lucky enough never to have attended law school, a case book is essentially a law school text book.  Most case books are incredibly dry and are sold or tossed after the class ends. But “Doing Business in China: Problems, Cases and Materials,” by Daniel C.K. Chow and Anna M. Han could not be more different.  It is superb.  So superb, in fact, that when interviewed today by a reporter I listed it as one of the three best China books I had read in the last year.  So superb in fact, that when I asked an associate at my firm about what she thought of an expensive book we had purchased for her on Technology Transfer and Intellectual Property in China, she responded by saying that she had read the chapter in this book and found it “far superior.”  This is now the book I refer to young lawyers and law students who write seeking a book that will enable them to better understand Chinese law.
  • East Asian Labor and Employment Law, by Ronald C. Brown, is also a great law book.  Brown wrote the book, Understanding Labor and Employment Law in China, which already has a prominent place on my bookshelf and which I reviewed when it came out here. Professor Brown’s newest book deserves the same accolades as I gave his previous book but it is probably suited for a somewhat different audience. This book is less a hands “how-to” and more of an exploration and explanation of how globalization affects “lawyers, business, labor, labor unions, and human resource management and the labor issues that can arise in dealing with EA [East Asian] trade and investment.”  Its focus is on Japan, China and South Korea, but it makes for an excellent resource on how labor has become a global issue and the repercussions of that.
  •  When I first received The New Chinese Economy: Dynamic Transitions into the Future, by Elias C. Grivoyannis, I groaned.  It is, to put it mildly, a very dense and academic-looking book.  But once I started it, I could not put it down.  It is a collection of essays on China’s economy by various different China scholars and the essays range from good to great. Most of the writers appear to be Chinese nationals, but thankfully, the editing of the book was excellent so it feels as though all of the essays were written by native English speakers.  My favorites were “A Historical Background of China’s Economy and Lessons from Its Globalization, by Grivoyannis himself and “Understanding China’s Rising Saving Rate: The Role of Higher Education Reform,” by Binkai Chen and Rudai Yang.  The back jacket of the book accurately describes it as follows “a must-read for graduate and undergraduate students, academic and economic policy researchers, business professionals, and economic consultants with a vested interest [or any interest?] in the new and evolving economy of China.”
Whew.
So if you are looking for a good book, check out any one or more of the above.  Agreed?

 

My friend Andrew Hupert is going to be putting on a webinar entitled, “Chinese Negotiation for Westerners: Tactics and Counter Tactics.”  It is going to focus on the “right way” to negotiate in China. It will be on Friday, September 2, from 9:30 p.m. to 10:30 p.m., China time/9:30 a.m. to 10:30 a.m. United States Eastern Time. 

I have known Andrew for a long time and I can vouch for his knowing as much about negotiating with Chinese companies as any Westerner alive. 

Here’s Andrew’s bio from the webinar site:

Since 2003 he has been advising and coaching executives and managers in multinationals to improve their deal-making and negotiating skills with Chinese counter-parties. His corporate clients include Philips, Schneider/Clipsal and Keuhne + Nagel. He is an Adjunct Professor at New York University (Shanghai campus) and has also lectured at Strathclyde
University’s EMBA program.

Andrew first came to Asia in 1990 after receiving his MBA in International Finance from New York University Stern School of Management. He gained extensive senior sales and management experience with leading financial institutions in Taipei, Hong Kong, Kyoto and New York before settling in Shanghai as a consultant and lecturer. He has also published articles in business journals such as Shanghai Business Review and the China Economic Review, for which he writes a column on China-business strategy and negotiation.

It’s free and it’s going to be excellent. What more can you want? Go here to register. 

UPDATE: Andrew’s webinar is now on YouTube

Just read an interesting post on one of my favorite blogs. The blog is China Solved, written by my friend Andrew Hupert. I have known Andrew since forever and I have always found him to be one of the most thoughtful and rational China anaylsyts out there. Andrew is an adjunct business professor at NYU in Shanghai.

Anyway, the post is entitled, “Is Bad News Good Again?” [link no longer exists] and it was written by Jeff Coggshall, who handles China investments for Tiburon Partners, a UK-based fund management company. The post is about signs of recent slowing in China’s growth. Now as regular readers of this blog know, I am not a fan of long term economic predictions and I am not going to discuss that here.

Instead, I am going to focus on what Coggshall calls the medium-term and on that, Coggshall says he has no worries:

I personally don’t spend much time worrying about China’s medium-term growth prospects – mainly because many of China’s growth constraints are self-imposed (i.e. property market restrictions and other tightening measures). These can easily be rolled back, and on a 1-3 year timeframe I find it very hard to envisage a scenario in which Chinese policymakers are either unable or unwilling to underline growth at a “reasonably fast” level of – say, 7 or 8%.

Coggshall’s lack of medium-term worry really struck me.

In one camp, we have the China’s economy can and never will do anything wrong crowd. See, e.g., Jim Rogers). In the other camp, we have the China’s economy (and everything else) is on the verge of crashing crowd  See e.g., Gordon Chang or Nouriel Roubini.

Then something struck me again.

Roubini has been calling for a China crash landing [free subscription may be required] to happen in or soon after 2013:

“China is rife with overinvestment in physical capital, infrastructure and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns and brand-new aluminium smelters kept closed to prevent global prices from plunging.”

“Eventually, most likely after 2013, China will suffer a hard landing. All historical episodes of excessive investment – including East Asia in the 1990s – have ended with a financial crisis and/or a long period of slow growth.”

So here’s what I am thinking. I think Cogshall is right that China has enough tools to be able to keep its economy going for at least a few more years. Heck, even Dr. Gloom himself, Nouriel Roubini, seems to agree with that.

So is it pretty much a given that China’s economy will do fine until at least 2013? Does everyone agree we can relax until then? Can we all get along on this one China economy issue? What do you think?

If you are doing business in or with China, you have to check out ChinaSolved. It is operated by my friend Andrew Hupert, who also operates DiligenceChina, [link no longer exists] which is one of the best China business blogs. ChinaSolved is shaping up as a terrific resource on doing business in China. It is already chock-full of useful business advice.

Its article, “Ten Commandments for Westerners In China,” [link no longer exists] is typical of the site’s excellent and straightforward advice for foreign companies doing business in China. And I found myself agreeing with nine out of ten. Here goes:

  1. “Know what you don’t know” (for many westerners, this is by far the most difficult challenge.). Any similarities between China and “back home” are purely accidental. This is a completely different culture. Do not be fooled by surface similarities or by local people who “seem to get it.” Sources of reliable information are your #1 asset.
  2. China is still a communist country – and there is absolutely zero chance of that changing any time soon.
  3. You have to show up to win. You must be physically present and put in the “face time.” There is no “autopilot” in China business. If you feel that you are too busy to learn about China, then you are certainly too busy to be successful here.
  4. If things worked well here in China, then there would be significantly fewer opportunities for competent westerners. Try not to get too frustrated by the challenges you face.
  5. Time does not mean money here. Chinese business people do not believe in “opportunity cost.” Even simple negotiations can drag on for a long time. Avoid getting sucked into an endless cycle of meetings that don’t accomplish anything.
  6. Truth, honesty, good-will and long-term benefit are all culturally-specific concepts. Don’t expect your western standards to carry over here. Win-Win is not standard operating procedure here. Do not fool yourself that your long-term relationship with a local partner means anything.
  7. Don’t check your brains in at the border. You wouldn’t hand over your company’s money, intellectual property or trademarks to a virtual stranger in Sydney, London or San Francisco and expect to make a windfall. Don’t do it in China. The people that are offering to open doors for you are the same ones that can lock you out. Beware of people who peddle their “powerful friends and great connections.” They can use them to hurt you as well as help you.
  8. Due Diligence becomes more important when the language and systems are unclear, not less important. Don’t settle for the “least worst” deal or partner. Partners don’t get more honest and relationships don’t improve as the amount of money involved increases.
  9. China will still be here next year, and in 5 years. Don’t be pressured into signing a contract or making a deal because you are afraid of “missing the boat.” The boat has been here for 4,000+ years.
  10. Having a sense of humor helps. Having a Plan B helps even more.

I agree with all but number 6.  I understand why ChinaSolved felt it necessary to put it in here, but I think it is wrong.

Truth, honesty, good-will and long term benefit are not culturally specific concepts and long term relationships with local partners mean a lot. I think ChinaSolved felt the need to put this in here to make up for the common mistake of Westerners equating a week of good businesses meetings and friendly dinners in China with being set for life. All of us (China consultants, China accountants, and China lawyers alike) who represent Western companies that are doing business with China could fill a book with stories of China deals gone bad. So let us just take it as a given that Western companies constantly make the mistake of trusting too much, too soon.

But, I personally have also have seen enough to fill a book about excellent, mutually beneficial relationships between Chinese companies and Western companies.  And, at least as far as I know, every one of those successful long term relationships was based on trust and mutual long term benefit.

So I say we downsize to just nine commandments.

A management consultant on the ground in Shanghai who truly understands both Western and Chinese business practices is invaluable. Andrew Hupert fills this bill.

Andrew has spent more than twelve years living and working in China as a finance and management professional.  He came to Asia in 1990 after receiving his MBA in International Finance from New York University’s Leonard N. Stern School of Business.

Andrew has been living in Shanghai for the past four years, where he runs a sales training consultancy business focused on management, marketing and HR in China.  In addition to his consulting business, Andrew also publishes www.DiligenceChina.com [link no longer exists] to assist companies new to China or planning to start operations there and www.ChinaSolved.com, which focuses on applying international best business practices to existing China-based operations.  Andrew also frequently lectures on these same things for various Shanghai MBA programs.

On top of his extensive knowledge of China business practices, Andrew also has a deep knowledge of China’s stock markets (of which he is quite skeptical) and he is a great source of Shanghai information.  I always find meeting with Andrew to be both informative and interesting and I recommend him for marketing and HR help in China.