Tips on Doing Business in China and China Sourcing

How to do business in China? You may hear some stories of the miserable experience in doing business in China and China sourcing projects from your business partner, friends or publications. Entering any new market has its risks, so does China. China is the place which has its own completely different business background and culture to western business. Here are some key tips of
"do's and don'ts" of doing business in China draws from the experience of Gigabiz China sourcing consultants.
•    Distance
The distance we are talking about between you and your suppliers in China is not only “physical”, but also “cultural”. China has its very unique business culture. The thing it matters here probably is not even taken into consideration at all in China. The thing you never care about here probably is the key QC procedure for Chinese manufacturer. Therefore, DO NOT presume they should have known all these and it should have been done, DO go through everything and double check with your supplier.
In addition, even if most Chinese suppliers employ at least one proficient English speaker or interpreter, their mother tongue remains Mandarin (and often a second Chinese dialect). There are significant culture-based differences in communications styles around the world. In China, if you are not speaking Chinese, DO speak English slowly, avoid slang, jargon and contractions, and pause often to review key points. Seeking consulting services from a Chinese native, a native language speaker or experienced China trading agents will be helpful.
•    Products picking up from Chinese manufacturer
Everyone is moving to China, is this right for me? While almost any class of product can be sourced and purchased in China, not all make economic or strategic sense. Picking up your products very carefully especially for low quantity purchasing requirement. Production outsourcing in China and manufacturing customized products is NOT shopping on high street. Therefore, DO make sure product and its quantity are suitable for manufacturing, DO NOT “shop” in the manufacturers of the other side of the world.
•    Chinese Suppliers and Chinese manufacturers
There are NO methods to check the reputation, credibility and financial status of Chinese manufacturers. That's why it is so important to choose a manufacturing partner in China with rich experience and have a good track record. As a general rule, engaging with a new supplier through their agents and representatives is only a start. The corporate structure and ownership of companies in China can often be murky and at times beyond comprehension. To minimize the gulf and establish a productive relationship, you need to hold face-to-face meetings with members of the prospective suppliers' management teams. It is essential to interview key executives, tour their facilities, ask for and check references.
•    Business Partner and “Guanxi”
Most of the guides on doing business in China emphasize the importance of personal connections, or guanxi (relationship, networking). Networking is an aspect of doing business around the world, but it takes on added importance in a society with a complex bureaucracy and a weak legal system. A web of guanxi helps firms navigate China's bureaucratic and distribution challenges. Find your own business partner who has rich "Guanxi" is very important. The right business partner in China or its representatives in UK is critical to your success in any sourcing projects. If you put in the time and build a relationship, or "guanxi", you will have a dedicated and loyal partner that will move mountains for you when you're in a jam.
China is the place with opportunities and challenges, if you are willing to learn about local business culture, and understand the way to do business in China, with proper preparation, your company can position itself to profit from China's growth in the years to come.

Culled from: Gigabiz