Did you know, in 2010 America was displaced as the number one manufacturing company in the world? (Forbes, 2014). Why? Why has manufacturing fallen in America from 30% in 2002, to 17.4% in 2012? (Forbes, 2014). I believe, the answer to this is simple. It saves companies money. Companies can keep cost an average 30-50% lower than competitors that do business in America. 30-50% is a huge savings when looking at the bottom line for your business. Try finding a comb in Wal-Mart that isn’t “Made in China”. You can’t, there isn’t one. It looks like trends are beginning to change and some businesses are coming back home but for now, what should you know about doing business in China?
For starters, to build a strong partnership, it’s a must to get to know their culture, traditions and holidays. During the Chinese New Year, which is one of the most important holidays in China, business can shut down for upwards of three weeks! Penn-Mar, the Organization I work for, once held a contract with Tesco cell phone components. Every February, we knew products would be back ordered because of this holiday and there was nothing we could do about it. Did you know it’s not polite to shake a businessman’s hand in China? It is much more important to begin with a bow and possibly a quick handshake. During meetings, you must dress formal and it’s a good idea to be more reserved rather than outgoing. Punctuality is a must, always be on time.
Business is China is a relationship and it’s imperative to also build very close communication. Unlike in America where business is mostly based on economics, the Chinese must trust you. Doing business with fellow countrymen is easy. A simple email or phone call is made and it’s understood what must be done. However, when doing business with another country you must make necessary follow-ups. After talking with your business partner, follow up with an email. The smallest detail error can make or break your product. Under communication is much easier to achieve than over communication. Follow-up, follow-up, follow-up!!!
The squeaky wheel gets the grease. It’s an old saying but also a true statement when working in China. As I said earlier, communication must be open and there needs to be an “all-in boots on the ground type approach” (Forbes, 2014). Manufactures must have at least three different sets of quality control staff working around the clock making sure products are up to snuff and what was said from one worker to another is being completed properly with nothing being lost in translation.
So you’ve made it, you’re doing business in China. Now, going back to an earlier statement, aren’t most companies starting to head elsewhere? This is true, new statistics being released show that by 2015, the cost of production in China will be a closer gap to America than ever before (bls.gov, 2014). The good news is that the China population is so large, just selling products in China will lead to huge profits. All in all, starting up business in China isn’t easy, with the right work ethic and time spent doing homework on the culture, business can thrive!
References:
Evans, Michael. (2014) Doing Business in China. Forbes.com/sites
Moran, R.T, Harris, P.R, Moran, S.V. (2011) Managing Cultural Differences Leadership Skills and Strategies for Working in a Global World. Oxford: Routledge
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