Seeing China for what it really is...
It’s been a while since I wrote on my blog, so I thought I would start off with something easy: People being fooled into thinking that a signed agreement means that everything is ready to make some money in China.
A while back there was an article in The Sidney Morning Herald that caught the attention of a colleague and he promptly forwarded it to me… It was very well written, and although the subject matter was hilarious to me, I am sure that it was not so to the people involved in the case. Basically someone had entered into a written agreement with a Chinese partner, thinking that that would be the end of it… I wonder if their advisers were embarrassed enough to give all the money they had received for their “consulting services” back to the poor Australian company that only a few weeks earlier had thought they had the golden goose in hand, only to find out it was a dressed up hen that overnight had become sickly and died?
Probably not… Sadly, this is not an uncommon occurrence but it is such an easy thing to avoid… Yes, yes, yes, I get it, and so do many others… People do not have time to do proper due diligence because of the pace in the market segment, but come on! Why start celebrating before the money is in the bank? Are people so eager to satisfy the stock market that they need an announcement as soon as there is something on the horizon?
Basically (and many will be able to give you concrete examples of this), a signed agreement with a Chinese company is simply a framework for further negotiations – if you let it be… You can however say: “NO!, this is our agreement and this is what we are going to be doing, if you do not like it we are moving on to do business with your competitor.”
Impossible? I think not… Business People is China are like business people everywhere else in the world, they like to make money. So, if the Chinese see that they will be making money they will honor you agreement and move forward, if they do not really see the business case they will not be so eager. The only thing that sets the Chinese (although a shrinking number) apart from a “westernized” business person is their willingness to waste time… As long as you are paying for them wasting time that is…
So, how to succeed? It is quite obvious, be patient and do not make a big song and dance about something before it comes to fruition, i.e. before actual payments are being made and the flow of goods/services have started, because until then, you really do not know what is going to happen.