Tips on Doing Business with Your Chinese Team

American and Chinese communication styles are seemingly diametrically opposed. This is one of the greatest challenges for Chinese staff. Suddenly, they seem to be thrust into meetings, either one-on-one or in groups, where leaders keep asking for their opinions. This can be incredibly disconcerting.

The Clueless Leader

It is the leader’s job to make decisions, not the employee’s. A business leader asking their employee’s opinion brings up several thoughts for the Chinese employee. First, they may question his or her competence. “Why are they asking me, a lowly employee?” they may wonder, “Why did the company send them if they don’t know what they’re doing? Aren’t they getting paid all that money to know these things?”

Commanding Respect

Secondly, the relationship may appear too informal. While many younger employees just graduating from university may actually seek out father and mother figures at work, the boss should still be someone they respect that fits into expected social hierarchies. In Chinese business, if the boss acts too casual or too much like their friend, they may not take them seriously as a manager. They’ll think that they don’t really need to follow this person or do what they say.

Losing Face

Especially in a group setting, there is also a huge cause for concern regarding losing mianzi or face. The importance of face in Chinese business or life cannot be overemphasized.

Western managers need to understand that there is only one right answer in China. This is drilled into Chinese through home, school, and work life. To answer wrong or make a mistake is a huge loss of face and no self-respecting Chinese would take that risk, especially in front of their peers or maybe even bosses.

There is no tradition of discussing ideas and coming to mutual agreement on steps forward in a Chinese business. This is why Western managers often leave meetings with Chinese staff feeling frustrated that all they receive are silence and head nods to their questions.

The other danger for Chinese staff with answering a question, particularly one related to achieving results, is the risk of failure. Many Chinese hate taking responsibility in the work place because that increases their risk of failure leading to loss of face. Managers are paid highly in Chinese business not just because of their skills or experience, but because of the risks they are exposed to when taking responsibility for achieving results.

Are You Trying to Make Me Cry?

American managers come from a low-context communication culture. Americans have a relatively short shared history and are largely a culture of immigrants. Understanding is achieved through direct communication and brevity is considered an asset.

Chinese come from a high-context communication culture. They have 5,000 years of history and the Han Chinese still make up 80% of the population. How does this play out?

Maybe a new young Chinese employee comes in wearing sandals that don’t fit the professional dress code. A Chinese manager would probably say something like, “It’s a little cold in the office for sandals, isn’t it”. The employee would get the message that they need to wear shoes. The American manager would probably directly confront the employee and state, “Professional shoes are expected in the office.”

This kind of direct statement can be taken as very rude and hurtful by the Chinese employee. They’ve now lost face in front of you (regardless of if anyone else heard or not) and you’re clearly angry and have lost respect for them in order for you to speak so directly. You’d be surprised at how often what the American manager sees as a very small incident leads to tears and long-term resentment on the part of the Chinese employee.

Communicate to Succeed

Just like in every work place, when doing business in China, effective communication leads to strong teams and great results. Americans doing business in China may face many challenges, but Chinese staff are also facing many challenges when working with Americans. It’s important to understand and work with both sides of that dynamic.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in the Chinese marketplace. Casey can be reached at cxmorris@LeverageChina.com.

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What Disney Learns After Entering the China Market

Building the Plane While It’s Flying

A common mantra that was repeated at Disney English was that “we’re building the plane as we’re flying it”. This is the reality for most start-ups and Disney English definitely operated as a start-up, just one with a lot of financial backing from the parent company.

Even with huge resources at its disposal, Disney was woefully unprepared for the realities of doing business in China. After expanding to over 40 centers in 12 cities in just the first 4 years, Disney closed 11 of them within the next year. Sales were down and customer retention had become a hot button issue. What were some of the reasons for this backward slide?

Growth Eats Cash Flow for Breakfast

This is true for any start-up, in China or otherwise. Once a company starts to grow, and grow like Disney did by doubling in size every year, there is a huge cost in terms of expense, building infrastructure, hiring, training, and operational complexity.

Due to a huge number of consumers being located in very dense areas, successful businesses can take off very quickly. Is your business prepared to handle such growth? It may be smarter to actually take the time to finish building the plane before launching again. Otherwise you may find yourself with major cash flow issues, laying off employees, or closing down parts of your operation.

You Must Hire for Ethics

One thing Disney was not at all prepared for was the common trait of Chinese managers to game the system for their own profit. While this is common in almost any organization that institutes strong commission and bonus structures, the problems created by such systems are amplified in China where, culturally, it’s assumed you’ll game the system in order to line your own pockets. This is even built into some Chinese employers who will pay lower salaries knowing that their employees will be making additional compensation in other ways.

Just a few examples:

• One center manager had a cousin working as a sales rep at another center that was very close by. The sales rep would tell the potential customer not to purchase at their center as they could get a discount at the center down the road. Upon leaving, the cousin would call the center manager with the customer’s info. The center manager would then proceed to call that customer, offer them a discount, and steal the sale. Of course, the cousin was getting a nice kick back from this as well.
• Numerous sales managers offered outrageous discounts to customers such as buy one get one free for a year, unlimited contract lengths, and large discounts, all unauthorized by the company and not allowed in the system. Sales managers would be caught with extensive offline notes of what customers were guaranteed what and elaborate systems were put in place to continue to hide customers that were no longer officially in the system, but receiving some kind of free classes.
• Center managers would deliberately try to avoid teachers of color, lie about countries of origin, or even ask teachers to lie about their origins in order to make sales as many Chinese customers invariably preferred young, white teachers of European decent. This was strongly against Disney values, but, without oversight, went unchecked in some locations.

Not surprisingly, these actions had tremendous impact on employee relations and moral as well as customer retention.

Government Setbacks

Government bribes and kickbacks are the norm and trying to do things the legal way will almost always take longer. As many government districts operate quite independently and sometimes even have their own unique legalities, every time the business enters a new area, they must start over. Every time Disney entered a new city or region, there would be massive delays as government relationships had to be built anew and officials would constantly hem and haw, waiting for bribes, before ever actually moving the legal paperwork forward. The farther ones move from the big international cities, where they are familiar with dealing with foreign companies that actually follow the law, the harder this becomes.

The government can also change the law on a whim. In Chengdu, Disney had just finished building a new center on the sixth floor of a building when, without notice, the government issued a regulation that all schools and training centers for children must be built below that level for reasons of safety during earthquakes. No grandfathering was allowed and Disney was forced to tear down and rebuild the center before opening, all on its own dime.

Learning from Others

It’s important not just to look at what has made companies successful in China, but also what mistakes they have made, so that your business may learn from both as it enters the China market. Take the time to get established, you’re in a completely new market and flying by the seat of your pants may have worked in the US, where you know how the game is played, but it can quickly be your downfall in China.

Gaining an understanding of Chinese business culture, especially as it relates to how your employees will operate on the front-lines, will prove invaluable. Always hire for ethics first in China and then train for the role.

Finally, make sure you have planned and budgeted for all the extra time it will take to expand as you deal with various government bodies and officials. Building relationships will always be the best way to go, but this takes time.

No one ever said entering the China market was easy, but if you prepare well and learn from others, you can be equally or more successful than those who have gone before, and the rewards are certainly worth it.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in the Chinese marketplace. Casey can be reached at cxmorris@LeverageChina.com.

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Chinese Students Bring Big Profits to Private US Schools

A Growing Market

A degree from a US university is still seen as much more prestigious than an equivalent degree from even the best Chinese universities. It’s not even the highly technical sectors such as engineering and medicine. Chinese students are willing to pay for a variety of degree opportunities in the West. For example, the University of Guangzhou offers students degrees in cooking and restaurant management in partnership with Canadian universities, so be sure to think outside the box when determining what programs to market.

In addition to expanded interest in a variety of university disciplines, more and more Chinese parents are sending their children to the US at a younger age. High school exchange programs are a booming market in China and some families are even starting to send their children as young as middle school age.

As discussed in my post on What Early Education Opportunities Exist for Doing Business in China, Chinese families are looking to get their children out of the overly rigid Chinese education system that they remember non-too-fondly.

However, results still drive decision-making and Chinese parents don’t want to send their children to just any school, they want to send them to the best (and most expensive!) to ensure success. This is where boarding schools or costly private schools in the US can find a ready market of families. Driven to succeed, these students are also often an asset to the schools test scores and ivy league acceptance numbers.

They’re Looking for You

What can be better than a business where customers are trying to find you rather than the other way around? Families in China are constantly seeking companies that can help them achieve their goals and the number of private schools, especially below the university level, have not caught on yet. If you start making partnerships and marketing now, you could lock in a strong share of the market.

In China, it’s all about reputations for excellence and success, something every private school in the US is already focused on. This is a perfect fit for the schools and the families.

Dealing with the Tricksters

Because this is such a booming industry, there are a lot of agents already on the Chinese end of the market. Many of these are very unscrupulous and you’ll quickly come across horror stories of families that were lied to or stolen from.

As a school searching for Chinese students, you have to be extremely careful about partnering with an agent who promises students driven to succeed, only to find they can barely even speak English when they arrive.

Opportunities Abound

By some estimates 50% of private international student tuition is coming from Chinese students. With a reputation for excellence and trustworthiness, you can be assured that Chinese families will pay a higher price for children to attend your school. Chinese business consultants often have many contacts both in China and with US businesses that facilitate such exchanges. If you’re not sure how to go about taking advantage of this opportunity, they are a great place to start.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in the Chinese marketplace. Casey can be reached at cxmorris@LeverageChina.com.

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Are You Selling “Green Caps” in China?

Inquiring as to why, the response was that the cap is green. So what? Well, a green cap has a unique meaning in China. Whoever is wearing a green cap, males in particular, are considered to have been cheated on by their spouses.   If that were the case, would you want to wear a green cap?

When you are doing business in China, or any overseas markets, how do you know your products and services are not regarded in the same ways as the “green cap” in our story? Your product or service could be clashing with cultural values, provoking superstitions, or just going against social preferences and traditions.

As a China business consultant, I can tell you that foreign companies going into China make those mistakes quite often. American companies such as EBay, Mattel, and Home Depot have all had a hard time in China, not because of their products, but because their approaches do not agree with Chinese culture and traditions. Let’s look at a few more cases in-depth to get a better understanding of the pitfalls that exist out there.

Lost in Translation

Another case in point, Burger King in China launched a drink in their restaurants called The PooPoo* Smoothie. It’s a mango-flavored slushy with what tastes like lychee flavored “pulp pearls” on the bottom of the cup. It’s topped off with a swirl of soft serve vanilla ice cream. If you are familiar with East Asian drink preferences, you’d assume this would be a big hit.

But PooPoo means something different in mainland China than it does in Taiwan. PooPoo is a word often used by young children who have to go number 2. It is the opposite of what Burger King wanted to associate a delicious drink with. How often do you simply translate your marketing message into a foreign language? Even between neighbors such as Taiwan and mainland China, there are still sometimes vast differences in language and culture.

Taobao Succeeded While Ebay Failed

Ebay and Taobao both launched online platforms around the same time. Ebay is a two-billion dollar company and has achieved global success prior to coming to China. Alibaba, which owns an online platform connecting foreign buyers and Chinese suppliers, launched Taobao one year after Ebay entered China. Even though Ebay had the first mover advantage, Taobao succeeded while Ebay failed. Why? Let’s look at some of those reasons:

Taobao is a local company and has a good understanding of Chinese culture. Their revenue model was realistic and suits Chinese customers who, at that time, were cautious regarding the new businesses of online marketplaces.

Understanding this, Taobao’s revenue comes from online advertisement whereas Ebay used the same strategy it was using in the US, charging fees for online vendors to sell their wares. Ebay’s model was not received well by Chinese customers who did not want to pay for fees to sell their goods like American customers do.

Furthermore, around 2003, it was the beginning of a revolution in online business development in China. Marketplace development moved fast. Being a local company, Taobao reacted just as fast, introducing customer service tools, communications platform, and payment services.

When Ebay entered China in 2002, the penetration rate of credit card ownership was relatively low. Those with one credit card had not had it for too long. There were security concerns regarding giving credit card information to someone that they had never met. Ebay’s model did not address this concern. They launched the same business model in China that they were operating in the US, without bothering to research cultural differences.

As a global company with attention divided among its many operations, Ebay also did not respond to the market trends as fast as they could have, even when they did recognize them. China was not the largest nor most profitable market at this early stage, why should they pay extra attention? Alibaba felt differently. They had to win and they were willing to invest to win. So Ebay both didn’t react fast enough and didn’t invest enough time and energy to stay competitive.

Finally, Ebay misread Chinese culture on the subject of price. Chinese people are price sensitive and they like deals. They are also relationship-oriented. They are not comfortable bidding against others, even anonymously online. Taobao understands this culture, but Ebay did not. Taobao allows flat-rate pricing, which is a type of innovation in itself in a country where almost everything is negotiated for. In addition, Taobao did not pit customers against each other to get the deal, thereby not butting up against the same cultural concerns that Ebay did.

Hopefully these case studies have given you some insights into the importance of researching cultural differences before launching products and services. Maybe you have a wonderful cap to sell, you noticed that Chinese people wear caps, and they may own 1-2 caps each. You are excited about the opportunity to sell your company’s caps. Just make sure they’re not green ones. No one will buy them.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in the Chinese marketplace. Casey can be reached at cxmorris@LeverageChina.com.

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When you hear 30% of the family income, that’s extended family as well. So usually both parents and both sets of grandparents are contributing to that child’s future through education. Chinese culture has always placed a strong emphasis on learning and formal schooling in particular. From this business opportunity standpoint, there is a lot of potential for profit. On the other hand, it’s also extremely competitive, with more competition than you can even keep track of. So what opportunities exist for Western educational businesses?

Differences in Early Education

No Joy in Learning

We can explore this by first gaining some insight into our customers. A typical question asked in many beginning children’s English language courses is, “What do you do in your free time?” The answer that most Chinese children give is that they don’t have free time. They aren’t joking or exaggerating. The average Chinese child may go to school from 7:30 am to 5:30 pm and then have 2 hours of homework per night. Extra time on evenings or weekends will be spent in a plethora of additional learning environments, English, music, and chess being some of the top among them.

Many parents that grew up in that environment themselves grew up to resent it. They often want something different for their child. At the same time, the social pressure to compete is tremendous and parents will still enroll their children in the same number of extracurricular learning activities.

The difference is that they hope their child can find joy in those activities, a joy they see as missing from their own childhoods. The compromise is looking towards Western education that is considered to be more play-based and focused on additional skills such as socializing and creativity.

A Move to the West

For this reason, Western educational businesses have skyrocketed in the market, especially in the big cities. My previous article on Disney English is an example of this, but you can find numerous examples without looking too hard. Maybe it’s an international school that promotes a US or British curriculum, maybe it’s a parent-child class that teachers English through yoga, maybe it’s an early MBA program.

Often, just stating that you’re using this or that Western method is enough to start drawing in families as clients. And it’s common in China to do a minimum of a 1-year contract for any educational program, all paid up front, no payment plans here. That means the cash flow issues that exist in many US educational businesses don’t exist in China. You have the cash on hand; plus, refunds are not standard practice, so you can count on that income to be stable throughout the year.

Results are Still King

Similar to their upper-income counterparts in the US, Chinese parents may seek a fun, play-based learning environment, but results are still the bottom-line. The entire point is for their child to get a leg up on the competition. If they don’t see their child making the break-neck progress they expect, they may pull their child. Chinese parent expectations can be very demanding, some might even say unrealistic at times.

This can be very hard for a play-based program where results are much more qualitative than quantitative. Realistically speaking, a true play-based program lacking in linear structure and defined assessments will not carry much weight with most Chinese parents past the first 3 months. To retain children in the program, they will have to show tracked results and marked improvement. Keep in mind that New Oriental, a test-prep school, is still dominating the market, which goes to show that tradition can often trump personal preference.

Tremendous Opportunity

There is opportunity everywhere within the children’s education sector. There is already a ton of competition in the market, but parents are very willing to try new approaches stemming from the West that promise learning and fun combined. The quality of that competition also varies greatly, so it may not be as challenging as it appears at first. For any early childhood company wishing to do business in China, it’s definitely worth exploring.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in China’s market. Casey can be reached at cxmorris@LeverageChina.com.

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I love China. It’s a great country with amazing history, culture, and language. Now back in the US, my wife and I both often think back wistfully of our time there. However, the things we liked most were found in our personal lives. My life in Chinese business was often a struggle and a challenge, as so many American leaders coming to China have found out.

Lying is the Norm

One thing you notice pretty quickly when starting to work in China is that lying is very common. And not in the American spin, lack of transparency sort of way, just outright lying.

Why is lying so common? Because appearance is everything. The reality of the situation doesn’t really matter. It’s what people believe to be true that does.

Appearance is Reality

This concept is hard for many Westerners to grasp, but let’s look at an example to help clarify. Try to think about a time, maybe in high school, where you or someone you know was affected by a malicious rumor. The rumor was absolutely untrue, yet it completely changed the way people reacted to you and what they thought about you. It also had a huge effect on your life.

This way that other people’s beliefs affect reality, regardless of validity, is a core tenant in understanding how many Chinese think. If reality is affected by appearances more than the truth, what’s the point in focusing on the truth? Much better to focus on what has real word effects.

Great Teachers Aren’t Always Pretty

When Doing Business in China, Appearance is Everything

One of my first tasks as a consultant at the school was to create the recruitment, hiring, and training process for foreign teachers from the ground up. Having been doing business in China for a few years already, I knew how difficult it was to find great teachers that could endure the culture shock of moving abroad and working in a foreign system. I knew what it took to find people that would both be an asset to the school and would also adapt well so as to stick around long-term.

With my criteria in mind, I set about recruiting teachers and was amazingly successful. Only given a $100 budget to advertise and less than 2 months to find the teachers (the average length of time to find a teacher and bring them over is 6 months in China), I found 4 fantastic teachers to launch our school with.

I had truly pulled off the impossible. The only problem? The board was extremely upset about the teachers. Why? Because none of them were blonde and blue-eyed, pretty, 20-something women. When the teachers arrived on the ground, I was immediately pulled into an emergency meeting and grilled about what teachers had been hired and where were some of the pretty candidates they had seen pictures of in the hiring folder.

In their mindset, the quality of the teacher doesn’t really matter, only the image they project. To my credit, every teacher I hired completed their contract. I found out after leaving that every teacher the board hired had failed to complete their contracts, sometimes leaving as quickly as within 3 months.

Paperwork is the Real Work

In another indicative example, the Board was extremely mad one day that the foreign teachers did not have 5-page lesson plans for every day of lessons like their Chinese counterparts. The Board then mandated 5-page plans from each teacher to be reviewed directly by the Board each week.

The fascinating thing was that the Chinese teachers never even used their lesson plans. When we actually started teaching classes, I observed a few and the Chinese teachers more or less babysat the children, not even using anything close to a lesson plan. I asked about the difference between their activities and the plans. They stated that they had been taught to write plans in university, but had never actually set foot in a classroom before. They didn’t know what to do.

Yet, nobody cared since their lesson plans were 5 pages long and properly filed. When I brought up the idea of training and quality control to the Board, they weren’t interested. They had their documents, which is all they needed. I never even had a board member enter a classroom!

Lessons Learned

If appearances are upheld, everybody is happy. This was a hard lesson for me to learn in China and one I was never comfortable with. I had to know that the lessons that were being delivered were quality. I had to know that I was hiring great teachers. None of this really mattered to the Board, who was happy as long as they had something good to show prospective parents that encouraged them to enroll.

Have you had similar learning experiences while doing business in China? What solutions did you find to perhaps reach a middle ground? I’d love to hear about it.

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Successful Transitions Lead to Successful Operations

Check for Understanding

This may sound like common sense, but you actually need to go a lot deeper than just getting agreement from the manager you want to transfer. Maybe you’re a gridlocked organization with few current opportunities for advancement or maybe heading China business operations is an opportunity to accelerate an already rapidly growing career.

Whatever the case may be, you need to ensure, as much as possible, that your manager fully understands what a move to doing business in China entails. Probably the most important point to get across is that you are looking for a long-term commitment. Some companies make the mistake of saying the manager will just need to be there a year or two to set things up and then they can come home. In our experience, this rarely turns out to be true.

The Chinese market is complex and there is so much to learn. Switching out management in your first five years could derail everything you had set up. Besides, you don’t really want a manager going in if their heart isn’t in the move.

At least one trip to China is a necessity, but I would encourage several. Really making an investment and sending your manager 3 months in advance just to learn the language and culture, with limited work responsibilities during that time, is an excellent precaution. It will both give them a huge step up by having learned a lot beforehand, without the pressure of actually achieving results, as well as ensure that they understand fully what they’re getting into and won’t back out just a little while down the road.

Make Sure Everyone is Onboard

So your manager is fully onboard and you even sent them on several trips and they’re still committed to the move. But what about their spouse or any children? Doing business in China is as much about family as it is about operations and you can take a cue from the Chinese in this regard. They understand that family and business are often strongly intertwined.

It’s often unlikely that your manager’s spouse will be able to find work and the entire family will be plummeted into an entirely foreign culture. One of the most common reasons for a manager to pull out of a China role is not the challenges they face, but the challenges their families face. Relationships can become stressed and strained and an unhappy home leads to poor performance on the job.

Hiring a Relocation Service

If you ask me, relocation services are more than worth the investment for any organization planning to do business in China and send key leaders abroad. Relocation services do far more than just help your manager find a home and schools for the kids. They often provide pre-trip preparation such as cultural and language lessons for the entire family. Depending on the company or service package, they will also offer continued support after the move.

This continued support after the move is actually the most critical. All the preparation in the world actually does little to ensure a smooth transition. It’s only when the pre-move preparation is tied to after-move support that we see a high shift in success rates. Until truly arriving on the ground and living in a foreign country, you just don’t know what you don’t know. Language lessons that were just for fun become vitally important to securing that peanut free snack or explaining to building management that you have no water in your apartment.

Doing business in China can be tough, but daily life can be just as tough. Getting used to brown outs, constant traffic, and heavy pollution or not having the ability to drive because you don’t have a license are all huge stressors on families.

With the spouse working all day, family members will need someone to reach out to. Relocation agencies may offer a personal service themselves, but will also know all the expat communities in the area and any English-speaking services geared towards them. This can come as a huge relief to someone already suffering culture from shock and struggling to adjust.

Successful Transitions Lead to Successful Operations

Strong preparation, agreement from all interested parties, and great post-relocation support are steps that will lead to a successful transition for your manager. I’d say the two most important are buy-in from the spouse and post-relocation support services. A happy manager with a happy family will have the time to devote 100% of his or her energy while at work and ensure your move to doing business in China is a success.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in China’s market. Casey can be reached at cxmorris@LeverageChina.com.

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Doing Business in China: stay or leave?

Life in China

Doing Business in China: Why Transplanted Managers Fail

Life in China is very different from life in the US. Sure, many highly paid managers on an expat package probably live in one of the extremely nice, almost Americanized communities in an international city. But these areas are small and can feel isolating. The second you step outside them, you are in China proper and face to face with all the differences you can’t really understand until you’re actually there.

Life can seem loud and chaotic in China. There are a lot of people and everywhere is busy, all the time. Americans who are used to living in their homes and cars and barely even seeing neighbors can find this very frustrating to deal with.

The pollution in major cities is awful and future health is a major concern. Companies in Beijing have been struggling to retain and attract talent for years now. The pictures on the news are awful and, living there, it’s even worse. Other major cities like Shanghai, Shenzhen, and Guangzhou aren’t faring that well either. You may only see the sun 2 weeks out of the entire year, the rest of the time the sky is covered in smog.

Medical care can also be a major factor. Even in topnotch international hospitals, doctors may still be stronger supporters of traditional Chinese medicine (TCM) than Western medicine. A common question for any kind of illness may be, “Did you have the air conditioner on?” as cold air is believed to cause all kinds of sickness. You may have a torn ligament that needs surgery and the doctor recommends you stop eating a particular kind of bean. For a Westerner with a health issue or facing a major medical procedure, this does not inspire trust, regardless of how well insurance covers it.

The bottom-line is that, in addition to doing business, life in China, or any new country, can be frustrating and scary if they haven’t lived abroad in a developing nation before.

Business in China

Dealing with employees who refuse to take responsibility, managers who are gaming the system or giving special treatment to friends, government officials asking for bribes and then making life difficult for the business when not given, these are all challenges faced while doing business in China that may not be faced back home.

Yet, the home office often rarely understands these struggles. The intense pressure to achieve results may put the new manager in a position where they feel like they are forced to compromise on their values or they are putting in long hours and coming home stressed every day to try and achieve results. This is on top of all the added pressure and stress of moving to a foreign country and culture.

The Trailing Spouse

Spouses and children can be just as big a factor in a manager’s decision to leave as anything to do with everyday life or business in China. Many spouses often quit their jobs with little opportunity to also find work or continue their own business in China. Being forced to stay home and take on a role they don’t remember going to college for can cause resentment and a huge amount of stress in the relationship.

The spouse, who is probably home all the time, must also deal with the stresses of adjusting to life in a new country, but much more consistently than their partner who is at work all day. It can be isolating and lonely.

Children also may not like moving to another country and the trailing spouse will hear about it from them, which will then add to the general level of stress in the household.

Making the Necessary Preparations

There is actually a lot of periphery support that needs to go into transplanting a manager from the US to doing business in China, far above and beyond that offered by typical compensation and benefits packages. What kind of support will the wife and children also have on hand? Is there a community the company works with that they will be able to integrate into? How much time will you give the manager to adjust to life in China and start to understand the business before putting on heavy pressure to achieve success? Have they been given sufficient initial and ongoing training in terms of cross cultural communication and understanding?

Having a stable leader that you can trust may be a deciding factor in whether or not your venture into doing business in China actually succeeds. Take the time to understand the factors above and find answers to the questions before sending them over. They’ll thank you for it and your business is much more likely to succeed without frequent changes in leadership.

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in China’s market. Casey can be reached at cxmorris@LeverageChina.com.

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Disney, as a media company, fell into the restricted category. There initial attempts to make inroads into China largely fell flat. They had tried to start in Hong Kong by opening a Disney World there, but it had limited success both as a profitable park and as an entry point into the China market.

Disney Gets Creative

Disney has always been a creative company and one that often succeeds when they are told they can’t. Disney did not give up trying to enter the China market and, eventually, an interesting idea came along. What about opening up a chain of English language schools for children?

Disney already ran educational programming in its parks and through its publishing wing. Furthermore, inspiring children had always been a key component of its mission. More importantly, the education industry in China was one of the most unregulated out there and would be easy to get the necessary approvals.

China Market Entry: Disney’s Creativity

Disney English is Born

With that, Disney English was born. Most people in the States are still unaware that Disney operates over 40 language learning schools for children in China ages 2-12, but they do. The school chain had high initial success, growing from 1 school in Shanghai to over 40 schools in 12 different cities just 4 years later. It looked to be a successful venture.

But the success of Disney English was actually its embodiment as a vehicle for Disney to fully enter the China market as a media company. Within 2 years, Disney broke ground on Shanghai Disneyland, a deal that had been sitting on the table for over a decade prior. In addition, Disney shows and movies began to show up everywhere. China only allows 34 foreign films a year into the country. Suddenly, a good number of those were Disney films. Old Disney cartoons also began to be shown every day on Shanghai’s expat-facing channel – ICS.

Thinking Long-term

Due to media restrictions, Disney as a cultural entity had not really penetrated China. Whereas every American child has fond memories of Mickey and probably at least 4-7 Disney films, the same cultural currency and nostalgia cannot be found in the Chinese market. Disney English was just one more way to get into the hearts and minds of children and, hopefully, create the same cultural presence it now enjoys in much of the world. Talk about thinking long-term!

Working Strategically

Disney English served as the entry point for the entire Walt Disney Company to make full progress into China. Having offices in Shanghai and Beijing, Disney was now able to do two things – build important government relationships and get an understanding of the China market.

Initially, the relationship-building aspect proved to be the most successful with quick expansion of entertainment, parks, and licensing throughout the country. If you’re looking to enter the China market this is an important lesson to learn. Having your initial venture be successful actually may not be as important as getting on the ground and building relationships for future growth.

Another side effect of being on the ground was the ability to learn quickly about what worked and didn’t work in China. This is never any easy process for foreign companies and Disney English certainly had its shares of ups-and-downs. After expanding to 44 locations and 3 regions, it shut down 11 of those centers just a year later.

Getting creative and playing the long game is a hallmark of Disney’s global strategy and certainly any company that also plans to enter the China market should be taking notes. Stay tuned for my next post that explores what some of Disney’s learning moments were.

Casey W. Xiao-Morris is China Business Consultant at Leverage China, LLC, specializing in capturing China’s market opportunities for American companies. Casey can be reached at cxmorris@LeverageChina.com

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The supplier shipped the first order out. The order arrived, but China Customs refused to release it without a designated importer. To make a long story short, the goods were never released and the shipment ended up being returned to the States. The buyer eventually had to cancel the order.

Obtaining a buyer in China is great news. However, the process in importing and exporting to China is quite complicated and leaves no wiggle room for errors. Without preparations, you may lose out on the hard-earned new business.

Exporting to China – Prerequisites

What Steps to Take

There are a few steps to take on your part. Let’s go through the prerequisites in exporting to China successfully:

1. Confirm the documentation required by China Customs beforehand and plan out how to obtain it.
2. Your buyer in China has to have an import license; otherwise, you or your buyer has to line up with a 3^rd party company with the proper import license. This conversation has to happen at an early stage when engaging buyers, before time and money is invested in a process that won’t be able to proceed.
3. In case your products are regulated by the China FDA, AQSIQ or another Chinese agency, be prepared to wait it out until you can obtain the certificate. You want to investigate the cost and potential size of business to see if this wait is worth the cost. Most of time, it is the seller’s responsibility to bear the cost. You may also want to refer to my article on How to Overcome Chinese Import Regulations.
4. Be aware that there is a chance you cannot export to China at all. For instance, for beef products or any other bio products using beef, your industry association should be aware of any existing treaties that may restrict importation of your product.

Final Responsibility Falls on You

Even though the importation process occurs in the land of China, you, as an exporter, are responsible for providing the correct paperwork needed to ship the products so as to meet all importation requirements. Some Chinese buyers are capable of importing their orders on their own while others have no experience at all. In that case, you may need to step up and create an entire infrastructure surrounding importation.

Unfortunately, exporting to China is not as easy as just finding a buyer. You need to do your due diligence and ensure all the Customs requirements are met before signing deals or shipping product. Getting into China can be a great opportunity that you don’t want to pass up, so my advice is to consult with an expert before moving forward. Good luck!

Casey W. Xiao-Morris is a veteran China Business Consultant at Leverage China, LLC., helping her clients succeed in China’s market. Casey can be reached at cxmorris@LeverageChina.com.

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