Doing Business in China

Tips from our Marketing Class

Three Weapons:
1. Policy
- Always move ahead of the policy, see the domestic market
- If you don't follow the policy of the government, then you can move into trouble.
- Government policy affects Corporate Strategy

2. Corporate Strategy
- Move into the domestic markets in order to gain traction

3. Relationship (Guan Xi)
- Overseas companies have heavy emphasis on Guan Xi, so that you can be more mobile in China.
- In the 80s and early 90s, relationships helped you enter markets.
- Now, since opening the WTO in 2002, the Chinese government has to be fair to companies. The relationship helps you understand detail about the policy but it's not the only thing now.
- If you don't know how to play the relationship card, then it will get you in trouble.

In the old day when you invest in China you bring money, technician and technique, but from now on if you invest in China I advice you to bring along with you a lawyer, an accountant and an economist

- Mr. Zhu Rong Ji, Former Prime Minister of China

Central Government Policy = Company Law, Tax Ordinance, Economic Law, Foreign Affair
Local Government Policy = Tax Incentive, Investment Incentive

Case 1: The implementation of New Labor Ordinance
Case 2: the Change of Policy Towards the Sub-Contracting Factory in Southern China
Case 3: The Real Estate Policy

Corporate Strategy:
- Type of Investment
- Localization
- Location of market
- Consumer Behaviors
- Competition
- Pricing

Reasons why Shanghai is so important to China:
1. End of the Yangzte River
2. The buildings on the Bund have been there for over 100 years
3. Shainghainese is the most of all the Chinese that are willing to spend

Case 1: Gucci Watches vs. Swatch
Case 2: Movie Business (theater)
- If you want to have a Hollywood movie in the China market, you can only have about 25 foreign movies a year. If the production houses want to share the movie, they have to JV (joint venture) with a local production house. Relationship important.
Case 3: Ernst & Young (CPA firm)
Case 4: Zara, H&M, Next
- Purchasing power of the market, inventory turn over 7 days.

Relationship: Guan Xi
- Building up good business relationships, trust, time&money spent on business
- Makes all the difference in ensuring that business will be successful, minimizes rusks, frustrations, disappointments

"How to Build Guan Xi"
- First, it is not only based on money. Based on heart.
- Being dependable and reliable
- Guan Xi with high rank official is important but never use it wrongly"


I know it was a bit dry of a presentation...Catherine

Befriending over Badminton

Yesterday, not wanting to continue the same boring workout regime, I dusted off my old badminton skills ... solo. Yes, pretty pathetic with no plans of playing I renting one racquet and forced the fitness man to hand over a birdie too. Then while the bball boys were shooting around, I was swatting the shuttlecock over the net...with no one to return it (insert pathetic puppy picture). Then after maybe 10 minutes, a couple walks into the gym...with only one racquet. Rather than surrender my fun and let them play, I challenge her to a match! haha it was a bit kinder of an exchange than what I just described, as that sounds like a stubborn kid not wanting to share. I was merely encouraging meeting new people. So a couple volleys and aces and wiffs later, she comments, "It's so strange you're good but not yellow." I was flabergasted! Did she just say that? It's not even possible to be offended by her low expectations of me as she applied racial descripters to herself that were limiting. Haha, I laughed it off and won the next point. Surprise, surprise - awkward white girl has got game.

We continued playing for a while, rotating who would play so everyone got a turn. Quite a good workout - didn't remember it involving a drenched t-shirt last time I played. This was an accomplishment to know that I had actually worked while I was on the court. After about and hour+ of play, we both decided to end the fun as 10pm was approaching. As I reached for my bag to leave, Jo (my new friend) reached into her wallet and pulled out what looked to be a piece of bark on a cellphone key chain. "This is from my travels," she said. "For you."

I was shocked! I literally had met this girl an hour ago, whooped her in badminton, was whooped by her a couple times, and now we exchange gifts! (perhaps it was a gift of surrender due to my menacing smashes and Western/tennis strength as a player)The small carving on the wood is a scene from a window view that she had seen, and it was from the area where she and Ivan (her friend) were from in Mainland China - Xi'an. Still shocked by the random act of kindness, I exchanged emails with Jo in hopes of playing again.

This reminded me of the kindness of Lux, my bus angel that lent me 100hkd as a stranger. So far the score is Mainland Students 2 Hong Kong 0. I am not sure whether it is because they are also visitors to this place that they are more open to international students or that showing interest in someone's life really does pay off. While we were on the court, I asked Jo how to say "nice shot" in Mandarin - pronounced "How Cho" I received applause from the two for my pronounciation though I consider only as skilled as a parrot, just repeating the same thing I hear without remembering what I'm saying. Regardless, I find the kindness in surprises to keep me thinking the world will be alright. And if that's silly of me to do so, please let me enjoy the surprising friendships and mini-blessings that I cherish.