Myths about doing business in China

168 Pages·2004·1.047 MB·English

by  Harold Chee, Chris West (auth.)

Myths about doing business in China
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Myths about doing business in China
Harold Chee
with Chris West
© Harold Chee and Chris West2004
Softcover reprint of the hardcover 1st edition 2004 978-1-4039-4458-0
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in accordance with the Copyright, Designs and Patents Act 1988.
First published in paperback 2004 by PALGRAVE MACMILLAN
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175 Fifth Avenue, New York, N.Y.10010
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PALGRAVE MACMILLAN is the global academic imprint of the Palgrave
Macmillan division of St.Martin’s Press, LLC and of Palgrave Macmillan Ltd.
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Palgrave is a registered trademark in the European Union and other countries.
ISBN 978-1-349-52255-2 ISBN 978-0-230-50886-6 (eBook)
DOI 10.1057/9780230508866
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10 9 8 7 6 5 4 3 2 1
13 12 11 10 09 08 07 06 05 04
Contents
List of figures and tables ix
Foreword xi
Introduction 1
Myth 1 One market: 1.3 billion people 3
Myth 3
Reality 3
Conclusion 7
Box – Go west! 9
Myth 2 The Chinese market will grow forever 11
Myth 11
Reality 13
Box – China’s use of capital 13
The cost of China’s growth 15
Reforming the state-owned enterprises
(SOEs) 18
Box – The mystery of statistics 19
The labour market 21
Banking 22
Conclusion 26
Box – The enduring legacy of Mao
Zedong 27
Myth 3 The market is easy 29
Myth 29
Reality 29
Culturally different 29
vi
CONTENTS
Highly competitive 30
Bureaucracy 32
Box – The Chinese as innovators 33
The legal and regulatory framework 36
Working capital management 37
Underdeveloped infrastructure and
distribution systems 38
Labour costs 38
Corruption 39
Conclusion 40
Myth 4 China is Westernising 43
Myth 43
Reality 43
Relationships 45
Face 48
Harmony (hexie/hemu) 53
Box – Yin and Yang 54
The person of quality (junzi) 56
A changing China? 57
Conclusion 58
Box – The Great People’s Sexual
Revolution 59
Myth 5 Guanxi is a time-consuming sideshow to
the real business of business 61
Myth 61
Reality 61
Box – The king of guanxi 62
How do you attain guanxi 64
When guanxi goes wrong 67
Conclusion 69
Myth 6 The Chinese are irrationally xenophobic 71
Myth 71
Reality 71
Conclusion 77
Box – China: the world’s oldest
surviving culture 77
Myth 7 The Mask of Fu Manchu: the myth of
inscrutability 81
vii
CONTENTS
Myth 81
Reality 81
Box – The power of friendship 84
Chinese culture and context 85
Chinese notions of space and time 89
Conclusion 89
Box – Fu who ...? 91
Myth 8 Rules are rules: negotiating in China is
like negotiating everywhere else 93
Myth 93
Reality 93
Two classics 94
Box – China: a nation of strategists 97
The negotiation process 100
Applying this model to China ... 101
Conclusion 104
Myth 9 Chinese business people are not
trustworthy 105
Myth 105
Reality 105
Intellectual property rights (IPR) 106
What can foreign companies do about
IPR violations in China? 108
Box – Right or wrong? 109
Box – High-tech investment in China 110
Negotiation practices 111
Luring the tiger from its lair 114
Corruption 118
Myth 10 The Chinese are difficult to manage 121
Myth 121
Reality 121
Box – Power distance in China 123
Paternalism 125
Politeness 126
Fitting in 126
Cultural bias in Western management
methods 128
Team-working 128
viii
CONTENTS
Initiative 129
Feedback 129
Attitudes of Western managers 130
Cross-cultural training 130
Sourcing managers 131
Retaining key local staff 132
Conclusion 133
Afterword 135
Appendix A A summary of key success factors for
dealing with the Chinese 137
Appendix B Some key differences between China and
the West 139
Appendix C Making sense of Pinyin 145
Appendix D Recommended reading 147
Bibliography 149
Index 151
Figures and tables
Figures
1.1 China’s projected population growth
1997–2050 6
2.1 Projected GDP growth rates, 2000 to
2020, assuming high and low growth
scenarios 15
7.1 High and low context communications 87
10.1 Dilemmas of managing in China 124
Tables
7.1 Key differences in attitudes of Westerners
and Chinese 82
8.1 Different perceptions and negotiation
procedures 104