As I sat here watching the series of videos, I can't help but laugh out loud at some of the issues the Brits are encountering. Not because they are funny but because I can see thru the actions of the Chinese business men and can almost predict the outcomes. As someone who grew up in an emerging economy and who still has ties to a 3rd world country, the actions of the Chinese business men come as no surprise to me. I have come to the realization that business men in emerging economies are all the same, shrewd, sometimes dubious, sometimes dishonest, and unreliable and inherently greedy. Different cultures, locations and people but they all have the same common link of greed. Not to say their Western counterparts are too different. The only difference for the westerners is the availability of law & order. The attitude of most is to take advantage of their western counterparts who are not familiar with the way of doing business because they feel they have the resource to burn. Tony, Peter and Vance are all taking a huge risks going to China. What tempts them and most westerners is the possibility of "high risk, high rewards", to quote Vance. They are aware that in emerging markets, a business man can become a millionaire overnight because these countries have very high potentials and vastly untapped markets. You can also loose your shirt and your life if you are not careful.
Tony - His cushion business was ruined by cheap Chinese imports. He was the #1 cushion maker in Europe before then. He determined to go to China to salvage his business, sort of "if you can't beat them, join them". Heavily indebted, he heads for China to build a factory for manufacturing cushions. One of the biggest concerns he encounters is copy right infringement. There are no laws governing or discouraging this dubious practice in China. The problem is so bad that people are actually taking pictures of his product right in front of him for later reproduction. Building the factory was also a massive challenge for him. He needed to partner with a Chinese business woman in order to accomplish this project. The work ethics of some of the workers is very bad with the workers not being very dependable and there does not seem to be much the average foreign business man can do about this. Tony was able to secure contracts thru his persistence and hardwork. Finally with the factory almost complete, there was the issue of hiring english speaking Chinese workers for his business. Most of the workers are migrant workers leaving their farms to move to the urban areas to seek a better life for themselves and their families back home. With Tony's factory successfully completed, most of the local dignitaries wanted to be associated with his success though they were not visible when he was struggling to set up the factory.
Con't: Peter - a retire army officer who had developed an energy saving product that had a huge potential of making millions of dollars. Though he came to China very optimistic, he soon learnt doing business in China was not the same as in the western world. He had tried to go on his own but he soon realize he needed a Chinese business partner if he was going to sell even one unit of his product. He was of course concerned about copyright infringements and the possibility of the Chinese stealing his trade secret and producing millions of his product before he yet had the opportunity to sell even one unit. He had to partner with Mr. Cecil a local business man who told him doing business in China was like the "wild, wild west". I have to agree with him and reinforce the fact that doing business in any 3rd world country is indeed like the wild, wild west. It is a survival of the fittest. Indeed a "dog eat dog" mentality. Peter had to take a leap of faith which paid off in the end. Mr. Cecil did business the Chinese way and got the job done. Though he disappeared for a while without communicating with Peter ( this is a very common practice in 3rd world countries), "now you see me, now you don't. Peter learns doing business with the Chinese and in any emerging economy is a waiting game. You have to be very patient because the people do not move at the pace of the western world. Hopfully, while you are waiting, they are geting the job done like Mr. Cecil.
Con't: Vance - Very streetsmart. Made his money from under cutting competition by selling cheap Chinese kitchens. Would go off the beaten track to get the cheapest prices for his products. Though he was very aggressive, I would venture to say, he needed to be that way to accomplish his goals. He was very distrustful of the Chinese business men based on his past experiences with them. They sent him damaged goods and did not deliver on their promises though they had his money. He seemed very frustrated so many times and I kept wondering why he did not leave and go back home. But he couldn't because he knew of the huge potential for success, the potential to make a lot of money that awaited him if he was successful. He seemed to make a few hasty decisions in his bid to have control over the products such as his purchase of the guary. Given that Vance himself had made a huge profit off the failures of others, it is amazing how much he could not tolerate the shortcomings of the Chinese. He did not want them to make a profit off him unnecessarily. There were situations where he was dupped out of his money with the Chinese business men not delivering on their promise. There were time when it was obvious the Chinese business man had spent Vance's money on personal items such as with Mr. Lee who then requested for additional money from Vance though he had not delivered on the intial money he received. My understanding of Mr. Lee's behaviour is that he considered the intial money given him by Vance as a gift or a requirement for doing business. This is the common practive in emerging countries. The business man is expected to give a bribe or gift before they can do business with the local people. It seems Vance is learning the ways of the local, he is willing to bend the rules to get his way. He had a fake Olympic inspection bus to enable him transact a little smoother. You could also tell he had a heart despite his hard exterior. He was willing to give Mr. Wong a second chance and not take his business away from his factory. Mr. Wong's factory provided employment for the village and this prevented the people from migrating to the urban areas for work. In conclusion, doing business in China or any emerging economy is a very risky venture with opportunity for huge profits if successful. It is very critical to study the people and culture before venturing to these nations. They are no courts to intervene and the law will also not be on the side of the foreigner. China is a nation that is growing rapidly. In order to sustain it's growth, it must put more structure in place to protect those coming to do business with it. The western world will only be permissive of this way of doing business for so long before a new economy emerges as the place to do business.
As I sat here watching the series of videos, I can't help but laugh out loud at some of the issues the Brits are encountering. Not because they are funny but because I can see thru the actions of the Chinese business men and can almost predict the outcomes.
ReplyDeleteAs someone who grew up in an emerging economy and who still has ties to a 3rd world country, the actions of the Chinese business men come as no surprise to me. I have come to the realization that business men in emerging economies are all the same, shrewd, sometimes dubious, sometimes dishonest, and unreliable and inherently greedy. Different cultures, locations and people but they all have the same common link of greed. Not to say their Western counterparts are too different. The only difference for the westerners is the availability of law & order. The attitude of most is to take advantage of their western counterparts who are not familiar with the way of doing business because they feel they have the resource to burn.
Tony, Peter and Vance are all taking a huge risks going to China. What tempts them and most westerners is the possibility of "high risk, high rewards", to quote Vance. They are aware that in emerging markets, a business man can become a millionaire overnight because these countries have very high potentials and vastly untapped markets. You can also loose your shirt and your life if you are not careful.
Tony - His cushion business was ruined by cheap Chinese imports. He was the #1 cushion maker in Europe before then. He determined to go to China to salvage his business, sort of "if you can't beat them, join them". Heavily indebted, he heads for China to build a factory for manufacturing cushions. One of the biggest concerns he encounters is copy right infringement. There are no laws governing or discouraging this dubious practice in China. The problem is so bad that people are actually taking pictures of his product right in front of him for later reproduction. Building the factory was also a massive challenge for him. He needed to partner with a Chinese business woman in order to accomplish this project. The work ethics of some of the workers is very bad with the workers not being very dependable and there does not seem to be much the average foreign business man can do about this.
Tony was able to secure contracts thru his persistence and hardwork. Finally with the factory almost complete, there was the issue of hiring english speaking Chinese workers for his business. Most of the workers are migrant workers leaving their farms to move to the urban areas to seek a better life for themselves and their families back home.
With Tony's factory successfully completed, most of the local dignitaries wanted to be associated with his success though they were not visible when he was struggling to set up the factory.
Con't:
ReplyDeletePeter - a retire army officer who had developed an energy saving product that had a huge potential of making millions of dollars. Though he came to China very optimistic, he soon learnt doing business in China was not the same as in the western world. He had tried to go on his own but he soon realize he needed a Chinese business partner if he was going to sell even one unit of his product. He was of course concerned about copyright infringements and the possibility of the Chinese stealing his trade secret and producing millions of his product before he yet had the opportunity to sell even one unit. He had to partner with Mr. Cecil a local business man who told him doing business in China was like the "wild, wild west". I have to agree with him and reinforce the fact that doing business in any 3rd world country is indeed like the wild, wild west. It is a survival of the fittest. Indeed a "dog eat dog" mentality.
Peter had to take a leap of faith which paid off in the end. Mr. Cecil did business the Chinese way and got the job done. Though he disappeared for a while without communicating with Peter ( this is a very common practice in 3rd world countries), "now you see me, now you don't. Peter learns doing business with the Chinese and in any emerging economy is a waiting game. You have to be very patient because the people do not move at the pace of the western world. Hopfully, while you are waiting, they are geting the job done like Mr. Cecil.
Con't:
ReplyDeleteVance - Very streetsmart. Made his money from under cutting competition by selling cheap Chinese kitchens. Would go off the beaten track to get the cheapest prices for his products. Though he was very aggressive, I would venture to say, he needed to be that way to accomplish his goals. He was very distrustful of the Chinese business men based on his past experiences with them. They sent him damaged goods and did not deliver on their promises though they had his money. He seemed very frustrated so many times and I kept wondering why he did not leave and go back home. But he couldn't because he knew of the huge potential for success, the potential to make a lot of money that awaited him if he was successful. He seemed to make a few hasty decisions in his bid to have control over the products such as his purchase of the guary.
Given that Vance himself had made a huge profit off the failures of others, it is amazing how much he could not tolerate the shortcomings of the Chinese. He did not want them to make a profit off him unnecessarily. There were situations where he was dupped out of his money with the Chinese business men not delivering on their promise. There were time when it was obvious the Chinese business man had spent Vance's money on personal items such as with Mr. Lee who then requested for additional money from Vance though he had not delivered on the intial money he received.
My understanding of Mr. Lee's behaviour is that he considered the intial money given him by Vance as a gift or a requirement for doing business. This is the common practive in emerging countries. The business man is expected to give a bribe or gift before they can do business with the local people.
It seems Vance is learning the ways of the local, he is willing to bend the rules to get his way. He had a fake Olympic inspection bus to enable him transact a little smoother. You could also tell he had a heart despite his hard exterior. He was willing to give Mr. Wong a second chance and not take his business away from his factory. Mr. Wong's factory provided employment for the village and this prevented the people from migrating to the urban areas for work.
In conclusion, doing business in China or any emerging economy is a very risky venture with opportunity for huge profits if successful. It is very critical to study the people and culture before venturing to these nations. They are no courts to intervene and the law will also not be on the side of the foreigner.
China is a nation that is growing rapidly. In order to sustain it's growth, it must put more structure in place to protect those coming to do business with it. The western world will only be permissive of this way of doing business for so long before a new economy emerges as the place to do business.