SMEs look to ride wave of transformation in China

SMEs across Australia are reaching out to China in the hope of being a part of the country’s transformation.

China will become a puzzle for every entrepreneur, investor and business leader throughout the world. The country is investing heavily in science and technology, in research and development, in clean technology, and in high-value manufacturing. They’re actually turning many industries upside down by the new innovation that they’re introducing.

The key to success in China for SMEs is meaningful relationships, friendships and business opportunities. Conferences and visits by delegations, such as those our Association arranges, act as bridges between SMEs in both countries and gives Australian SMEs an opportunity to get a taste of the sort of cross-culture transactions that could occur. They also help SMEs to capture the essence of Chinese culture and the possibilities available for their business.

As China expands further and starts to disrupt industries in other countries, everyone will be hungry for knowledge, skills and guidance in their dealings with China. The mentoring available to SMEs, such as that we provide, gives them guidance and clarity before they making major financial and business decisions.

Unfortunately, many westerners who are used to relying on legal contracts to do business with strangers, or even friends, often don’t have the time, patience and emotional intelligence to invest in building the trusted and binding relationships that are necessary to succeed in China.

I make my clients aware they’ll be dealing in a business environment in which they’ll be unable to rely on the rule of law and the courts to resolve disputes. China managed for hundreds of years without a legal system largely because of the focus on trusted relationships and networks.

As a foreigner doing business in China you are a stranger, no matter how much they appear to like you, trust you and respect you. Building a trustful relationship requires patience, endless meals, going out of your way to support and understand the, and occasionally make a leap of faith to help them with something that they highly value.

I have seen many business deals fail due to SMEs’ lack of understanding and knowledge of Chinese culture and practice. The most effective and lasting business relationships have come from SMEs who are willing to learn and adapt to the foreign culture and norms, more than just simply speaking a few words of the native language.

From my experience, one of the biggest stumbling blocks is grappling with the timing, wording or emphasis of a particular message. These small but crucial aspects of the language can make a huge difference between delighting, disappointing or even offending the recipient.

Effective communication is an art, not a science, and there’s no doubt that we can, and must, all get better at it if we hope to succeed and prosper in the Asian Century. I can never stress enough to my clients that there are no hard and fast rules that I can give them that will create a long lasting and trusting business relationship. What I do tell them is that it will require lots of patience, emotional intelligence and a deep and genuine respect of Chinese culture to gain the connections you need to succeed in China.

David Thomas, Founder and President, The Australia China SME Association

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