Insights For Success

Strategy, Innovation, Leadership and Security

DEALING WITH CHINA (PART 2)

Behavior, Management, Marketing, Risk Management, StrategyEdward KiledjianComment

... continuation 

Intellectual Property

The previous paragraph highlighted the difference between laws “on the books” and the extent to which business people are willing to bend them for profit. As a foreign company entering into the Chinese market, you should be thinking about how you will protect your Intellectual Property. 

A common example of this is that of Will-Burt. Will-Burt is a company that manufactures and sells Night-Scan telescoping masts for police or military use. They entered the Chinese market and sales boomed. Then all of a sudden, the sales stopped. It seems a local company had reverse engineered their products and was selling perfect replica fakes. They went as far as printing Will-Burt’s name on the counterfeit products and presenting them at a local Chinese trade show. The irony is that its prime customers are law enforcement and military who seemed to be choosing the cheaper counterfeits. 

Because of international pressure, the Chinese government is trying to fight IP theft and counterfeiting but it is an uphill battle. There are well entrenched officials and powerful Chinese business leaders who like things just the way they are. As a company entering the Chinese market, it is important to understand that you may have to spend buckets of money to defend and safeguard your corporate IP assets. 

When in Rome, do like the romans

Anytime you are dealing with a foreign entity (partner or customers), it is important to learn as much about their local customs as possible. In North America, when I hand someone a business card, they likely take it with one hand and shove it into a pocket. In Asia (particularly in China), the custom is to accept someone’s business card with 2 hands, then read it carefully and present a genuine compliment related to it, the business or the neighborhood the business it located in. 

There are also topics that will be cheerfully welcome and others that will be shunned (like Taiwan, Tiananmen Square, Tibet, Japan, etc). It is important to work with a local contact who can provide guidance and support as it relates to this section. 

Many western educated Chinese are now returning home and taking  prominent business positions in local companies. You will find it much easier to work with these younger Chinese managers as they are more likely to accept your western ways.

 

... to be continued