Common Business Blunders
| ✓ | Giving away too much information: Discussing how your company is structured and related items is okay, but don’t tell Chinese contacts how your product works, and be careful not to give away proprietary information (including samples that can be reverse engineered). See Chapter 6 for more on negotiations. |
| ✓ | Partnering as a shortcut: Working with partners (whether in a joint venture or other arrangement) usually gets your company off the ground faster, but it can hurt you over the long run. Think carefully about whether the partnership is a good permanent arrangement. Chapter 7 discusses a number of the tradeoffs of joint ventures. |
| ✓ | Failing to instill your corporate culture: If you don’t instill your corporate culture, the China business will likely work poorly with the rest of the company, and you may have a lot of problems with financial controls and employee politicking. We explain more about company culture in Chapter 9. |
| ✓ | Not offering career development paths for employees: Capable office employees are in high demand, and most Chinese employees are extremely interested in developing their skills and careers. To keep your best people, give them clear paths to developing those skills and increasing responsibility. |
| ✓ | Registering IP too late: China uses a first-to-file system, which means that whoever registers intellectual property (IP) first in China owns it. Don’t begin any discussions with potential partners without first filing an application to register your trademark. See Chapter 17 for more on how to manage IP risks. |
| ✓ | Not establishing solid distribution before selling: Distribution is tough, expensive, and dirty in China. Don’t even think of selling your product without having first put a solid distribution system in place. For more on consumer product distribution, see Chapter 14. |
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