The China Venture

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in negotiations and communication with your Chinese partner. We should always keep in mind that human beings are individuals all over the world, it doesn’t matter if they come from Germany, Switzerland, Africa, or China. Each person needs to be treated individually. 3.4.2.1 Understanding of Confucianism Chinese philosophy and thought have been influenced greatly by Confucianism. Confucius was born in 551 BC, in what is now called Shandong province, and died in 479 BC. His ambition was to hold a high government office and reorder society through the administrative apparatus. The glorification of Confucius began after his death, and during the Han Dynasty, Confucianism effectively became the state “religion". He aimed to instil a feeling of humanity towards others and respect for oneself, as well as a sense of dignity of human life. Courtesy, selflessness, magnanimity, diligence and empathy would naturally follow. His ideal person was competent, poised, fearless, even-tempered and free of violence and vulgarity. 125 The understanding of Confucianism may help foreigners to understand the Chinese better, particularly during negotiations: • Harmony is the highest goal of action and thought, to maintain it, each person has to seek compromise, not confrontation. • Stability of society is based on unequal relationships. This involves mutually binding obligations. • A family is the prototype of all social organisations. Every person is member of a family or group. • A role played by an individual is more important than the individual. • One must behave in a virtuous manner towards others. Everyone’s “face” must be maintained. 126 Harmony is in the centre of morality, righteousness, relationships, virtue, sincerity and thrift. 125 Storey, 1994, p. 72. 126 Rubensdörffer, 1997. 128
Germany/Switzerland China democratic, "mündig" (i.e. mature) respectful, obedient open-direct communication humble, demeanour-circuitous communication conflict means to clear issues seeking harmony towards all, tenacity Performance-motivated ready to learn and to take up active, self-driven patient, respectable, humble "have fun" thrift, sincerity advantage-driven morally, conscientious analytic-researching seeking synthesis/balance change: challenge, ego stability, tradition, family creative self-development self-discipline, self-sacrifice opinion-oriented evasive-"receiver-oriented" TABLE 3-18: Comparison of Values and Behaviour 3.4.2.2 Guanxi and the importance of family and friends For the Chinese, their family, including extended family and friends is the central unit. All members of the family and friends build a society network which can extend all over the world. This networ k, also called "guanxi", is based on personal loyalty, trust and responsibility. It takes a lot of time and patience to develop such a network, which involves lasting relationships. As a result, members of a network are obliged to each other. If someone is in trouble, the other members will work together on a solution. This social network is a major reason why Chinese business people can be so successful: They work together and not against each other. "Guanxi" is carried into the economic system and has an immense influence on the Chinese decision-maker. For the Western business partner it means that he has to be conscious of the resulting restrictions as well as advantages when his Chinese counterpart belongs to such a network. 127 A foreigner in China can eve ntually become part of a Chinese person’s circle of family and friends. However, he is expected to accept the traditional Chinese obligations of being a friend and must be reliable and dependable. Foreigners, who are not used to such a high level of mutual dependency can feel the Chinese expectations of friendship extremely burdensome. Moreover, friendship is expected to last throughout a person’s life. 128 3.4.2.3 Self-Presentation At the first meeting it is very important that you have a positive effect on your Chinese partner. It is very helpful for further negotiations, if you are seen as competent and trustworthy. 127 Melchers 1994, p. 66. 129
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The China Venture: Business Environ
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Table of Contents List of Figures .
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3.2.3.2 Special Funds for Setting U
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3.4.1.1 National Culture ..........
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List of Tables TABLE 2-1: THE AREAS
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GBP Pounds Sterling GDB Guangdong D
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1. Introduction: The China Venture
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After a short discussion with the p
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co-operate with other firms, especi
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The Chinese operating legal system
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First of all, Britain’s predomina
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democratic centralism, all governme
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The courts are the state organs exe
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more than three hundred intermedia
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2.2.8 Company Law China’s first n
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Things seem have to become a lot cl
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2.3.1.1 Financial sector developmen
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securities, trading, initial public
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underdeveloped compared with market
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established in January 1996 by 59 p
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Chinese Banks Foreign Banks Financi
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system formulation has been put on
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The separation of production and co
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swap centres (see also above). From
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investors with little experience an
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them, while a branch with a shortag
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Loans, public offerings of shares,
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is often to acquire foreign capital
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2.3.3.2 Debt financing As getting t
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the approval of special authorities
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control compared to national enterp
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usiness in China and related issues
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3. Pre-Entry Strategic Consideratio
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While the testing for the general r
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of relevant contacts to suppliers a
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partner companies with free servici
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strengths which his own company lac
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Central Committee of the Communist
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environment for foreign investment
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legal and regulatory environment of
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3.2.4.3 Legal Framework for Foreign
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• China’s entry into membership
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• stipulates that advanced techno
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Government approval. Foreign invest
Page 89 and 90: Co-operative Joint Venture Status P
Page 91 and 92: Reflecting on these points the foll
Page 93 and 94: Success Factors concerning Products
Page 95 and 96: Success Factors concerning Company
Page 97 and 98: high-technology are eligible for th
Page 99 and 100: Available Distribution Channels A m
Page 101 and 102: Available Distribution Channels Mar
Page 105 and 106: Illustrative Case Studies The follo
Page 109 and 110: Which Aspects should SME's Focus on
Page 111 and 112: Strategy No. 1: Have Cash A comfort
Page 113 and 114: expenses have a detrimental effect
Page 115 and 116: As a conclusion, network oriented m
Page 117 and 118: 3.2.13 Case Study: Swisstec, Lyss 3
Page 119 and 120: factor which makes the foreign firm
Page 121 and 122: developed within the SME, its impac
Page 123 and 124: 3.3.1.3 The Role of Technology Mana
Page 125 and 126: Indirect export and direct export a
Page 127 and 128: maintenance or the use of establish
Page 129 and 130: Government Central Exploiting Sales
Page 131 and 132: in the most advanced provinces and
Page 133 and 134: network through which the products
Page 135 and 136: Siemens or Motorola, they may have
Page 137 and 138: Chinese partners. He also began to
Page 139: orders. However, a country may also
Page 143 and 144: 3.4.2.4 Conversation at the first m
Page 145 and 146: only after a certain time and even
Page 147 and 148: 3.4.3 Experiences of European Compa
Page 149 and 150: ones who atte nded a course. They s
Page 151 and 152: Another Chinese tactic is, as menti
Page 153 and 154: 4. Post-Entry Strategic Considerati
Page 155 and 156: and the other one in China. The com
Page 157 and 158: experience in operating production
Page 159 and 160: In these two cases, the companies m
Page 161 and 162: 5. References Aharoni, Y. (1966): T
Page 163 and 164: Dony, A. G. (1998): Market Entry St
Page 165 and 166: Islam, I. / Chowdhury, A. (1997): A
Page 167 and 168: Madura, J. (1993): International Fi
Page 169 and 170: Semkow, B. W. (ed.) (1995): China F
Page 171 and 172: 6. Appendix 6.1 Fact Sheet People
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