DOING BUSINESS IN CHINA: Out for the Holidays

Doing Business In China with Dan Paulson

In the US, we may take it for granted that the holidays we celebrate are also celebrated elsewhere. In China this is not so and if you’re not careful, you may find yourself in a pinch.

With the holiday season upon us, I am reminded how different cultures can be when it comes to celebrating. Seasoned travelers understand that what we celebrate here often isn’t celebrated somewhere else or vice versa. You can imagine how things change around the holidays in the US. During this time of year, retailers are in full swing. There’s a reason why Black Friday is such an important day for this industry as most of the profits earned by retailers starts just after Thanksgiving. In some industries, trying to do business this time of year is virtually impossible as business-to-business transactions come to a screeching halt.

In China, the holidays there are considerably different than they are here. The Chinese have seven holidays (see table) that are recognized nationally. During these celebrations, work in China comes almost to a complete standstill. With the exception of New Year’s, no other holiday aligns with ours here in the states. If you are doing business with China, it will be important for you to remember these dates and understand their significance.

Festival	Date	Legal Holidays	Holidays of 2010	Holidays of 2011
New Year’s Day	Jan. 1	1 day	Jan. 1-3	Jan1-3
Spring Festival (Chinese New Year)	Based on Lunar calendar	3 days	Feb. 13-19	Feb. 2-8
Qingming Festival	Apr. 4 or 5	1 day	Apr. 3-5	April 3-5
May Day	May 1	1 day	May 1-3	May 1-3
Dragon Boat Festival	The fifth day of the fifth lunar month	1 day	June 14-16	June 4-6
Mid-Autumn Day	August 15 according to the lunar calendar	1 day	Sep. 22-24	Sep 10-12
National Day	October 1	3 days	Oct 1-7	Oct 1-7

In addition to the seven legal holidays, there are four other national festivals where workers may get time off, plus there could be numerous recognized local and regional events that could impact workflow.

Recently we were working with a company in the states that wanted to purchase products from China. This company is very client centered and deadline driven. While they were used to working with these tight deadlines, they had not done much business with China.

We were asked to assist them with finding a suitable manufacturer and making the contact for them. We began our process in early fall and shortly after starting work, were asked to place an order that had to be in the United States by early October. At the time the order was placed, it was approximately two weeks before National Day which is the equivalent of our Independence Day. Keep in mind the products had to be made, passed through customs, shipped, pass through customs in the U.S.A. and delivered in this time. What transpired in the coming weeks was enough to give anyone gray hair and I earned my share as different unexpected challenges popped up.

The shortened version of the story is the products, though they were made in time were tied up in shipping and customs, and ended up arriving late. Even our best efforts couldn’t control all the variables from what would be a normal workweek in China. The problems compounded themselves with the holidays. Here we have been spoiled in recent years. There was a time in our not too distant past when nothing would happen on a national holiday. You spent time with friends and family. If you needed to go to the store or get something done, too bad. In China, it is still much like that. Everybody stops to celebrate, and while early October might not be a big deal to us, it is very important to that culture.

So here’s wishing you a happy holiday season. If you are looking at expanding internationally, be sure to know that nation’s culture and what they celebrate as well. It could lead to profitable relationships for years to come!

For more information, please visit Dan's TNNWC Bio.

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Capital, Traffic Building, International Customers and unique SERVICES.
The National Networker Publications™ produced by TNNWC Group, LLC
Resources for Business Planning, Development, Capital and Growth

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DOING BUSINESS IN CHINA: Out for the Holidays

DOING BUSINESS IN CHINA: China Trade: Becoming a Good Chess Player

Doing Business In China with Dan Paulson

In recent months, the US has sought to pressure China to re-value the Yuan. By strengthening China’s currency, the US hopes to lessen the imbalance of trade by making US goods more competitive. Over the past several months, this pressure has been increasing. Watching this play out is a good study on how business between the US and China often differs.

In the United States, we are very used to our way of business. We can be demanding, willing to pressure others for price and service, and set expectations for immediate returns. Things here move at a pretty fast pace. In China however, the pace can be much different. Relationships take longer to build and the quality of these relationships can vary significantly. Also important is one’s ability to save face. Things we take for granted in business discussions here, can potentially be deemed offensive by a business connection in China. This is why the strength of the relationships are so important and one should treat business relationships in China more like a Chess match.

If you consider the re-valuation of the Yuan, China has taken a slow and methodical approach. This doesn’t work well with our occasional “shoot from the hip” style. Our habits of wanting action now could potentially cause the China administration to retaliate creating a negative impact on trade in the years to come.

Doing business in China is more of a chess game. It requires strategy, patience and a willingness to approach business from a different perspective. Setting political differences aside, there are tremendous opportunities for businesses to grow in China if they apply certain tactics and observe some of the mistakes others make.

• Relationships first – Weak relationships produce poor results. Much like us, the Chinese look for short-term gains. Less like us, they are not as concerned about the “sale after the sale”. Unfortunately, this is where many businesses get burned. Focus on strong relationships first.


• Saving Face – It’s hard for anyone to accept criticism. In some cultures it is even more difficult. So is true in China. Anything that could challenge or damage someone’s power (real or perceived) is frowned upon. This is where you may get commitments from business connections that cannot hold up.


• Give respect as well as receive it – This is part of relationship building and saving face. The more respect you give to your business contact, the greater respect you will receive in return. Playing games or trying to force your hand will damage your business relationship and could cost you. Make sure you show that you intend to work with your partner.


• Conduct face-to-face meetings. Again build relationships. Personal contact can make the difference. There is a lot that can be lost in translation (quite literally) by not getting together with the individuals you are trying to do business with. Especially if they are half way around the world. The money spend on travel could save you increased costs and headaches down the road.


• Understand what moves your international connection is looking to make – Depending on your relationship, be ready for them to tell you what you want to hear. Make sure they are able to deliver on what you are looking for. You may receive assurances that they can deliver when they really are unable to. Pay attention to body language. Get clear about what you need and what they are offering.

The differences in your relationships will make all the difference in your business. While we may not have control over the value of currency, when it comes to negotiations, we can definitely learn what works and what doesn’t.


For more information, please visit Dan's TNNWC Bio.

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Capital, Traffic Building, International Customers and unique SERVICES.
The National Networker Publications™ produced by TNNWC Group, LLC
Resources for Business Planning, Development, Capital and Growth

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DOING BUSINESS IN CHINA: China Trade: Becoming a Good Chess Player

CONTROL = APPLICATION OF INFORMATION: The Vast Opportunities of Internationalism for Emerging Enterprises

The Vast Opportunities of Internationalism for Emerging Enterprises.

Going Global is not Unpatriotic - it may well be a powerful domestic stimulus and a "shot in the arm" for new and growing businesses and the United States economy.

Dear Colleagues, Members, Readers and Friends:

I have been accused on many occasions of being less than "patriotic" or "optimistic" when I have written about the vast possibilities available to entrepreneurial and emerging enterprises when they choose to "go global." For the record (I have been thinking of producing an album, but my market would be [ahem] very vertical]) I am not advocating swearing an oath against your native country, putting your neighbors out of work, or any such thing. I would like to see my native country (the United States of America) at full employment, with a declining budget deficit, and with a growing balance of net exports. Really.

Sadly, I am one of those Main Street Economists who believe that none of these noble objectives will be achieved simply by waiting for our government (as well-intended as they are, printing out currency and issuing incredible sovereign debt -- and with "unemployment" programs, overhauls and other noble objectives) or the large conglomerates who are "too big too fail" (but too 'cautious' to inject loans into growing companies, or to even give credit to consumers and small businesses whose owners don't have a combination of liquid dollar-for-dollar collateral and FICO credit scores higher than my SAT scores were when I was applying for college), or the the suddenly "profitable" smaller and medium=sized companies who are engaged in pre-suicidal profitablility syndrome.*

*NOTE: PRE-SUICIDAL PROFITABILITY SYNDROME is a Lingovation coined by Douglas Castle to describe a scenario where companies with declining sales in a declining marketplace with no resurgence in demand in sight ramp profits up by radically cutting costs -- largely personnel costs, or "jobs" as we regular folks call them. Profitability goes up solely by cutting both non-productive and productive costs. For a time, some shareholders (and some Wall Street hacks and quacks) are happy (hopefully they are slowly selling off their holdings) --- until a point is reached where costs cannot be further trimmed and revenues continue to decline. It is then that the "suicide point" has been reached - irreversible losses simply overtake the company. In the world of instant gratification, this is becoming increasingly common.

In a situation of PRE-SUICIDAL PROFITABILITY, short-term profitability is increased, in essence, by taking fired workers' paychecks, and transferring them over to the bottom line for "re-distribution" to the shareholders. It is every bit as productive as heating a log cabin by pulling off logs one by one and throwing them into the fireplace. -DC

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As a patriot as well as an Internationalist, I want U.S. jobs, consumerism and prosperity, as well as some financial security for our nation's returning veterans, our chronically ill and unable to work, and our growing numbers of elderly who are barely able to work, but who no longer have adequate principal or income in their retirement and pension plans to allow them to retire after a lifetime of hard work.

I believe that these changes can only be brought about by the entrepreneurial sector (which cannot be allowed to atrophy any further), through their proactive and collaborative response to the real problem here: a lack of genuine productivity. The global marketplace is a study in arbitrage and opportunity -- they are sources of inexpensive production, efficient labor and growing consumerism (customers!).

If these sources can be utilized by our own enterprizing entrepreneurs through virtual export and international business divisions (much of this can be done through cyberspace, by web conferencing, by Skype... and very inexpensively), they can increase their markets, decrease some of their costs of manufacture, grow rapidly and become PRODUCTIVE.

And any growing business in the United States which can become truly productive will eventually (no matter what your uncle Phineas told you) become profitable, a domestic jobs creator (for those wishing to work while waiting for government magic), a bigger taxpayer, and a greater contributor to the prosperity of the U.S. economy.

If a number of entrepreneurial and emerging enterprises became resourceful, a bit more adventurous and went global, the ultimate result will be increased productivity, employment opportunities, business-to-business purchases, consumerism, government tax collections, and prosperity. If a U.S. - based company can use available international resources, the impact on the U.S. economy will, with some time be favorably impacted; if a multitude of such thought-leaders worked collaboratively, they (WE!) could accomplish what government and the industrial behemoths cannot seem to do -- that is to bring genuine, fundamental and lasting positive economic change to the U.S. Subsidies, bailouts, stimulus packages and government-created non-productive positions are neither massively patriotic nor productive.

We cannot borrow our way out of debt, and we cannot create real employment without new productivity and innovative competitiveness. Subsidies cannot accomplish anything except to delay the acknowledgment of failure.

In sum, the proposition is that by going global, U.S. emerging enterprises can actually do more for their country than by idle flag-waving, waiting for government contracts or other passive non-strategies.

Following is a quick excerpt (almost a teaser, really) about the International Connections Program (ICS) about to be rolled out by TNNWC Group, LLC, which you can access directly on the website at http://www.thenationalnetworker.com/international.shtml. Incidentally, only Members (membership is free) of TNNWC Group, LLC and its Global Interworked Cooperative Business Community can access these services, so it might be a smart idea to get your free Membership, if you haven't already by clicking on http://bit.ly/JoinTNNWC .

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WE OFFER YOUR COMPANY UNLIMITED ACCESS TO THE ENTIRE WORLD.

GROW YOUR BUSINESS ENTERPRISE WORLDWIDE THROUGH INTERNATIONAL CONTRACTING, OUTSOURCING, OFFSHORING, CO-VENTURING, EXPORT, IMPORT, ACCESS TO THE INTERNATIONAL CAPITAL MARKETS, TRANSLATION AND INTERPRETING SERVICES AND THROUGH LIMITLESS GLOBAL OPPORTUNITIES INVOLVING MARKET RESEARCH, TRUSTED ON-LOCATION REPRESENTATION, DISTRIBUTION AND COLLABORATION

There are no geographical barriers in cyberspace...and the costs associated with international travel and communications are no longer an impediment to expanding your business, markets and access to resources worldwide.

The key issues in going global are not merely a knowledge of international laws and treaties, tariffs, logistics and payment arrangements (our TNNWC experts can get that information for you)...the key issues are actually 1) having a trusted agent in your own country to act as your advisor and liaison and 2) having a well-regarded, well-connected, competent "native" agent in the country in which your want to conduct business who is not only trustworthy, but is an expert at all of the laws, customs and practices that will impact your business.

These two persons, one “at home” and one “in the field” are indispensible – and TNNWC™ will provide you with personal introductions to both of them through our Country Concierge Service™. They will immediately become part of your bank of international Human Resources. Highly knowledgeable, connected and trustworthy, they will become your powerful allies.

With these two individuals well-chosen and in place, and with the various Service Enhancements offered by TNNWC (trade financing, credit guarantees, insurances, foreign exchange services, administrative and invoicing services, translation and interpreting services, specialized international SEO services, payment processing, etcetera), we can truly assist you in the creation of your own virtual international business division for your company [more]. ####


Don't hide from reality -- exploit opportunity. It exists everywhere if you are proactive and do a bit of exploration.

Faithfully,

Douglas Castle

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Capital, Traffic Building, International Customers and unique SERVICES.
The National Networker Publications™ produced by TNNWC Group, LLC

“Empowering Emerging Enterprises”

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