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The China Challenge - Essential Skills


Andrea Charman
Andrea Charman, Executive Director, CTS Inc, New York, NY 10017, 212 661 5682,
Agar Burton
Agar Burton, President, CTS Inc, New York, NY 10017, 212 661 5682,

83rd Annual International Conference Proceedings - 1998 

Abstract. China and Chinese business present an on-going challenge to purchasing professionals who are involved in business in the People's Republic of China and the Greater China Region. This session builds on an Essential Skills Toolkit first presented at NAPM 1996 and built on at the 1997 Convention. This toolkit will be presented at the outset of this session which goes on to provide an update on the People's Republic of China, the PRC, in the context of corporate structure and ownership, business strategy, and the impact of the latter issues on business partnering for western professionals. Once these macro concerns have been addressed, the session moves to a skills level. It will demonstrate the importance of the role of culture in business in general, and in this case, with China. By contrasting 4 specific aspects of Chinese culture which Americans find a challenge, with 4 key aspects of American culture which challenge Chinese business professionals, the session offers participants the opportunity of honing their skills in handling Chinese business interactions. Consideration will be given to cultural nuances between the PRC and other areas in the so-called Greater China Region. The session closes with time for questions and answers.

Opening. The session opens with a Toolkit for cross-border business partnering. It revisits a checklist of critical issues, which form the basis of successful global sourcing today.

China Update. One of the first hurdles in China sourcing is to develop an understanding of Chinese corporations, their ownership, and their governance. This update takes a look at the question of state and collective ownership, foreign joint ventures, and privately held corporations. In successful business interactions, it is crucial to have a clear understanding of who it is you may be dealing with, even if you are operating through third parties. Since China is a fast changing and developing economy - for example, the country went from 7 million mobile phone subscribers in the first quarter of 1997 to 15 million in the fourth quarter - it is key to keep up-to-date.

This segment of the session will also look briefly at the current status of the reintegration of Hong Kong and its business practice impact. The removal of the British Queen's head from postage stamps and currency may be trivial; the possible introduction of simplified Chinese characters or changes in the legal system might carry deeper implications.

Culture's Consequences. Although we each experience culture personally, at an individual level, it is essentially a shared system. In fact culture is a silent language which is speaking all the time, yet, we frequently fail to hear it. In cross-border business, this inability can have profound consequences. The session, therefore, introduces common difficulties which Chinese culture presents purchasers operating from other cultural conventions. 4 particular aspects of mainstream Chinese culture and its consequences are considered. These are referenced to a similar number of American values and practices which, in turn, can pose problems for Chinese business professionals. These differences have the potential of upsetting productive business transactions if not addressed. This practical approach to the potential gaps in cultural preferences provides a concrete skillset for participants to take away.

Conclusion. The session will close with questions and answers.

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