China’s rise as a business powerhouse has as much to do with scale as anything else. There are great opportunities for U.S. businesses to gain entry into the China market as well as help Chinese companies do business in the United States. It can be a long and sometimes difficult climb, but getting it right from the start can help pay big dividends.
Here are five things U.S. companies would be wise to keep in mind when attempting to engage a Chinese company in a business relationship.
1. Set expectations and deadlines before starting the engagement
Communicate when your deliverables will be ready and what the Chinese company expects in actual sales over some predetermined period. The Chinese are accustomed to living in a business world of grey area, and you need to be as explicit as possible. If the Chinese company hesitates in giving out that information, offer some scenarios and gauge their reaction in order to better understand their real expectations.
Remember that just because Chinese businesspeople may nod when you are talking, it doesn't mean they are agreeing with your points. They are only acknowledging that words are coming out of your mouth. Americans can be easily confused by that.
2. Make it happen fast
While it takes time to build a relationship based on trust and understanding, do not expect as much patience when it comes to delivering results. The Chinese people I have encountered in business are in a hurry to make it and make it big. If the rewards are not substantial or they take too long to materialize, your company is likely to be dropped like a bad habit. On more than one occasion, I was asked how long I thought it would take to arrange a deal with distributors of lighting products in the U.S. When I said it could take up to a year or more, I could sense their impatience and frustration.
3. Receive payment for all or part of your service at the outset
This isn't because you won't get paid. (Although that happens in China just like it does everywhere else.) But payment acknowledges commitment on the part of the Chinese company to do business with your company. It is acceptable to provide some level of service in advance without payment to demonstrate capability and capacity, but be mindful of how much you give away.
4. Communicate regularly, and in Mandarin whenever possible
Many Chinese businesspeople under 40 are functional in English. However, most are decidedly more comfortable in Mandarin. If you want more honest and thorough explanations, you will find that happens in Mandarin much more than in English. I find Chinese people are flattered when you compliment their English skills, but when you dig deeper they do not appear to understand as much English as one might think. Be careful about translation services—there are many nuances that you need to be mindful of to have the right tone in your communication. For instance, you must appear supremely confident and communicate that you expect to be working with them. In the United States, that could appear presumptuous. In China, it is both necessary and a good show of confidence in your abilities.
5. Go to China and go often
Open a small office if you can. Having a presence in China does not have to be a colossal expense, but showing your commitment goes a long way in gaining the confidence of those you are trying to engage (or are engaged with already).
OPEN Cardmember Mark Kolier is President and CEO of CGSM Inc., a marketing consultancy and agency with expertise on working with companies in China.