Feb 11, 2012

The February newsletter is up here:

https://www.mgtrading.com/Newsletter-February-2012-China-Business.htm

The main article is “It’s All About the Relationship.” Here’s an excerpt:

A few weeks ago, while everything was shut down in China for the New Year holiday,
I attended an event at the World Trade Center in Denver. As one of the speakers
spoke about importing, she bottom-lined her presentation by saying that
“International Trade is all about relationships.”

I couldn’t have said it better.

Importing sight unseen from an unknown company in China is dangerous. Last year,
Businessweek reported that 2,300 vendors from one of China’s largest ecommerce
websites scammed their buyers. While I’m sure some good comes from these sites,
I receive calls from first time customers who tried to make contact with a
vendor on a Chinese e-commerce site and didn’t receive a response, or received a
quote and then the lights went out… or worse.

Learning Chinese culture takes much time and expense in the form of costly, week-long
business trips, making mistakes, and learning how business works over there.
Just understanding the sociological concept of “face” is a challenge. “Face” is
somewhat similar to our view of reputation; if a man’s reputation is of good
character, honesty, and efficiency, he will be respected; he has “face.”
However, “face” has more weight in China than mere reputation; a person can
“lose face” just from making a mistake.

Conflict can ensue between East and West because saving face comes before transparency in China. If a company makes a mistake, they are more liable to withhold the truth
and say “we’re sorry, production time is delayed” without an explanation. Here
in the U.S., we want to know what happened, what the company is doing to fix the
problem, and when it will be resolved. The Chinese will fix the problem, but in
a way that doesn’t cause them to lose face, which means we may not get all the
details.

Over the years I’ve learned that a “face issue” can be lurking if there’s no reply to
a request for an update on delivery time… or if I receive an answer that is
inconsistent with the original query. (For example, if I ask “Did the factory
use the new package design?” and the answer comes back “Factory is boxing the
order.” Uh oh.)