Crystal clear view of trading in China
SCOTTISH companies should grasp the wealth of business opportunities available to them in China's booming economy – but they will only be successful if they proceed with honesty, integrity and a proper understanding of Chinese culture.
Crystal Pan, a PhD researcher at Strathclyde University who is originally from Shanghai and now advises Scottish companies on how to conduct business with the Chinese dragon, believes most foreign firms get it wrong and make costly errors when dealing with Chinese counterparts.
Pan, who has lived in Glasgow for three years, said: "You should never just go straight to China and expect to do business right away. That is not the way things are done there.
"One of the most important things to know about doing business in China is that Chinese people only do business with friends. Networking and forming trusting relationships are far more important in China than in the west. Touching their hearts is the golden key.
"It's impossible to break into the Chinese market alone. Outsiders will get nowhere.
"Western business people can also often get very frustrated in China – particularly with negotiations. They want things to move fast. But Chinese people value investment in time.
"Look at the Chinese philosophies of Taoism and Confucism. These are all about slow and considered action and thought. Both trust and time are crucial.
"Understanding Chinese culture is absolutely key. If you don't want to know the culture and the people, don't bother going to China."
Pan, 36, began her career in human resources, but after working for US business information giant Dun & Bradstreet in Shanghai in the 1990s and then for the Finnish consulate, where she matched markets and companies in Finland and China, she became "passionate about business".
Since beginning her PhD at Strathclyde, Pan has held three workshops for Scottish firms trying to break into China, and numerous private consultations for individual companies.
As part of her workshops, she teaches the importance of four "P"s for doing business in China – people, patience, persistence and product.
She declined to name any of her client companies, but said most of them are now operating successfully in the Chinese market.
Pan expects to complete her PhD this autumn and plans to set up a Chinese-Scottish consultancy in Glasgow – to help both Chinese and Scottish firms break into each other's markets.
China is home to one in five of the global population and has become the world's fastest-growing economy. Since the late supreme leader Deng Xiaoping set the country on a course of economic reform in 1978, GDP has grown by an average of 9.5% a year.
The dragon will likely overtake the US as the world's largest economy by 2040.
By the end of 2005, China is also likely to be the third-largest exporter in the world, after the US and Germany – yet with its fast-burgeoning middle class, it is also a massive new market for goods from elsewhere in the world.
She said opportunities abound for Scottish firms in the education, technology, food and drink and luxury goods sectors.
Pan, who prefers Crystal to her Chinese name Yong Qing, also advises Scottish business people to acquire Chinese names for their business cards and for familiarity in China.
"Your Chinese name should reflect the kind of person you are. Who you really are is probably the most important thing in China," she said.
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