fbpx

BayBuzz

Menu

Guanxi … DoinG Business in China

Business/Economy

Rex Graham08 December 2014

BB20

I was traveling on the bullet train between Xi’an and Beijing, relaxing in my very comfortable seat, travelling at 350 kilometres per hour, aimlessly looking out the window, reflecting on my journey, my life, my business and this incredible nation.

I am involved in a fruit intellectual property business in China and I have been very fortunate to travel regularly throughout that country over the last decade. As you can imagine, that has been an incredible period of time with cataclysmic growth and change, from cycle power to BMWs in a decade.

Every six months it seems different; the speed of change is overwhelming. New motorways, bullet trains, amazing transport and airport terminals, stunning clusters of skyscrapers, housing, entire new villages all the size of my own town … and they are everywhere. There are some very smart architectural designs and others quite utilitarian, but all reaching to the sky.

I look out the window and wonder how my own small country can relate to this giant, this new empire, and how will our people survive and prosper in this relationship?

One thing that I am sure about is that we must find a way to tread this path despite the challenges and dangers for us. Our very survival and prosperity will depend on it. In doing this we also need to learn from their economic experience and try to avoid the pitfalls of growth that they are grappling with.

There is new wealth everywhere, but thick smog smothers most cities and even a lot of the countryside. I still don’t dare to clean my teeth using tap water and can’t find a river, stream or lake that I would be happy to swim in with my kids. This is their challenge and I think we will all see huge developments in this area over the next decade as they address this issue, as it seems nothing is too big for this determined nation.

China is a huge country with an ethically and religiously diverse population of 1.3 billion people, some very rich, a large and growing middle class, and some still very poor. It is a society still challenged by growth pains as the recent events in Hong Kong illustrate. There is no safety net, so everyone must work, even if this means they must do the most menial job. However, the positive side of this is that it drives everyone towards education and self-improvement. It also drives a strong family focus of respect, self-reliance and an ethic of looking after each other. You need to look after each other because nobody else will.

This is also a country that is very connected. Everywhere you go young people, some very young, are connecting to social media and retail options on their smart phones. Business people are very connected to the internet, the Chinese internet, and therein lies another challenge.

A firewall blocks the usual western internet platforms such as Google, Facebook and YouTube. Instead, over 600 million Chinese internet users go on their own platforms everyday such as Baidu (the Chinese search engine equivalent to Google), Weibo (the equivalent to Facebook and Twitter) and Youku (the equivalent to YouTube). If we want to reach these people then we need to start getting serious and use their IT mediums and communicate with them in their way and treat them like customers. China is our natural trading partner and over the last decade has become our largest and most important one. They have people; lots of people who need to eat and the wealth to buy the food we grow so well. They also want safe food and that is exactly the kind of food that we have.

It’s a truly excellent mix. In addition, they have something else that is very special and unique – a desire to establish long term strategic relationships with other food growing countries such as us. This sounds obvious, but in reality it is very different from most other countries, especially those in Europe and the USA, who only want to use us as a top-up to their own domestic production even if our product is better and can be cheaper to grow.

China is a willing and natural trading partner for our producers to build long term strategic partnerships, but we will need to build the platforms of Guanxi to secure this success and the durability of these relationships.

Guanxi is the building of relationships before business is done, and this is essential in China for establishing trust and a spirit of cooperation. One of our challenges is that the Chinese actually believe and live this concept, which is often counter to our own Anglo Saxon trading culture.

My young Chinese colleague, James, tells me that New Zealanders should be good at ‘Guanxi’, because this is also an essential element in the Maori culture similar to the Chinese. In his view that is perhaps why Maori and Chinese relate so well. But sadly not all NZ Europeans have been successful adaptors in this relationship in our own land and are unable to draw on those lessons.

So the pitfalls are huge and we are all starting on a big learning curve and, like all learners, we will make a lot of mistakes on the journey.

Some years ago we used an official Chinese translator to translate elements of a legal document for a major international client, which said, quote: “Shennong Variety Management Ltd will grant to the propagator …”. The official translator translated this to: “The Vector Machinery Company Ltd will grant to the calculator …”!

Our client was too polite to say anything and we only found out when we employed our own Chinese associate. Since that time he has found numerous mistakes and misunderstandings in our business, not just in direct translations, but also in the way that we are relating. And that is of course the key to future success.

The Chinese are also more used to communicating implicitly as opposed to our more explicit expression style, which means we have to learn to be more mindful of the subtle implications and be more careful in our customary directness.

Understanding and relating to the language and nuances of the Chinese culture will be an essential part of our journey.

China is a wonderful opportunity for us all, but this new relationship will also challenge us. We will need to keep pace and grasp it with both hands.

Rex Graham08 December 2014

BB20

Leave a Reply

Your email address will not be published. Required fields are marked *

BayBuzz Sponsors

Sign up to The Buzz

Our free weekly email update reporting
on HB's important stuff

No thanks