Even for locals, China is a difficult place to do business

When I was in Shanghai last month I had a very interesting conversation with an old colleague/friend of mine, “Jessie.”  Jessie used to be the Controller for a large US home textiles company, where she worked for about 15 years.  I worked for the same company in their Shanghai office and that is where we got to know each other and became friends. I have known Jessie for about 15 years now. 

Since leaving the home textiles company in 2008 Jessie has gone out on her own. She is currently sourcing for US companies in China, and is working closely with one of our former bosses who has started up a new children’s home textiles line.  As if that were not enough to keep her busy,  Jessie is also working with an American investment company in the SF Bay Area that is seeking to bring Chinese investment to the US. 

Jessie is one of the most dynamic Chinese businesswomen I have ever met and whenever I go to Shanghai and spend a day with her I learn a lot about doing business in China. She knows as much about China consumer goods manufacturing as anyone and, more valuably, she can give me the local perspective.  This time when I visited her we talked about how to select factories and manage production because this is something we both do right now.  I guess I was somewhat surprised to hear that even Jessie has problems here, simply because she used to do such a great job selecting and managing factories when we were in home textiles.  But she does have problems – mainly with quality – and she told me that she needs to constantly visit and monitor her vendors. This, she emphasized, is the only way to control quality.  And listening to Jessie over the course of the day I spent with her, I realized that she is on the road a great deal, visiting a factory in Fujian one week and one in Zhejiang the next week.  If she doesn’t do it herself, then she sends someone from her office. 

Over the past year I have been approached by many companies who have problems in China but yet who never spend any time there.  I have said this over and over again, but you have to spend time with the vendor if you want them to get things right.  Because China is just not an easy place to do business. Not for anyone. Not even for the Chinese.

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