This week, we resume our series about business cultures around the world with an interview with Dr. Jeff Wang of Poetica LLC.
What do you see as unique cultural characteristics of Chinese people that are
reflected in China’s business culture?
The long history, distinguished business and social cultures, different consumer value structures, and dramatic different regional contexts- all these and more make doing business in China a unique experience.
What I’d like to point out as the most significant variable in doing business in China, is how
much and how fast everything is changing in China. China has been going through an industrial revolution, information revolution, and green revolution almost simultaneously, compressing some 200 some years of world history into a few decades. It brought about 600 million people out of poverty in about 25 years. It is in the mist of the greatest urbanization in human history. The development of infrastructure includes a leading highway system and high speed railways, the three year US$121 billion healthcare reform, etc. The astonishing changes include changes in virtually everything, including business environment, people’s mind set, and social and business cultures.
China still has the vast inland area yet to be developed, or fully developed. And all the changes, including in business cultures, are on-going.
What do all these changes mean to us? First, it means opportunities and more opportunities. Second, any opportunity will not stay as an opportunity for long. And finally, what you learned/heard about China a year ago, even assuming they were accurate then, are probably not applicable any more.
In your opinion, what are China’s most competitive industries in world markets?
China has had significant development in many sectors. The efforts and results in clean tech fields are among many examples. Last year, China identified seven strategic emerging industrial sectors:
- Energy efficiency and environment protection
- New generation info tech
- High-end equipment manufacturing
- Renewable energy
- New materials
- New energy automotive
Favorable policies followed, including structural changes and financial incentives. I expect China become competitive, if not already, in all those sectors.
What’s the best way to find potential Chinese business contacts?
If you could afford the budget and time, visit China first, hire locals with real networks, and start building relationships. If you cannot afford doing that, find a firm/agency that does have extensive networks in China and acquire their services. You might want to make a trip with them to China, meet and have discussions with some of their contacts yourself. You can get first-hand feeling of business environment there and a good sense of the quality of the networks they have.
Be aware: just because someone speaks Chinese or was born in China does not mean he/she can help you doing business there.
What do you wish people knew about doing business in China before they arrive in country?
China represents potential markets, potential partners, and potential capital sources. The
opportunities are abundant, the rewards *could* be enormous, but it is not easy. Get help and be prepared.
From your perspective, what’s the business climate like for entrepreneurs (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?
China’s business tradition goes back a few thousand years. An interruption of a couple decades has long been a thing of the past. Nowadays, China is one of the most entrepreneurial places
in the world.
Some of my relatives and friends are among the first entrepreneurs after China re-opened and reformed. Most of them became successful in various fields such as manufacturing, IT, and legal. For example, brothers Chen Dan and Chen Tong started their logo design firm, Zhengbang, in a little department back in the early 90’s. Now Zhengbang http://www.zhengbang.com.cn/) is the most famous and sought-after logo design and branding management firm in China. Walking down any major street in Beijing or Shanghai you can spot logos designed by Zhengbang.
Last summer, China issued the 8th revision of “Classification Standard for Small and Medium-sized Enterprises” and defined micro enterprises. For industrial sectors, micro enterprises are those employ less than 20 people or with annual revenues less than RMB 3 million. For other sectors such as restaurant and catering, information transmission, and accommodation micro enterprises are those employ less than 10 people or with annual revenues less than RMB 1 million. For software and IT, micro enterprises are defined as having less than 10 people or less than RMB 0.5 million. Small and (newly defined) micro enterprises have become a policy support focus in China.
On January 8, 2012 in a financial planning conference in Beijing, Chinese Premier Wen Jiabao pledged to provide more loans to entrepreneurs in order to help them sustain growth in the negative global economic environment.
About Dr. Jeff Wang
Dr. Wang is an adjunct professor at Colorado State University’s College of Business and a member of the Executive Advisory Board of Colorado State University-Denver Executive MBA Program. He received his B.S. degree from Beijing University, Ph.D. from University of Rochester, and MBA from Colorado State University.
Dr. Wang has worked at various companies ranging from startups to IBM. He started on the technical side and moved into management and business. As Director of Operations at Click Commerce and Merge Healthcare, he oversaw business development and vendor management in North America, Europe, Australia, and Asia.
Dr. Wang is passionate about bridging social and business cultures. He founded Poetica LLC, a consulting firm that specializes in market analysis, market entry and partnership management for business enterprises and educational institutes in U.S. and China, and in connecting U.S. companies with Chinese capital sources.
For more information on doing business in China, please go to www.poetica-llc.com and visit Dr. Wang’s profile on the ECO network: http://www.entrepreneurcommunityonline.com/ECO-Advisor-Bio/jeff-wang-phd.