The experience in China was a key milestone for the whole Aristeia team, from both a professional and a personal point of view.
From 2004 to 2010, the agency partners travelled on average 4 to 8 months a year on the mission in China (Beijing, Shanghai and Hong Kong). Between 2006 and 2010, Aristeia set up a regional office, made up of a 50 person strong team for the final preparations for the Olympic Games. In other words we had to recruit about 40 Chinese partners to run the Olympic Games project in Beijing 2008. In the first year, we had 100% turnover of the workforce in the Beijing office! The Chinese employees trained for a few months with us then left for our competitors and partners for a few hundred Yuan.
We had to find new management techniques, unusual for Europeans in order to ease this setback. What we were lacking was a comprehensive understanding of how to manage the Chinese on a day to day basis… This is what we did, thanks to the help of a young European girl who had been living there for many years and had started up her own Human Resources office for the local ‘laowai’-foreigners. For a while, we used her services in order to understand and apply the most relevant methods.
Olivier Carteret, founder of Aristeia, lived in Beijing for three years from 2006-2008. His regional and local experiences were surprising, rich, disconcerting and so delightful when the happy conclusion came. Wearing another hat, he was also the author of the BFM Postcard, a short weekly column about China in 2007 and 2008, in which he conveyed his experience as a businessman in Beijing before the Olympic Games.
In China, we developed and managed the project for the Olympic Games with total revenue of €17 million. It meant we saw China in a light other than that projected by the western media and local influence of European institutions. China is so different from what we read in the Western press and from what the ‘laowai’ say. It is this innovative and personal knowledge that meant we could succeed in 100% of the hospitality programmes. China is uncontrollable; it is growing in leaps and bounds, waiting for nobody, certainly not Europe and will without doubt be the world’s largest economy relatively soon. It is a giant machine where the individual is virtually nonexistent. China has 1.4 billion inhabitants and growing!
Unlike in other emerging economies, China has not distinguished itself has the forefront of world economy (unlike Korea…) China doesn’t use traditional business methods and will force the rest of the world to use them.
The Chinese methods seem fairly complicated to the European entrepreneur who respects the norms and concerned about the year ahead, but in reality they are quite simple. Have a look at our rudimentary ideas about business in China that our time there taught us:
Guanxi/关系
This is the number 1 key factor for success. The term refers to the personal relations and friendships maintained by individuals as part of their business relationship. It is a relationship that involves mutual obligations. It is important to note that in China personal friendships don’t really exist: friends are there to do business with. In this context, it is vital to have a good network of connections (guanxi): Partners,Clients, Suppliers, Central Administration…
It takes time and patience to build up this network which then needs to be taken care of daily. So you need to be in situ, to be ready to develop good business relations in China (dinners-careful with dinners, they start at 6:30pm over there! Golf, communal massages etc…). The majority of the people who emigrate to China for a few years never manage to build up their guanxi. It’s a mistake. The Guanxi is not only there to target the markets but above all navigate the maze of incredibly complex administrative system and put pressure on the right person when need be (the final decision in an invitation to tender for example).
The Face/ / 面子
This is the pride, the image that we’ll give others. The Chinese can never lose face. You should never reprimand a colleague in public (you would lose your reputation immediately). You should never publically show off if you come out on top of the negotiations. The Chinese have to hold their head high in all circumstances. Further, however much of a ‘big shot’ your Chinese counterpart is (with an elevated social standing) the more obvious his honour (reputation) will be. Reputation is a valued nobly as honour is in Europe. You must inspire a certain respect in your Chinese counterpart. This can be shown through how they sit at the negotiating table, addressing the people present, choosing their partners, coming alone or accompanied by a group.
Ganbei / 干杯
In order to develop the Guanxi, advance in the world of business, closing deals, you will have to drink various alcoholic shots (of Baijiu) in one go, and toast your Chinese partner (everyone can judge the taste of Beijiu for themselves as it deserves to be). It is very likely you will have as many shots as there are people at the table. It is worrying to know that the Chinese always travel in groups. To be successful In China, you must show personality in your work. Respect is fundamental, being valuable, present, doing businesses firmly…Yet, a good sense of humour and cheerfulness are also required to do business. It is unlikely that the business relationship will last if you partners don’t like you. So, if you don’t drink, you need to consider how to compensate for it by having a pleasant personality.
Hezuo / 合作
It is important for the Chinese to establish balanced relationships of mutual benefit. The Chinese usually say:’希望我们未来会有很好的合作’I hope you have a good cooperation. In other words, your proposal has to be balanced so that both sides are interested. But neither can you show obvious fear or weakness as the Chinese will not hesitate to take control of the situation. In fact, our Chinese friends don’t respect the weak and they don’t mind further hindering them.
Kaolu /考虑
It means to reflect, to think. In reality, it is a polite way of saying no. In fact, the Chinese never say no, it is inconceivable. Saying no is considered a direct affront and is extremely rude and another way of saying: I declare war on you. Instead of that, the Chinese prefer to say: I’m considering it. In short, they aren’t going to do business, but it is pointless to wait until a definitive end, it would be better to try a different approach.
The Daoli Reason /道理
The Chinese use this expression to argue against something. “What you are saying is right-你说得有道理, 不过… What you’re saying makes sense, but… These types of words are very important in China during discussions and debates because it is the way to contradict something. What you are saying is true, but adds something new. It avoids a violent discussion with the partner.
To do business in China, you need time, energy, momentum and a rare fighting spirit: then the Chinese will respect and look forward to working with you. The pressure is still there, there are always challenges and your partners will test you every step of the way. Those who know how to avoid and resist the traps, will have the upper hand. This is what all Chinese look for when doing business.
Finally, it is of paramount importance to be surrounded by experts. In the legal field, we like to highlight the excellent work done by Gide Loyretter Nouel, a consultant ( an in particular Stephane Vernay and Guillaume Jeannet) who allowed up to set up an effective legal structure and primarily, support us and help us to avoid many classic Chinese traps that many laowai fall into. Of course we love Yan Lan, the brief star of Chinese business
