Savio Chan 5 Rules For Doing Business in China
June 1, 2012 @ 12:00 am EDT
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Today’s speaker was Savio Chan, President and CEO of China US Partnership. Mr. Chan is a native of China and uses his education and exposure to American business and culture to be an effective bridge builder for both sides of the partnership.
Savio began his talk by telling us about the call he got from Steve Jobs when Jobs was trying to do business in China. He was able to give Jobs the information on the cultural differences that impede the non-Chinese in that country. Today China represents 25% of Apples earnings
Mr. Chan gave us a relatively easy to remember set of rules;
C – Cultural complexity, be familiar with custom and hidden meanings. He told a story of a businessman that gave a Chinese executive a very expensive Tiffany clock, and was totally ignored. A clock is recognition of mortality and such a gift implies you do not wish that person a long life. As we say in Brooklyn "Who Knew?"
H -Harness the influence of government. Be aware of the need to marshal the good will and cooperation of the government
I – Intellectual Property rights are very differently interpreted. There are ways to protect your intellectual property, you must know the nuances
N – Navigate the landscape and look for partners. There are various special skills available throughout the country. He spoke of a company that wanted to create crystal pieces and was able to find a small village that was already producing work for Steuben and Swarovski.
A – Anticipate strong local competition, cloning, copying, and reverse engineering. You have to address remedies for this going in.
Register your trade name in Mandarin as recognition of the culture and use the three P’s; Be patient, Be Persistent and create Partnerships.
Deals are not made over a single lunch or diner. Relationships are slowly and patiently built.
Savio told us that with all of the changes that have taken place in China it is still a command economy. Whereas America tends to have its markets design growth.
These basic differences create challenges that can be, and need to be overcome. Chan pointed out that China is one of America’s most important trade partners. In addition Chinese manufacturers are now slowly moving factories into the United States. This moving of manufacturing facilities to the US is old policy with some European and Japanese companies, but is new for China.
During the Q&A the question of human rights came up. According to Savio those concerns can be discussed, and conditions can be agreed upon. Another question was; "How long will it be before China is no longer the low cost labor pool? Will it then be a further race to the bottom?" Chan said that in some cases China is no longer the cheapest labor pool.