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Learning Chinese Business Practices

englishbusiness (9 posts) • 0

Hey everyone I was just wondering if there was any school (or anyone one) that teaches "Doing business in China" more or less. I am just wanting to know about marketing and selling to the Chinese and how businesses are set up (the process) and things like this. I speak Chinese at an intermediate level so I might be able to do an all Chinese class but I would also like to know about foreigners experiences setting up businesses here. I am not interested in setting up a business in Kunming but another city in China. Thanks in advance for any information you can share with me.

tigertiger - moderator (5085 posts) • +3

Apart from the academic exercise, such a course, if it existed, would be of little use in setting up a business.
There are the laws, as stated, and the laws as exercised. The basic laws are easy to find online, but local practice, consult crystal ball for outsiders. These vary from city to city. The experiences learned in Kunming are not automatically transferable. A lot of the time it is more about who you know, than what you know.
Unless you are born, or marry, into a Chinese business family it is not easy and it is never straightforward.

goldie122 (645 posts) • 0

I agree with everything tiger said except the last sentence.

It is not very difficult as long as you are "extra friendly" to the right people.

englishbusiness (9 posts) • 0

Thanks you guys for the feed back. I realize now that what I meant was more along the lines of how to market and sell to Chinese people than it is to set up a local business. I am thinking more like negotiating business deals with factory ownership or online/social media marketing with Chinese people. But it's good to know about the obstacles faced by foreigners setting up local businesses. Anyway if anyone has gone to a class at Yunda or somewhere else that they feel like has been helpful with their business vernacular and has shed some light on acquiring customers in China that is exactly what I'm looking for.

michael2015 (676 posts) • 0

@englishbusiness
This is merely my own opinion.

It sounds as though you are unfamiliar with the business environment in China, much less Yunnan (how you managed to navigate to this website would be an interesting discussion).

My advice is to enroll in some post-graduate certificate level training courses for business executives and management - preferably english speaking.

The goal is NOT to enhance your business acumen, although that may be a beneficial side-effect, but to make connections with various entrepreneurial individuals and groups of individuals of like minds, to form a team. As you don't know anyone - this is still a shotgun marketing ploy - but at least you'd be fishing in the right pond.

Team members should demonstrate both technical (hard skills) and soft skills that match and complement the business' needs, as it begins, grows, and matures, assuming you're trying to start something with a long-term sustainable vision in mind.

You should naturally expect that as your business launches, grows and or expands, partners, employees, etc would want to go their own way - perhaps even compete, etc - so be prepared for those events and perhaps even encourage innovation and entrepreneuring, so you can channel those kinds of energies so they're more cooperative in nature, as opposed to destructively competitive (taiji).

As the capital of this province, Kunming has many such continuing education certificates and classes for new and entrenched executives, seeking to sustain and or enhance their business battle skills and positions.

If you have the money - enroll in EMBA or week-long executive level certificate programs (not inexpensive). Expand your circles of influence and opportunities.

The Dudeson's (1106 posts) • 0

My buddy told me while working for the EUCC in Beijing, that the unofficial policy for investor recommendation is, NEVER DO BUSINESS IN CHINA.

According to him, he says, they recommend to look into other markets, such as Vietnam, India, Brazil, and Myanmar.

And from my own experience of 5 different forced partnerships and co-operations, who got sabotaged, ruined or just straight stolen, I can only emphasize it.

p.s. I am not talking about opening a food shop, diner or mixian place.
I mean production lines, educations, consulting and design businesses in mid-level. Too big to operate alone as foreign entity, and too small for multi-national corporations.

From what I hear, India is the sh*t, these day. Corruption is cheaper there and actual laws to stick with, you can even win a lawsuit against a local....sounds like luxury to me.

The Dudeson's (1106 posts) • +1

Let me say it differently, unless you like gambling or high risk investments, it doesn't matter if you know Chinese business manners and practices, or not.

It is all in the hands of your potential partners.

The potential partner, will display his options and judge you not by the business etiquette but what he or she can use against you, to his advantage.

If you are LUCKY and he is pleased and he personally likes you and you plan, he may cooperate and you have a long and prosperous future, until he doesn't need you anymore and drop you, as you have no real power to win against him in a court. So he can act as he pleases.

Keep him happy!

If you give him a hongbao or not, if you invite an official to a banquette, or not, is not up to your try or effort but how much that person feels, thinks of you, or can benefit from you.

If you are a well planned strategist-business planner, China has too many variables and potential obstacles and risk factors. Even if you have a fantastic product, location is great, distribution network is tip-top, quality is amazing and marketing and sales is top (=an USUALLY fail-safe business plan) the chance to fail is still 50% in China (maybe even higher).

That is why many companies, even the top brands are seriously considering moving away from China,

plus a whole bunch of other major problems.

In terms of business etiquette, I saw loads of owners doing everything right, by Chinese business standards, but they still got axed, or didn't get the bid and that is the more upbeat options, as I said, I have seen my contracts been flushed down the toilet and lawyers telling me, that to win the lawyer battles I don't have the connections or budget.

So as Tiger Tiger stated. Set up a company in the family, get investments from the family as well as any other NEEDS for setting up the business. It's still a high risk by international standards, but much lower, as family is tighter than outsiders.

Usually families have a few rich uncles and aunts trying to evade taxes by investing in start ups and new business ventures.

The Scouser (41 posts) • +2

Myanmar?

Are you sure?
You need cadets to get things from one region of the country to another which involve 13 pages of A4.

Any tooling, moulding or equipment has to be done in China and then sent back to Myanmar.

Equipment, same, all from China.

Then you have to get documents from China/ Thailand because so many things made in Myanmar can not be imported to The EU. So why anyone associated with the EU would recommend business in Myanmar is confusing.

Also it's cheaper and quicker to send any goods from Myanmar via

China than from Rangoon port. Goods to Myanmar come from Thailand/ China overland, making a reputable shipping merchant difficult if not impossible to come by when you want to export.

FT rated Myanmar close to bottom in their ease of Business ratings a year or two ago.

I don't know who your friend is but Myanmar doesn't sound like the solution. If you can't do what you intend to do in China then I can't imagine you having more luck in Myanmar.

Did you mean Malaysia?

The Dudeson's (1106 posts) • 0

@scouser
No, I am not sure.

But it sounds like you are putting it all on one product.

I think he put Myanmar there as an emerging market and as he put Myanmar at the very bottom of the list [there were still 4 more,- depending on the goods you want to produce], I'd say he is on the same page with you.

According to him, the government is welcoming businesses and breaking their legs to get investments, as it means stability in the long run.

Of course it is an ex-socialist country and thus the paper works is tremendous, as is in China.

When I tried to start my fabrics production line, the government bloke in charge of liaison (in Guangzhou) told me that it would take me about a year to get all my paper work ready, and the amount of stuff we had to prepare, for using organic dye, was more than 13 pages.

The biggest issue, in Myanmar is not bureaucracy but stability.
Anyway it is on the list of emerging markets. EU regulations you can go around, for example assembly in another country. And we did the numbers, producing in Thailand, Vietnam, Myanmar or Sri Lanka, including, shipping, E.U. standards of safety and environmental friendly production, red envelopes, shipping it to HK for print and assembly, it was still cheaper than producing in a run-down, wastewater flushing craphole of a factory, where workers breath in fumes all day long and the quality is still below standard.

It shows how serious he was about China's policies to suck foreign companies and investments dry and using shady business practices, whilst still complaining that foreign investors and politicians are not exactly ecstatic when it comes to their failed business-graves in China.

Anyway, I just think that China is too risky without any securities for companies. You have to give up all your secrets and technology, your contracts don't mean anything, IP does only exists for Chinese gov.-firms, and no state of law.
So in short you cannot win in China.

India is the way to go, especially if you have some IP, that is important to your production and state of the art goods.

The Dudeson's (1106 posts) • 0

So business etiquette and practices don't matter much. We talked to potential partners who like western honesty and direct approach and we met customers, who were all traditional.

It's your gut feeling what will succeed in the end.

@OP
I would say hang out with a nice economics professor or student from a good University and treat them for nice meals and meetings. I did that once and I got some really good advice and ideas, one student even helped me to meet potential investors.

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