Keys to Success In China

At the end of our interview last week, Sam Gustin, the writer for AOL’s Daily Finance, asked me to give his readers five keys to success in China. It’s always difficult to take the matter of doing business in this very big and very complicated country and reduce it to a few simple statements, but here is what I told him:

1. Develop a strong local management team, and then truly empower them to make decisions.

2. Work very hard to develop “mutual trust” with your employees and counterparts in China. Once a level of mutual trust is achieved, things get a whole lot easier in the country.

3. Learn to listen very carefully — things are not always as they first appear. Most problems in China are the result of miscommunication.

4. Be patient, and practice what I call the “cold shower” approach to decision-making. Just when you think you know enough to make a decision, take a cold shower and think again before acting.

5. Resolve to settle any disputes that may arise through friendly negotiation. Going to court, trying to create pressure by making a dispute public and resorting to other such tactics seldom work. The Chinese value stability and harmony, and do not like confrontation and conflict.

In many ways, doing business in China is getting more difficult, not easier. Yes, demand for virtually all products continues to expand at rates of growth that are beyond imagination in most other countries of the world, and China’s infrastructure improves on a daily basis. However, local competitors are becoming stronger and are now getting access to very cheap capital in China’s “A” share market, and at least according to the latest AmCham survey, many U.S. companies believe that China is less hospitable than it once was.

At times like this, I believe that it’s even more important for every company to go back to basics. Hopefully, the five keys above will assist in that process.

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