Foreign companies should do their homework before they chase
profits in China's western region, said a German businessman with
seven-year's experience of working in the country.
They should take their time when compiling market analysis and
feasibility studies, said Helmut Schneider, general manager of
Messer China.
"Don't rush it as you gain nothing that way. Be sure you know what
the market is, and then invest in line with international standards
of competitiveness and professionalism," he said.
As
early as 1995, the Frankfurt-based Messer Group entered the western
China market by setting up SMC Asia Gas Systems to manufacture gas
production equipment.
There are now altogether six Messer enterprises in the western
region, with a total investment of more than US$87 million. These
include three enterprises in Sichuan Province, two in Yunnan
Province and one in Hunan Province.
"We encountered many unexpected difficulties in the initial phase
of our investment in Sichuan, which is where we launched our
mainland operations first. But great improvements have been made in
both infrastructure and supplementary services since then," he
said.
Covering a vast area of land in China, the western region is rich
in natural resources and human labour and has tremendous market
potential, he said.
He
believed the strategy of the Chinese Government for developing the
western region will offer more opportunities for foreign investors
in the future.
He
added business opportunities must be surrounded and supported by an
environment of stable and predictable government, legislation and
law enforcement.
He
said the central and the local government should be consistent with
their messages, trying to understand what the real attraction to
foreign investors might be.
"Your audience is not the world of superlatives that we encounter
so often in public announcements, but the world of facts and
interests," he said.
"Be focused and don't spread the message to the wind. Talk to
target groups like the chambers of commerce or the industry
associations. Use the embassies abroad for targeted messages."
During Schneider's seven-year stay on the Chinese mainland, he has
taken senior executive positions in two leading multinational
companies, first as the general manager of Hoechst (China)
Investment Co Ltd from 1995 to 1997 and then as the general manager
of Messer China group.
Messer China's business has been growing from a very small base to
its current total of 14 companies with a total investment of US$180
million and 1,400 Chinese employees.
Messer has companies in Shanghai and Tianjin, Zhejiang, Jiangsu,
Sichuan, Yunnan, Guangdong, Hunan and Jilin provinces. They serve
various markets such as electronics, petrochemical, metallurgy,
cutting and welding and environmental protection.
He
acknowledged there were some cultural conflicts when he tried to
implement the management system of the west to the organization
whose overwhelming majority of staff members are Chinese.
"The important point is not to deny that problems exist, but to be
aware of them and try to avoid or at least anticipate them," he
said.
"It is very important to have an early warning system, an antenna
for things going wrong."
He
said problems occur between joint venture partners in many
cases.
"One of the first little word games that I learned here was about
joint venture partners being like a married couple: same bed, but
different dreams. That's so very true and encapsulates a cultural
problem," he said.
Cultural problems also occur frequently between foreign managers
and the Chinese staff.
"That cannot be fully ruled out, but I think we have made a lot of
progress in our company, mainly through team experience and
learning from mistakes," he said.
The worst problems between foreigners and local partners are those
which come up when there is no awareness of the existence of
cultural differences. Communication can fail completely and leave
frustration and bitterness, he said.
Recognizing cultural differences does not mean giving up on
efficiency or on positive results. It only means: outsmart the
differences, he said.
"That may require some trial and error phase and some apparent
wasting of time, but there is nothing worse and more destructive
than the schoolmaster approach that I have seen so often," he
said.
For Schneider, the most difficult thing he has encountered while
doing business in China is finding the right people for its fast
expanding business.
"We have sometimes neglected the need to develop people and their
skills before throwing them into a challenge. That is often very
risky, for both sides."
It
has now become easier to find the right people in the developing
job market, he said, adding: "but ask me again after some time;
maybe I will find my optimism premature."
(China Daily April 23, 2002)