Do you want to do business in China? Maybe what you need is
a partner to work with. “How”, you might ask, “do I work with a partner in China”? “Inc” (
www.inc.com
) posted an article on their website on January 16, 2013 entitled, “How to Partner in China in 2013”which gives a read some savvy advice about just that question. The article is written by Burt Helm, and here are a few things Mr. Helm has to say about working with a partner in the PRC:
“How can you take advantage of lower costs and the prospect of over 1 billion new consumers while minimizing risk? Three experts share the best ways to partner in China.
Start small and tough.
Use a small, low-risk project to set a high bar for quality and timing, says Arie Lewin, professor of International Business and strategy at Fuqua School of Business at Duke University. It’s fine and wise to hedge bets further by hiring two or three suppliers to serve similar functions and mandate outside quality control, adds Andrew Hupert, a consultant and author of
The Fragile Bridge: Conflict Management in Chinese Business.
The key is to be transparent about it at the outset. Let partners know they’re not alone, and must meet certain standards. Otherwise, unexpectedly introducing new quality requirements or shifting orders to other suppliers later on can damage the relationship.
Get everything in writing.
Ten years ago, the typical entrepreneur would not have had a written contract with their Chinese suppliers, says Daniel P. Harris, a lawyer at Seattle-based Harris & Moure and editor of chinalawblog.com. The business community, especially in developed areas like Shanghai and Shenzen, are now accustomed to them. “Today it’s foolish not to have a written contract,” says Harris. Make sure it’s spelled out in both English and Chinese, and clearly states the product specifications, the quality requirements, the trade secrets policy, and so forth.
Realize a contract is just the beginning of the conversation.
To an American, negotiation ends when the contract is signed. “Traditional Chinese negotiators don’t feel that way,” says Hupert. “A contract is seen as a written record of a meeting of the minds between two specific people at a certain time, under a particular set of business conditions.” In other words, it’s an exercise meant to help the two sides understand the dynamics and expectations of the relationship—not to determine a hard and fast set of deliverables. When conditions change, your partners will expect flexibility and understanding.
Don’t let them get away with things—even if you let them get away with things.
Even if you plan to let one bad shipment slide, it’s important to let the partner know you noticed. “Let them know you know what’s going on,” says Harris. “And if it happens again, you’ll need a new agreement on that.”
Get to know them—and their friends.
At the end of the day, relationships trump everything else. Historically, Chinese society kept few written business records, says Lewin, so people grew accustomed to depending on family and a few trusted outsiders instead.
“There’s an old joke in China,” says Hupert. “If your partner doesn’t have a picture of your family on their computer, then you’re just a transaction. And that doesn’t count for much.”
Reach out to local government officials, and make them aware of you and how you’re helping their economy, says Lewin. “If you’re creating employment, they’re very interested.” By gaining importance as a community member, you gain importance as a business partner, too. That’s good advice for someone on any unfamiliar terrain.”
If you want to explore the opportunities to do business in China then by all means get going, China is waiting for you. Just don’t shoot from the hip first before finding out what and who you are up against. You can do business successfully in China! However, first find an experienced legal pathfinder to help guide you through the woods.
Hawkeye in China
– Lex Smith