A few years ago I was in a job I wasn’t excited about anymore and had just ended a relationship. On a whim I applied for a scholarship to learn Mandarin in Taiwan. Three months later my apartment was packed, I had said goodbye to my friends and found myself on the back of a scooter going for hot pot in Taipei.
Let me back up a little. I became interested in China when I found out that the largest migration in human history is the urbanization of China. What did that mean for their society? Business? What opportunities lay there? After reading Jim Rogers Adventure Capitalist and Getting Rich First by Ducan Hewitt I decided to find out by backpacking through primarily rural and newly industrialized cities. Lot’s of train tickets and a bout of Swine Flu later here’s what I found:
They Don’t Think Next Quarter, They Think Next Century
I was lucky enough to have dinner with a group of visiting American journalists in the coastal city Xiamen. They had spent the day with the American Ambassador to China in Beijing. The Ambassador told a story of coming to Beijing before starting his posting to get the lay of the land. He was invited to the Forbidden City by a high ranking diplomat for a tour.
The diplomat whisked the soon-to-be ambassador around on a tour of The Great Hall of the People. They entered one section that is dedicated to each Province and Administrative Region of China. The Diplomat began expounding “This is the Taiwan Hall, it was built in 1982. This is the Hong Kong Hall, built in 1988.” If you know your history this will come as a surprise.
First lesson, you don’t think next quarter in China, you think what you can build over decades.
There is More Concern for the Environment then Any City in North American City I’ve Been To. But the Place is Still Really Polluted.
In a small fishing village outside of Qingdao I was invited by the rooming house owner to have dinner with a group of their friends. They were about my parents age and had all grown up in the Cultural Revolution. That meant many were forcibly relocated to farms in rural villages where they had no family.
They spoke with immense pride about their country, and huge concern with the rampant development around them. High school friends suddenly owned huge factories and drove Lambos. There was an understanding that with such a large population, and limited natural resources, everyone had to participate in ensuring resources lasted. Food was composted at the end of meal, cans recycled. One bigger, it’s also why China is buying up minerals and resources worldwide.
When I was taking trains between cities I lost count of the number of apartment towers with solar water arrays on the roof providing hot water. That is not to say it is a bastion of social enterprise and environmentalism. However, it’s a story not often told in the China growth narrative.
Your Idea is Unimportant, It’s Who You Are and Are Friends With
A criticism hear about doing business in China is its clubby nature and it takes too long to do anything. Westerners fail to realize that this insularity is intentional. China didn’t evolve with a strong legal system of contracts and enforcement. Having little recourse, besides hurting or killing someone, if something goes wrong means the only way to do business is with someone you know or comes recommended. Over time networks of friends and family have developed. Along with a culture that prizes loyalty, respect and connection. Having respect, connection with a group is to “have good guan xi” and that takes time to develop. You work on something small, you gain trust. You get to know each other as people and show your intentions to build a relationship over time. It’s a very different way of doing business, especially compared to America. So when I read about Western companies "pulling out of China” after seeing “no results” after a year I laugh, you’re just getting started!
The Size of the Market is a Scale North Americans Can’t Comprehend
Shanghai makes Manhattan look like Omaha. With 24 million people alone it is the world’s largest city and most of it’s current infrastructure didn’t exist in the 90’s. I lost count of the number of cities I passed through that had 4-6 million people and simply didn’t exist a decade ago. My biggest surprise of the trip was the mind boggling size of the country, population and change occurring at every level of society.
So in short, just go. Even if it’s just to see the Great Wall in Beijing or the skyscrapers of Pudong. Asian taste is already influencing how we buy cars, the movies we watch and the luxury brands we consume.
I highly suggest you book a ticket for at least a month and wander through Shanghai, Beijing and a couple of cities on the coast, like Xiamen or Qingdao.
Plus, the food is amazing.