Eats, Crowds and Cheats; Doing Business in China Presents Special Challenges. Meals Are an Event, Efficiency Is Foreign, Counterfeiting Is Rampant. Some Tips from Our Globe-Trotting Correspondent
Stone, Brad, Newsweek
Byline: Brad Stone
Google jumped whole hog into China last year, investing in search leader Baidu.com and doubling down on its own Chinese-language portal. Yahoo bet part of the farm on China last month, plugging $1 billion into the search engine Alibaba.com. These days, it seems like every major American Internet business is going to China, and so I did, too. My wife and I toured the megalopolises of Beijing and Shanghai, the bustling manufacturing centers outside both cities, sampled the varied cuisine, regularly got lost and subjected ourselves to widespread ridicule for our bungling of basic Chinese words. Naturally, the two-week experience now qualifies me as an experienced Sinologist. So here are some basic, hard-earned rules for conducting business in the world's most populous country, derived from some intriguing customs we encountered along our way: Get ready to eat. Yes, formal Chinese dinners are long, lavish and a challenge to the stamina of Americans accustomed to the dine-and-dash. Every Western businessman and investor must cultivate relationships, or guanxi, with local contacts to do business in China, and these allies will likely spirit you out for festive hours-long meals. A Silicon Valley refugee who had moved to Beijing told us that state-run companies are particularly prone to throwing toast-packed banquets for their Western business partners, and though we didn't do business with any, we did get to partake in some of the longest meals of our lives. Advice: have painkillers handy to blot out any developing leg cramps during hour number four. Bonus advice: the potent Chinese grain liquor, baijiu, should not be consumed in great quantities or mixed with pijiu (beer). Please, just take my word on this.
No efficiency software. There are lots of people in China. Yep, that's a bombshell. But nothing quite prepares you for the experience of walking into a department store in the shockingly vertical city of Shanghai and getting besieged by a soccer team of uniformed employees, each earning about 10 yuan ($1.25) a day and sweetly pointing to the merchandise in front of you. (This doesn't happen at your local Sam's Club, does it?) Labor is so cheap that companies seem to employ as many people as possible. Yet many American businesses these days are focused on using technology to wring inefficiencies out of the production chain and automating human tasks. …