Reflections on a Wandering Life.....

Tuesday, January 13, 2009

The guy on the left is Jeremy Goldkorn from Danwei. The other guys are entrepreneurs who have all started businesses in Beijing. As a matter of fact, Jeremy himself sorta fits into that category. Came here from South Africa and set up a news outlet that disseminates news about China mainly by translating existing stuff from Chinese blogs. It's quite useful for those of us who live in China, and don't read Chinese comfortably enough to follow Chinese news articles.

This evening, I attended the Third Plenary Session put on by Danwei, and hosted at the the Cheung Kong Graduate School of Business, which is located at the Oriental Plaza. After the presentations, I asked the panelists how their own stories would be different if they had started out in today's China. They all insisted there was plenty of opportunity, and one of them made the point that the main benefit of starting a business in Beijing is that the cost of overhead is so low.

The whole question of doing business in China is something I have been curious about, because often foreigners will tell me with a shrug that corruption is just the order of the day in this country. Seems like they are saying, "If you can't beat them, join them." But if you take that attitude, you have forfeited the right to complain about corruption in this country. I asked a friend of mine from church who has worked in this country for many years, "Do you have to be dishonest to do business in China?" He said, "No. You can be honest. But you won't make as much money."

During the discussion this evening, the subject of guanxi came up with differing views about how important it is. That word has always bothered me, because the word guanxi just means "relationship." Sometimes foreigners use the word as if it has some special, magic meaning. But the meaning of the word is really quite basic. So the question, then, is what role does relationship play in how you do business? And is it really any different from any other country, such as America, where people often use expressions like, "It's not what you know, it's who you know." That's guanxi. I do think it is somewhat different, but it's hard to explain just how. One Chinese businessman in America told me that he didn't want to go to China, because doing business in China was so much more complicated. In the States, you take someone out to lunch or something, and that's it. But in China.... Hmmm... I don't know. I'm not sure. But from time to time I do hear from Chinese people who have lived in both Asia and North America, that relationships in Canada or America are simpler than in China. But all that assumes, of course, that you are involved in the Asian market. As was pointed out this evening, the issue of guanxi could be largely irrelevant if you are just living in China for the purpose of taking advantage of the lower cost of getting stuff done here.

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