Understanding why piracy is here to stay does not necessary make it less costly or frustrating for International companies, but it can be helpful to understand that this practice stems from a several thousand year old mindset. And to learn what is and is not effective in countering it (ie. the example of Microsoft’s ads).

One of the most commonly examined element of intercultural theory is that of the Collective vs. Independent nature of a society.   European and especially North American cultures exhibit a strongly Independent business and social structure.  The rights of the individual (person or company) override the collective, and are protected as such. China exhibits one of the most Collective societies in the world – where the well-being of the group trumps the rights of the individual. We can’t call one or the other way bad/good; or right/wrong, it’s simply how these diverse societies have evolved over hundreds and thousands of years.  And it’s difficult to erase thousands of years of behaviour based on a Collective mindset with an advertising campaign.

Piracy goes back to the China world view that individual rights don’t matter.  The courts have never evolved to protect innovative individuals. There is still very much the ethos that economic growth has to be managed, so individual and intellectual property, where the spoils go to one entity or one person, is not a cultural value, says Tom Doctoroff of J. Walter Thompson

I’ve heard it said in China, that brands don’t matter.  I completely disagree and feel that Chinese have a keen understanding of the value of brands and the face they can provide.  It makes sense.  Imagine a rural factory in the hinterland of China that makes knock off MP3 players.  They notice that if they make red ones, they sell for 50% more.  Then, they notice that if they sell white ones with a label that says IPOD and a picture of a fruit they can sell them for 200% more.  It makes perfect sense.

In the opinion of many, unfortunately for China, the ongoing abuse of IP may provide short term revenue but hurts China in the long run.  With rising labour costs and increasing competition from cheaper countries, China as a whole wishes to evolve from being the world’s factory to a more innovative economy.  However, lacking comprehensive and consistent enforcement of IP international laws not only hurts international corporations but also fledgling Chinese innovators. For every conspicuous black-market DVD stand bust I’ve seen in China, I’ve seen thousands operate with complete impunity. New domestic innovation in China will always be threatened by a lack of protection, unfortunately stifling the evolution of its economy.

You may have worked with translators before, but you should be aware that translating English – Chinese is much more challenging than translating between English and other Western languages.  Chinese lacks the similarities that Western languages like French or Italian share with English, and further it is considered a “high context” language. This means that each Chinese word has a rather vague meaning until the surrounding verbiage and even situation is taken into context.  Conversely, English is a “low-context” language, meaning that each individual word contains a highly-specific stand-alone meaning.

If you’ve ever watched an old Kungfu movie with English subtitles you have probably already witnessed awkward Chinese-English translations!  It’s no wonder there are numerous websites dedicated to “Chinglish,” the amusing creations that are a result of imperfect translations.

(Before you laugh, know this goes both ways. Many major Western corporations suffered from poor translations in China – most notably Coca Cola’s unfortunate original Chinese brand name which translated as “bite the wax tadpole.”)

Here are 7 practical tips to ensure your business communication is translated accurately & effectively in China:

1. If you are negotiating or managing a challenging business situation, hire your own translator.  Never utilize a translator from a company you are negotiating with!  Bonus tip: A Chinese company you are negotiating with will prefer that you use their translator, this puts them at an advantage. Avoid everyone losing face by telling them you’ve already arranged and paid for a translator.
2. In serious negotiation, make sure your translator understands your materials.  Provide him or her with presentations or speeches in advance.  Spend time confirming specialized terms.
3. Ask established organizations to recommend experienced translators – local consulates, Canada China Business Council, US Chamber of Commerce, etc.
4. When speaking, use short phrases to allow the translator to easily keep up and not miss key points.
5. Is there back and forth between your translator and your Chinese counterpart?  Politely ask your translator if you can help clarify something further.
6. Always speak to your Chinese counterpart, not to your translator.
7. Make sure you hire a translator who speaks the right dialect!  In most cases this will be Mandarin, but if you are doing business in the south of China, it could be Cantonese.

What other tips can you suggest?

Famed Chinese Canadian geomancer Paul Ng has released his business predictions for the coming year ahead based on analysis of the I-Jing (I-Ching).

According to Mr. Ng, the year 2012 is “EarthThunder Restart”, containing 5 “Yin’s” and 1 “Yang”.   The “yang” (positivity) is just beginning making this is a year of major changes, with “yin” (negativity) reaching an end.  Hence the “yang” (positivity) is taking over.  In life, all things must reach the bottom before they can bounce back up.  This is a year of changes, adjustments, new directions and new strategies – sounds like a reboot!

There has been speculation that the world would end in 2012.  According to I-Jing, there is no such happening. On the contrary, we will see new directions for the better.

The best elements for this year are “fire, earth and metal”. “Water and wood” are negative.  Energy and hi-tech fields will continue to do well, so as real estate, metals, especially gold and silver.  Travel and textile sectors will be unstable.  There is no root for this year, causing most things to be unstable and unpredictable.

Business involving “fire, earth or metal” will do well.

• Automobiles
• Those driven by new energy sources
• Wind-related businesses, such as wind turbines
• Electronics and computer/storage media, especially those with Nano technology
• Communications and Internet
• Hi-tech securities
• Household securities
• Mining
• Real Estate
• Education
• Communications
• Entertainment
• New building materials
• House renovations
• Food business, especially those targeting weddings

Those involving “water” or “wood” have to work much harder.

• Water-oriented businesses
• Clothing
• Fishing
• Travel
• Airplanes
• Smugglings
• Imports & Exports

PROJECTION FOR THE WORLD STOCK MARKETS

February: Negative
March: Negative
April: First half negative; second half volatile
May First half negative; second half positive
June First half positive; second half volatile
July Positive
August: Positive
September: Positive
October: First half positive; second half negative
November: First half positive; second half very negative
December: Negative
January (2013): First half negative; second half positive

You can download the original version from Paul Ng’s website.

(Gong Xi Fa Cai) Have a healthy and prosperous 2012!

Why are companies making this effort to learn how to cater to Chinese travelers?

“Chinese residents made over 30 million overseas trips in the first half of 2011 alone, up 20% since 2010. For comparison, US citizens made only 37 million outbound air travel trips during the whole of 2010.”

In addition to a huge growth of sheer numbers of Chinese traveling abroad, Chinese tend to spend more money while traveling.  According to the Economist, “Chinese people often spend as much as 8% of their annual discretionary income on a single trip.”

Not only should travel providers be looking to customize experiences for Chinese tourists – this could be as simple as making sure that hotel room amenities include slippers and a pot to make tea – but also providing them with experiences that give them “bragging rights” or “face,” according to Hong Kong-based China Elite Focus. For instance, experiences which may not be possible in their own country, like a private tour of an Italian fashion house, wine tasting tours in well known wine regions like Bordeaux, or yachting in the Mediterranean islands.

But as much as Chinese travelers are looking for unique experiences they are also looking for comforts of home.  Many Chinese visitors to my hometown of Toronto are less interested in sampling unique Canadian cuisine as they are in finding a good Chinese restaurant.

But be wary when promoting local activities geared towards Chinese tourists.  While Casinos are  enormously popular, it is illegal to advertise gambling in China.

Resources:

Trendwatching.com 12 Crucial Trends for 2012

Chinese Tourists want Casinos, not Koalas

KPMG Report on China’s Luxury Tourists

Chinese City Shuts Down 13 Wal-Marts

Why?

One of the most important intercultural considerations in international business is the value of hierarchy.  The USA, along with Canada, the UK, Australia, Germany, Scandinavian countries and Austria; places a low value of hierarchy in  business.  This means there is little importance placed on rank and titles, and organizations operate with a high degree of participation by all employees, regardless of position in a company.  And yes, CEOs often get their own coffee ,and don’t really care who sees them doing it.

Additionally, politicians go to great lengths in those countries to show that they are an average joe (consider George W. Bush playing down his Ivy League credentials).  Last year, my Italian partner attended a Parliamentary event with me, and was shocked when former Prime Minster of Canada Joe Clark lined up with the rest of us plebes to get a plate of lunch from the buffet.

In China; like Russia, India, and many Middle Eastern countries; observing hierarchy is critically important, as well as giving off the signals that indicate the appropriate level of hierarchy accorded to your rank. When doing business in China, it is vital to observe the importance of rank, and to follow a more formal protocol in business interactions.  Subordinates are more likely to follow (and require) specific directions, rather than being comfortable taking initiative. One person will speak on behalf of the organization, and a collaborative approach to external communications is rare. These are also cultures where the concept of preserving face is paramount.

Understanding how to conduct business within a culture that places a high value on hierarchy has more than the impact of “being polite.” Intercultural values such as hierarchy form our unconscious assumptions and attitudes, and drive the “rules” and outcomes of business engagement.

Fortunately for Locke, his position and authority is well known in China.  Therefore, his self-sufficient behaviour drew a positive response from the Chinese public, who are accustomed to their own bureaucrats’ grandstanding.  However, a less well known senior business executive to China would do well to practice behaviour that reinforces their high level status.  Why? Because Chinese decision makers (the ones you want to meet) will not deign to engage with anyone that they perceive to be junior to them. A few simple tricks:

• Dress up.  Chinese have a mental image of a successful business exec (male & female), and that includes a sharp suit and nice watch.
• Control the conversation from your team.  No matter how interactive and collaborative your meetings are at home, advise your staff not to speak at meetings with Chinese decision-makers, unless you invite them to.
• Always be the first person to enter or leave a meeting room.
• If a group picture is taken (and it probably will be), make sure you are front and centre.

In China, the motivations behind environmental awareness and actions are different.

Contrary to what many westerners assume, China has begun to recognize the consequences of its economic development at all costs, with the biggest price being the impact of pollution and environmental damage.  The central government has made cleantech themes a major component of its stimulus package, and some forward-thinking regional officials have taken leaderships roles in understanding and inculcating sustainable values.

(BTW, China Environmental Forum, Harmony Foundation – providing Canadian sustainability training to China’s mayors, and China CSR are 3 terrific sources regarding environmental direction in China).

In China, concerns about environment relate directly and tangibly to individuals instead of to an abstract cause. People care about environmental issues when they perceive the impact on their health.  They connect the dots between the factory dumping waste in the local water supply and people in the community getting sick.  Sure, it may be providing jobs but those matter less when someone you love is suffering from environmentally related illness.  It’s this encouraging grass-roots realization that is motivating positive change at all levels in China.

The challenge comes when environment and health are at odds with one another.  Nothing was so immediately obvious in this regard as the issue of bottled water.

Water quality is an enormous issue topic in China. Although other issues such as air quality of product safety get more airplay in the western press, clean water is becoming a severe concern in China.  The degree of pollution in many of China’s water sources is becoming too high for industrial or agricultural use, never mind drinking or fishing.  When living in China several years ago, I began boiling my tap water, distressed at the alternative of buying bottled water for drinking and cooking.  A friend advised me that the contaminants in the water – such as lead and other industrial chemicals could not be simply boiled away.

So when faced with the choice of questionable drinking water on my recent trip to Beijing, vs buying bottles, I was faced with a dilemma.  My hotel room came stocked with a steady stream of 500 ml water bottles.  But with heat in the upper 30s C (near 100 F) I knew that I could go through 5 bottles a day, contributing to China’s landfills of plastic water bottles.  If Americans use dispose of 50 billion plastic water bottles a year, imagine what that volume would be in China?

My solution?  Ignore the 500 ml bottles in the hotel room, and haul back a 4 L bottle from a nearby Watson’s (despite my partially dislocated shoulder).

What would you do, when health and safety concerns conflict with your environmental beliefs?

“Status, authority and power are perhaps the main drivers behind most Chinese consumer behavior. Shopping trips, therefore, are often the result of the need to increase social status with the purchase of what are to considered to be prestigious, exclusive brands.”

With this in mind, consider the though-provoking article in the Times,  “China’s Wealth Drain;” translated from its original in the Beijing-based Economic Observer. The article ponders whether “too many of the best and brightest — and above all, richest — Chinese dream of packing up their accumulated capital, and going to live abroad?” Beyond the social and economic risk of China’s class departing, a more troubling picture emerges.

Despite China’s growing wealth, the majority of people still feel to be struggling, according to a recent Gallop Wellbeing Survey.  It is understandable that a country which has suffered so much financial instability in this century would have assumed that the recipe for individual and societal contentment would have been to have more money.  Yet China’s rapid pursuit for economic development has at times been at any cost – and more Chinese are finding that the price has been too high.  The article lists factors causing frustration to Chinese, rich and poor alike, that cannot be resolved regardless of how much wealth one has: “laws and regulations, the education system, social welfare…quality of air…food safety, [and] ability to travel.”

Beyond these quality of life issues, there is another factor in the emigration of the wealthy class:

“Last year, when a Chinese woman living in Canada was asked by the International Herald Tribune why she had left her country, she said it was because of the Sanlu (toxic baby milk) case, and also because of the “hatred against the rich.” Her answer highlights the fact that, as the gap between the rich and the poor is getting wider, and the poor are complaining more and more, the rich are also getting more nervous. Some rich people even worry that the ‘redistribution of wealth might start all over again,’ “an reference to the Cultural Revolution where anyone with wealth, education or property was persecuted.

Yet, China has long been a country where “face” is vitally important in order to establish and communicate one’s position in society – as clearly illustrated by our first article.  When one has wealth, it must be publicly displayed – this signifies one has arrived and is someone of importance.  And nothing stokes resentment in a country where the poor feel marginalized like ostentatious displays of wealth.  And, “when rich people pack their money and leave, not only are they no longer identifying with their country, but they are also avoiding their social obligations. While the reason behind these people’s decision matters little, the undeniable fact is that they make money from this society, but they refuse to give anything back.”

In culture where Confucius values dictate that one has an obligation to take care of themselves and their immediate family, a call to give back to virtual strangers in the larger community might be a tall order.  But an awareness of social responsibility, while still in its infancy, seems to be growing Chinese companies and wealthy (recommended website is ChinaCSR.com).  Perhaps “giving back” can take hold as the newest and most powerful status symbol in China.

Rapid growth in middle class affluence, coupled with a loosening of outbound travel regulations mean that tens of millions of Chinese who were previously unable to travel internationally, will be doing so in increasing numbers in the coming years.  This is encouraging news for the tourism & hospitality industry in many countries, as the economic downturn in the US and Europe has been devastating.

According to said David Scowsill, CEO of the World Travel and Tourism Council, “the growth of Chinese outbound travel is moving at a huge pace – it’s about a 20 percent increase every year. And the number of outbound Chinese travelers hit 58 million last year.”

But of course, it comes with a price.

According to a recent article in the China Daily, many destinations are not prepared for the infrastructure upgrades, in particular airports, that such a large increase in traffic would require.

But there is one hospitality company that is getting the message.  Starwood Hotels will be sending its top executives on a one month cultural immersion experience in China.  You can read more about this story here. I applaud the vision of Starwood’s leadership for understanding: #1 how important the future Chinese tourism market will be, and #2 that to be successful with this growing market, a company must understand the cultural perspective and expectations of their Chinese customers.

It is not uncommon for top leadership in Western companies to be removed from the day to day operations of business with China, leading to conflict and misunderstanding with their own teams who are responsible for the Chinese market.  More than once, I’ve been called in to train an organization where one unspoken objective is to validate the challenges by China managers to their executive teams (as well as to facilitate solutions, of course).

I do invite Starwood Hotels to reconsider 1 statement from the article: “The executives won’t be tourists [during their stay in China].” While it is of course expected that they continue to work during their sojourn in Shanghai, it will also be important that they tour Chinese sites to see and understand how Chinese like to travel (in large groups!) and the amenities that are important during their stays at a hotel (slippers, hot water for tea and toothbrushes).