China and New Zealand Work Together to Promote Mandarin Study

I found this article about a an ambitious program captained by the Confucius Institute at the University of Auckland to quintuple the number of students learning Mandarin in New Zealand.

From the article:

“Last year, the institute placed eight assistants in New Zealand schools to promote the language – this year, that number will be 18.

Under the New Zealand-China Free Trade Agreement, up to 150 Mandarin assistants can work in New Zealand at any one time.

“We are very encouraged by a near 40 per cent increase in Kiwis learning Mandarin last year and will be doing much more to generate interest in the language this year,” said institute director Nora Yao.

“I will expect a more significant growth, and even if we do not reach our target, I am confident we will get near there.”

This year, 18 schools will be hosting the Chinese language assistants, whose jobs will be to fuel interest in Mandarin among students and train local teachers to teach the language.”

First, kudos to the governments of China and New Zealand for undertaking this effort. It won’t succeed (a huge percentage of those who start studying Mandarin drop out before they learn more than a few phrases), but it is an admirable effort.

Question for the reporter: How do you train local teachers to teach Mandarin when they don’t speak it in the first place? Or, are there already certified teachers in place who are Mandarin speakers and readers?

Chinese Drywall and Working with Chinese Suppliers

Stories like this one are popping up all over the media. People move into a lovely new tract home, bought at a good price, and a year or two later…toxic drywall starts poisoning the occupants and affecting the structure of the building.

I’m not a legal expert, so I’m not going to offer a legal opinion. What I will say is this: Somewhere along the supply chain, someone bought drywall that wasn’t made according to code. Whether the manufacture of toxic drywall on the Chinese side was a purposeful violation of standards for building materials, an unfortunate oversight, or just plain incompetence, somebody in the US, probably several people, sourced and approved the purchase of that drywall.

My guess is that these people had absolutely no idea what they were getting into. They may have hesitated at first and then caved to the pressure to provide materials at lower costs. They may have seen $$ signs in their eyes and gone for it with glee. Who knows what the motivation was? What they probably didn’t realize is that when you source overseas, you have got to be very, very careful about your QC process. You might order one shipment that looks perfect but, six months later, turns out to be defective. You might order a shipment that arrives in perfect order, but the next shipment might be bad. You may think you have the leverage you need to prevent you from getting cheated, only to find out that your definition of leverage is very different from your Chinese partner’s definition.

There are tremendous cost advantages to sourcing overseas, and there are many fine, ethical Chinese suppliers. But in the end, you’re buying something from a country that you probably don’t understand, and from people that you don’t understand. You CANNOT take it for granted that everything will be in order. You have got to put airtight QC/QA procedures in place for every shipment. If that means you have to send a consultant, or hire one in China, to inspect the factory, the materials used, and the finished product for every single shipment, then that’s what you do.

If you don’t do that, then you get to face a bunch of angry homeowners whose lives your poor purchasing practices have destroyed.

Cultural Awareness and Doing Business in China

An excellent article on cultural awareness and doing business in China recently appeared in the Miami Herald.

A very insightful read for those who are doing business with or planning to do business with Chinese people.

A some point I’ll open a Chinese language and culture acclimation boot camp for American and Canadian businesspeople who are heading to China for an assignment. Do you think it would be better to hold it in greater China, or in North America? There are advantages and downsides to both.

More on Chinese Food Safety

I’ve already written about Chinese food safety, explaining that Chinese manufacturing as a whole is going through growing pains that have a devastating effect on its victims.

Corporate China will eventually come around and do things right, but not before killing more people and losing much of its market for food products around the world.

This article gets it right. China’s business ethics environment needs to grow up, and fast. What many of those who are so keen to do business in China don’t realize is that, in many ways and in many parts of its vast territory, China is still the wild West.

There are many, many advantages to doing business with the Chinese, but if you don’t know what you’re doing, please get competent advice from someone you trust who does know what he/she is doing in greater China.

Doing Business with the Chinese: Communication Breakdown

Many people ask me what it’s like to do business in greater China. One of my favorite songs from the classic rock era, “Communication Breakdown” by Led Zeppelin, comes immediately to mind.

I speak, read, and write fluent Mandarin Chinese. I conduct the daily business of life, as I have done for the past twenty years, largely surrounded by Chinese people.

And still, I often have to probe, prod, and read between thousands of lines in order to figure out what the hell is going on. You see, in greater China, speaking directly is NOT a virtue as it is back home.

Consider a recent discussion I had with a contract manufacturer (OEM factory) in Taiwan. I was there on behalf of a client, a food manufacturer. When I called the factory, on the recommendation of a distributor, they assured me up and down that they take all sorts of OEM work from companies both domestic and overseas.

Here’s a condensed version of the conversation I had with the boss (he had an assistant at his side the whole time), translated from Mandarin into English:

Boss: (Examining my client’s product). “We can make this.”

Me: “Good. So you already have the necessary equipment in your factory?”

Boss: “We’ll need to study this a while before we can start producing it.”

Me: “Of course. So, you have the equipment and can do it then?”

Boss: (Munching on one of the samples I brought) “This doesn’t taste very good. Too hard. Try one of ours.” (Hands me a few samples of his product.)

Me: (Politely trying a few of his samples). “Yes, it tastes very good. Of course, my client will want you to recreate his product from a formula. He’ll want you to develop a product that is very similar in look, texture, and taste to the product his produces at his home factory.”

Boss: “Your product doesn’t taste very good. Consumers in Taiwan and China won’t like it.”

Me: “Thank you for your kind advice. So, are you interested in producing this product? Will you work up a quotation for me on X kg?”

Boss:“It would take a long time to get this right before we could start producing it.”

Me: “I know. I have experience with making other food products. We’ll go for as close a match as we can get. If it takes a few weeks or even a few months, that’s okay. So, are you interested in producing this product?”

Boss: “Can you just put our products into your packaging? That would be easier.”

Me: “I’m afraid not. The client wants to sell his product, not someone else’s product. Mr. X, forgive me, I’m an American and we tend to speak directly. Will you tell me if you are interested in working with my client?”

Boss: “I don’t know. Making your product wouldn’t be very convenient.”

Me: “Thank you for your time.”

This really happened. It has happened many times in my years in greater China. Do you see the vast differences in the way a Westerner might communicate and the way a Chinese person communicates? In China, a boss won’t say “no,” even if his life depends on it. He trains his people to tell all prospects that his factory can make anything and everything, on the off chance that either he can make it, or his friend/brother/old high school classmate can make it and he gets his cut of the deal. He won’t answer questions directly unless pressed, and even then, he won’t like it. He also very often won’t understand that you want him to do some work for you in the way you want it done, not the way he wants it done. He’ll tell you “yes” at the beginning of the conversation and then, two hours later, you’ll learn that it’s actually a “no.” And here’s the kicker–behaving and communicating this way is not only acceptable, but proper, a virtue even. Chalk it up to cultural differences, my friends.

I’ve gotten pretty good at figuring out the truth in a relatively short period of time, but I haven’t ever figured out a way to get a factory owner to speak plainly and directly. It just isn’t done here. So I continue to probe and read between the lines, and accept that this is the way it is done with 98% of the people I do business with in greater China.

Now, can you imagine dealing with a situation like this without knowing anything about Chinese culture?

The Bottom Line: You won’t get very far, operating in greater China, unless you are personally prepared to deal with communication challenges like these, or you are able to hire someone who knows local culture to deal with them for you. China and the West are a universe apart, culturally. That isn’t a gap that is easily bridged. (But it is an endless source of fascination for a few of us nutjobs!)

Culture Shock: American Managers in China

I found this well-written, concise article in the Salt Lake Tribune that highlights some of the cultural adaptation problems American managers who work in China encounter.

From the article:

The issue…is that the Chinese culture is so different from what Americans have experienced in life and in the workplace.

When people ask me if there are major cultural differences between Greater China and the United States, I usually reply with this: “They are two entirely different worlds. Humans need to eat, sleep, and work, but the similarities end there.” Managers heading for China would do well do keep a very open mind, and to avoid any major policy decisions until they get the lay of the land. They should also consider hiring a cross-cultural communications trainer with experience in Greater China to guide them through the mine fields.

This article is full of other gems that provide a brief overview of some of the major cultural differences between China and the West. I’d love to go through them but, as usual, I’m in the middle of 18 projects.

Culture Shock For Chinese Tourists And Taiwanese Hosts

I’ll borrow the title of the article for this post.

Basically, mainland Chinese tourists have begun to visit Taiwan, and are expected to do so in greater numbers in the months and years to come. Predictably, there are some biases and prejudices on both sides and like most biases and prejudices, they are largely without logical foundation.

The article doesn’t go into any kind of depth on the political, cultural, and socio-economic differences between the Chinese-speaking peoples living on either side of the Taiwan Strait, but it makes for a light, fun read.

It will be fascinating to see how things play out. I’ll be watching with interest.

Classic Communication Gap: China vs. the West

I cannot tell you how many times I have observed the following conversation between Chinese-speaking and English-speaking businesspeople:

English Speaker: “I need you to lower your price/produce a machine I need/accept a higher price/grant a concession.”

Chinese Speaker: “Hmmm. That will be difficult.”

English Speaker: “Difficult? Well, good then. That means you can do it. If business was easy, everyone would be doing it!”

Chinese Speaker: Baffled silence.

What has just occurred is a complete misunderstanding based both sides’ lack of understanding of context and meaning in communication patterns commonly used in greater China vs. the West.

Here is what each side really means:

English Speaker: “I’m not making enough money and I need your help by reducing the price to $X/buying at a higher price ($X).”

Chinese Speaker: “I’m sorry, that’s impossible. I just can’t do that.”

At this point, the English speaker should say something like: “I understand. So, how much can you do, because I can’t do business at this price?”

The Chinese speaker will likely come back and say: “I can give you 5% less/more, but not the 10% you asked for.”

Classic. Happens all of the time. If you can learn what Chinese-speaking people really mean when they say things like “That is very difficult,” you’ll be much better equipped to negotiate in greater China.

Doing Business in Greater China: What do Foreign Businesspeople Expect?

Earlier this year I taught a seminar to a group of Taiwanese executives. The trainees were an excellent group, full of energy and ideas. During the Q & A session, one of the attendees asked “What do foreign businesspeople expect from their local suppliers and customers?”

Wow, what an excellent question.

My answer? “If they are sourcing, they expect to find what they need at a price lower than they would have to pay at home and at the same or better quality. If they are on a sales trip, they hope to figure out the local distribution system and see if they can make a profit selling locally.”

But that wasn’t the most important thing the audience needed to know. I added something.

I told them that they need to educate their clients and customers, to help them understand how business is done locally, because there are such vast differences between West and East. I told them they should do this honestly, without selfish concern for their own position, but with the aim of creating a relationship that is beneficial to both sides (and no, nobody smirked–this was a great group of people who understand long-term partnerships). One example I gave was the current trend in the Taiwan consumer market toward unique and elegant packaging for products priced in the NT$100-200 range (about US$3-6). Many foreign businesspeople cannot understand how a finely packaged product could sell for US$10 in their home market, but must be priced at half of that in Taiwan, Hong Kong or China. They don’t understand that many white collar workers in these countries have only US$100-300 a month in disposable income (after housing, utilities, car, medical, and educational expenses) and so will travel an extra four bus stops to find something priced only US$0.50 cheaper at another store.

As far as sourcing goes, there are some honest suppliers out there who have chosen a long-term, relationship-building strategy over a short-term, screw the customer strategy, but they are still in the minority in China, less so in Hong Kong and Taiwan. That is why a company doing business in Greater China needs to do its research and have a number of checks and balances in place. Sourcing in Greater China can be a huge boon to a business, and can also be a minefield that results in lost limbs and profit. Plan on spending weeks overseas just to get all of the details worked out. Multiple trips, help from consultants, constant quality checks are a necessity for a prudent businessperson, but if you can get a steady supply of finished goods at half the price you’re paying now, it is well worth the effort.

Do the Chinese Lie? That Depends…

Out in my neck of the woods, it is not uncommon to hear a businessperson from a Western country, following a disappointing episode with a Chinese supplier, say something like: “They’re all a bunch of liars!”  Of course, they’re not all bad. Part of the problem is very different definitions of what constitutes ethical and honest behavior between the Chinese and the Western world (Note: I’d include the Japanese in the group of people who don’t understand Chinese “lying”).

In short, for most Chinese people, lying is not really lying. What we in the West would consider to be a bald-faced lie, a person in greater China might think of as a courtesy, a convenience, or a smart tactic, none of which are immoral. In fact, lying to achieve some business or social aim, and getting away with it, is considered to be a sign of intelligence and social skill among many Chinese.

Chinese values are rooted in concepts of duty to oneself, one’s family, one’s company, one’s friends and associates, but not to anyone else. There is no “Good Samaritan” ethic going on; kids are not really taught from a young age that they have a duty to help strangers. The teaching is more along the lines of “don’t make trouble,” “don’t do anything shameful,” or “be a good student.”

Also worth noting is the fact that many more things are covered up by the Chinese than they would be in the West. People don’t tell each other about things that would make someone lose face or cause social embarrassment, and once the “deception” is discovered, all is generally forgiven after a brief explanation along the lines of “it wasn’t convenient for me to tell you the truth.” Things like job loss, serious illness, legal trouble, or problems with children are seldom talked about, and often kept hidden, even among close friends and relatives.

In a business context, you might not hear about a shipment that was supposed to go out last week but will now likely never go out until it is too late. This occurs with great frequency in greater China, and there is very little concern or shame on the Chinese end, because it simply isn’t viewed as being wrong.

For the unprepared Western businessperson, these ethics can be quite unnerving. I’ve personally seen many a business deal, and many a friendship, fall apart because of these radically different values.

The Bottom Line: Don’t expect your Chinese suppliers to have the same set of ethics that you have. There are differences across the board in what constitutes ethical behavior when you’re talking about East and West. Tread carefully, and set up plenty of checks and balances until you really know what you are doing.