For Sale In China Blog

I was introduced to a young Chinese student a little over 4 years ago by a friend of mine who was his landlord. My friend was aware that I had talked for some time about ‘doing the China thing’ and as this young student was undertaking a general business degree and was somewhat entrepreneurial my friend wondered whether there were any opportunities to be had jointly. I had just had my first experience of ‘Guanxi’, which I will explain all about later. Mongo was the name of my friend and ‘Chris’ was the English name of the Chinese student.

We decided that we would attempt to import marble and Mongo being his usual ‘wheeling and dealing’ self decided he would like some of the action. Mongo and Chris set up a business together called Pacific Imports with me as their only customer. Mongo funded a trip to China for Chris who duly purchased a container of Marble. Instructions were given and standards and prices agreed. Twelve weeks later we were excited about the arrival of our first container from China. We couldn’t wait to open it but as we did our jaws dropped. It was nothing like what we thought we had ordered and even if it was the quality of the product was awful. I guess, fortunately for me, I was the customer and as such could reject the container. However, due to the ‘old pals act’ Mongo and I agreed we would share the loss on this first container. The product couldn’t be sold and after sitting in the warehouse for an age was eventually scrapped. Should we try again……yes, we agreed so Chris jumped on another flight and met with another supplier and placed another order. I am almost embarrassed to say that exactly the same thing happened again and once again we shared the loss. Mongo had had enough by now and gave up on the whole idea and decided India might hold more opportunity. Chris wanted one more go so I agreed to fund his next trip, but also that I would go out myself to inspect the goods this time before departure. Several weeks later Chris called from China and said I should come out. On arrival I was met by a downhearted and dispirited Chris who buy now had run out of money and was on the brink of giving up. He had being living on noodles for a month at 25p a dish.

I was still convinced that China would eventually offer up the opportunities that I believed it had and was determined to keep going……..but I needed Chris on my side…….and motivated. I offered Chris a full time employed position, fully expensed with a UK salary. He was made up and so was I. He had security and I had a motivated staff member who had gained a huge amount of experience. We had both learnt how not to do it.

Chris is still with me now and is the General Manager of all my Chinese operations.

So……..’Guanxi’. The most powerful of all tools in Chinese Business. Literally translated it means ‘relationships’ but more accurately it means ‘mutually beneficial relationships’. It is the lubricant that oils the wheels of Chinese enterprise.

Chinese business people place great emphasis on introductions through mutual friends. There is a natural distrust of foreigners and some might say deservedly, and many will say that it goes both ways. An introduction will break down these barriers. ‘Face’ is terribly important and Chinese people are insistent on dealing with principles when first establishing business relationships. If anyone wants to trade in China they have to be prepared to either move there or travel there extensively. I go every 4 to 6 weeks.

Coming up next: a fake businessmen, bribes and a ‘legal’ agreement.