There was an interesting interview with in The Telegraph the other day with Chancellor of the Exchequer George Osborne. The subject of course was China. Osborne first visited China some 20 years ago and has gone back over the years including his most recent trip this month. Even though he has seen the development of China first hand over the years, he was “astonished” by what he saw on this trip, especially the property development and the entrepreneurial spirit or the “ambition.” as he put it. It is a lengthy and very interesting interview (with video) and there are some valuable insights as follows:
1.) One should not have a view of China as just a country where labor is cheap and goods can be manufactured at low cost.
2.) China is a unique country with its own history.
3.) The Chinese should be treated as equals and not as “inferiors.”
These are all valid and very wise points. Let’s look at each as it applies to small business owners who want to source in China.
1.) Many people still have simplistic view of China as a country where there is an abundance of cheap labor and goods can be manufactured very cheaply. This is not the attitude to have when you want to do source in China. The goal should be good quality at a reasonable price, a price that will allow you to grow your business to your goals. The goal should never be good quality at a dirt-cheap price.
2.) People are quick to criticize the Chinese govt and society for what they perceive are shortcomings and fail to recognize that China has its own rich and very complex history. Some criticisms are valid. Others may not be. But you have to be careful about imposing your own standards on China. And you should always see the good with the bad. Sure China has its share of human rights abuses, corruption, and pollution etc. etc. But its economic miracle has also raised millions of people out of poverty. Not just in China but in countries all over the world where China has created jobs. Osborne makes the same point, a valid one I think.
3.) If you want to do business in China you must treat your China vendors as equals. Thirty years ago it would have been hard to see your China suppliers as equals. However, the reality of doing business in China in 2013 is that your supplier is every bit your equal and, in fact, if you go by the kind of car he/she drives, you would probably have to consider yourself the inferior. After all I do not know many small US business owners who drive a $ 200,000 BMW. In China one meets them all the time.
Here is the interview in full: