Understanding China. Ben Newman Beijing Consulting Group

Transcription

1 Understanding China Ben Newman Beijing Consulting Group

2 Understanding China Introduction China in Numbers Doing Business in China Culture in Business (Business in Culture)

3 China: Interesting Facts China produces 66% of the world's garlic. 400 different varieties of kiwi fruit in China (used for over 700 years) KFC first translated its advertising slogan "finger lickin' good" into Chinese, it came out as "eat your fingers off". 35 children are born every minute in China. About 700,000 engineers graduate annually 42,000 characters in Chinese language. An adult is only expected to know 5,000 of them.

4 Ost trifft West 刘杨 Yang Liu Graphic Designer Born in Beijing, Moved to Germany in I am very German in my approach to work. But when it comes to emotional decisions and human interaction, I am more Chinese.

5 Cultural Impressions

6 Me

7 Lifestyle 7

8 Daily Meals

9 Transport

10 Children

11 Queues 11

12 Parties 12

13 In a Restaurant 13

14 Travelling

15 China in Numbers

16 500,000,000 lifted out of poverty since BILLION consumers by 2030 as urbanisation continues

17 Changing of the Times Workshop of the World

18 Economic Transition Planned Economy Closed Economy Rural Market Economy Open Economy Urban

19 China s ODI Source:

20 FDI in China 7 Strategic Industries Energy conservation and environmental protection Next generation IT China Inward FDI (2014) 11% Biotechnology High-end equipment manufacturing New energy New materials Clean energy vehicles 33% 56% Services Manufacturing Other

21 Overseas Companies INDUSTRIES FDI GROWTH 2011 FDI TREND Joint Ventures PREFERRED TO TRANSFER TECHNOLOGY & KNOWLEDGE Moving Inland Or To Remote Locations 1,200 R&D Centres set up in China by Foreign Companies Construction OF OFFICES IN CHINA DIFFICULT TO ATTRACT & RETAIN STAFF IN 2ND & 3RD TIER CITIES STRONG INFLUX OF Foreign Experts TO DRIVE QUALITY, SAFETY AND PRODUCTIVITY Changing Face of EXPATRIATES MORE LOCAL HIRES SINGLES NATIONALISING OF MANAGERS

22 Overseas Companies CONSTANTLY Changing Regulations, LICENCING & LEGAL ENVIRONMENT INCREASED STRENGTH &THREAT OF Chinese COMPETITORS HEALTH RISKS POLLUTION PANDEMICS Food Safety Lack OF INTELLECTUAL PROPERTY PROTECTION HIGH INFLATION, RISING LABOUR & Raw Material COSTS

23 Doing Business in China

24 Numbers vs. Reality If Only Every Chinese Person Bought One Bottle of My Beer China is not ONE big market Sum of many mini-markets (geography, language, social background, finances and culture).

25 China: One Country? 4 Municipalities 23 Provinces & Municipilaties 5 Autonomous Regions 2 Special Administrative Regions (SAR)

26 China: One Country? North East China (3 provinces) West China (13 provinces) Central China (6 provinces) East China (10 provinces)

27 Business in China: Opportunities Growing Urbanization and Mobility Wealth Consumer Sophistication Use of Internet Services Sector

28 Challenges [Source: CBBC, Leeds University, UKTI]

29 Challenges With time and patience the mulberry leaf becomes a silk gown. - Chinese proverb

30 Challenges Unfamiliarity Operating Practices Intense Competition Scale/Pace of Change Different Cost base Steep Learning Curve - Unforgiving Regulations/Bureaucracy

31 Business in China: Success Factors Strategic Plan Decide Entry Strategy Understand Government Prepare for Culture Gap Importance of relationships NOT contracts Understand legal system and IPR Find the right local partner Be flexible and adapt Expect delayed pay-off

32 Culture in Business (Business in Culture)

33 Punctuality 33

34 Contacts 34

35 Annoyance 35

36 Opinions 36

37 Solving Problems 37

38 The Boss 38

39 Chinese Culture Influences History Women Elders Language Education Confucius Family Zhongguo Patriotism

40 Chinese Culture Behaviours Patience Group Hierarchy Guanxi Modesty Decisions Bonding Face Contracts

41 Chinese View: Overseas Staff Equality Safety Systematic Individualism Rigid Superior Too honest Too much concern for environment and safety Good at planning and filing Family before work Poor reaction to change Lack of trust

42 Common Mistakes Interpreter Ill-prepared Focus on protocols and not matter at hand Believe words at face value Over-reliance on guanxi No person-to-person links Losing temper

43 Rules & Relationships Universal and clear Binding and detailed contract Focus on fairness Not universal and often unclear Contract can be changed Focus on relationships

44 Rules & Relationships How can I trust the Chinese? They always help their friends How can I trust Westerners? They don t even help their friends

45 关系 Guanxi What is it? 2 Way Street Built Over Time Not Free or Unlimited Important? Comfort Zone Need Verification Bonus vs. replacement How to Care Frequent Contact Walk a mile Investment

46 Negotiation: Techniques Independent Advice Legal firm with presence in China Intellectual Property - advice Halve expectations, double budget Grey issues Be firm, creative Be prepared to say no

47 Business Etiquette Trust Handshake Business cards Basic Mandarin Phrases Host begins a meal toasts, speeches Patience

48 Summary: Profile for Success Leave your preconceptions at home; Keep hold of your business sense; Do your homework; Patience is a virtue; Long-term approach; Be flexible; Quality independent legal/professional advice; Specialist legal advice on IPR: Due diligence; Remember personal relationships.

49 谢谢 Thank You! Beijing Suite 1206, Zhubang Office 98 Bali Zhuang Xili Chaoyang District Beijing China Tel: +86 (0) /6386/6387 Fax: +86 (0) Shanghai Tel: +86 (0) Fax: +86 (0)