If you wanna do business in China, make sure you've read this--One Billion Customers by James McGregor. I will write a review after I finish it, so far it's good. Below are some of the classic lessons from the book. Fatigue, food and drink are negotiating tools. If your Chinese counterpart wants to finalize a deal after Mao-tai-soaked banquet, it is better to throw up on the contract than sign it.
Foreign business people who come to China often have too much goodwill, too much trust and too little patience.
Never joint-venture with government entities unless you have no choice. Then understand that this partnership is about China obtaining your technology, know-how and capital while maintaining control.
If China requires that you joint-venture, get a majority stake, control the board and install your own CEO, CFO and HR director. If you don’t trust your CFO like your mother, give your mother the job.
Don’t mistake language ability with business or management competence. The savviest and smartest Chinese managers often don’t speak English or have a Western university degree.
China is all checks and no balances. Chinese government anti-corruption drives are not cynical exercises. But the effect is minimal because the overall system is almost incompatible with honesty.
China has returned to its traditional symbiotic relationship between the merchants and mandarins. Officials clear the way for business. The business people pave the way for officials to accumulate assets.
If you decide to sell your soul and succumb to China’s corruption, get a good price and focus on charity work in your old age.
China’s modernization is aiming at “rule by law” not the “rule of law,” so relationships and personal power reign supreme.
Don’t rely exclusively on the law in China. You will lose. Use laws and regulations to enhance political and business arguments in favor of your position.
Avoid the “slobbering CEO syndrome.” Don’t fall for China’s brilliant use of its huge size and 2,000-year tradition of manipulative political pageantry to intimidate foreigners into accepting unwise deals.
Education is China’s greatest strength and greatest weakness. The Chinese are great memorizers, mathematicians and scientists who run tedious routines. But the rote education system leaves many weak on powers of analysis and leadership.
China’s rush to get rich is accompanied by deep distrust of the system, and anyone outside one’s immediate family or circle of close friends. This has created a business environment that is steeped in dishonesty and in dire need of transparency and fair dispute resolution systems.
China’s greatest management challenges are to create organizations that are not dictatorships, to treat others as equals, to accept responsibility and to share information, all behaviors that have been almost absent.
China is modernizing, not Westernizing. The country’s goal is to modernize but retain the Chinese “essence,” which it is still struggling to define.
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