Wednesday, November 17, 2010

Learn China Business from Donald Trump

China Business, Learn Business, B2B China

Learn China Business from Donald Trump

Donald Trump has a reputation as a savvy business professional and powerful negotiatior.  I would expect that anyone who was planning on doing business with "The Donald" would be as prepared as possible and expect him to be an agressive and well prepared partner.  The same can be said for many Chinese business people.

I was recently talking with a friend of mine about business in China and in particular Joint Ventures and some of the horror stories that people hear about doing Joint Ventures with Chinese firms.  There is an impression that the Chinese will some how cheat at doing business.  It is sometimes difficult to say what seperates cheating and being creative and using all the resources one possesses to tip the table in one's favor.

If someone influences government to pass laws favorable to them, is that cheating?  It sure happens in every Western county, so there is no reason that China should be singled out, when people here engage in this activity.  Expect that this is one of the possibilities.  Is it cheating if someone is able to convince other businesses to change the way they supply goods or services, for example charging more, or delivering more slowly?  This, again, happens in all countries.

The example that we were discussion was a foreign company that owned 65% of an enterprise and felt relatively secure.  The thing they didn't account for was that this was a manufacturing facility that required water and the Chinese partner had control over the water supply.  Whenever it came time to do negotiations, coincidentally, there would be problems with the water supply.

This story reminds me of the story in the US of a hotel owner who was being pressured by the bank to make more regular mortgage payments.  Eventually the bank said they would foreclose on the hotel.  The hotel owner, cautioned the bank that taking the hotel away from him would also remove their access to the parking lot which he owned seperately.  They were able to come to an accomodation.

The key lesson here is to avoid confrontations.  An apparant minority partner might still have more influence that is first apparent.

Steve Hubbard


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