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New China Hands

Is it Still Worth it to Do Business in China? (Part 1)

Guanxi-building gifts, premium pricing for prestige brands, and closely guarded trade secrets used to be the hallmarks of a savvy international management team in China – now they are prosecutable offenses.   

Glaxo SmithKline.  Mercedes Benz.  Yum.  McDonalds.  The list of Fortune 100 MNCs getting into high-profile legal trouble in China has been growing – and the

10 China Negotiating Mistakes - Buy the eBook on Kindle
Learn from the expensive mistakes of expats who have come before you.

severity of problems growing more intense than ever.  With the conviction of a well-known Western consultant and the widespread deployment of China’s Anti Monopoly Law, even the most die-hard Chinapologists are having a hard time arguing that international firms are getting fair treatment from Beijing.  In the past the biggest problem facing Western managers and negotiators in China was the lack of consistent laws – now the problem is too much law and uneven enforcement.

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Negotiating with (Reluctantly) First-World Chinese Managers (Part 2)

How to do business with Chinese managers who are still in denial about their changing role in the world.

10 China Negotiating Mistakes - Buy the eBook on Kindle
Learn from the expensive mistakes of expat negotiators who have come before you…

Forget the Financial Times headlines about China’s rising international clout, and super-lux marketing campaigns targeting elite buyers in Beijing and Shanghai.  Chinese media is still carrying the Party line about China as the struggling developing market – and your Chinese negotiating counterparty believes it to some degree.  When approaching a Chinese negotiation, you have to take into account the conflicting roles that Chinese managers are grappling with.  On the one hand they are brought up to see the Chinese Nation as  perennial victim of foreign aggression, but they are also confident about their growing economic power.

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China’s First World Problems – and the International Negotiator (Part 1)

Doing business with China as an emerged market

10 China Negotiating Mistakes - Buy the eBook on Kindle

This month China had to finally put aside its own closely held claims that it is an emerging market. Since Deng Xiaoping steered the country onto the road of “free market with Chinese Characteristics” in 1978, Chinese leaders and economists have characterized the PRC as a developing nation that deserved special treatment. Beijing’s “soft power” foreign policy hearkened back to the  non-aligned movement of the Cold War, always stressing that China was – at heart – still a peace-loving revolutionary “down with the struggle” of oppressed nations everywhere. The steady drumbeat of Chinese propagandists and negotiators alike was that China was big, poor, and struggling – and should not be judged by the pockets of wealth in a few coastal cities.

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How Involved Should You Be in China Business? (An unscientific quiz)

Doing business in China was once characterized by low costs, steep learning curves and a lack of best practices.  No more.  Nowadays, China is expensive in terms of funds, personnel AND opportunity cost.  Still, if your business requires a global marketing footprint or relies on supply-chain efficiency, you may need to have some kind of China presence.

Here is a quick & easy quiz to gauge your China involvement.  (An excerpt from the online course “10 Common China Negotiating Mistakes“)

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Are International Managers in China Ready for the New Middle Class?

The service sector is the key to understanding the New Chinese Consumption Model

On Tues I attended a panel discussion at the Asia Society in NY  titled Doing Business in Asia: 2014 and Beyond where five experts shared their thoughts on direction of the business environment in Learn to negotiate in China with China SooveAsia. You can get details and see a webcast here. The 5 experts, including Quartz’s Gwynn Guilford and the Harvard Kennedy School’s Edward Cunningham  laid out their views on the future of Asia with a focus on China.

The five big takeaways:

1. The big story is the growth of the middle class – carrying with it the promise of new prosperity and the threat of greater environmental strains.
2. GDP in China will fall significantly. Although admittedly not economic experts, the panel mostly predicted that China’s economic growth would be somewhere around 5% YOY in the near future — or roughly 30% off official projections. China is shifting from an investment based to consumption based economic model.
3. Pollution will continue to be a major problem.
4. The demand for new health care is rising dramatically.
5. Chinese industry is becoming less competitive as wages rise and the cost of inputs continues to trend upwards. The new middle class is going to be big users and providers of services.

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The ChinaSolved Newsreader List

Here is the list of sources I load into my China newsreader (I have used Feedly.com ever since Google cut their G-Reader).  I’m shooting for a comprehensive list of business sources that are good for a daily 15 – 30 minute scan.  If I’ve overlooked any, please let me know:

China Business Intelligence Sources Basic (news, finance & business)

ChinaSolved Blog   http://chinasolved.com/news-articles/

Want China Times  (Knowing China through Taiwan)  http://www.wantchinatimes.com/

Caixin http://english.caixin.com/

China Business Review  (The US-China Business Council)

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Don’t Build on a Weak Foundation – Chinese Negotiation Training Topics

ChinaSolved’s Least Wanted List #2 – Failing to Negotiate with Your Own HQ

China management behaviors you need to eliminate # 2.  Building on a Weak Foundation

Sign up for the ChinaSolved newsletterYour most important China negotiation takes place in your own HQ.  Unless your Board and bosses are 100% committed to the China business, you will spend too much time explaining and reassuring your own people.  Your Chinese negotiating counter-parties will sense it – and take advantage of your weakness.   And if you are the main engineer behind the China operation, then you have to make certain that your plan is the guts of the machine – and not just window-dressing prettying up a Chinese operation.

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Chinese Negotiation – Email and Online Platforms

How to Negotiate with Chinese using email and online platforms. Strategies for email and online negotiation with Chinese counter-parties. Chinese negotiators value relationships more highly than Western negotiators do, which presents a unique set of challenges when deals are being discussed long distance.
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Negotiating Online with Chinese Counterparts (Part 2 of 3)

How to negotiate online with Chinese clients, partners and suppliers – Part 2

Sign up for the ChinaSolved newsletterChinese negotiation often requires Americans to engage in long distance, online and email communication.  These methods can work just fine – but the rules of distance negotiation are different from face-to-face communicating.  How do you build relationships online?  Let’s finish the list of challenges westerners face when negotiating with Chinese counterparties online.  Click here for Part 1.

6. IP Theft Phishing, spoofing and other security breaches.  By now we all know about the need for security and the dangers of hacking and intellectual property theft.  Without pointing fingers or attacking anyone’s character, let’s just say that savvy international businessmen are extra careful about their intellectual property and technology in China.  Unfortunately, email and online platforms are the media through which networks get compromised.  It doesn’t matter how much you trust your direct counterparty – you have to worry about everyone else that he (or his network) share information with.

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Negotiating Online with Chinese Counterparts

Negotiating with China via email and online platforms brings unique challenges

Whether you are based in New York, Shanghai or Frankfort, you are probably conducting much Sign up for the ChinaSolved newsletterof your negotiation online – particularly email, but also via SMS, fax, video-chat, and conference calls. Technology is supposed to shorten distance and enhance communication – but more than a few frustrated purchasing managers and entrepreneurs have good reason to think that the opposite is true. Online negotiation often seems the most direct route to misunderstanding and conflict.

Noamn Ebner, Assistant Professor & Online Program Chair at Creighton University School of Law has just written an interesting paper titled Negotiation Via (the New) Email. Here’s a link to his fascinating, though somewhat academic article.  He focuses on eight elements of email communication:

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