China, China, China!  
Will You Get Burned by the Sleeping Dragon?


Consultants Corner  News  China  Consulting



By:  Bruce S. Berton

I entered China as an importer in the first trade mission in 1974, which took place after President Nixon opened the door. I could write about those times and fill a book, detailing many experiences that were not much different from what is happening today.

I have given seminars and participated on many panels, discussing China's Economic Revolution and what is going to take place in the near future.

The panels have consisted of experts in all fields -- finance, legal, distinguished government officials, industrialists, and entrepreneurs wishing to share their experiences.

I cannot remember how many of China's trade missions that I have been asked to meet with and assist them in accomplishing their goals and objectives. Having lived in many Pacific Rim countries for many years, I eventually learned to separate so-called Laundry List requests from possible real deals.

I learned that the word NO can be said in 10 different ways by Chinese representatives, without the word
NO ever being spoken.

I think it was Conrad Hilton who said location, location, location, when it came to putting up a retail business.

The key words when dealing in China are relationships, relationships, relationships in order to avoid being burned by the sleeping Dragon that is China!

Fortunately, I was born in the year of the Metal Imperial Two Headed Dragon, which comes once every sixty years, and I have survived the risks of doing business in China.

China's focus includes an exact plan that is being moved forward faster than any that I have witnessed over the years, including Japan, Korea, and now Mexico.

With quotas being removed on December 31, 2004, not only the American businessman will be trying to figure out what will happen. There are countries whose whole economic export structures could fall apart, and they are also trying to figure out what action to take.

Gold Rush frenzied investment brokers will tell you that this is the time to invest, stating that five years ago this was empty land, and now it is a modern city with 5 million people, and that there are many other industrial cities with exactly the same story and more to come.

The vacant land and modern city parts are true; the question is, were profits made by those who built it?

The lack of laws that we as Americans are familiar with, the non-financial accounting that now exists, the type of entities that you may participate in, the joint venture objectives that you as the American desire for profits, and your  Chinese partner's inability to employ people, are just a few of the many pitfalls that can cause you to fail.

This is just the tip of the fire breathing dragon, and you had better be prepared. The ability to maintain patience and build relationships is an art that very few can learn.  Remember, the Chinese have been a social empire for over 5,000 years; therefore, they may have gone through a few isms in modern time, but you are dealing with a society that has founded many of the basic economic tools used in modern business today.

The sleeping dragon breathing fire is to be respected, touched very carefully, and watched daily to determine the direction in which it will move.

Your FACTS should be researched by professionals that have hands on, been there, done that experience.  Your PLANS must be for the long term, and not for the quick turn.  The EXECUTION of your relationships must be worked on daily and not just when a visit is required. And the SUPERVISION of your business is not just getting reports, but having trained personnel of the country, so the dragon does not burn you.

These are very exciting times, and your adventures will be plentiful enough to tell your grandchildren, but please remember the words:  RELATIONSHIPS, RELATIONSIPS, RELATIONSHIPS.

We at Stonefield Josephson have the experience to guide our clients so that risk factors are known and sensible decisions can be made.

Bruce S. Berton is a business and management consultant with Stonefield Josephson, Inc., a leading regional consulting and accounting firm with offices in Santa Monica, San Francisco, Walnut Creek and Mexico City. The information in this column is of a general nature.  Readers inquiries are welcome; and may be sent to Bruce Berton, at Stonefield Josephson, Inc., 2049 Century Park East Suite 400 Los Angeles, California 90067 310-432-7437 Direct
866-225-4511 Toll Free
310-432-7519 Fax Los Angeles
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