PBV Part 1: How Do I Manufacture My Product In China?!

Manufacturing in China – Pulling Back the Veil, Part 1

This will be the first of a 10 part series called “Pulling Back the Veil” that aims to answer the basic question “how do I manufacture my product in China”?  The following articles will primarily be step-by-step instructions and directly applicable information, but it’s hard to really get a feel for China without having at least some sense of what the business environment is like and where it came from.  To see the other “Pulling Back the Veil” Articles, click the “Pulling Back the Veil Link” under the categories section to the right.

Know that you don’t know

First accept that there are a lot of things that will go on in China that you will never understand, it makes the rest of the process a whole lot easier.

In writing about China, trying to describe the general sense of how things work culturally is the most challenging task.  It is quite easy to describe an event or explain a how-to for getting something done, but to understand what’s behind China the only real way is to experience it, and experience it, and experience it again.  Most expats that have been here more than 5 or 10 years have accepted that there is a lot they will never understand and all the rest are getting there slowly if they don’t believe it already.  So, why not get there right away?  First accept that there are a lot of things that will go on in China that you will never understand, it makes the rest of the process a whole lot easier.  At the same time, distinguish that just because you don’t know why something happened or the thinking behind it doesn’t mean that you shouldn’t have control, as the customer, over the outcome.

Complex Society

China is a much more complex society than Westerner’s are familiar with.  For thousands of years the elite have developed and formalized intricate social systems to control population sizes that require completely different political tools.  Emperors constantly struggled to prevent civil war, many times unsuccessfully, as well as coups from their inner circle. Confucianism has been relied on heavily to dictate specific roles within society, family, and governmental relationships.  With each of these mandates the culture changed, some were adopted and remembered more, others were lost but not altogether forgotten, and often the final results really depended upon the region in which you live.

China Business Environment

After a couple thousand years of this, the last emperor was overthrown, there was a period of uncertainty, and in 1948 Communism came and completely altered the landscape.  Many of the old traditions were banished, made illegal, religions were wiped out and a multitude of new and untested ideas were put into full force.  Change happened at breakneck speeds.  Propaganda was in full swing and the focus of the country was a moving target.  The constants were: Capitalism was bad, unique thoughts were frowned upon if not downright punished, everyone was treated (relatively) equally, except those in the Party who always got more.

Let some get rich first

Then in 1978, Deng Xiao Ping issued a single phrase that was to change the world, “Let some get rich first”.  This was a singularly strong shift away from the prevailing sentiment and began the opening of the China market to the rest of the world.  Learning from Russia’s mistakes, China opened its doors very slowly.  As always, the feeling was that one false move would lead to revolution and another long period of chaos and destruction.  It really is so difficult to lead 1.6 billion people.  So, for 32 years now, China has been slowly modernizing, freeing each of its markets in turn, opening itself again to cultural arts and religion, and joining the rest of the industrialized world in this contemporary age.

Takeaways

There are a few key points to this history that form some basic, unique tenants of modern Chinese society:

1)      The big cities have been the first to adapt to the Information Age, so the difference between the bigger and smaller cities is tremendous.  Cities like Shanghai are among the most modern in the world, but there are thousands of “small” towns where simple technologies we take for granted are seldom found.  The range of business environments across China is tremendous.

2)      There is great optimism.  China has had the largest average increase in GDP of any country in the last 25 years, and coming from the largest population in the world, that is truly a phenomenal achievement.  The Chinese are willing to bet on the future.

3)      Change happens.  The speed of adoption of new ideas and realities dwarfs most other countries.  When you’ve seen the kind of changes they’ve seen, switching to an automated card bus system is not going to ruffle a lot of feathers.

4)      The resultant authoritarian government is united and quick to act.  Instead of partisan politics, the Chinese officials, meet, discuss, decide and execute.  New train lines go up from concept to commute in a matter of years.

We’d like to hear from you.  Have you been to China?  What are your experiences?

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One Response to PBV Part 1: How Do I Manufacture My Product In China?!

  1. Jeni says:

    I was just in China a few months ago and was surprised by the differences between the small towns compared to Shanghai and Shenzhen. Not just in the technology, but in the quality of the roads, housing, etc. I think understanding the environment of where exactly in China you are doing business is important, since there are these vast differences. Looking forward to reading your next article about this.

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