How To Deal with Chinese suppliers?

How To Deal With Chinese Suppliers?

For this post, we will be looking at How To Deal With Chinese Suppliers? Now you have your RFQ in hand, China is an interesting place filled with subtle intrinsic easter eggs, that can catch you out at any point. 

  • Respect, Respect, Respect
  • Loose Face, the introduction to Chinese Mian Zi behaviour
  • Guan Xi, what is it, how I can capitalise upon it and use it to my advantage?
  • How to approach gaining the products you want?

Respect, Respect, Respect: 

 

When I first moved to China, I was under the impression it was still a developing country. When working in the Automotive sector in the west, I was taught that emerging markets of the BRIC block; were just that: Emerging. 

I didn’t appreciate how fast one country could emerge from what it once was. In my preconception, I felt, naively, that people were still tending to rice paddies and farm work….

How wrong was I? 

 

China felt as if it could not get any further from the small town UK that I grew up in. Looking out upon the Shanghainese skyline for the very first time is something that I will never forget. How could a country with so little, so few a years ago, have so much, so fast? 

Cheap cash and trade deficit is the answer. But more on that in a later blog post. This place was massive with a mass of cash, a strict society, yet a system based very heavily on social respectful rules.   

Laws:

 

Regardless of what you feel about the state of laws and rights in China, you have to have no pre-conception that it is not what it is. It can become a barrier. The Chinese are not going to have the wool pulled over their eyes, and they are not stupid, very, very far from it; being derogatory and disrespectful with a sense of entitlement will get you nowhere, I have seen it, embarrassingly, on many occasion with people who should have just known better!

One thing I learned very early on is how on the surface it looks like there is little respect between people (especially on the roads), but they are intrinsically respectful to elders and in business settings. Do not let it catch you out; there is a minefield of alien emotions embedded in the Chinese psyche, it’s a very in-depth topic dating far back to the founding religions of China, based around the teachings of Confucius. Here are the most important ones that I felt helped me:

Loose Face

 

This comes up a lot in day to day conversation when leading Chinese teams in China; the rule works with equal weight when dealing in trading and sourcing positions. 

But what does that mean? To lose face in Chinese culture has its term Mian Zi, its translation is fraught. Its subtle connotations make it somewhat untranslatable because (like many Chinese subtleties) it’s just not felt in the West as an understood emotion as deeply as it does in China. 

There are a few ways that you can avoid it and also allow for a better understanding of it: 

Revealing someone’s lack of knowledge or ability, e.g. that they have poor English skills

  • Calling someone out on a lie.
  • Not showing the proper deference to one’s elders or superiors.
  • Turning down an invitation outright. It’s better to deflect with noncommittal phrases such as “Maybe” or “Let’s talk about it later”.
  • Openly criticizing, challenging, or disagreeing with someone. This is especially embarrassing if the person’s superiors are present.
  • Being openly and publicly angry at someone. This causes you to lose face as well, because you are openly showing a strong emotion in public, instead of maintaining a calm outward demeanour, as is proper.

There are also ways to improve your game dealing with the China supplier such as:

  • Give high compliments often and freely.
  • Praise someone in front of their elders or superiors.
  • Give high marks on customer evaluation forms.

This will not only improve working relationships but leads me very nicely into another exquisite behavioural subtlety:

Guan Xi

 

Networking, the Chinese way.  Guan Xi (Sounds Like Guan Shee) translates to networking but is far more complex in the sense of the word. Having a strong Guan Xi is paramount to getting things done.  In China Guan Xi can extend through one’s family relatives, Classmates and Co-workers, also the Bei Jiu (Chinese White Spirit, drunk heavily as a shot in business party settings) themed evenings also are very good at finding the Guan Xi contacts.

As people grow their Guan Xi, avenues and more attractive deals open themselves up; Again, re-enforcing the necessity to maintain contact on the ground. 

Foreigners who arrive in China hold low or next to no Guan Xi. It is important to grow these contacts through respect and abiding by the subtleties noted above in the Losing face section; as quickly as possible. 

This will not just help you navigate the best sourcing deals but also the bureaucratic spider web that can sometimes be put in place. 

Things happen faster with the strong force of Guan Xi, remember though; those favours have to be returned!

How to approach gaining the products you want?

 

Hopefully, by now, you have your RFQ in hand, giving just enough detail into the products that you want to get some ideas as to the capability of the supplier. 

As with any business dealing, you can build up a good idea to the capability of the supplier based upon the questions you receive back. Trust me on this one, some of the questions border on the line of insanity!

Again, Language barriers are equally as complex as cultural barriers when ironing out the initial details of a product and again, attendance in person is always recommended to ensure there are no discrepancies in understanding. 

Picking an initial supplier may be a tedious right of passage, but a necessity. Finding the correct supplier, with a proven track record, can be one of the difficult aspects of doing business in China. Keep calm, have the resilience, and the Guan Xi force will guide you! 

During these negotiations, I would always advise you to consult with a Chinese speaking contact that can ensure you get everything you require. Sometimes when something in China is not fully understood instead of asking, a lot of Chinese businesses may assume, to save face (see how important understanding local culture is), meaning a very embarrassing situation further down the road.

If you want to see some of the services and business opportunities here at MerchSprout can offer be sure to check it out here.

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