International Trade/Offshore Manufacturing/Sourcing/Export/Import/Consulting China: Overcome Cultural Barriers By Wen-Qiang Bian In discussions of international business on the eve of the 21st century, China is not a place to be overlooked, not withstanding its exciting possibilities and troublesome issues. As Chinese pride reached its peak with the July 1 handover of Hong Kong to the People's Republic of China, so did the awareness of China's business opportunities. Every day in the Middle Kingdom, skyscrapers are sprouting, business interactions evolving and people hustling. Planes from foreign countries to Chinese cities bring a phenomenal number of Western business travelers. In April 1997, an options exchange market maker from San Francisco at Portman Hotel in Shanghai started his conversation by describing the business dynamism pervading its corridors with the look of a child at a wondrous world, exclaiming, "This place is really cooking!" Still, with ample ingredients available, not everyone is going to be a good "cook." Just like the Volkswagen motor company winning the current round of the auto battle in China is being hailed, while the media has shown little interest in mentioning the fading out of dozens of tough losers such as the French auto maker Peugeot, stories of prominent multinational companies cashing in on successful China strategies are often accompanied by tone-down stories of those who lost. Entrepreneurs suffer, too. A Southern California-based European businessman (Mr. V), with a strong desire to succeed in the international marketplace, has been traveling throughout east Asia, mainly China, trying to put together large and ambitious business deals to fulfill his dream to "conquer China." However, after 10 years, he is still trying to put his first deal together: an instance of tenacity without proper awareness. For companies like Peugeot and individuals like Mr. V, China must be a frustrating place. One of the major reasons Western companies fail in China is a lack of understanding of the way Chinese people do things. According to Phil O'Connor, chairman of Coopers & Lybrand/Palmer Bellevue Corp. in Chicago, for example, "The biggest problem for an American firm wanting to do business in China is the cultural barrier." O'Connor's opinion is not unique. Hui-Hua Deng, the top trader at the China operation of Tomen Corp. (Japan's giant trading house), who recently inked a $50 million sales agreement with a prominent Shanghai real estate developer, describes the difficulty of making a trade deal with Japanese manufacturers nowadays. "I live in the tough squeeze of rigid Japanese and savvy Chinese." A little exaggeration, perhaps, but there is some truth in what he says. To be successful in an unfamiliar market like China means to cope well with the increasing complexity of the exotic business environment where people operate on a different mode of thinking. Even veterans in China business cannot simply use known methods employed successfully in the home market and take them for granted without expecting any adjustments. Practices that appear irrelevant to business deals themselves may become quite significant on many occasions. Take attitude toward foreign people, for example. In the past, Western businessmen were often arrogant when being in a less-developed foreign market, such as China. They held the colonial belief that people in less-developed countries should give up their own style and learn the principles that underlie Western capitalism and culture, like the desire of Mr. V to conquer China. Strength Is Growing But time changes. The strength of these less-developed countries is being amassed at an unprecedented rate and, at the same time, an increasing number of intelligent Western business professionals are realizing success because they have respected the perceived cultural difference. Many are "blending" and revising their strategies to adapt to the foreign situations, while explaining and teaching these strategies to their foreign partners. Western business people also should meld into the Chinese life. What may be first revised is the itinerary of a typical Western executive, which usually extends to airports, nice hotels and business meetings, and anything beyond seems to be irrelevant. This works well within the territory of the home culture because he lives in it and is fully aware of its dynamic. However, spending all the non-business hours in first class Western hotels and other such places may isolate yourself so that you cannot have a full taste of what is really going on there. Business is not only about economy, it is also about life, about how people live, work and play. Successful business decisions are arrived at not only from macro-economic figures and statistics, but also from keen insights into how such decisions will play with the people. Ultimately, what will earn you success are the people who pay you, not the charts that you pay for. Therefore, it can be surprisingly beneficial for those who are or will be responsible for China decisions to have the opportunity to spend some free time living around the people. Make some Chinese friends at all levels, not only with the so-called "movers and shakers." When going out with your Chinese partners or clients, forgo the limousines once in a while, take buses from time to time, look about, move around. Refrain from making quick judgments, wait and observe, for life can be a satisfactory opera when one takes time to uncover pleasurable rhythms in life's unfolding drama. The harder you listen, the more you hear. You can even, for a short period of time, live a Chinese life, in a Chinese family, and develop a Chinese mindset. Then comes the increasingly spoken fact of patience about doing business in China. When you cannot make a deal that you are desperate for, don't consider it too negatively - you have to be patient. There is an old Chinese saying, "It may be a fortune for an old race man to lose his horse." In that story, the lost horse later led a group of faster and stronger wild horses and ended up winning for the old man. When you feel like complaining like Mr. V - "There could be a thousand reasons that you miss a deal in China, but there is only one reason that you seize it. That is, when all the thousand reasons turn right for you." - you are probably not in a right mood. The aftermath of the failure may be a perfect time for you to relax and retrospect. There are many quick successes around such as Avon, P&G, Unilever, Coca-Cola, and PepsiCo. You just need to find the right way to realize yours. When you find it, you are lucky to be the race man. Overcoming Cultural Barriers Overcoming the cultural barrier is also a long journey. People are constantly molding and being molded by the culture. Therefore, one needs to maintain a learning and passionate spirit in order to stay on top of the often perplexing trends. Even a native Chinese could feel lost when he fails to do so. For example, I lived in Shanghai for 23 years before I spent my last five years in the U.S. During the first month of my first visit back home, I did not quite understand my friends, who I had known for more than 10 years. When you don't have the luxury to always stay in China, other people's updated experience can be insightful, so listen to the stories of other people who have been there, stay in touch with your friends there, read various sources of publications, and keep thinking. Successful examples of capitalizing on removing the cultural barriers are plenty, large corporations and individual businessmen alike. For a period of time, Ford Motor Co. was encouraging hundreds of executives to live a Japanese life. The return of this investment cannot be calculated in terms of its monetary return, but in terms of the quality improvement as a result of a deep understanding of the Japanese manufacturing management and the expansion of the Japanese auto market as a result of an acute comprehension of the Japanese market. Hershey hired a consulting company formed by two young Jewish Americans as a result of their traveling the everyday life of the Chinese people and finding out what can be potentially sold to them. Hershey benefitted from their marketing expertise of the Chinese market. Aside from the acknowledgment of the culturally divergent encounters, however, you still must know that human nature is the same on this Earth and there are far more similarities than discrepancies in the way people in different places conduct themselves. Finally, this fundamental concept perhaps should be used to justify the optimism of multinational corporations and entrepreneurs alike toward integrating China into the world market, as well as to celebrate their adventurous spirit when confronting an unfamiliar culture. When this article was first published, Wen-Qiang Bian was a partner with the American Pacific Trading Co. in Los Angeles and formerly worked in China. Advertise on this site Put your company on this site!