Silk Road International Blog

Before I get to the post today, everyone working in China should read this great article on corrupt QC (h/t China Law Blog).

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We’ve been extremely busy both before and after the CNY break.  As we get back into factories to do QC and project management some factories are more helpful than others scheduling visits. I’m sure there are a hundred versions of “we’re not ready for you just yet.”  These are just a few of the responses that we’ve heard from factories this last week or so.

“There really isn’t anything new to see this week.”

“Don’t worry, we’re doing it just like you asked/last time.”

“Maybe you should come next week to see finished product.”

“All of our staff have not returned from holiday yet.”

Regardless of the words used, my experience tells me that there are really only a few reasons that you can’t go into a factory to see your product for a scheduled QC visit (or any other reason):

1. They are not as far along as they should be.

2. They are not actually making the product.

3. They don’t want you to see how some part of the process is done.

4. They don’t want you to reject product or change processes.

5. They are busy and have schedule legitimate appointments with others on your requested day.

6. They are closed (no power?), have repairs/inspections/other issues that would not allow you to come see product on your requested day.

Maybe there are others.  But the point really is this: either there is product for you to see or they are booked and there will be product to see within 24 hours of your requested date.  Yes you should be understanding of legitimate conflicts, but you’re paying for it.   Unless they’ve contracted different standards with you before the order was started you should be able to see it anytime you want (within reason, not 3AM Sunday morning “anytime you want”).

In defense of busy suppliers, maybe there really isn’t anything different/new from last time.  But the point of QC isn’t “what’s new” as much as it is a confirmation that everything is still the same (quality) level as last time it was checked.  IP (In Process) QC already assumes that product isn’t finished anyway, right?  So just keep pressing to get into the factory as often as you want.

Side Note: IPQC does NOT mean one day of final QC on the same day as container loading. I’m constantly reminding buyers that QC is not for just finished goods—it’s also for processes.  What good is QC on finished product if you can’t reject it or they won’t replace it or you’re too late to have it re-done?

All but the scheduling conflict should make you worry.  Not freak out, but certainly worry and get back into the factory as soon as possible for new dates.

Specifically, if the supplier is late and not telling you you’re either going to get bad product (rush job), someone’s going to pay for airfreight, or both.  It’s much harder for you to reject things if you’re up against a deadline or when production is completed and factories know this.  They may just be busy but don’t discount the reality of them delaying your order because of “better” (more profit) projects or the very common belief that you can’t do much about it.

If they are outsourcing your project and not telling you then you may have a major problem on your hands.  The big question is “can you do QC at the other factory or not?”  If the answer is anything less than “Yes! Anytime you want” then you certainly are going to have issues.  One of the dirty little secret of Chinese business is not that projects are outsourced but that they are outsourced to “friends” (sub suppliers) that would be offended if a QC was sent in by the original factory.  We’ve negotiated special deals with factories so that we can send in our own people for other projects just so that the factory doesn’t offend their friends/sub suppliers.

Often times there are real issues that the factory can’t control like laborers not returning on time, rolling blackouts, accidents, etc.  But in the very least you need to get new schedules.  And it should be the factory that offers solutions to make up for lost time (since you’ve signed a contract and probably have ship dates that you have to meet). You can be flexible, but outside of “acts of god” you can reasonably expect the factory to be responsible to meet dates or make other arrangements for you.

To eliminate as much of this rigmarole, be prepared to roll with the punches, plan extra time into your schedule before you order and of course, spend as much time as possible in the factory.

Tags: Business, China, Culture by David Dayton
1 Comment »

So I’m sitting in a factory office outside of HCM city as the factory General Manager is talking with another client.   The inevitable discussion about product quality and how the production doesn’t match the samples comes up and the conversation starts to get heated.  The client is arguing that because of the samples he expects better quality than what is currently being produced.  The factory is saying that his expectations are unreasonable—“production quality is never 100%.  Nobody can do perfect.”

The client, of course, is pointing out that the samples are much better looking than production and the sample from the factory is the standard he agreed to before he paid.  The factory boss turns to me for support in his argument and says: “Mr. Dayton has been doing QC in Asia for many years, he knows that we can’t get it perfect, right?”

Now, this was the first time that we’d ever worked with this specific factory otherwise this manager would have known that this was a bad move on his part.  I complete agree with the client—but, since I’m next in line (to be screwed?) I’m a little bit more diplomatic.   But only a little. “Yes, there are often differences in production and samples. BUT since you have both a sample and a contract, I believe that you should be able to get exactly what you contracted for since the factory already told you they could do it.”

The manager who started out smiling was not pleased with my final answer.  But, I was there to have the exact same conversation with him about our products.  I wasn’t going to lie to this other guy (who was obviously lost as to what to do next) just to be nice to a factory that I was already displeased with.  I’m all for being nice, but I’m not much on compromise when it comes to my clients’ money.

The other client ended up getting more than what he was currently getting, but not as much as he wanted or thought he had contracted for.  He got (almost) what he expected because of three things he did–he had a contract (and brought it with him);  he and the factory both signed multiple sets of samples (and he brought them with him); AND HE SHOWED UP AT THE FACTORY.  Not doing anyone of these three things means he never gets what he wants.

I got a cheap bowl of Pho and a very silent ride back to my hotel.  But I also got what I wanted/contracted for and stayed though two more days of production to guarantee it.  I’ll take the crappy lunches, pay for my own taxies and endure the silent treatment if that’s the price of getting what I’ve ordered.  It’s not what I want nor is it fun/comfortable.  But it’s certainly worth it.

On day two of my visit the manager, obviously still bugged, asked me why I didn’t help him out a bit more with the other client.  I told them that I thought the client was right and that I’ve worked with too many factories that make golden samples to have any empathy for “differences” in production vs sample quality.

He then told me that he has this same argument with just about every foreign client that comes to the factory (but not the local ones or the ones that don’t come to the factory, hmmm….)  And then he launched into the same oratory that he used the day before with the other client.  I listened politely, waited until he was finished and then, again, disagreed 100%.

Side Note: Listening to disarm. I have found that if you listen to, without interrupting, most people, but Asians in particular, and allow them to finish their arguments completely they are just blown away if, in the end, you don’t agree with them.  It’s like they think that if they can just finish the sentence uninterrupted they win.  I think that they expect you to interrupt each and every time you disagree and if you don’t interrupt, then you certainly must agree with all of what they’ve just said.  When I first figured this out, I admit, I tried it a few times just for shock value.  Now, I’ve seen it so many times over so many years that I realize that it’s more than just individual quirks.  Yes, I’m stereotyping (“I’m like my mother, I stereotype. It’s faster.“).  But I’m not saying Asians are dumb/bad/ignorant/purple/whatever.  Relax.  I’m just pointing out that expectations in communications are different and it’s to your advantage if you know those differences.  Remember, if you can name the game, you don’t have to play it.

I told him that Westerners feel lied to if they get production pieces that are noticeable different (lower quality) then the samples they used for contract standards.  Let’s be honest, in the West it’s bait and switch.  I said that doing business like this is the best way to ruin relationships quickly. I tried to share with him the idea that he’s got to under-promise and over deliver, and right now he’s doing the opposite.  Foreigners want the sample to be the basic standard—something that checks off all the boxes but in no way should be better than production.  It’s the standard, not the exception.

Of course, he told me the same thing that every other factory tells me when we have the “golden sample” argument.  Factories in Asia all face so much competition that they make perfect samples to get orders all the while knowing that production will never be that good.  They just want to get the deposit and start the order assuming that they can work out the discrepancies in quality later; which they often can (or they can hide it if they know you’re not coming to do QC).

My take away was this: the factory isn’t stupid.  They would rather get deposits and have this quality argument over and over than take a chance at losing orders with “almost” perfect samples and never argue–money is more important peace.  And I can’t argue with this logic; when a good percentage of the clients either don’t do QC, don’t call them on the changes or don’t even show up at all, factories have really lost nothing by making golden samples. In fact they’re making money!

One more reason to always do QC.

Tags: Business, Culture by David Dayton
3 Comments »

On of the things that I’ve learned, the hard way, about doing business in China is that as a (foreign) buyer when there are problems, even if they’re not my fault, I’m going to be asked to pay for them.

For me, this is the single most exasperating thing about working in China (and Vietnam and Thailand and Taiwan and India too).   Bad quality we can monitor and keep to a minimum.  Ditto late deliveries.  Changes in the prices and terms after we sign contracts really sucks, but the changes usually are not killing deals.  But mistakes, even (or especially?) factory-acknowledged errors that cost time and money (and my face) are the thing that always makes me mad.

“Nothing can be done perfectly” I’m always told (after we’ve approved the sample, paid the deposit and committed to the client).  What does that even mean?!  OK, so about 99% perfect?  No?  96%?  Who, if it’s not me (the guy holding the bag), gets to choose what is and is not perfect?  Which part of “yes, we can do that” does not cover the current imperfection?

Now, I’m not unreasonable, I understand that mistakes happen.  Anyone that reads this blog knows about my (poor) typing skills—everyone has something they don’t do well.  That’s just part of life.  Typo’s are my fault and I’ll refund your subscription if they are too much for you to deal with.  I want that same offer from my factories.  Or at least an offer to pay for the fixes!

Only once or twice has that ever happened though.  So, more often than not, we have to find ways to solve the problems or go crazy being angry all the time.

Usually when we find problems, we’re also told something like, “It’s just really hard to do what you want” or “We’ve never done this before” or “What you’re asking for is impossible.”  I’ve found that one of the best ways to resolve production issues is to ask these questions back to whomever is telling you no: “Is it impossible or just difficult?”  And: “Is it impossible or have you just never done it before?”  Impossible means you need to find a new factory.  “Difficult or “never before” simply means we need to try something new.  Most production issues are NOT impossible to resolve.  But because China is so task specific (a product of both hierarchy and a focus on labor) people are usually tied to very a very limited number of repetitive duties.  They are paid to NOT make any changes or deviate from SOP so they do not solve problems.

For example, this week we had a hat manufacture that had (handmade) perfect samples but was now having issues getting some layering correct in mass production.  They even went so far as to tell my QC that what we were asking for was “impossible.”

I went to the factory, they were politely embarrassed but agreed to build a hat with me. We walked through every one of the production steps with one of the hats, from cutting materials to final ironing and packaging.

Now I’m not a seamstress (seamster?) so I had lots of stupid questions about why they were doing it the way they were.  They had answers for most of the questions and a couple times they were honest and just said “that’s just how we’ve always done it.”  After we produced the same (wrong) result together (“See?  This is just what we can do!”) I asked them to switch up a couple of the steps in the process and see what would happen.  They wouldn’t do it.  I finally told them I’d pay for whatever happens—the wasted sample, the material, extra bills.  Just switch up the steps, please.  They did, amidst a bunch of grumblings and comments like, “It just isn’t done this way” and “I don’t think that our machines will be able to do this” and “You’re not a professional” and “We’ve been making hats for 15 years and never done this before.”

What do you know?  It worked!  They were as surprised as I was and we solved the problem at no extra cost to me (which was the whole point).  This wasn’t me solving the problem as much as it was just being in the factory and taking responsibility for trying out potential solutions, one of which happened to work out.

I was talking with my friend, and 25-year China vet, Bernie, about why this lack of “just try it” attitude exists.  He mentioned that it may have something to do with that fact that there is no one who is responsible for the mistakes it may cause or the fact that it’s really no one’s specific responsibility to try new things either.  So no one does.  It also opens the door to future “adjustments” and “changes” and gives the client the expectation that they are welcome to come in and change process and try other things out in the future.

I agree and would add that there is no incentive to try new things as that means new processes and potentially new and currently unknown problems and/or costs.   And if you get paid by the piece, why would you do anything but the same thing as fast as you possible can over and over—even if it’s wrong (as long as your step in the process is done correctly)?!  In fact, if you’re paid by the piece and you know something is wrong, it’s better for you to not say anything and then have twice as much work (income opportunity) to do later.

Side Note: Did you ever see those management clips where the guy in the US factory pushes “the button” and stops the whole line?  The boss comes down, they talk about the solution that this line worker thought up and all of a sudden the planets line up, world peace happens spontaneously and everyone is happy.  You know the one I’m talking about, right?  Well the Chinese have never see it.  In China the guy would be fired, the loses from a delay in the line would be taken out of his salary–his family would probably be billed too, he’d be locked out of his dorm so they could sell his stuff, and if he had the guts to tell a manager that they were doing it wrong (or there was a better way) he’d be laughed at, cursed at.  If foreigners were there at the time, they would be apologized to profusely and promises would be made that something like that would never happen again.

For whatever reason, it takes pressure from someone with influence (paying client), a manager (responsible party), a technician (the person running the machine) and then an agreement that the change can be repeated (without extra costs or time or money) in the production process to make even a simple change and have it last.

I’m serious about getting all these people involved.  If you don’t have a technician, you’re not getting the full machine capabilities—this person is really important and they don’t usually have any financial stake in the production process; they’re getting paid no matter what.  They will say things that the salesman or the manager won’t and they know production details that that admin folks do not.  Pay attention to these people, buy line workers or QC or engineers drinks gets and you’ll get access to privileged info and you’ll have a “friend” on the inside for future problems.

And no matter how many friends you have on the line, you’ll never be able to do anything without having a manager sign off on the process.  What I see more often than not is that this admin guy may also have to be at least the co-author of the solution too.  Not always a bad thing since he’s then invested in making it work too.

Knowing the process isn’t as important as knowing the final result/testing standards/quality spec’s and being here to make sure that you get what you want.  I can’t know everything about every product that we manufacture.  There are just too many variations.  And I can’t do anything without a ton of other people signing off on the processes, prices, standards, timelines and contracts.  So, as in all business, I trust a limited number of people in each part of the production process.  Each has specific value added that I can’t do without.

First, I trust the factory that they know what they are doing—even if I don’t agree with the way they are doing it.  Hopefully I’ve done enough homework that this trust isn’t misplaced.  But I’m also not arrogant enough that I don’t back up my own decision; we always have a second factory (or even third) that can do what we want if Option A fails.  This also means that I’ve verified a supplier’s previous products, clients and as much history as I can find; so it’s not a blind trust.

Let’s be very clear about the trust here.  I trust factories to know how to make product and buy supplies.  I do not trust them to value my business interests over their own.  So I also trust in very very detailed bi-lingual contracts and instructions and lots of on-site QC.

Further, I’ve learned that while there are specific steps and standards that can be translated from the West to China, there are many things that are done completely differently here but still achieve the same end result—which, again, is the goal.  Don’t confuse the importance of the process with the importance of ending up in the right place.  I know, sometimes you can’t skip steps.  Some times process IS the end result.  But many times, what we think is absolutely necessary isn’t even an option in China.

Second, my staff—an honest QC, a detail orient project manager and an aggressing negotiator are as good as gold in China.  If you have people that you can trust to look out for you first, you can get just about whatever you want in China (or anywhere).  It is worth just about any amount of money to have quality, committed staff.

Third, my clients—they are often banking their lives (second mortgages, loans, etc) on their products and they have a HUGE store of information/knowledge about what is and isn’t acceptable and usually a list of things that have already failed.  They almost always know more than I do about their own product/industry than I do—and they want to share and be involved.  People already in the industry are a gold mine of information, especially if they have a vested interest in your success.

Chinese factories have issues with letting others in or letting people know that there is a problem.  For some reason there is a deeply ingrained fear of mistakes being made public.  I’ve said over that if you want to solve the problems (or even know about them) you have to be here and you have to ask the right questions.  If you’re not here to ask, you won’t even know there is a problem until crappy (already paid for) product shows up in your warehouse.  But even if you are here, you’ve got to get to the root of the problem before you can solve it.

Tags: Business, China, Culture by David Dayton
4 Comments »

This article started a discussion on the China Law Blog LinkedIn group.  Since I participated a bit (and I thought I summed it up nicely, “if I do say so my damn self“) I thought I’d share my comments here.

Interesting article.  Convoluted point.  My ten cents:

1. He’s right that Chinese brands aren’t famous in the West yet. But while ubiquitous elsewhere in the 3rd world, they are not “famous” in other countries either. I do a lot of business in Vietnam and Thailand–Chinese brands of soap, motorcycles, noodles and other household items are everywhere–are they famous/have they built a brand or are they the lowest entry points into the market and so everyone carries them? Ditto Li Ning shoes–famous or cheap options with aging/unfamiliar reps (Shaq–failed at his own shoe line, JKid, Battie).  Maggie Rauch points out that they are not really going global at all, just trying to look like it for the Chinese Market (see #4 below).

2. Taking market share and “building a brand” are not synonymous. If a Chinese brands takes (the bottom?) 5% of Coke’s high-end tea market, I’m willing to bet, they’ll let them have it. When a Chinese brand makes a serious play at their connection with McD’s or the NBA OUTSIDE of China you know that have both branding success and market share (and deep pockets).

3a. The Chinese market is not the same as the West, true. That they don’t understand this is the knock against Western brands that fail going into China.  But like every other article on this topic, the pro-Chinese side here fails to mention that this is also the very same reason that Chinese brands don’t do well in the West.

3b. While HK and each city and class in the mainland are unique and must be understood individually, for some reason we’re supposed to believe that expensive tea and Li Ning and other Chinese brands (that no one has heard of) are getting the entire “West” right all at the same time? And the first time they try it too! LA and Lisbon are the same? Paris and Chicago? Hell, LA and Irvine are not the same.

4. China is culturally (and internetly, yea I just made that word up) isolated. Not because they aren’t connect or don’t ‘get out’ but because they are so big at home that there is often limited motivation to move into the unknown when there are still so many opportunities in the known. Ok, and they have repressive investment, currency, internet, and travel laws too.

5. Read Elite China or Luxury China for details on what the Chinese consumer really want. Wait 25 more years before anyone produces The Chinese version of Good to Great (even the examples of the past ten years like Hai’er have since stumbled) or the coffee table book: Famous Chinese Brands.

6. This NYT article from 5 years ago says the same thing as the BW article–China brands are going big soon. Look out world! Totally different brands mentioned than Shaun’s article–what does that say about the longevity/global position of Chinese Brands?

7a. BW list of 20 Top Chinese Brands–where’s Huawei and Hai’er? I guess since they are not “technically” registered Chinese companies they don’t count?  What does “Top” mean?  Certainly not famous or global.

7b. Of the 20 brands in the BW list less than 1/2 are private–only Moutai and Lenovo in the top 10 are. And if these are the best, then branding efforts are pretty pathetic. (Anecdotal evidence: I’ve lived here for 10 years and speak Chinese and haven’t even heard of some of them IN China, let alone out of China.)  I think that this is really a list of actually profitable state owned companies with a couple of semi-private companies thrown in just for (Wall) street cred.

8. The best book to read about this would be Capitalism with Chinese Characteristics–it points out specifically (written by a mainland Chinese scholar at Harvard) that NONE, not a single one, of the big Chinese success stories would even exist without Hong Kong. Most of the companies are not really Chinese and even when they are, they leave as quickly as possible to protect themselves from the Chinese govt.

Finally, (or maybe this should have been first) if people can’t name the Chinese brands off the top of their heads then how can Chinese companies be meeting any objective definition of “building a brand?!”

Tags: Business, China by David Dayton
2 Comments »

While the Google controversy is truly fascinating, unless it’s directly impacting your ability to do business it really doesn’t matter exactly why Google says they might be leaving China.  For most people it doesn’t even matter if they leave China or not.  (For the rest of us in China, the new uber-slow, ultra-filtered internet is almost worthless, and probably not getting better any time soon—time to move the Shenzhen office to Shangshui.)

One thing that most people should take from the Google mess is this: no matter how big you are, no matter how much money you throw at China, no matter how many other countries you’ve been successful in already, no matter if you hire local or foreign or both, the bottom line is that China is still a different beast. My friend from Wal-Mart and I have sat around and told the same stories about working with factories in China. Exact same problems, just different dollar amounts.  Your size doesn’t matter when dealing with China–no matter who you are.  The pool is just so big here that most foreign companies are nothing here.

China ranks first in the world in exports, first in car sales, third in GDP, first in people, first in internet users and the list goes on and on (and will continue to grow–better get used to it).  But it ranks 140 out of 183 in terms of freedom. Even if you don’t like this particular survey or the rankings (certainly a very hawkish source), the fact is that China is wildly different than what most westerners are used to.  It’s much more like the ASEAN countries—just lots bigger (than all of them put together).

And that’s the real trouble.  If you’re coming from Vietnam to China, or vise versa, you’ve probably got some experience that crosses over very well.  If you’re coming from Perth or Detroit or Liverpool, probably no so much.

The fact that HK, Singapore, Japan, Macao, Taiwan, South Korea, Malaysia and Thailand are ahead of China in the rankings is not all that surprising—they all had a 30 year head start and more international exposure.  But that Cambodia and Lao are also ahead and openly repressive and corrupt Vietnam is about the same says clearly that economic development and engagement do NOT mean more freedom—business or otherwise.

Imagethief, in his discussion on Google last week, highlights the fact that there are specifically predetermined ways companies are expected to work with China.  Though speaking specifically to public communications the analysis is applicable to other areas of work in China as well.

Google has taken the China corporate communications playbook, wrapped it in oily rags, doused it in gasoline and dropped a lit match on it. In China, foreign companies tend to be deferential to the authorities to the point of obsequiousness, in a way that you would almost certainly never encounter in the United States or Europe. Scan any foreign company’s China press releases and count the number of times you see the phrase, “commitment to China”. Demonstrating “alignment with the Chinese government’s agenda” is an accepted tenet of corporate positioning and corporate social responsibility work in China. This is testament to the degree of direct power that the Chinese authorities wield over the fortunes of foreign businesses in China. Even when foreign companies are in dispute with the Chinese government they tend to offer criticism obliquely as long as they have a business stake or operations in the country. Note, for example, the scrupulous diplomacy of Rio Tinto’s communications concerning the detention of its employees last summer, a far more serious situation than anything Google has encountered (although also with far more money at stake).

To me the key part for small business owners here is that there is a play book at all–and the people spending big dollars all know it.  This is something that small companies typically learn the hard way, over years of (painful) involvement on the ground.

Further to that end is an article from the Guardian UK.  The Chinese internet (and country in general), it says, is more like its own intranet than a hub in the global community.  Despite how “small” the world is today, China is still very much an island unto itself.  Like the (legitimate) criticisms aimed at the US for being too culturally insulated (physically isolated), China is the same, only with more people, less overall education, fewer if any emigrants and a more restrictive government.

I’ve been saying this for years—China is unique.  Business is business, I know.  But the context within which business is conducted, personal relationships and communications here are all different from anything most have ever worked with in the West before.

But “different” doesn’t mean threat, although it may be threatening.  In the larger picture, there are generally two theories bantered about by China watchers, the China threat and the engagement philosophy.  James Mann’s book discusses why both have failed and if there is a third path.

Anyone you talk to in China thinks that the rest of the world (especially many politicians the US and the popular media) sees China as a threat.  I agree that this is the most popular approach for many in the US (media)—they need a villain in their myopic, simplistic, sound-bite driven world of ratings.  “China is good” doesn’t have nearly the impact as “Red Hoard” or “Chicoms” does.

But even in the midst of this Google mess, I don’t think that China is an inherent threat.   I do believe that China, for purely short-term domestic political goals thinks that the rest of the world is a threat to China (or at least wants the Chinese populace to think that the rest of the world see China as a threat).  Because the Chinese Government is scared (of the rest of the world or of losing domestic power) it then acts like a threat—a threat because it’s actions are based on an aggressive fearful position that it’s being attacked.

China thinks that the rest of the world acts just like they do—the specifics in the response to Google and the attacks on the Whitehouse, for example, are exactly what is going on here.  China assumes that Govt communication issues/companies in the US are tied to and part of the US national interests and that the corporations actions are directed by the govt—just like they are in China.  Of course they see everyone else acting like they act.  We all do this. (And just because they are paranoid doesn’t mean they aren’t right.)

But like the strict law defense that we’ve heard from China over the years (“Our laws are more strict than those in the US!”  Yea, but you have no enforcement, so the laws are often meaningless.), just because China is honestly acting in their own best interest does not mean that they are not, at the same time and by those very same actions, threatening others.  Just because you’re not an overt threat does not mean that you are not threatening.

For precisely this reason, China is not a global partner or good neighbor.  Could they be?  Yes.  Will they?  I doubt it; only because they’ve determined that it’s not in their best interests to do so.

Side Note: And for those who are offended at this, this blog isn’t about “yea, well the US sucks too!”  I really don’t care what you think about the US.  This is about the question “will China act like the super power that it wants to be” (and claims internally that it already is).  You want to complain about the US?  Go get in line somewhere else.

And I’m convinced that foreigners are trying to use some kind of reverse psychology on China–convince them that by our mass stupidity they really are the best in the world.  These, for example, are defenses of China’s GFW: “We have a very controlling govt in Australia too.”  “I guess that the people of China really do want to decide their own direction with the internet.”  So by this same logic, if we have human rights violations in Australia, then it’s OK to have them in China too?  How about other crimes?  How about just crappy quality?  That OK too?  And which part of “the people of China” do you think are “deciding” anything about “their” internet or anything else for that matter?  Sorry.  I’m finished.

This Google mess bring to light specifically how “business” can very quickly become nationalized and politicized.  Just like Rio Tinto last year.  What is considered “State’s interests” is up to anyone’s guess.  Like so much of the content that is blocked on the Chinese internet or the people that are stopped at the border crossings—it’s random, political, emotional and event (rather than policy) driven.

If you don’t think that this affects you, Mr-I’m-here-doing-business-on-a-tourist-visa, then you just wait for the combination of the tightening economy and this year’s census.

One of the best lines that I’ve ever read about doing business is form Jame McGregor’s One Billion Customers: “Most business people come to China with way too much trust.”

I strongly suggest that you read James Mann’s book, The China Fantasy.  Excerpts from my review:

“But if you wonder why economic change in China hasn’t lead to political change or why no one seems to mind that every US president has taken a hard line on China to get elected but then reversed course in office then you should read James Mann’s The China Fantasy: Why Capitalism will not bring Democracy to China.”

“This is not a rah-rah China book and it’s not a China disaster book either—it’s a middle ground, a third path.  Mann says that it’s far more likely for China to continue to grow economically and remain repressive politically than any other option.  The question is: can businesspeople and politicians and consumers in the west live with that.”

Tags: Business, China by David Dayton
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