Tips for Dealing With Business in China: How to Deal With Chinese Businessmen
In all likelihood, China is the largest factory in the world currently. Finding made in China label on your wardrobe is a simple task in the present. Many traders and manufacturers have been looking for counterparts in China to begin producing their goods at the lowest cost. However, in my time working as a consultant for trading working in Hong Kong, I’ve witnessed numerous unnecessary losses or difficulties that these companies from the West confronted in dealing with Chinese factories and businessmen, primarily due to minor misunderstandings and cultural differences.
Common Behaviors of Chinese Manufacturers
Here are the two most typical behaviors of Chinese manufacturers. I will discuss the reasons for their actions, and once you understand their primary focus, this will allow you to comprehend their mental state and help you develop better strategies to deal with them.
Ordinary Behaviour #1: Over-Promising
The most frequent practice in Chinese factories is over-promising. It is essential to realize that the principal purpose of Chinese businessmen is to secure the business and ensure that they will earn money no matter what.
They may promise all you want or give you a cost estimate that is not as high or a short time to deliver before they have your order. But when production is over, they could offer you a small amount, or in deplorable circumstances, they might give you something that is entirely uninformed of your expectations.
How to Tackle?
To combat this over-promising behavior To stop this behavior, be aware of the cost of production in the market of the product you intend to sell. It’s difficult for you to figure out that most factories give you a lower rate than the actual cost. If you’re a novice to dealing with Chinese producers, it is recommended to employ local sourcing companies to assist you in finding the most reliable market price and aid you in creating a first-time business alliance with Chinese factories.
When you are scoping your product’s details to Chinese manufacturers, make sure you have a fair agreement regarding penalties for the poor quality of the product (for example, a penalty of a specific percentage of the cost of your product is not able to conform to a specific laboratory test requirement or is delayed in the delivery process that results in an air-transportation of your products instead of shipping them as originally planned.) Numerous sourcing companies and local trading companies would be able to assist in negotiating.
The information above is not just for novices. However, it is also suitable for firms that have already established connections with Chinese producers. The investment in the hiring of agents is an excellent idea to prevent a total fail with your manufacturing. Personally, I strongly suggest using representatives from Hong Kong, as these businesses operating in Hong Kong do have resources who communicate in Mandarin, which is the most widely spoken Chinese language in China. In addition, they are aware of the mindset of mainland Chinese people while being familiar with the way business is conducted within China and the Western world.
Tip for You: Be Realistic & Alert
If you choose not to use middlemen to trade directly with Chinese manufactures, my most important advice is to be honest. Be realistic about the guarantees they made, and don’t be embarrassed to ask them questions over and over again.
Another recommendation is to keep an eye closely with regard to the production process. The factories may not notify you right away if they spot an issue with the design of your product or other quality issues. Instead, they will be quiet and wait until you find the issue. Make sure you’re aware of the progress of production.
Ordinary Behaviour #2: Denial of the Intangible Barrier of Language
Another issue that western businessmen confront when dealing with Chinese manufacturers from Mainland China is the language.
It is a fact that the English proficiency of the Chinese population in China has improved throughout the years. The increased level of education in cities with higher levels of education and ease of access to educational materials online certainly helped.
However, as a non-native speaker of the language entirely different from Chinese, there are many meanings they attempted to convey through their conversations, particularly in the workplace, which could result in confusion.