Should we go to China?

train_sml

Train

Is this the best we can do?

 There are more people in China than anywhere else.

Yet my grasp of this huge nation borders on ignorance.

I could do months of research to bring me up to speed.

Or I could ask you.

Dumb Aussie?

As an opinionated Dutch migrant, Dad raised me to believe European history was the only one worth studying.

Yet when Mum finally dragged him to China, his eyes shot open.

He realised that while his forebears were grubbing in the mud, China was streets ahead inventing paper, printing and the compass.

The West eventually ‘caught up’ but today we see an even bigger swing to The East.

I think this is worth watching.

What I don’t know

Below are my (mis?)understandings of China.

They came to me through various filters, so I’m keen to get them vetted by those close to the action.

We haven’t played Fortunately/Unfortunately for a while.

What better topic for this game than our biggest Asian neighbour?

Unfortunately

When I was Personnel Manager for a global corporation, Chinese jets crashed so often that we had a written policy forbidding more than one director to travel on the same flight. Just in case.

I hope things have improved in the last 15 years.

Fortunately

China is buying a WHOLE LOT of our raw materials.  I hear, for instance, that China builds a city the size of Brisbane every month.

This sounds extraordinary, but is it true?

Unfortunately

Chinese products aren’t known for their high quality. But nor were Japan’s – at first.

And digging up stuff to send it overseas isn’t the best possible thing for the environment.

Fortunately

China’s doing BIG things in renewable energy and already leads the world in wind power.

If we’re so smart, why aren’t we doing this?

Unfortunately

Chinese languages are difficult to master.

Then again, English is hardly a snap.

Studying Mandarin could be an extremely smart move.

Fortunately

There’s a large, vibrant population of Chinese Australians from whom savvy business people could learn.

Unfortunately

It takes years and years (and years) to build enough trust to do business in China.

Those who know set up ages ago.

Have the rest of us missed this slow boat?

East meets West

We may be able to run our businesses (for a while) without reaching out to China.

But what happens when China comes to us – via tourists, expats and new corporations?

Do we really want them to find us ignorant?

Can we afford that luxury?

I suspect not, and suggest we bone up on this big player.

To this end, I warmly invite your additions, corrections, questions, impressions, admonitions, expectations and excitations

about all things

China.

:)

 

| Founder & Senior Writer – The Feisty Empire

  • http://www.thefeistyempire.com/ Paul Hassing

    I found this video interview particularly illuminating:

    http://laowaiblog.com/innovation-in-china-in-the-digital-age/

  • http://www.thefeistyempire.com/ Paul Hassing
  • http://www.thefeistyempire.com/ Paul Hassing

    In an even more topical coincidence, Fonnie (my wife) received an email for this site just this morning:

    http://technode.com/2011/06/07/hengzhi-another-chinese-linkedin/

    I’d love to hear from anyone who uses this. :)

  • http://www.wordconstructions.com.au/blog Tash Hughes

    My kids learn mandarin at primary school. My Dad speaks it (well he did a few years ago!) and has been to China a few times, including some teaching gigs. My in laws travelled through China a few years ago, too. A friend in the airline industry used to go to China occasionally and buy incredible bargains (like curtain fabric for a house under $10!)

    So I’ve heard stories about China as a beautiful place and good for shopping. I’ve heard things on the news. I’ve read a few books (like Mao’s Last Dancer).

    But there are many gaps in my knowledge of China – a shame given how big the country and population are, And you’re right, Paul, we probably should know more but it just doesn’t get anywhere near the top of my to do list…

    • http://www.thefeistyempire.com/ Paul Hassing

      Fair dinkum, Tash? I was lucky to EAT mandarins at primary school! How times have changed. And just as well. Sounds like your little tackers are going to clean up down the track! 😀

      Thanks for such a varied and generous share. I learn more about you and yours every week, and I dig it the most. :)

      • http://www.thefeistyempire.com/ Paul Hassing

        BTW, at last count my dad could speak six languages. But when he tried to learn ‘Chinese’ (not sure which one) he found it infinitely harder than all the others combined. Scary stuff.

      • http://www.thefeistyempire.com/ Paul Hassing

        Does anyone know a reverse version of this extraordinary language learning resource?

        http://www.youtube.com/watch?v=UhUQMrOLyVU

      • http://www.thefeistyempire.com/ Paul Hassing

        The importance of getting it right: http://www.youtube.com/watch?v=yR0lWICH3rY

  • http://cn.linkedin.com/in/philiphbeck Philip Beck – 贝曦贤

    I’m an Aussie that’s been living in China for 7 years now and hoping to be here for at least another 10 years. By that time I might know 1% of what there is to know about this amazing country.

    Beijing’s population alone, is greater than all of Australia!

    Two things that appeal to me the most:

    1) Best advice ever given to me for doing business in China: The number of decisions you’ll make in one year in China, is the same amount you will make in 7 years in Australia. So don’t procrastinate, or you will be run-over by the competition.

    2) The government runs the country like a business. They have a business plan they wrote in the mid 90’s that takes them through to 2049, when they celebrate their 100th anniversary of the PRC. It fits on one page and is 100% focused on lifting their population out of poverty and becoming a world leading sustainable economy (like they were centuries ago). This plan is broken into 5 year chunks and like a business, they focus all their effort on making it happen. They know they have issues, which the foreign media love to criticise, however, these are prioritised and dealt with in their plan…….there is a timeline. For the moment, there are still +400 million people in their population of 1.3 billion who are yet to afford their first can of Coca-Cola and this is what has their attention.

    • http://www.thefeistyempire.com/ Paul Hassing

      Hello, Philip. I was dearly hoping we’d hear from you, as you’re about as close to the action as one can get.

      Every one of your stats is new (and mind-blowing) for me.

      I’ve never seen China described in such graphic shorthand, and I must say it’s fascinating.

      I know it’s a furphy, but when they asked some mythical modern Chinese leader what he thought of the French Revolution and he said: ‘Too early to tell’, it sounds like they weren’t entirely joking!

      A thousand thanks for joining us today, Philip. I’d be thrilled to bits if you dropped us a line from time to time. :)

    • http://www.writefish.com.au Adam Finlay

      Wow, cracking and instructive comment, Philip.Thanks for your wisdom!

      • http://www.thefeistyempire.com/ Paul Hassing

        Ditto! :)

  • Malcolm Owens

    Hi Paul,

    You are right about China, it’s the next powerhouse economy (if not already) and there has been a major shift in the way business is done there. When I started working with Chinese manufacturers there were several major advantages and all of them price related!

    Things change and recently they have significantly increased labour rates and also reduced the government subsidies to factories as they move towards a ‘competitive global economy’. A decade ago the primary concern of the government was employing people so they needed to keep the prices down to keep the industrial wheels turning and cheap products flooding the developed world.

    Back then the only ‘green’ concern was the US$ and they dug out hills for building materials and had scrap lying around everywhere. The first sign of change was when the factories began relocating north away from the Hong Kong/China boarder. Moving North (Ningbo) provided cheaper factory costs and also cheaper labour.

    This put a strain on the southern factories as the workers no longer had to travel down from the north to work. So the wages in the southern regions increased to attract people and the prices went up. Following this the prices of raw material such as copper, aluminium and steel increased dramatically. It was about this time that the government took the subsidies off so prices rose by as much as 60% over night.

    People started to look to Indonesia and Malaysia, Vietnam and India for lower cost production options. The next significant thing to happen was that the Chinese people became wealthier. Slowly at first but there was a shift from factories making for export to manufacturing for the local market.

    This again increased the export prices for companies in the ‘West’ that insisted on higher quality and finish standards. Manufacturers such as Mercedes, BMW and Audi set up shop to produce for the local market. Luxury brand sales soared drawing a new import market into China which assisted in pegging the Yuan against the world economy, first the $US and later the Euro.

    China is moving from a reliant economy to strong one in its own right. The tourist trade is huge, although the vast majority of the country is bland, industrialised land. I’ve seen some absolutely beautiful places and also the cities now have shopping strips to rival London and New York.

    China provides fantastic opportunities for business if you are prepared to work with them and learn the new rules of a changing global economy. Many traps for young players but that’s a topic for another day …

    • http://www.thefeistyempire.com/ Paul Hassing

      Dear Malcolm, whenever we hit a topic close to your heart it’s like rubbing a magic lamp. Out comes an erudite genie, spouting all sorts of fascinating data with authority and elan. I hope we never fit you back in the bottle, Mate. Thanks so much for giving us these valuable micro, macro and personal views. :)

      • http://www.thefeistyempire.com/ Paul Hassing

        PS. We LOVE hearing about traps for young players. The more terrifying, the better. Looking forward to that one … 😀

      • http://www.thefeistyempire.com/ Paul Hassing

        A short primer on possible barriers to entry: http://www.youtube.com/watch?v=z3qIXQCHf94 😉

  • http://www.writefish.com.au Adam Finlay

    Missed my email notification of this post, so I’m chiming in late. Great to see some knowledgeable folk share their stories. All’s I know is that it’s always fascinated me, and I should go there. If parts of China are anything like the vibrancy of Hong Kong, I won’t be disappointed. Nice thought starter, Paul. Thanks.

    • http://www.thefeistyempire.com/ Paul Hassing

      Never too late for us, Ad. I agree we’re lucky to be in such learned company. If you ever go there, write us a post so you can claim part of your ticket! 😉

  • http://www.thefeistyempire.com/ Paul Hassing

    Email ‘comments’ from an associate who has done business in China (sorted by topic):

    Population: ‘1.3 billion of them.’

    Jets: ‘I think that might be thing of the past. Recent safety records of China airlines are pretty good, and I have flown with many domestic China airlines in recent years myself. Things have definitely improved.’

    Products: ‘Most Chinese products nowadays are in fact foreign “brand-name” products made in China with cheaper Chinese resources, but using foreign technology and quality standards under foreign management. Their quality cannot be higher and that is reflected in their high price tags too.’

    Trust: ‘Most Australians unfortunately do not understand Chinese business culture which is totally different from ours. [Those who do] are very successful.’

    Thank you VERY much for your thoughts! :)

    • http://www.thefeistyempire.com/ Paul Hassing

      If anyone would like to describe the differences between Chinese and Australian business culture, I’d be most grateful.

  • http://deswalsh.com Des Walsh

    From visiting Beijing a few years ago and speaking at a conference there and also visiting Shanghai briefly, and from listening to various expats and doing some reading, here are a few things I’ve noticed:

    1. Saying “China” and expecting to cover the diversity, is a bit like saying “Europe” or “America” and thinking you’ve got it covered.
    2. There is huge energy – it was intoxicating to be at a conference in Beijing and see how keen people were to gain knowledge and do business
    3. There are some very good English-language blogs to learn about China:e.g. China Law Blog http://chinalawblog.com Lost Laowai http://www.lostlaowai.com/blog/ Danwei http://danwei.com and see the list of sites there at http://www.danwei.com/model-workers-2012/ (Danwei is an affiliate of the Australian Centre on China and the World, at the ANU – http://ciw.anu.edu.au/)
    4. Learning Mandarin, however challenging, is probably (definitely?) an essential part of making it there
    5. There are Australians who have made good in business in China and whom I have found helpful (I can provide a few names if anyone wants to get in touch)
    6. An illustration of the challenges of cultural difference and some clues as to how to handle the situation in this post on Harvard Business Review http://blogs.hbr.org/cs/2012/08/cross_cultural_communication_takes_more.html
    7. Social media is HUGE in China (and Facebook is still blocked as far as I know)
    8. It’s not my field but when I see or meet the Chinese tourists up here on the Gold Coast and realise that most of them seem to have no working ability with English I wonder what people who complain about slowness in the industry are doing to connect with the opportunities I see right here in Australia for providing “sino-friendly” services.
    9. Not taking time to read up on some Chinese history back into the 19th century at least would seem to me a particularly dumb omission, especially as – for one thing – there would be a business-busing gap in trying to understand the sensitivity of Chinese people about even the suspicion of being pushed around or otherwise not respected by Westerners (see item 6 above).
    10. Going there beats just reading about it.
    11. Be prepared for paradox – it’s not Alice in Wonderland, but it is different.

    • http://www.thefeistyempire.com/ Paul Hassing

      Crikey, Des! That’s a ten-out-of-ten essay if every I saw one.

      Those links look extremely helpful and your personal views are just as interesting.

      I’m indebted to you for taking such pains of what I’m sure our readers will agree is a mighty fine contribution. Many thanks indeed! :)

  • http://www.thefeistyempire.com/ Paul Hassing
  • http://www.thefeistyempire.com/ Paul Hassing
  • http://www.thefeistyempire.com/ Paul Hassing