Cry Me A Red River: 5 Lessons We Can Learn From Rio Tintos Misery

I don’t know much about the Rio Tinto case, nor the specifics of the laws, regulations or personalities involved. But after working with international negotiations in China for more than a few years, I know these five things:

    1. Rio Tinto’s local Chinese consultants and advisors kept saying, “This Is China. It’s expected to do business this way.”
    2. Then they said, “Don’t worry about it. Mr. XYZ has guanxi with that department/bureau.
    3. After that they said, “Everyone does it. No one worries about that law.”
    4. They didn’t say, “The Chinese government values information MUCH differently than you do.
    5. Payback is a bitch.

So let us learn from the lesson another has paid for: The true price of intellectual property in China can actually be quite high – especially if it’s THEIRS.

Just because China has lax IP protection and lots of pirating, many Westerners fall victim to the misguided notion that China doesn’t value intellectual property. They value it plenty, but they don’t like paying for it – and they bloody well hate sharing it with you.

Note to the newbies: When we Old Hands talk about learning the business culture of China, WE AREN’T TALKING ABOUT THE DAMNED TWO-HANDED BUSINESS CARD PASS. That’s not the business culture of China. Rio Tinto’s top management clearing their schedule for a month to put out a fire that they helped to feed over a deal they didn’t do — yeah, that’s what we’re all going on and on about.

I hope we all learned something from this. Thank you.


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