Doing successful business in China isn’t about culture
November 20, 2013 Leave a comment
Michael Bleby Reporter
Doing successful business in China isn’t about culture
Published 19 November 2013 10:29, Updated 19 November 2013 13:05
It doesn’t take much to throw a spanner in the works of Chinese negotiations. Just ask Ben Hammond. The chief executive of ASX-listed Centrex Metals – which has sealed three joint-venture deals with Chinese partners to mine iron ore and base metals in South Australia and NSW – has run into plenty of those hurdles. One, he says, is translation errors.“On one deal, the other side couldn’t understand why we weren’t considering underground mining,” Hammond says. “We couldn’t understand why they were considering it.”
Negotiations were tied up for a month as the other side consulted extensively before asking for more information. Then the penny dropped – there was a translating error in one of the documents. “Eventually it came out that they thought it was eight kilometres deep,” he recalls.
“We told them it’s not eight kilometres deep, it’s eight kilometres long!”
The anecdote sounds minor, but the delay it caused wasn’t. Of course, it’s no surprise the biggest “China” lessons have been learnt by the resources industry. Minerals and fuel exports account for over half of Australia’s total exports and over the decade to 2011, resources grew in importance in the bilateral trade with China from 45 per cent of exports to 81 per cent.
But while dealing with China brings its difficulties, these revolve more around basic business issues than they do about great cultural gaps that need to be bridged, Hammond says.
It’s not just the size of the company, it’s the goals of the company.
“There are these cultural taboos, but they’re not the fundamental underlying thing that’s causing the most negotiations in joint ventures,” he says.
This highlights a misunderstanding that many people fall for when they contemplate doing business in China or with Chinese partners.
“The biggest misconception about cultural capability is that it’s all about manners,” says Tamerlaine Beasley, the head of consultancy Beasley Intercultural. “It is not about chopsticks and manners. If you don’t understand the driving values of the people you’re negotiating with, it makes it difficult to reach a business outcome. This is about risk management, about getting a return on your time, on your capital, getting the business happening.”
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