Preview

Section I

Introduction

Which would you prefer: getting roughed up by someone who cares or getting the crap kicked out of you by someone who doesn’t?

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CH 1. CHINA FEVER

It wasn’t too long ago that internet fever made a hefty percentage of the best and brightest in the West delirious with ambition and greed. The internet boomed for a few years at the turn of the millennium and then crashed in a matter of months. Millions made by entrepreneurs barely old enough to drink were lost before they had time to blow them the old-fashioned way: through bad marriages, worse divorces and lawyering-slash-rehab for their spoiled, delinquent children.

Right now, parts of the Western world are being swept by a new fever, one just as intoxicating: China fever. It’s characterized by the recurring dream of selling just one widget to the over 1 BILLION Chinese.

Yes, the dragon has certainly awakened. It’s big, it’s tough, it’s glittering and to many, it’s enticing. China is roaring to life economically, is the manufacturing center of the world and it’s the place to be – no, HAVE to be, if you want to make money.

But be warned: It will warm, toast and then slow-roast you before you know what’s happening. And then it will eat you up, like it has so many others who have gone before you. That is, if you don’t come to the fight armed and you stay alert… if you become delirious with China Fever.

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CH 2. THE GOAL OF THIS BOOK

This book, Where East Eats West, is designed to offer those delirious with ‘China fever’ a few extra-strength aspirin, to help them ice themselves down and snap the hell out of it before they screw up their lives and their fortunes irreparably.

The Goal of this book:

Accelerate your China learning curve to help you accomplish your goals;
AKA Skip making elementary China business mistakes so you can get right into making advanced ones. *
In these pages, I’ve purposefully painted a rough and tough picture of the Chinese business environment, because it is rough and tough – and because I’d rather you find yourself pleasantly surprised when things go smoothly than caught unaware by a sucker punch.

Please Note: Where East Eats West is not an analytical look at the business climate of the fastest-growing economy in the world.  It is not a corporate etiquette guide or a comprehensive how-to book on doing business in China.  Plenty of those have already been written – and then some.  Instead, it’s an on-the-ground, in-the-trenches, street smarts guide of lessons that entrepreneurs in China have learned the hard way.

It’s designed to give people, especially entrepreneurs who are thinking about doing business in mainland China a heads-up about some of the red-hot realities that are going to give them big, burning bites in the ass when they least expect it.

It’s designed to help you think more deeply about your decision to stake your future and your fortunes on this wild, exciting place. And it’s designed to prepare you to survive the thrashings ahead, when you decide to go for it, anyway.

And, on a very practical level, it’s designed to accelerate your China business education – to help you avoid making elementary China business mistakes so you can get right to making advanced ones.

It’s the book I wish I could have bought 13 years ago, when I started my own enterprise in China.

Oh… Yeah. Let’s just get another thing clear, I am by no means a Sinophile (someone who loves thinking about and expounding on all things Chinese).

Nor am I an academic. (All of my high school teachers would attest to this, I have no doubt. I am sure my university professors would as well, if they could remember me.) What I am is a guy who has been there, seen it, done that, and lived to tell the tale. And if you’re smart, you’ll listen and learn.  You’ve heard the saying “A penny saved is a penny earned.”  Well, this book could save you lots of pennies – millions, in fact.

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CH 3. THIS BOOK IS FOR YOU IF…

  • You or your spouse are gutsy entrepreneurs and are thinking about pulling up stakes and heading across the ocean in search of fortune, fame and smoking good stories you can tell your grandkids.
  • You have received the corporate memo that you are about to be transplanted to China for the “OPPORTUNITY OF A LIFETIME,” to head up the country operations and well, you are scared witless. Relax. You’re on the right track. You’re reading this.
  • You are already in China trying to do some good business and struggling to maintain your faith in your own vision (and the essential goodness of humankind).
  • You have been doing business in China for a long time (three years or more) and simply need a good laugh and know that you are not alone.

Of course, this book may be a waste of your money if…

You are one of those rare geniuses who have no need to learn from others.  You will break the mold, carve new ground, and prove that those who came (and fizzled) before you were lesser beings whose outcomes would have been entirely different had they possessed your intellect, business savvy and all-around cross-cultural prowess.

No, you are not the first person with those thoughts and no, you will not be the last. I laugh so hard milk comes out my nose every time I hear a Westerner tell me they’ve “got it covered” because they’ve “done a lot of business with Asian people” or “have been in business for 25 years.”

But seriously, don’t let your past experiences or successes lull you into complacency.  Pay attention to the information you’re about to read in this book.

Don’t get me wrong – there are other ways to get this information. But there certainly isn’t an easier way. Lawyers and consultants will gladly take hundreds of dollars per hour to wax poetic, telling you a lot of the same stuff. They will however use more biz school lingo.

So grab a snack or a beer, get comfortable and get ready for the straight truth on all the ways you can screw up doing business in China.

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CH 4. BOTTOM LINE – What are we dealing with here?

The China market will probably eat you alive.

China certainly welcomes your money, your knowledge, your experience, your technology, pretty much anything you have that they don’t.
BUT!!!… Don’t think that it is you who are entirely welcomed.

You are often seen as a tool.

And like a tool, you will be used when needed and then cast aside. DEAL WITH IT.

We are talking about the wild, Wild West in the EAST. You are in their house, trying to make money off of them.  You think they don’t know that? Come on, Mainland Chinese are extremely pragmatic. They wants some of what you gots and they’re willing to do just about anything to get it.

Generally speaking….
In the West, people are taught to believe that the ends do NOT justify the means. Here, however, the law of the jungle kicks in and the ends do in fact tend to justify the means.  Lying, cheating and stealing is not something people openly support here, but when you get right down to it, if it gets them where they want to go then ….

And don’t forget… as you are not one of “them,” which makes doing it that much easier; given the ingrained belief that foreigners have screwed over China so many times, you now owe them.

No, not everyone is like this, but you will be shocked at the number of people who are.

Don’t forget, China is still a develop-PING nation and with such a huge population, think “jungle mentality.”  (China in Chinese is pronounced “Zhong Guo,” which sounds a bit like Jun-gle.)

Here is my version of the disclaimer.
I am not a lawyer. Nor should any of the following information be considered a substitute for legal advice.

On the one side, there are too many lawyers out there who are focused on covering their own asses and give “so-cautious-you-have-no-room-to-move” advice. On the flip side there are a handful of lawyers who have been in China a long time and seen so many deals that they know when you are on the road that leads to a cliff.

By the end of this book you should be able to brush past the basics (saving you a few hundred bucks right there) and have enough understanding of the environment to NOT choose the first lawyer you come across NOR expect to use the same lawyer you have been using at home.

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CH 5. THE ANTI ANTI-CHINA RANT

OK, enough of the China bashing and enough of the China horror stories. Yes, bashing China is easy to do. (Bashing of any kind usually is.)

Bashing a culture that does not represent your values or beliefs is always easy to do.  And, it’s always a mistake.  Sure, there are a number of things that go on in this country that I don’t agree with – and not all of them have to do with the business environment.  But no country is perfect and I guarantee you that an outsider looking in on your country or mine could and would find plenty to criticize.

I hate the pollution that clouds the skies of Beijing, my adopted home city.  It sucks.  On the bad days, I grumble.  On the good days, I smile.  It’s the same in business.

So “the China price” is kicking your ass? So your customers aren’t loyal to your product? So your suppliers are having you for dinner – and not as a guest? So your competitors copied your product design, and they’re manufacturing and selling your product for 30% less than you?

You’re right.  It’s rough.  It’s tough.  It’s not fair.  It’s not right.  What can you do?

Innovate or die.

Find new ways to improve and promote your product or service.  Get a new product or service.  Get a new attitude.  Or get out of business.  But don’t get caught in the trap that snares so many Western entrepreneurs in China and waste your time and energy complaining about the realities of doing business here.  Don’t bitch and moan about the system, the bureaucracy, the lack of respect for intellectual property, the crazy zoning laws.  Don’t even hope or work for better conditions.  Get creative and work with the way things are now.

Invest the energy generated by your frustration in finding smart solutions to the problems that face you today, one by one by one.  And if it’s time for you to pack up and go home, do it knowing you gave it your best shot, and you’ve learned a lot about business, China, people, and perseverance.  You’ll find a way to leverage what you’ve learned into financial and life resources that will make your investment pay dividends – regardless of how your China enterprise ends.

As low as China can take you – that’s how high it will allow you to soar.  The challenges are immense, matched only by the opportunities.  As it was in America’s Old West, there are fortunes being made in China that couldn’t be made anywhere else in the world.  There are also experiences to be had and friendships to be built that can make you a richer, better person than you thought you could be – if you’re ready for them.

Read on and keep your eye on the prize. China is a magical, mystifying, messy land where victory is hard won, which makes it so very, very sweet.

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CH 6. GETTING STARTED

There is no business school, no corporate internship, no real-life-in-the-trenches entrepreneurial experiences in the West that can fully prepare you for starting a business in China.

So, what can you do if you want to start a business in China and you have no China business experience?

  1. You can “go corporate.” You can take a job in China chopping wood and carrying water for a company that’s doing something a lot like what you want to do. While there, you can learn as much as possible, and then go out and apply what you’ve learned to your own business.
  2. You can just go. You can pull up stakes, head on over to the Middle Kingdom, “learn by doing” (a.k.a. “The School of Hard Knocks”) and let the chips fall where they may.
  3. You can get mentored. You can read books, hire consultants, search out advisors, and otherwise make use of wisdom gleaned through other entrepreneurs’ experiences.

I suggest you do Option #1 or do it in combination with Option #3. It worked for Kung Fu, and it will work for you.

By itself, Option #1 – “going corporate” for awhile, has intensive time requirements, means postponing your dream, and has obvious limitations. I mean, by the time you’ve gotten enough experience under your belt to make a real difference, your dream may have died. It may no longer have a market – or that market may have been filled. And frankly, there’s a lot you can’t learn about entrepreneurship in the corporate world. (I’m assuming you are not going in as the operations side of someone else’s company.

Because who the hell would hire a non China experienced manager…right?)

By itself, Option #2 – “learning as you go” is the toughest – and most likely to leave you penniless. I’m sorry to say that it’s also the option of choice for most Western entrepreneurs on the Mainland. Sure, the School of Hard Knocks is generally considered a peerless educational institution, but by the time you master half of the courses it offers, you’ll be on your way home, tail between your legs. Whipped.

A combination with Option #3 is the thinking person’s option. Learn, learn, learn from others’ mistakes, successes and insights. You can do that by paying attention to what you read in this book, checking out the Recommended Resources at the back, joining the community at  WhereEastEatsWest.com, and by calling up people who’ve been there and done that, and asking for their advice.

Grasshopper, go to China on fire to succeed, but don’t go expecting to succeed instantly. Attachment to specific outcomes (like actually making money) will only set you up to be plagued by fear and anxiety when things don’t seem to be going your way – which will probably be the case most of the time.

(Sound of a gong….)