Silk Road International Blog

“Would you make the same decisions in a foreign language as you would in your native tongue?” asked psychologists led by Boaz Keysar of the University of Chicago in an April 18 Psychological Science study.

“It may be intuitive that people would make the same choices regardless of the language they are using, or that the difficulty of using a foreign language would make decisions less systematic. We discovered, however, that the opposite is true: Using a foreign language reduces decision-making biases,” wrote Keysar’s team.

Originally from Wired Magazine, I’m wondering how does this impact doing business in China?  My two cents (in English):

First, it means that given the same sets of circumstances you likely will NOT make the same decisions in a different language environment.  That’s HUGE for CSL speakers that are both learning Chinese (almost all of us foreigners) and working in China.

Second, it means that understanding and decision making in ESL is also different for your English speaking Chinese staff.

Third, there are limits to fluency and translation on the effectiveness of thinking through something in a second language.  How many of us have, years after learning a second or third language had an epiphany about a word/concept that we use all the time when we hear it used in a new context?  I know that this happens to me regularly in Thai and Chinese.  I’ve “learned” and used a word for years, decades even, and then one day someone uses it differently and it hits me, “Oh, yea, it can mean that too.”

Further, it likely means that when you’re not thinking in your second language you’re making decisions “normally” as are your Chinese counter parts (although each person’s “normal” is different).

The research in the article point out that the second language literally gave people more pause and more deliberation, thus possibly allowing for better decision making.

From the article:

“The researchers believe a second language provides a useful cognitive distance from automatic processes, promoting analytical thought and reducing unthinking, emotional reaction.

“Given that more and more people use a foreign language on a daily basis, our discovery could have far-reaching implications,” they wrote, suggesting that people who speak a second language might use it when considering financial decisions. “Over a long time horizon, this might very well be beneficial.”

One other aspect I was considering is both the level of risk-adverseness in each culture/language and also what is valued (time, money, decorum, relationships, immediate success, long-term goals, etc.).   I know that because of second/third language abilities I “reverse engineer” decisions and Chinglish or Thinglish sentences all the time.  I’ve been doing it for decades now, it’s second nature.  (I’m surprised at times when non-Chinese speakers don’t “get” what’s going on sometimes, but then realize it’s an acquired skill.)  I’ve also come to realize that my counterparts are deconstructing what I’m saying as well–and over the years we’ve learned to hire for this skill/ability.  This, I think, is very valuable in negotiations and problem solving, especially in High Context cultures like Chinese.

I can see that thinking about things in a second language can have dramatic effects on decision making, both good and bad.  Delays/thinking things through can be positive, but there certainly are limits to the value of analyzing a situation in a second language (while still based in your first language culture/values).

After 20 years in China/Taiwan and Thailand I believe that the majority of foreigners that “love” China don’t (yet) speak the language.  And oddly, those that have the most difficult time with the business/govt culture are those that have dedicated the years necessary to learning the language.  The acquisition of a second language may allow for more deliberation on decisions, but those decisions not made in a vacuum and there are so many other factors that contribute to the final outcome in addition to just language understanding.

What do you think?

Tags: Uncategorized by David Dayton
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The more they stay the same.  From Michael May at the East Asian Forum, Curbing corruption in China

One of Hu Jintao’s first addresses to party leaders in 2012 included an order to fight harder against corruption. The fight is crucial, but a poor record of success gives little reason for optimism. There are different views on why this battle is not being won. While some say it comes hand in hand with the benefits of an otherwise successful system, others say it is the legacy of extreme poverty during the Cultural Revolution. And others just believe it to be a part of Chinese culture. Be that as it may, the corrosive effects of corruption on government reforms, the economy and the reputation of the party are undeniable.

China’s previous efforts to curb corruption have focused on toughening related penalties, even resorting to capital punishment. But this approach has proved unsuccessful. Rather, transparency and public accountability are more effective in fighting corruption. And while China’s authoritarian leadership provided fast and comprehensive reforms, which turned the impoverished state into a superpower, accountability has little place within authoritarian regimes. This is why reform in China is so difficult.

If you can’t see the applicability to your own personal manufacturing in China, just replace party/government with corporate.  It’s the same people, the same history, the same environment, the same culture that is running the govt as is running the companies–often much more so than one may realize as the % of SOE’s and state investment in business is growing.  Almost any supplier (and sub-suppliers and secretaries and QC with dirty hands) in China that’s making money is NOT excited about increased transparency.  Sure, at dinner, factory owners complain about the “fees” they pay to local officials.  But in the breath they extol the savings they gain from guanxi they have with the tax or safety inspectors.

In the last week (that’s just 5 days now) we’ve had 3 (count them 1-2-3) different companies, all selling large qtty’s (multiple containers per order per quarter) into box stores, come back to us with the same story: “We talked with you last year, thought you were too expensive since China is so much better/easier for companies to manage directly now, and we started projects on our own.  It’s been a disaster!  What will it cost for you to a) help us rescue current orders that are now delayed due to negotiation/price/other issues, b) do QC and fulfillment work on current orders to get them up to standard and out as quickly as possible, and c) can you source new factories for us and manage the re-orders? “  Some of these companies are 2 or more orders in and assumed that the second order would be smoother sailing than the first.  Never happened.  One can’t even get the first order off the ground.  They did due diligence.  They test, they have independent QC.  They even have history/experience working in China.  But they are not there full-time.  They run a business elsewhere and managing China is not their core-competency.

SRI is not a miracle worker, but we are on the ground.  We speak the languages.  We have experience in both negotiations and problem solving.  You need to have these specific skill sets/logistical advantages if you expect to be successful in China (or any developing country).  If you’re not working with someone that specifically knows where the “corruption points” are going to be, you’re going to get taken advantage of.  If you’re not working with someone that can answer questions immediately, you’re going to be both delayed AND get less-than-expected-quality as the lag between communicating/sending samples to the US and getting feedback will give the supplier a window to do what whatever he deems best for himself (at that moment).  This could mean replacing your approved components with something cheaper after the test, if could mean replacing your order in the production queue with one from another client.  It could mean that your stuff sits outside in the rain for a week while samples are being approved and/or redone.

As usual, due diligence, trust w/verification and a physical presence are still keys to getting things done right in China.

And sorry for the lack of posting for the last few months.  I’ve been blogging on an average of more than once a week since 2005 (and I don’t have a “blog assistant” like some lucky guys I know).  It’s taken it’s toll, I needed a break.

Tags: Uncategorized by David Dayton
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David Dayton will be speaking at 9:30 AM EST on Thursday Nov 3rd (tomorrow) for China Business Webinars. This the presentation will focus on preparing to work within Chinese culture and with Chinese suppliers in China.  You can register here (it’s free!).

David Dayton is the owner and manager of SRI.  David has been working and studying in Asia since 1988 and he leads SRI from our Shenzhen, China office.  Besides Shenzhen, David has lived and in Thailand, Taiwan, and Chongqing.

David is a regular presenter for Global Sources’ New Buyer Training seminars in Shanghai, Dubai, Hong Kong (and Johannesburg in 2012).  He has also spoken for Global Sources’ Supplier Education program and Metering China’s Xi’An and Guangzhou Sourcing Shows.  David has been published in Euro Biz magazine, Right Sight Asia, Garden International, The China Sourcer and other trade publications and on numerous sites online including the China Economic Review, the New Zealand government’s international trade information website and China Success Stories.  He has been interviewed by the BBC, CBS 60 Minutes, The AP, the CBS Evening News, the Hong Kong Trade and Development Council and by NPR on China related education and business issues.  SRI’s blog has been listed on multiple lists as one of the top 10 business blogs for China and David’s blog postings have been featured on the WSJ China blog “best of” lists.  David is also a founding member of the China Sourcing Information Center.

David has a Master’s Degree in Southeast Asian Cultural Anthropology, focusing on Comparative Chinese and Thai Corporate Cultures and a BA in International Relations and East Asian History.  David has worked as a consultant, manager, trainer and translator on both sides of the Pacific and he speaks both Thai and Mandarin.

Tags: Uncategorized by David Dayton
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We’ve never had a post from anyone that was not an SRI employee.  Today is the first.

The most trusted source of Asian suppliers!

October 20, 2011 by Global Sources

Many buyers don’t do business with China suppliers because they think most of them are unreliable. Well, Global Sources has got the sourcing help to find trustworthy suppliers, not fly-by-night shops. Each verified supplier on our site and in our magazines is visited at least three times to make sure that their company is a real, export-ready, with real products and real offices. Some of the specific tools we offer buyers to source more confidently, with less risk are:

Online sourcing directory

GlobalSources.com lists millions of products from hundreds of thousands of suppliers. Use our search functions to sort and filter suppliers by business type, location and more.  Contact suppliers directly using our convenient online inquiry form to get answers to questions on product specifications, pricing, shipping and more.

Industry-specific sourcing magazines

Subscribe to free e-magazines and receive new issues monthly by e-mail.  Every month buyers get updates on new products, news on market trends and accurate contact details for hundreds of verified suppliers. There are 18 industry-specific titles, so each magazine provides targeted information. Clicking on a supplier ad in the e-magazine lets buyers contact that supplier directly or go to their websites to learn more about them. Print subscriptions also available.

China Sourcing Fairs

Meet thousands of suppliers in-person at Global Sources’ specialized tradeshows, held in seven key locations in Asia, South Africa, the US and the Middle East. Buyers can sit down with suppliers to see all the latest products available. Check out upcoming tradeshows at China Sourcing Fairs. And if you can’t visit in-person, look at our Online Sourcing Fairs, which allow you to “virtually” visit the fairs (both past and future).

New product updates in your chosen categories

With Product Alert updates, buyers know when new products in their selected categories are posted online. On the same day, in fact.  Fine tune the types of products you’re looking for by choosing from over 6,000 categories. And receive industry news in your areas of interest too. Save time and effort with these free product & news updates.

In-depth information on key China industries

China Sourcing Reports offer buyers detailed profiles of key manufacturers in China and elsewhere in Asia – plus information on best-selling export products, pricing forecasts, industry trends and more. See all 99 sourcing reports currently available. Prices range from $75 to $400.

PLUS…learn how to avoid common pitfalls when you’re sourcing from China. Check out the “What Every Buyer Should Know” page. This is where we’ve posted proven best practices, insights from experts in the field and first-hand advice from experienced China buyers.

Global Sources has been helping buyers make more confident, more informed China sourcing decisions for over 40 years, through its online directory, trade shows, research reports and monthly magazines. Learn more about Global Sources’ products and services.

Tags: Uncategorized by David Dayton
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1. Location counts—Sure the price may be better, but you need to factor in how long people have been doing business both in that factory and in that area (sub suppliers).  The rule of thumb is this: the most advanced suppliers are found in HK/Taiwan, then Guandong, then other East Coast cities, then the rest of China..  Sure there are different types of factories in all places.  And no doubt there are different types of bosses in each as well.  But in general the different locations will give you a general idea of the quality of the industry in the area–Guangdong province opened up for business 10-15 years before anywhere else in the country and so the depth of managerial experience is better there than anywhere else in the country.  Ditto for larger more experienced range of sub suppliers.  QC stats bear this out.  Remember, China may be cheaper, but it’s also measurably more difficult.

2. Price does not equal cost.  Let’s be honest, most people are coming to China to save money.  And so that’s why people work with horrible factories and take stupid risks with bad suppliers–they think that the cost savings will be worth it.  People would like to think that profit margin will take a small hit in the name of “cooperation.”  But my experience is this: when prices go down, quality will be affected first.  Competition is VERY high in China, so the incentive to cut prices (quality) to increase margins is VERY high as well.  People still have to have a set level of income to stay alive and if getting your business means lowering the price, things OTHER than profit are going to take the hit.  The reality is that profit is the very LAST item that will be cut.

Ask your self these three questions about your supplier.  Do they have the right capacity (techniques, processes and machinery)?  Do they have the right people (enough workers, experienced mangers professional communicators)?  Are they using/have access to the right raw materials (can they pass your independent testing)?  If you’re getting a “cheap” price, that probably means that you’re not getting 1 or more of these three questions answered satisfactorily.

3. A lot of things are out of your supplier’s control—and if they can’t control it, they will not take responsibility for it (even if they didn’t tell you they wouldn’t).  The dirty little secret in Chinese manufacturing is that EVERYONE is a middle-man, EVERYONE sub’s out some % of their work.  But nobody will tell you this.  The problem is that they’re usually subbing out to friends and family and they would lose face if they required a 3PQ check on the raw materials they bought from people they were close too.  So you have to do it your self.  If you do not step in and QC your suppliers sub suppliers NO ONE ELSE WILL.  And, when there are problems, the factory will not be responsible for product they didn’t make (even if they bought it and didn’t tell you).

4.  Always be prepared to (re)negotiate!  Everything.

5.  More love for SRI—we’re in the top 10 of China Business Blogs for the last decade!  Great mag on China’s ex-pat culture to boot!

And finally, for the next two weeks I will be speaking in HK and online 3 more times.  Most of the presentations will be at the Global Sources China Sourcing Fair held at the Hong Kong Asia-World Expo out by the Hong Kong Airport.

First presentation: Buying from China: What new buyers need to know.

Oct 27^th at the Fashion, Garments and Accessories Show

Second presentation: Improving your sourcing performance.

Oct 28^th at the Fashion, Garments and Accessories Show

The third presentation will be on online webinar hosted by China Business Webinars.  Nov 3^rd online, Preparing to work in China, what you need to know before you get here.  You can register here.

Tags: Uncategorized by David Dayton
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