Business with China 101

Companies like Mattel who have had to recall almost 20 million toys made in China are now reeling from the effects of selling toys with compromised product safety. The US toymaker has undertaken two recalls in a month, the second involving Chinese-made toys contaminated with hazardous magnets and lead paint, causing its share price to drop by 6%.

Locally, China has been getting bad press lately as foodstuffs, fertilisers and toothpaste sold to the international community are falling foul of health regulations because of unsafe substances used in their manufacturing by Chinese companies.

SA pet owners were recently faced with sick and dying pets who had been fed pet food containing melamine, distributed by a South African third-party supplier but which originated in China. East Cape pineapple farmers had a shipment of pineapples rejected by Switzerland after it was found to be contaminated with cadmium in Chinese-made fertiliser supplied by SA company, Protea Chemicals.

But China cannot be ignored or circumvented by companies doing business in the international community. Despite these and other scares, China is steadily becoming a serious player in the global economy. Its presence is being felt on just about every continent as it supplies cheaply made products to ever-demanding world markets. In addition, massive opportunities are opening up for companies to do business with China's market of 1,3 billion people. According to Guy McLeod, President of Airbus China, ‘‘Nowhere in the world is there a market like China.''

Risk vs. opportunity

It is however clear that China offers international investors at least as much risk as it does opportunity, for two reasons. Firstly, organisations doing business in China struggle to manage two business environments and two social, cultural and political systems. Secondly, as has become apparent, certain Chinese manufactured products do not comply with international health and safety requirements. The challenge is therefore for corporate purchasers of these products to have rigorous quality control and other procedures in place to ensure that they do not end up distributing dangerous products.

It has become clear that companies wanting to make the most of the business opportunities presented by China will have to acquire and act on reliable and current information.

According to an article in the August 2007 issue of Fortune magazine, it took Microsoft 15 years and billions of dollars to learn how to do business with China. Bill Gates says he had to throw all his existing business models away and start from scratch in order to succeed.

SA businesses now have an opportunity to acquire sound knowledge to overcome the challenges they will face when dealing with Chinese companies. SA's leading human strategy magazine, HR Future, in conjunction with LWW and Partners and the China Chamber of Commerce and Industry, is hosting a half-day seminar on doing business with China on 19 September at the Hilton Hotel in Sandton.

The keynote address will be delivered by an official from The China Economic and Commercial Consulate and in-depth sessions will be conducted by senior role players with hands-on experience of Chinese markets, companies and business practices.

Two of the leading speakers are:

• Marjo Louw, Managing Director of Sasol Chemicals Asia Pacific who oversees Sasol's Chemical Portfolio in the Asia Pacific Region and is also Chairman of the board for Sasol Chemicals (Shanghai) Co. Ltd and Sasol Chemicals Japan KK, as well as a board member of the Sasol China Management Company. Marjo is also a member of Solvents and Olefins and Surfactants Global Excom and the Steering Committee for CTL in China. He is active in numerous Business Associations and Chambers of Commerce in the Asia Pacific Region, and has presented at international conferences.
• Kobus van der Wath, Managing Director of international consulting firm The Beijing Axis. Based in China, having lived and worked in Asia, Europe and Africa, Kobus is also a Director of the South Africa China Business Association (SACBA). He is the author of Doing Business in China – The system and the strategies, and the editor of The China Analyst for Africa. Kobus has appeared on international TV networks, has written for numerous international business newspapers and has presented at international conferences and workshops on operating in China's business environment.

Topics covered by these and other speakers will include:
• the secret to establishing a presence in China and working with Chinese business partners;
• China's contradictions and how to navigate them successfully;
• negotiating with the Chinese Government;
• Chinese people's behaviour at meetings and their negotiation methods;
• the different ‘faces' presented by the Chinese and the reasons for this;
• qualities of a successful manager in China;
• how to assess and recruit suitable employees for China;
• managing Chinese employees;
• why it's important to have an understanding of the norms, culture, values and political environment in China;
• understanding Chinese core beliefs and their consequences in business;
• the ‘Middle Kingdom' and the Chinese approach to foreigners;
• best Economic Zones for business;
• an overview of business opportunities in China; and
• living and working in China.

Accessing the rapidly growing Chinese market, whether by way of exporting or importing goods or services, can be a very complex activity, given the distance, culture, language, safety compliance and ever-changing economic conditions.

This half-day briefing is for senior executives, HR directors and senior managers, and will provide a strategic overview to China. It will be followed up by a series of seminars focusing on further specific aspects and business practices.

For more information, contact Jenny Morris at 011 888-8914 or email .