I once wrote an article on the nine keys to controlling legal costs and improving legal services and I wrote another article on the four essential principles of emerging market success. Co-blogger, Steve Dickinson, wrote an article on the five basics for reducing risk with China outsourcing. Three articles and the two of us could come up with only 18 commandments total.
So when ChinaSolved came out with its “Ten commandments for Westerners in China,” [link no longer exists] we had to post on it. Sinocidal then came out with its own post, entitled, “The Sinocidal Antithesis Commandments: 10 Commandments for Chinese Working with Westerners.” [link no longer exists] If your put your mouse on “Sinocidal” on our blogroll (to the right), you would see that we describe it as “Funny rants on China. Sometimes even informative,” and that is how I would describe its most ten commandments post. It is meant to be funny and it is, but underneath it all, it makes some valid points. How can you dispute a post that tells people to contact my law firm’s China lawyers for China legal assistance? This post is an excellent primer on what Western companies will find (not always) in dealing with Chinese companies.
Following up on its commandments to Chinese dealing with foreigners, Sinocidal came out with an additional ten commandments for Westerners dealing with China. Beyond being impressed with Sinocidal’s ability to gin out 20 commandments with seeming ease, this post certainly qualifies as “even informative.” I know the guy who wrote these posts for Sinocidal and though he enjoys having us believe he is an uncouth low-life, he is also quite knowledgeable about doing business in China and I have from time to time on this blog used information and advice he has given me.
In PG-13 form, this post’s ten commandments are as follows:
1. Know your ‘enemy’ well. Keep your friends close and your enemies closer still. Both phrases that come to mind when dealing with potential Chinese partners. A couple of good books to read on the plane The Art of War and When Yes means No’. Read them, understand them and remember them. A meeting with the Chinese is based on sound principles of feeling your enemy out, probing attacks, tactical withdrawals and counter attacks, all leading up to a ‘decisive’ thrust, from both parties, that at best will end up in stalemate. You’ll never win the war but you may end up with a non-aggression pact. Just think Korean peninsula and try to end up being the South.
2. China is a communist country and who are we to disagree. As a country, they’ve got far bigger problems than communism. Live with it, live in it and have fun . . . .
3. There was a saying we read many lunar events ago, well seven Spring Festivals ago to be exact. “It’s China’s a sand pit and if you want to play in it then learn to play by their rules.” This does not mean you follow their example on all occasions though: keep it legal and keep it above the table.
4. When you feel your ability to meet the China Challenge is diminishing, take a break. Do NOT keep beating your head against the Great Wall that is business in China. There is a reason Chinese take off for a month a year. Plan a trip to Australia for a week, or better yet, just take a 5 day cruise.
5. Time is one thing the Chinese have plenty of. The more time they spend in meetings the less actual work they have to do. Since they rarely make decisions in meetings with foreigners then get into the meeting, make your point and then invite them to lunch or dinner. Always try to schedule meetings for about 10.30 or 15.00 and use the other time for doing real work and planning, that way your meetings will be cut short for meals and it’ll save you having to spend hours drinking cheap tea. If you don’t smoke and don’t like smoke, make it clear to the Chinese that you’d prefer it if they didn’t smoke in the meetings as you find it distracting and uncomfortable. At meals times forget it ‘ smoking at the table is part of life here.
6. Truth, honesty, good-will and long-term benefit are all culturally-specific concepts that do not apply in relationships between Western and Chinese companies. You’re not Chinese and they couldn’t give a toss about you. Forget trying to build up this “guangxi” you’ve heard about, you’ll never do it. Win-Win is not something the Chinese understand; it’s just the name of a Panda in the Chengdu zoo. The Chinese prefer “we Win more you Win less.” Be prepared and make sure that YOU win more.
7. Check your brains in at the border, pal. If you don’t, the minute the money starts draining away and your intellectual property starts turning up on every market stall, you will go nuts. Every single person here will claim to have great connections and offer to open doors for you, but when it comes down to it they’ll be nowhere to be . . . seen.
8. Due diligence is the most important part of preparing to do business in China. Your potential Chinese partner more than likely has no idea what they’re doing because if they did they wouldn’t need or even want to be your partner. Assume you’re about to be shafted . . . . and prepare for the worst. The concepts of “giving them the benefit of the doubt,” “competent until proven useless” or “innocent until proven guilty” are best forgotten and your best move is to be open-minded but prepared to walk away. 9 times out of 10 you will get screwed so shop clever.
9. China will be here for a long time and it’s a big (although very uneven) playing field. Remember the old adage of “history repeats itself” (sometimes) and look back at Chinese history. This place could yet fall to pieces at any time. Not only has the boat not sailed, it’s barely even floating yet. When in negotiations, remember to mention that you’re also looking at setting up in India or Vietnam. India especially has a more stable background and is the worlds largest democracy. The Chinese love to play the numbers game and love to be the world’s best or biggest – goad them into being the world’s largest democracy.
10. Having a sense of humor is absolutely pointless. You will drive yourself insane coming up with interesting and amusing uses of Chinese language only to be met with blank looks. And when things go tits up because of some clueless idiot, you will find that you are the only one laughing.
I agree with all of these commandments, at least partially. Here goes:
“Knowledge is power.”
True about China and I buy into that philosophy generally.
Absolutely. I have had clients argue with me about the irrationality of China’s laws as though convincing me that China’s laws are irrational means they will not need to follow them. For the record, China’s laws are often irrational and if you want to pay by the hour to have us help defend you in a China criminal trial, just let me know.
Certainly one need not go all the way to Australia for a break. Macau, HK, Tokyo, Bangkok, and Hanoi are plenty nice and a lot closer.
Yes. fortunately, not a single China lawyer with whom we typically work (and this is true throughout China) smokes.
I completely agree on the Guanxi point and I have said this many times previously. Co-blogger/China attorney Steve Dickinson has spent the last 30 years of his life intimately involved with China. He lives in China. He speaks absolutely flawless Chinese, and he knows Chinese history, modern and ancient literature, music, and philosophy better than just about anyone in China. Yet he unhesitatingly admits that because he is not Chinese he will never be able to do Guanxi like a native. Do you really think you can just because you read one book?
I have written on this previously as well. I said something along the lines of the more someone boasts of their connections, the faster you should run away from them. Everyone who does much business in China knows this.
I am always saying “trust yet verify” when doing business in any country. There is no excuse for acting otherwise. Some would say it should be “do not trust, yet verify,” but I think my version (stolen from Ronald Reagan) is really the same, just more optimistic.
Very true. Or, as co-blogger, Steve Dickinson, has told our clients and potential clients on more than one occasion: “based on what you know about the company with whom you are proposing to do business and based on the agreement they want you to sign, I think you would be better off taking all of the money you were going to put into this deal and going to Macau, sitting down at a roulette table and putting it all on black. Your chances of making any money will be much better and you will (at least for a short time) have more fun doing it.”
Humor is important and should not be abandoned.
This ten commandment thing has real legs and the following blogs have also done something with it:
- Mike Smock of TwoScenarios Blog says he “was selling engineered piping systems to the Chinese back in the late 80’s” and could have used ChinaSolved’s ten commandments back then and goes on to say he agrees “with every one of them.”
- Paul Woodward of the Asia Business Media Blog who refers to my original post and says he agrees with my take on ChinaSolved’s commandments.
- SwizStick at 3PL Wire Blog [link no longer exists] who says the commandments ares “simple, to the point, and highly relevant.”
- Jerome Cole at Fried Lice Blog [link no longer exists], who adds ten more commandments for Chinese doing business with Westerners, including one of my favorites: “Do not attack dial. If I do not answer my mobile phone, I have a good reason. Calling five or ten times in a row is stupid and annoying. Calling once is enough. After you have called once, your mobile number has been recorded in my missed calls list. I really will call you back.” This one also applies to my 16 year old daughter.
- Bill Belew at PanAsiaBiz, who feels Moses would be proud of ChinaSolved’s original ten.