Doing Business in China
People’s Republic of China is the world’s largest country with over 1. 3 billion people and is one of the fastest growing economies in the world with annual average growth rates reaching 14% in the 1990s. In fact some areas in Chinese costal provinces such as Guangdong, Fujian, Jiangsu, and the Shanghai reached growth rates of over 20% each year. Since China opened its doors to foreign business in the 1970s its performance has been absolutely remarkable. Over the last quarter of century China has transformed itself from a centrally planned socialist state to semi-market driven, semi-command economy.
China is now the second largest economy in the world behind USA, with a GDP exceeding $ 7 trillion. Many experts expect China to be the world’s largest economy by 2025 (Collins, Block, 2007, p. 10). Doing business in China is fraught with both risks and rewards. The attitude of most of the people intending to do business in China is to just consider one aspect and then extrapolate it to other areas – clearly an incorrect approach. China is much more than any single piece.
Business people who fail to see and understand the complexities of China environments could and many times do
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This view is inspired by Hofstede’s analysis of cultural differences, which suggests that Western capitalist market cultures are characterized by individualism, rationality and secularism, while Chinese or in general eastern business cultures are characterized by collectivism, familism and Confucianism (Shen, 2004, p. 7-9). There are many trade experts, popular authors, business consultants and even government guidelines that are readily available to advise on the economic opportunities, negotiating style, cultural differences and legal issues that are likely to be confronted in entering the Chinese market.
Most of the advice, however, dwells on the enormous prospects offered by China’s incredible boost on economy in the last quarter of a century (Dahles, Wels, 2002, p. 1). However, China is an intriguing market and one well worth investigating from a number of perspectives. For buyers China can provides wide range of quality goods at highly competitive prices. It is major producer of textiles, apparel, and footwear; foodstuffs; a wide range of machinery; metals and metal products; chemicals; raw materials; toys, games, and sporting goods; and handicrafts, among many other items.
Its businesses can handle orders ranging from smallest to the largest. From the seller’s standpoint China needs a wide range of agricultural and industrial raw materials, intermediate components, and specialty items to feed its rapidly expanding industries. For manufacturers China has a pool of semi-skilled to highly skilled laboring the areas already noted above, as well as in many others. For investors China is in the process of opening up additional areas of its economy that had previously been off-limits to foreigners, including some areas of its growing domestic markets and service and financial sectors.
China’s political face too is changing, albeit gradually, and it has a growing core of forward-looking technocrats committed to economic reform. The overall pace and level of change is expected to accelerate over the near term as China moves along the learning curve making it an even more complex and challenging, as well as compelling place to do business (Dixon, Newman, 1998, p. 2). This paper analyzes all the above mentioned aspects of business environment in China from different aspects to understand and make the process of developing business in China easier.
The paper will however concentrates on the business processes in China rather than the actual business environmental statistics that can be found in almost all the general websites. The concept of time: polychromic versus monochromic Culture is shared, learned, and adapted by a group of people. Cultures are always changing. When cultural diffusion happens there is a transfer of ideas, things and behaviors from one culture to another culture. There are two basic types of cultures which are diametrically opposed to each culture other (Meredith, 2005, p.
114). These are monochromic and polychromic cultures. Monochromic culture – These types of cultures are also known as M-time cultures. In a monochromic culture, time is of essence or as the saying goes, “Time is Money”. In such a culture people tend to perform one task at a time, take their schedules seriously, and are very impatient (Hodge, 2000, p. 67). A monochromic view of time construes it as linear, one track, compartmentalized and goal oriented.
Hence, monochromic cultures focus on schedules – when the time’s up, its time to go home regardless of whether or not the task has been completed. People belonging to monochromic culture tend to focus on one topic at a time. Meetings generally start on time, finish on time and follow a pre-specified agenda. Examples of monochromic cultures are British and American cultures (de Mooij, 2005, p. 58). Polychromic culture – These types of cultures are also known as P-time cultures.
In a polychromic culture, people perceive time as very flexible allowing them to do several things at the same time, for instance talking to someone in their office while polishing their shoes at the same time (Hodge, 2000, p. 67). A polychromic view of time construes it as nonlinear, multiple track, open-ended, and lacking clear boundaries. People from polychromic cultures, pay less attention to schedules and more to the completion of tasks or the conclusion of interchanges, and they tend to juggle multiple tasks rather than completing one at a time.
Meeting in polychromic cultures start when key people are ready and the meeting can be scheduled at the last minute for any reason. Also the meetings rarely use agendas for meetings and jump from one topic to next whenever a connection is made. Examples of monochromic cultures are Russia and China (de Mooij, 2005, p. 58). Monochromic cultures tend to see polychromic cultures as disorganized and scatterbrained and their own style as organized and focused.
However, it would be more accurate to see polychromic cultures as an early model for the multitasking and decentralized team-oriented approaches that characterize the new management structure. Polychromic cultures, on the other hand, tend to see the monochromic culture as heartless, mechanical and money oriented. The time management experts here usually advise managers to reduce office chitchats and give tips on how to cut people short. However, in monochromic cultures, if time is cut down in such a way, it is likely to incur bigger costs down the road (Laroche, 2003, p. 138-139).