Doing Business With Mainland China (Part II)

• Today, a new generation of professionally-minded and often Western-trained family members are now taking over by inheritance business control and leadership. They are at a crossroads - traditional Chinese practices versus Western business practices that often clash;

• Of all the developing countries, PROC attracts the biggest number of foreign direct investments with an average annual increase of more than 15 percent per year. More than 300 of the 500 mentioned in Fortune magazine have already operations in Mainland China, to mention some of the big companies - Volkswagen, General Motors and Motorola. In Shanghai with 17 million people foreign investments rose to 16,000 in 1996 from 300 in 1990;

• Chinese have great pride in their country's history especially their past achievements. They do not like criticism especially those directed at government's political policies;

• In their business dealings, many Chinese still adhere to the concept of "guanxi" which has its origin in ancient Chinese social customs. Simply, this principle says that when called upon by family members, friends and associate (and so on) for help, extend support. It is using 'connections' that are defined by reciprocity, trust, mutual obligation, personal concern or a sense of goodwill - in times of need. It is a kind of informal networking;

• Usually the common Chinese greetings are a nod or a slight bow. Handshaking is also practiced but wait for the Chinese to extend a hand first;

• If the Chinese host gives a dinner or a banquet, one should reciprocate. Gifts from a company to a Chinese company should be presented to the acknowledged leader of the Chinese delegation. High-quality pens are gifts appreciated by the Chinese. Never give as gifts to a Chinese clocks and handkerchiefs as these are associated with funerals and symbolize sadness;

• Chinese are skilled and hard negotiators but they rarely have the authority to make decisions as they have to consult their superiors. It is advisable for foreigners to bring their own interpreters along in business meetings;

• Chinese do not like pointing with one finger. Rather, point with your open hand. The thumbs up signal to mean OK is acceptable to the Chinese;

• So often said that the Chinese practice the soft sell and the hard buy. They have extraordinary patience for long, repetitive and detailed discussions and questions;

• The slump of the IT demand worldwide has not adversely affected China like South Korea, Malaysia, Singapore and the Philippines because of its robust domestic market. The electronic exports of Singapore and Malaysia make up 60 percent of their exports. In the Philippines, our electronic exports make up over 70 percent of our exports. In China, IT constitutes only 10 to 15 percent of its total exports;

• Today, China is being touted as the next tech superpower. Chinese universities are now graduating from 20,000 to 40,000 computer graduates every year. Undoubtedly too, China has the best infrastructure and Internet access among the other developing countries; and

• On the health side, China consumes 1/3 of the world's cigarettes. Believe it or not, 2/3 of its male population smoke.

Hopefully, this article will be informative to our exporters and other businessmen who are challenged to do business with Mainland China.

Have a joyful day!