Doing Business the Chinese Way

By Ken Gassman

Besides the caution trust no one businesspeople attempting to stake a claim in China's potential should be aware of several other differences many of which are foreign concepts to Westerners.

w  China will never accept America’s concept of human rights,” stated Premier Li Peng a decade ago. Despite repeated attempts by human rights groups and pressure by major U.S. retailers such as Wal-Mart, Gap, and others, working conditions in China are not like working conditions in America. The key question is this: should we judge China’s business climate through Western eyes?

w  Someone wins and someone loses. In China, the concept of a win-win situation simply does not exist. Contracts are not a guarantee of anything. If the Chinese want something, they will find a way to skirt rules, laws, and contracts.

w  Outright lying is OK for the Chinese, but not for anyone else. Chinese negotiators have no qualms about lying. For them, the outcome is far more important than the negotiations. How they get to the “bottom line” is inconsequential; the fact that they get the bottom-line profits is the name of the game. McGreggor, in his book, says “The sad fact is that the Chinese system today is almost incompatible with honesty.”

w  At the grassroots level, bribery is usually the only way to move a project ahead. This is unlawful for Western firms. Most Westerners who do business in China choose agents and consultants to obtain licenses and approvals, but don’t ask those agents how they received those approvals.

w  Chinese negotiators love to pit foreign business people against each other. Let the foreigners fight; when they are tired, we will take the spoils of war, say the Chinese.

w  The Chinese government is almost no help in putting business deals together. Government entities are more interested in cultural proclivities than the details of a practical business agreement. Bow to the government leaders, but get the real deal from Chinese entrepreneurs.

w  The Chinese government usually isn’t interested in forging genuine partnerships. It simply wants a vehicle to gain access to foreign technology, capital, and know-how while retaining Chinese control of the venture.

w  The American business executive’s typical business personality – confident, direct, vocal, candid – does not work in China. Expect the Chinese to speak in parables.

w  Despite its sheer size, China is not one market. Rather, it is a collection of many regional markets, each with its own practices, needs, wants, traditions, and ways of doing business.

w  Finally, because China is chaotic and complex, it requires business people to assert a more dictatorial management style with little room for discussion or democracy. That’s the Chinese way.