Posted on

WEEW’s: Top 10 China Business Mistakes made by Westerners

Jeez, too bad this isn’t a Top 25 or a Top 50, which would make things easier.

Here’s my attempt, in NO PARTICULAR order and all being important.

1.Any variation of ‘doing things like you did back home’

  • Using success back home as proof-of-concept
  • Failing to adapt to the local market
  • Using the same internal procedures and assuming they will seamlessly they will work the same

2.Overestimating the mystic of Face and Guanxi

  • The best way I can explain it to keep you on your toes, is Face is about appearance over substance. (i.e. Acting like you respect the other side even when you may not or Political correctness2)
  • Guanxi is merely connections2. Nothing mystical there.

3.Misunderstanding how (much) Face and Guanxi affects your business

  • The #1 motivation in China (and therefore the Chinese) is to NOT lose face. Followed closely behind by #2 motivation is how to gain face and then maybe #3, being not making someone else lose face.
  • If the core of business is about trust and there is a ingrained distrust of institutions in China, Guanxi uses connections with individuals as ‘insurance policy’ to make things happen.

4.Seeing China as 1 market

  • The country IS bigger than all of Europe.
  • There are local peculiarities (ie. local power struggles) that need to be understood and which for example makes using a nation-wide distribution system (sales or logistics) difficult and unlikely.

5.Managing by remote control/ not being on the ground, hands on, in the trenches

  • I hope simply reading over the other 9 will be enough to convince you.

6.Miscommunication

  • High Context vs Low Context thinking.
  • Cultural bias – They were taught differently, they think differently.
  • You think you are being clear – they are ‘interpreting’ your meaning
  • You are thinking ‘direct/straight line logic’, they aren’t.
  • But they said they understood….

7.Thinking a contract is binding

  • Think of the signing of the contract as your wedding day. In so many respects it is just the beginning of your relationship. All relationships require hard work to maintain.
  • Beware the ‘getting you on the boat’ tactic (aka Stratagem #28). Once on board and the boat leaves the dock, you can’t leave so easily and that is when the renegotiations begin.

8.Chasing Rainbows or Death by 1000 Cuts.

  • Focusing on process/method over results
  • Going for perfection instead of what works

This is a particularly tough one for Westerners to accept and tends to be an emotional issue because it is seen as a “right or wrong” issue.  Beware… this mistake has you driving yourself off the cliff while thinking you are doing the right thing.

9.Confusing language skills with management or business skills

  • Yes I know, but it makes it so much easier for YOU to talk with them. Sigh…(focus on measurable results)

10.Assuming Price and Quality are connected

  • Face is what ‘it’ is all about.
  • People will pay out the nose for something that gives them face and put very little faith in your idea of quality.
  • So if your product or service is not related to face, most Chinese go for the cheapest option

Comments?

Which ones did I miss that you think should be on the Top 10?

Also be sure to check out China Solved’s 10 Commandments and

The China Law Blog’s version of The Top 10 Reasons for China Business Failure.