Posted on NZ Herald - 05 August 2007
By Bo Li of Bananaworks CommunicationsQ. Are NZ companies just really too small to compete with the rush of global giants into China?
A. Nothing is too small, nothing is too big. The China market can accommodate anyone and everyone. Being a global giant has its advantages, but small businesses can still find a niche.
Q. What are some common mistakes companies make when looking to expand into China?
A. It's easy to think of China as a single market, whereas there is a vast range of markets. One pitfall is lack of research and market intelligence into local Chinese resource acts or reliable agencies in China. Another factor is New Zealand businesses' lack of preparation to deal with and/or live in a foreign country.
Q. Are people's fears about the security of intellectual property justified?
A. Yes, no one can guarantee that your IP is not going to be copied, but businesses should see this from the flip side - if your IP has been copied, this means it is a great idea, thus creating competition.
Q. Are there cultural sensitivities NZ companies should be aware of when starting out in China?
A. Knowing Chinese culture and traditions is important. Bananaworks has consistently helped New Zealand businesses understand Chinese business culture.
Q. Do we need deep pockets to commercially compete in China?
A. It depends on the type of business and sector in which it is located. If you don't gain the market share straight away, it becomes harder and harder in the future.
Q. Are some of the early fears about corruption justified? Is there good local support on the ground should things go wrong? Is the local legal system good to deal with for Kiwis?
A. Corruption prevails everywhere. China is not exempt. The best solution is reconciliation and negotiation if anything goes wrong. This is certainly seen as the Chinese way to resolve it. Seek out your Guan Xi (connections) to assist. The Chinese believe once an enemy, always an enemy. The legal system is complex.
Q. What sort of local support in China will we need? Lawyers, accountants, other advisers?
A. All you need are Guan Xi. See it as a toolbox that will open up myriad resources, skill-sets. Or seek foreign firms for professional services, although these are costly.
Q. Is it really the land of plenty? Are the increases in standards of living we hear about happening?
A. Not really. China is a vast territory, but it has limited land resources. There have been significant increases in the standard of living in the past 10 years, especially in cities where property prices soar year by year, brought on by demand for increased living space, modern kitchens within homes and the rise of the interior design market.
Q. What sort of business opportunities will the Beijing Olympics bring? What sort of changes in China?
A. All eyes will be on China. They will take centre stage and, and this platform will be used to project a dynamic and new Brand China.
By Bo Li of Bananaworks Communications* Doing business with China is being discussed at the Bananas NZ Going Global international conference in Auckland later this month. Check it out at www.goingbananas.org.nz
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