Business is a Global War

September 18, 2010

Like war, running a successful business is a challenge. To win, you cannot be merciful and give your competition the edge in price or quality.

If you read or listen to the media or Blogosphere in the U.S., it sounds as if China is the only country that is unfair in business.

However, there’s much that goes on most Westerners never hear or admit.

For example, the U.S. might be China’s biggest customer but that only represents about 18% of what China sells to the world.

In fact, Suite 101 listed a decline for Chinese 2009 global exports, which was estimated to be $1.19 trillion (in U.S. Dollars), and China imported $922 billion worth of products from other countries, down 18.5% from 2008.

Matthew Knight for CNN reported that Business is war, learn from the battlefield….

It seems that a few U.S. businesses may be listening and learning – at least the survivors, who are too busy counting profits.

According to the China Law Blog, several U.S. companies that manufacture in the U.S. and export to China dropped prices as high as 70% when a Chinese company started to compete by selling similar products.

When that happened, the Chinese companies had trouble competing because the prices of the U.S. equipment were dropped well below the prices set by domestic manufacturers in China.

After all, isn’t all fair in love, war and business and to the victor the spoils.

When U.S. once manufactured and sold more than 90% of U.S. cars globally, we didn’t hear GM, Ford or Chrysler complaining about the competition because they were the winners – now some Americans complain. 

Isn’t that the same as being a bad sport?

“It is a well-known fact that 80% of small businesses fail each year in the United States…. One key reason is that many people…have no idea what they’re getting into”. Source: Googobits.com

See Doing Business in China

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Naked Capitalism Gets it Wrong about China

July 18, 2010

Yves at naked capitalism provided a perfect example of Sinophobic comments when writing about doing business in China. In GE CEO Immelt Gets Pissy About China, Obama, I agreed with Yves when he pointed out the hypocrisy of a US corporate executive complaining about how Chinese officialdom is not supportive of GE’s business goals.

However, Yves then quotes “Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production”  and selected quotes like “Chinese manufacturers cut corners wherever they can, from product quality to factory equipment and maintenance…”  Before you believe everything Yves writes about doing business in China, I suggest you check out what China Law Blog says on the subject. 

http://www.youtube.com/watch?v=loL97DgsvdE

I have met Westerners doing business in China, and those who are carless get burned and others, who do their homework and know what they are getting into, have few if any complaints. When a careless, lazy deal with a Chinese manufacturer turns sour, a careful examination often shows that the fault lies with the foreigner—not the Chinese. Understanding China’s culture and laws is the key to success.

See Bob Grant’s guest post about doing business in China

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Stuck on a Name

June 30, 2010

Dave left this comment for a post on the China Law Blog: “The country (China) is ruled by an organization called “The Communist Party” claiming fealty to the teachings of the German Karl Marx and organizationally based on the teachings of the Russian Lenin.” Source of comment: China Law Blog

Think again, Dave. After Mao died and Deng Xiaoping declared, “Getting rich was glorious”, Marxism and Lenin went in the trash with Maoism. In fact, China is a mixture of capitalism and socialism and the socialism is shrinking.

Check out medical care in China. Soon after Mao died, the cradle to grave socialist system of medicine went into the rubbish. It’s cash, baby, or have a nice death. Along with the state-run hospitals, a growing and very expense private medical system caters to rich expatriates and wealthy Chinese.

In fact, in 2004, there were almost 2 million privately owned enterprises in China. The number of individually owned businesses stood at more than 39 million primarily concentrated in such areas as wholesale and retail, manufacturing and industrial, transport, personal services, and lodging and restaurants. Source: Research Institute of Economy, Trade & Industry, IAA

Soon after 1976, China’s government revised the Chinese Constitution imposing term limits (2 five-year terms) for public office and an age limit (67), something we don’t have in the US. Granted, China still has a one party system but regional governments don’t always listen to Beijing. China is a “Communist” nation in word only.

See Dictatorship Defined

_________________________

Lloyd Lofthouse,
Award winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Far from the Facts

June 29, 2010

Due to a China Law Blog post, I spent the better part of an hour hunting for a quote from Sir Robert Hart where he compares China and England’s legal systems in the 19th century. In the quote, which I couldn’t find, Hart points out that the British and Chinese legal systems differ because of culture—one is based on the individual and China’s is not.

Robert Hart's statue in Shanghai (1913 - 1942)

In I Wish All China Could be California Girls, Dan Harris (China Law Blog) mentions a post I wrote, Belching for China, and then he takes the topic further. Harris writes, “I agree with iLooks overall premise, but I am not so sure Hindrey’s article is the right one on which to go off, because it is neither simplistic nor jingoistic…”

To make his point, Harris provides better evidence written by a personal Injury lawyer, William Marler, who feels that China needs a few good lawyers and a legal product liabilty system similar to the US.

That is the last thing China needs. In my “opinion” many of America’s problems stem from a lottery ticket mentality and bumper stickers saying, “Go Ahead and Hit Me and Make My Day.”

Marler writes that executing a top food-safety official in China for taking bribes is not the way to solve problems in food safety. What Marler doesn’t understand is that removing a rotten egg from the carton is sending a message to the Chinese and they get it. The Chinese have punished convicted criminals like this for more than two thousand years—far longer than any Western culture. In fact, today’s China is far less brutal since 1976.

To strengthen his point, Harris uses evidence from Stan Abrams at China Hearsay, another lawyer who chastises Marler for getting his facts wrong.  

What I learned from Harris and Abrams was that people like Marler and Hindrey and their stereotypical “opinions” about China are examples of what many in America believe, which is usually far from the truth.

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Lloyd Lofthouse,
Award winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Greedy Buyers Beware

June 8, 2010

The China Law Blog posted a piece about China Product Beyond Your Worst Nightmare and pointed out that in China there are levels of quality five levels below anything you would think possible and for Chinese manufacturers those levels are normal.

For that reason, Dan, who posted the piece, blames US companies that have problems with the quality of Chinese manufactured products for failing to be specific in the contract’s language.

drywall disaster

One example used in the piece was about the tainted Chinese drywall that has been in the US news.  When the defect was discovered, the Chinese drywall manufacturer urged the U.S. customer, Banner Supply, to sell the drywall in other countries—not in the US.  Depositions unsealed Friday by a Florida court judge in Miami-Dade County shows that the US company refused the offer.

US companies that sign these flawed contracts are probably drooling at the low prices and imagined profits and stagger off giggling in a daze at all the money to be made. Greed for flawed products is the blinding motive. I understand because we had a problem with a greedy US contractor over an addition to our California house that had nothing to do with China. We ended up firing him and no addition was built.

Learn more—see China’s Labor Laws

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Posted by Lloyd Lofthouse

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