The following is an example of a probable scenario on doing business in China (in the past).
Something like this probably happened.
Employee walks in to the office of the CEO, forgetting to knock due to all the excitement.
“Mr. CEO, I just got an email from a huge Chinese company and they want us to do business with them and soon”
The CEO’s blood pressure, hearing these words is rising. New energy seems to be flowing into his mind. This is his chance to expand, a chance to break open a new market, sell to multi-million consumers, lift his career to the next level.
But he keeps his cool.
“What do they want? Do we know that company”
“They invite is to come over to Guangzhou and sign the contract. The amounts they are talking about are really huge. No surprise, as they have so many people there”
I never heard of them, but heck, this is a real opportunity
The employee chuckles after finishing this last sentence, this is really a no-brainer
The CEO ponders a bit, he doesn’t want to show the employee he would rather be there yesterday.
Ok, book the tickets, get me a that book, Murdoch recommended, what’s it called , oh right “10 Tips For Guaranteed Success in China”, make some business cards with those characters and buy some presents.
A couple of days later they are in the plane. They had to postpone one day as the CEO went to the plastic surgeon to have an eternal smile fixed on his face. Always look friendly, he read.
Landed they find an impressive delegation waiting for them. Wow, the CEO thinks, these guys are serious. Outside a Buick is ready to bring them to their 7 star hotel after which they are invited to an enormous banquet.
No business is talked yet, he knows about that, first get to know each other. He finally though has the chance to exchange business cards and he feels they really appreciate the fact he studies theirs for at least 5 minutes each.
The next day they visit one of the top notch offices of the Chinese side. Again, Wow.
That evening he gets into a really good talk with the Chinese CEO. The translator is a lovely girl he wouldn’t mind, no he is here for the deal.
The Chinese CEO explains that they are impressed by his company, want to buy whatever he has in stock. The Chinese CEO also explains that as a proof of faith from the foreigners side they like them to contribute to some of the cost they have made.
It seems a bit much, he thinks, but on the other hand it’s normal. This way the Chinese side will know that we are serious on doing business.
The CEO orders the employee to have a considerable amount of money transferred.
This is China, this is how it works, the deal is as rock hard as steel and if this it what it takes to tie up the loose ends, please. Compared what we’ll make on the order it’s peanuts anyway.
JiaoziA contract is signed and on arrival back in Foreign town, the board is waiting for him to congratulate him. We’re in, we’re doing business with China. Who ever said that doing business there is not easy is a fool.
A week goes by and they haven’t heard from the Chinese side as agreed. That’s China, he thinks, give them some time. Another week goes by and the CEO asks the employee to give them a call.
The Employee calls and hears.
“Sorry, the number you dialed does not exist”
The above is fiction but based on a story in Dutch newspaper based on a warning on the website of the Dutch embassy (only in Dutch)
Apparently they have realized in the provinces Guangdong, Yunnan, Henan and Guanxi that there is a China fever going on. Everything foreign wants a piece of the dumpling and will throw overboard any lesson they learned during their MBA.
In a way it makes me smile.
Sources: Volkskrant (Dutch), Embassy of the Netherlands (Dutch)
A related story about doing business in China