Let’s assume that you suddenly get an urge to open a factory in China. It
happens to almost everyone, doesn’t it?
You get hold of a Chinese partner who has connections from here to Shanghai, you retain a sophisticated lawyer who will prepare a water tight contract, you pull out the check book and all will be hunky dory.
So that’s all there is to it, is it not? Well, not really.
This is China that we are talking about, and nothing is as simple as it sounds.
Doing business in China, even more so opening up a factory there, is a totally different matter from doing Western style business. It is essential to get to know the business and social codes of this country, where almost everything is opposed to what we know here in the West.
Following are a number of tips from Shai Givon, the VP of LycoRed, who recently set up a huge factory in ChinaFor the production of natural food supplements:
Tip #1 : Assistance from the Chinese? – yes indeed, A Chinese partner – No way! Experience teaches that it is actually not worthwhile to take on a Chinese partner.
Tip #2 : Progress in the Chinese manner and at the Chinese tempo. It would be desirable to use the services of a local Chinaman to assist us with the local codes of conduct.
Tip #3 : Do the groundwork well and find the most suitable geographical region to do business in.
Tip #4 : The spoken word holds more water than the written word and an ironclad contract does not necessarily constitute an insurance policy in China.
Tip #5 : Personal friendship and commitment are vital factors in the Chinese world of business and could have critical significance.
Tip #6 : The Communist Party still has a say when doing business with China, mainly among high ranking officials. Pay your respects to the Party!
Tip #7 : There is very high quality local manpower in China and it is worthwhile putting in a effort to recruit a workforce from this pool.
Tip #8 : This is not by chance the eighth tip, because 8 is the Chinese lucky number and is used at every opportunity so that matters are sorted out without having to perform aerial somersaults.
Tip #9 : It may be hard to believe, but a contract is not a contract in China unless it is signed in black ink and with a fountain pen. Buy yourself such a pen at the stationery store.
Tip #10 : Start working on your drinking habits. Drinking alcohol, and in commercial quantities will assists in bridging many gaps.
Tip #11 : The rubber stamp is a crucial element in the Chinese world of business. The keeper of the stamp can do whatever he wants in the company.
And now, equipped with this information, you can drink a toast with the Party representative, undertake verbally but sign with a black ink fountain pen, on condition that this is done on August 8, at precisely 08:08 in the morning