Local & Foreign Entrepreneurs in China: Part 2 of 2

July 8, 2015

In the PBS documentary of foreign entrepreneurs in China we discover (when the US financial crises hit the world causing more than $64US trillion in global loses while those who caused the crises walked away with fortunes) China experienced a slowdown in economic growth in 2008.

One foreign entrepreneur, Ed Hung, talks of the clothing store he co-founded, NLGX Design, which opened in Beijing in 2008.  He said rent was still increasing.

Ed Hung was born and raised in San Francisco. His business partner, Michel Sutyadi, was born and raised in Germany.  They met in Beijing while studying Mandarin in 2005.

Ed Hung says modern Beijing is becoming a consumer culture.

Then Doug Ma, a co-founder of Go Tour-ING, talks of how the global financial crisis (which was started in America) has affected business.

In the spring of 2008, Dough Ma left his job at an investment bank to travel. He wrote a post for Jet Set Zero in July 2009, and said, “It has been quite a challenge starting up Tour-ING (looks like this business didn’t survive). For one thing, it has been a tough year for the tourism industry. Less people are traveling due to the global economy and the outbreak of swine flu has hindered a lot of travel plans.”

Brian Sloan, CEO of Robotic Blow Job (want to be shocked and/ or LOL, click on the link), says the toys he manufactures and sells seem more popular in hard economic times since people spend less money going out and stay home more so they need a method of self-entertainment.

In addition, in October 2013, Forbes ran The Rise Of Self-Made Billionaire Entrepreneurs In China, And What It Means For The Future Of Chinese Corporations, and said, “Anyone who has followed China’s business billionaire lists in recent years will probably have noticed an encouraging trend: self-made entrepreneurs are climbing the charts. Six out of the ten billionaires topping this year’s list are genuine entrepreneurs.”

Then in August 2014, The Diplomat.com said, “China has long been preparing the ground for entrepreneurial revolution. … Starting in the 1980s, the Chinese government actively encouraged entrepreneurship across the country, by introducing the first patent law, allowing state-owned enterprises (SOEs) to go bankrupt, and creating a more investor-friendly environment for private entrepreneurs.”

And in May 2014, TechNode.com offered The Top 3 Tips For Foreign Entrepreneurs Starting Up in China:

  1. Find a Local Partner
  2. Don’t confuse market size for adoption speed
  3. Learn the language and culture, and hire locals

Start with or return to Part 1

______________________________

Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the lusty love story Sir Robert Hart did not want the world to discover.

IMAGE with Blurbs and Awards to use on Twitter

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Local & Foreign Entrepreneurs in China: Part 1 of 2

July 7, 2015

“Young and Restless in China” was filmed over a period of four years starting in 2004 for the Public Broadcasting Service (PBS).

Paris Franz, a student, blogger and writer with a passion for history, art and travel, wrote a post about “Young and Restless in China” for Suite 101.com.

This two-part segment is about foreign entrepreneurs in China. I plan to also feature other segments of this PBS Frontline documentary because it demonstrates how much China is changing. The more I learn, the more it appears that there is more freedom in China than most people outside China are aware of.

Franz wrote, “The film highlights what is unique about China at the beginning of the twenty-first century.

“The entrepreneurs – starting up tailoring, hotel and internet café businesses – are full of optimism, supremely confident that their hard work is going to make them rich. As one of them says, China today is “the land of opportunity.”

Part One starts with “there is this misconception of China that it is not modern, that it is still changing, but if you come and see with your own eyes you will discover that (urban) China (where about 600 million people live) is as modern as any city in the world.

One entrepreneur says, if you visit Beijing and see the architecture, you will see that it is leaps and bounds ahead of the US.

Another entrepreneur says, China is a melting pot for all types of entrepreneurs in Beijing … For young entrepreneur it is cheap to start something new in China compared to the US.

In fact, as the economic tide turns against the west, younger, foreign talents are taking their entrepreneurial ambitions to China because the market is right for starting a business.

One American entrepreneur says he graduated from law school at Penn State in 2005. He then talks about how he arrived in China to create, manufacture and sell his own brand of sex toys and fetish clothing.

Continued in Part 2 on July 8, 2015

______________________________

Lloyd Lofthouse is the award-winning author of My Splendid Concubine [3rd edition]. When you love a Chinese woman, you marry her family and culture too. This is the lusty love story Sir Robert Hart did not want the world to discover.

IMAGE with Blurbs and Awards to use on Twitter

Subscribe to “iLook China”!
Sign up for an E-mail Subscription at the top of this page, or click on the “Following” tab in the WordPress toolbar at the top of the screen.

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China’s Holistic Historical Timeline


A bit of advice on doing business in China

January 14, 2013

An expatriate living in China sent me a copy of The Australian’s Goodwill Offers a Rich Yield by Greg Rudd.  The commentary was published in that newspaper back in May 2009.

However, what Greg Rudd says is just as important today as it was then regardless of the few negative voices that left comments.

I find it interesting that the negative comments from such as “lao de lao ren” and “RN of Canberra” may be from ignorant individuals that do not realize that the US Founding Fathers despised “democracies” and built a “republic” where only white male property owners (excluding Jews) could vote—about 10% of the 3.9 million people counted in the first U.S. Census of 1790, and 90% were farmers.  That number included almost 700,000 slaves in the land of the free. That means about 320,000 may have been eligible to vote.

“RN of Canberra” even compared China to Hitler’s Nazi Germany, which isn’t even close. There is no comparison. Today’s China is a much safer place to live than Nazi Germany was and there are no signs that China plans to go out and wage war against the rest of the world or set up gas chambers and start killing people as the Nazis did.

Both “lao de lao ren” and “RN of Canberra” express that China should become a democracy. Well, the CCP has about 80 million members and they do vote in addition to the 600 million rural Chinese that vote in elections for village political posts such as mayor. That’s more than 10% of the population.

In fact, the first time the US was officially called a democracy was by President Woodrow Wilson more than a century after the US was founded. Why, after the Civil War, veterans were known as the Grand Army of the Republic (GAR)—not the Grand Army of a Democracy.

Presidents John Adams and Thomas Jefferson both said democracy was no better than mob rule, which explains why the Founding Fathers created the Electoral College to select presidents and why George W Bush lost the popular vote to Al Gore but became president anyway.

Greg Rudd offers some advice about China in his commentary.

He says, “My mother taught me when you walk into someone’s house you shouldn’t be rude. You may not like what you see sometimes, and advice and suggestions can be given in the right spirit and in the right atmosphere, but always remember it is not your house.

“When we are in China’s house we should show respect and when they are in our house they should show respect.”

Greg Rudd is managing director of GPR Asia, based in Beijing. GPR advises on investment and joint ventures.

GPR Asia works with Asian companies who wish to invest/joint venture/merge or acquire companies in Australia and/or with Australian companies that wish to invest/joint venture/ merge or acquire companies within the Asian region.

Discover more about Doing Business in China

______________

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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Americans doing Business in China – Part 15/16

March 6, 2012

Note from Blog host — another example of East meets West through business and trade: Recently, the Future of US China Trade.com reported the results of a survey of 434 multinational companies doing business in China. “78% percent of companies surveyed rank China among their top three priority locations for investment. Only 7% rank China as ‘not a high priority’.”

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Part 1 – Young and Restless in China was filmed over a period of four years starting in 2004 for the Public Broadcasting Service (PBS).

Paris Franz, a student, blogger and writer with a passion for history, art and travel, wrote a post about Young and Restless in China for Suite 101.com.

This two-part segment is about foreign entrepreneurs in China. I plan to also feature other segments of this PBS Frontline documentary because it demonstrates how much China is changing. The more I learn, the more it appears that there is more freedom in China than most people outside China are aware of.

Franz wrote, “The film highlights what is unique about China at the beginning of the twenty-first century.

“The entrepreneurs – starting up tailoring, hotel and internet café businesses – are full of optimism, supremely confident that their hard work is going to make them rich. As one of them says, China today is “the land of opportunity.”

Part One starts with “there is this misconception of China that it is not modern, that it is still changing, but if you come and see with your own eyes you will discover that (urban) China (where about 500 million people live) is as modern as any city in the world.

One entrepreneur says, if you visit Beijing and see the architecture, you will see that it is leaps and bounds ahead of the US.

Another entrepreneur says, China is a melting pot for all types of entrepreneurs in Beijing… For young entrepreneur it is cheap to start something new in China compared to the US.

In fact, as the economic tide turns against the west, younger, foreign talents are taking their entrepreneurial ambitions to China because the market is right for starting a business.

One American entrepreneur says he graduated from law school at Penn State in 2005. He then talks about how he arrived in China to create, manufacture and sell his own brand of sex toys and fetish clothing.

Note from Blog host – If you plan to do business in China, I recommend visiting the China Law Blog first.

Continued March 7, 2012 in Americans doing Business in China – Part 16 or return to Part 14

______________

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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Sign up for an E-mail Subscription at the top of this page.

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Note: This post first appeared on January 23, 2011


The Importance of Guanxi to Chinese Civilization

May 23, 2011

In lieu of a Western style legal system for most of China’s history, Guanxi offered an alternative to foster innovation, develop trust and contribute to trade and commerce for thousands of years.

Sir Robert Hart (1835 – 1911), the godfather of China’s modernization and the main character of my first two historical fiction novels, discovered the importance of Guanxi soon after he left the employ of the British and went to work for the Emperor.

He quickly learned that a “supreme value of loyalty glued together China’s structure of personal relationships.” Source: Entering China’s Service

In addition, Hart wrote in a letter in 1891, “These people (referring to the Chinese) never act too soon, and, so far, I have not known of their losing anything by being late. To glide naturally, easily and seasonably into the safe position sequence as circumstances make, is probably a sounder though less heroic policy for a state than to be forever experimenting—”

To translate, it takes time to develop a relationship/friendship/trust (Guanxi) that all invovled may benefit from.


Warning: This is a Promotional Video. However, it offers a perspective on Guanxi worth seeing.

However, I did not learn about Guanxi from Robert Hart. I first learned of it from the China Law Blog, which quoted the Silicon Hutong Blog.

Then I did more research and watched a few videos on the subject. I learned that Guanxi is one of those complexities of Chinese
culture that does not translate easily.

There are several elements and layers to Guanxi. First, Guanxi is based on a Confucian hierarchy of familial relationships, long-term friendships, classmates, and schoolmates and to those no stranger – Chinese or foreign – will ever have access. Source: Silicon Hutong

Guanxi developed over millennia because China did not have a stable and effective legal system as it developed in the West.

In fact, the legal system in China today is relatively new and made its appearance after the 1982 Chinese Constitution became the law of the land.

Since 1982, there have been several amendments to the Constitution as China adapts its evolving legal system, which was modeled after the German legal system.

In time, this Western influenced legal system may replace Guanxi since business law modeled on Western law with Chinese characteristic has developed faster than civil law.

There are a several opinions about Guanxi. I learned that Guanxi is similar to a gate that opens to a network of human beings but it isn’t that simple.

Maintaining Guanxi is different than how relationships are maintained in other cultures. The embedded videos with this post offer a more detailed explanation.

The China Law Blog copied the post from the Silicon Hutong Blog. The post on the China Law Blog had more than twenty comments and it was a lively discussion worth reading if you are interested in discovering more.

Learn more of Chinese Culture from The Mental and Emotional State of “Face”

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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.

To subscribe to iLook China, use the “Subscribe” button at the top of the screen in the menu bar.

This revised and edited post first appeared here on October 18, 2010 as Guanxi in China


The Challenging Chinese Consumer Market

May 16, 2011

When foreign businesses such as Home Depot or Wal-Mart open for business in China, knowing the market and consumer is a good idea.

Most Chinese consumers have a different perspective than most Western shoppers when it comes to spending money. The average Chinese consumer born before 1980 prefers to pay cash and buy the best quality for the lowest price.

There’s also a difference in spending habits between younger Chinese born after 1980. Evidence suggests that younger Chinese have caught the credit card virus and are running up debt similar to the average American consumer.

Bob Schmitz writing for NPR’s Marketplace on Friday, April 8, 2011 says, “Home Depot not a hit in China.”

Schmitz talks to Raymond Chou, the CEO of Home Depot operations in China. When asked about closing five stores, Chou indicated this is not a sign of failure and said, “(Home Depot) has closed stores to focus on China’s lesser-known cities where much of the country’s real estate development is booming.”

One criticism Schmitz writes of is the fact that many of Home Depot’s products are made in China and may be bought for less from Chinese merchants.

However, one Chinese contractor says he shops at Home Depot because “It’s easy to exchange and return goods… and (he) knows the materials (at Home Depot) are safe and not fake.”

Wal-Mart critics may rejoice. According to NPR, Wal-Mart’s goals in China are to purchase a chain of retail stores there.

If this scheme will succeed remains to be seen. Wal-Mart has faced slowing business in the United States, is struggling in Japan and failed in Germany and South Korea.

Wal-Mart’s biggest challenge is to overcome its habit of fighting unions and paying low wages, which forces many workers to rely on local welfare and public-health programs. This isn’t welcome in some markets and is the reason why Wal-Mart left Germany.

For the same reasons, Wal-Mart, which is allergic to unions and paying workers a living wage, is facing a Chinese government that is strengthening worker protections and rights to organize/join labor unions.

Last summer, Wal-Mart was forced to allow its Chinese workers to join a union for the first time.

To understand the Walton family, Bizmarts.com reported, “As Sam Walton explained in his 1992 autobiography, Made in America, he didn’t believe in giving ‘any undeserving stranger a free ride’. Nor did he believe in being generous with company profits.”

Forbes reported that the Walton family was worth about 90 billion dollars or 18 billion each.

Discover how China is Holding a Vital Key to Humanity’s Future

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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.

To subscribe to iLook China, look for the “Subscribe” button at the top of the screen in the menu bar, click it then follow directions.


Changing China through its Youth – Part 3/5

February 1, 2011

The PBS Frontline narrator mentions how entrepreneurs that have been away from China must get used to doing business in China, which may include bribes.

In fact, to Chinese there is no clear definition of what is bribery — what the West calls corruption is deeply rooted in China’s culture (and has nothing to do with Communism) and is not seen the same way.

Lu Dong, going into the business of Internet tailoring, says, “If we use Western values to judge a Chinese company’s behavior, I think it is very hard to do business with them.”

Ben Wu, the Internet Cafe owner, says they (Chinese businessmen) have no interest in helping or not helping him, and he cannot figure out how to influence them.

To get help in China, one must make friends and since China is an eating culture that takes money. To learn more, discover the meaning of Guanxi in China.

Ben Wu, who was born in China but educated in the US, says he will not bribe anyone. However, he doesn’t think he can stop his Chinese partner.

One wise quote explains the choices. “There is nothing you can do. A fish has to live in water and if the water isn’t clean you must get used to it.”

Now, for a corruption reality check. Here is a comparison with the US. We know an engineer who stopped working in construction because of the difficulty in finding contractors that are honest.

We also had a bad experience with a contractor we signed on to build an addition to our house. Twenty-eight thousand dollars later without any construction starting, he was still asking for money.

An investigation on my part revealed he hadn’t taken out the construction permit even though he had collected the money months earlier to do so. We cancelled the contract and he filed a lien on our property for about $200,000 US.

Months later, we managed to get about half the 28 thousand back and California forced him to cancel the lien. However, we had to see and pay for a lawyer, file a complaint with a state agency in California and the process was stressful and frustrating.

The fact is that there is corruption in every culture and country. It just wears different clothing.

Return to Changing China through its Youth – Part 2

______________

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.

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.