HUMBA Spring 2012 Study Abroad Trip

China: May 17, 2012- May 31, 2012

By Adebowale Asaya, MBA candidate at the Howard University School of Business, 

Class of 2013

 

            If I could sum up my trip to China in May of 2012 with a few words, those words would be; amazing, cultural, celebritism, & shopping! The trip was motivated by China’s recent economic and social reforms. We visited Beijing, Shanghai, and Guangzhou….all tier 1 cities. As business students, personal observation on the people of China, and business practices in China is essential. I planned to develop an understanding of how to generate business and do business in Asia.  The trip started on May 17(a day after my birthday!), from Dulles airport. The first leg of our trip was from Washington to NJ, and then from NJ to Beijing. Our trip to China began in Beijing, which presented a wonderful experience and more importantly a rich, cultural journey. Beijing is the capital of the People’s Republic of China so there were a lot of other tourists in the city with us. One of the first things we did upon arriving in Beijing was enjoying a meal in one of Beijing’s finest restaurants close to our hotel. We ate family style, which was new to many of us. The Chinese culture measures very high on the “collectivism” scale along with Japan and Korea compared to most western cultures. This means that the Chinese, in general, is a collective society that strives for harmony and group belonging. Eating with a lazy Susan and sharing entrees was something that was very new to us. However, as we progressed meal after meal, we got a lot better with chopstick handling, and interacting with each other using the lazy Susan. I was particularly impressed with the Beijing duck, some sweet and sour sauces, sizzling fish pans and others.

            While in Beijing, we also saw the Forbidden City, Summer Palace and the Great Wall of China. In visiting those sites, one thing that we had to get used to was the staring. So many people were looking at us.  After a while we never noticed it anymore, but some got bothered by it. Lots of people even came up to me and asked if they can have a picture with me. In America, and more specifically in Washington, DC, the cultural landscape is more diverse. The amount of different cultures and people you meet in one day out in the city is almost countless and endless. In Beijing, commoners were shocked and very excited to us.

            Another interesting piece of my experience in China was the shopping. One thing about shopping in China is that many things are much cheaper than in the US.  This is due to manufacturers in China and their ability to compromise intellectual property. Of course the quality of items in the marketplace were very questionable, prices were so unbelievably low that we almost were left with no choice but to consume! China is currently taking advantage of their huge population and low labor cost structure to intentionally keep the value of their Yuan low. In turn, this almost forces other nations to continue to buy from them with no other options because of such low cost. China’s economy also benefits from foreign OEMs and multinational companies who NEED China’s consumer because there are 1.3 BILLION of them. Many US Manufacturers are experiences their highest sales from China now.

Business in China

While in Beijing, we visited both Lenovo Corp and HiSoft Technology International Limited. Lenovo hails as one of the world’s largest makers of personal computers. We took a tour of their headquarters, and heard a bit of their strategy to surpass Hewlett-Packard, who currently is #1 in world market share. The tour of their facility was very enlightening, and there was a certain level of humility that lingered in the headquarters of both Lenovo & HiSoft. This was because of the relationship – based culture that exists in China. Chinese and Westerners often approach a deal from opposite ends.

Westerners normally build transactions, and if they are successful, a relationship will ensue. However, the Chinese believe that prospective business partners should build a relationship, and if successful, commercial transactions will follow. Virtually all successful transactions in China result from careful cultivation of the Chinese partner by the foreign one, until a relationship of trust evolves. Business clauses might form a useful agenda, but obligations came from relationships, not paper. Today, a signed piece of paper is a symbol of progress, but nothing more. The Chinese may sign a contract to humor their guests. The idea of a friendship leading to business is attractive. The logical development of close relationships is the Chinese concept of guanxi, pronounced “guan xi”. The kernel of guanxi is doing business through value-laden relationships.

            Its very difficult to BRIEFLY describe what are the must-knows in doing business in China. But If I had to summarize here goes…..

Business and culture

l   Western business visitors are often deadline-driven and unwilling to slow down to the Chinese pace when discussing business.

l   Negotiations can seem to drag on when the Chinese side is consulting internally or has other reasons for delay.

l   Western thought is dominated by linear logic, whereas Chinese thinking is influenced by early philosophers who saw a paradoxical balance of opposites in all things.

l   Where Westerners tend to look for clear alternatives (option A instead of option B), Easterners may examine ways to combine both option A and option B.

l   Westerners normally build transactions, and if they are successful, a relationship will ensue.

l   However, the Chinese believe that prospective business partners should build a relationship, and if successful, commercial transactions will follow.

l   This difference underlies many misunderstandings arising from business negotiations.

l   Virtually all successful transactions in China result from careful cultivation of the Chinese partner by the foreign one, until a relationship of trust evolves.

l   The logical development of close relationships is the Chinese concept of guanxi, pronounced “guan xi”. The kernel of guanxi is doing business through value-laden relationships.

l   The idea of a friendship leading to business is attractive.

l   Chinese and Westerners often approach a deal from opposite ends.

l   Traditionally, commercial law scarcely existed in China and indicated bad faith—the early appearance of a draft legal contract being inappropriate irrelevant since it carried no sense of commitment.

l   Business clauses might form a useful agenda, but obligations came from relationships, not paper. Today, a signed piece of paper is a symbol of progress, but nothing more. The Chinese may sign a contract to humor their guests.

l   The challenge of learning to speak fluent Chinese, complexities of the Chinese way of doing business, and a strong sense of national pride mean a foreigner will very rarely be accepted on equal terms.

l   Having “face” means having a high status in the eyes of one's peers and is a mark of personal dignity.

l   “Face” is an essential component of the Chinese national psyche. Causing someone to lose face could ruin business prospects or even invite recrimination.  Examples include: Insulting an individual or criticizing them in front of others; Making fun of them in a good-natured way; and treating someone as a subordinate when their status is actually higher.