Figuring out China: 3 myths that got busted in 3 years

I recently completed 3 years of living and working in this country, and I am still learning newer things, as the country itself evolves. Along the way, I've had a few realizations about the differences between "what people told me" about working in China Vs. the reality on the ground. In this article, I try to break down 3 of these misconceptions. 

To ensure the arguments are structured, I want to clearly articulate this in terms of:

• MYTH - What I heard / read before I came to China 
• REALITY - My experience of the actual situation on-the-ground
• WHY did the MYTH exist? - My attempt to demystify

So, here we go ...

MYTH #1 - "Chinese people are closed to doing business with foreigners = It is hard to do business in China"

REALITY #1 - In my experience, Chinese people (as a "people") are as open as anyone else. Yes, there is an initial resistance and the conversation might not be the most fluent ever, given the language barrier. But by and large, the Chinese are very entrepreneurial and very value-conscious. So, as long as you are able to add value to their business and to their work, they will do business with you - just like in any other country / market / culture. 

In fact, if anything, I have found people from certain other cultures (which I do not wish to name here), to be way more closed towards "foreigners" than the Chinese. To put it in perspective with a statistic: China ranks 78th in the world in World Bank's "Ease of Doing Business" (while India ranks 100).

To top it all, with the advent of translation apps (thanks to Google/Baidu and others), real-time document translators, and now real-time conversational translation devices to make conversations seamless, living and working in China is getting easier and easier. It is a matter of debate that the process of getting work permits seems to be getting harder, but that is more a regulatory / governmental / economic action. Personally, I haven't found Chinese people to be closed to doing business with outsiders.

Why this myth existed? The Economy is closed doesn't mean the Culture is closed, or that the people are closed to doing business with foreigners!

MYTH #2 - "Chinese Tech companies copy US Tech companies. Baidu is a Copy of Google, and Alibaba is a copy of Amazon!"

REALITY #2 - When I came to China in 2015, this seemed to be the dominant theme I heard from China-experts. The reality (at least now) is that China is LEADING innovation globally now. Yes, it might still have traces of being a 'copycat' economy (largely due to losely enforced IP protection), but that is (by far) not the only perception you get of China if you're living / working here currently. Innovation is everywhere! 

As far as Alibaba and Tencent are concerned, there are a lot of innovations that have come in uniquely from them. While Baidu invests in projects very similar to Google, Alibaba does that and a lot more more vis-a-vis Amazon. In fact, to cite 2 simple examples Alibaba goes beyond just "copying" Amazon, these would be:

1. Mobile Payments / Launching Alipay: which has become the de-facto mode of payment across the country, and revolutionized how money is exchanged in the country
2. Spurring Taobao-prenuers and driving rural development: encouraging villagers to turn entrepreneurs, manufacturers and and change fortunes for themselves and their communities. Just google for "Taobao Villages", and you will find lots of articles. In terms of numbers, it is alarming. As of 2016, there were 800+ Taobao Villages (each having annual Ecomm transaction volume of at least 10 Mn RMB (1.6 Mn USD). And there were 200,000+ active online shops from such "Taobao Villages" all across China!

Why this myth existed? This one is kinda obvious. China being a "copycat" was probably true till a decade or so back. But this is changing. And changing FAST!

MYTH #3 - "Relationship" is the most important aspect of doing business in China. No "Guanxi" = No business."

REALITY #3: - So, this is not a direct blasting, because "Yes", relationships matter in China, just as they matter anywhere else. So, it is a "myth" that relationships (while doing business) matter MORE in China than anywhere else in the world. The reality is that it is the subtley of managing these relationships that sometimes become key. - and this has more to do with cultural sensitivity of "how" relationships are nurtured rather than the importance of "relationship" to achieve a business outcome. 

So, in my humble submission, there are 2 aspects that need to be considered here:

1. The Chinese love "value". So, offering a clear and core value proposition (relevant to your Industry) is important. If one has that, relationships can definitely complement / accelerate. 
2. Learning "how" to build relationships in China is a "hard skill". And that comes with experience. For starters, I recommend reading this Business Insider article: The Most Misunderstood Business Concept In China

Why this myth existed? - Language is a big barrier, and that more than anything else creates a perception that relationship is "MORE important" than anywhere else in the world.

These are some of the learnings I've had. By no stretch of imagination do I claim to all of them to be true or instructive. On the contrary, I sometimes feel figuring out China is like peeling an onion - and I am learning more and more everyday, just like thousands of other foreigners, entreprneurs, diplomats and travelers who are also on a similar journey. The journey always starts with Cliches ("myths") and then you demystify them as you go deeper and learn!), until you reach the "Core."

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Amit Haralalka is China GM at  Capillary Tech , a Retail CRM SaaS provider, and is based in Shanghai. He works with CMOs, CIOs and Digital teams of the world's favourite retail brands to drive Customer Engagement, CRM and Loyalty. You can connect with him on Twitter,  Facebook, and  LinkedIn