Trying to do business in China

A week ago, I met a German Swiss businessman. He had already been in China three times with the goal of securing an order for an innovative product that would lead to energy savings. In addition, the product was compatible with Chinese efforts in solar and wind energy.

This product should have generated substantial interest in China, particularly since the technology was ideal for the weather conditions. Unfortunately, he was heading back to Switzerland without a contract. He felt he could not trust his potential client and they probably did not understand him. He stated a series of issues that were “deal-breakers”.

renewable-energy-sourcesChina is by far the largest producer of renewable energy. Source: www.green-blog.org

What I heard from the businessperson was: “I do not understand what they want”, “I need an order to validate their seriousness”, and “this is taking too long”. I often read such comments from western business people looking to get a deal signed, hoping to head back home to implement the contract all within a short period of time. It is clear that business in China does not work the same way as in the West.

For the Swiss business person, he believed that the Chinese should have beaten a path to his door as he was providing the latest know-how in energy storage. He assumed that they would understand the technology he was presenting as all engineers in the West understood the concept and advantages of “latent heat”. He assumed that the Chinese company would trust him as he was representing a well-respected organization. He believed that China needed his help because the energy requirements are massive and the environment pressure keeps increasing. He did not see any reason to delay the signing of an agreement and proceeding with the implementation.

For the Chinese business people, they probably believed that the foreigner ought to be patient as there are many opportunities in China, and he would have to take a number. They needed to remain flexible and keep their options opened to adjust to opportunities and rapidly changing conditions. There was no need to rush anything until they better understood the technology, the company and its representative.

china-businessSource: Duke University – Corporate Education

Obviously the gap between the two parties had not been bridged after three visits, in spite of the last one lasting one week. According to the Swiss person, there had been too many dinners and not enough detailed business talks. He doubted that he would come back and meet this company again. He would be looking for another potential Chinese partner who might show the willingness to proceed with the business opportunity.

It is probable that neither of the parties understood each other. Will his efforts with a different company be fruitful or will he face the same challenges?

Pierre

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