A strange phenomenon is happening in China dealing with travel and foreign visitors.  The Chinese government has literally started denying travel visas.  Business, tourist, student and work visas all alike.  (Although mainly business visitors.)  I do not really know what to think of this, and I think most of the foreign business population does not really seem to know either.  Call me naive, but I thought China was pretty high on rich, westerners coming to their country to invest, spend, invest and spend some more.  Is China really worried about us entering China legally and then not leaving?  Now I realize that the Olympics and China’s 19,887 Olympic fears has them in a tizzy these days, but still seems strange.  China during the Olympics is going to be nuts!

here are some articles I have run by on the subject:

Business Visas Restricted to Shanghai During Olympics

Olympic Paranoia clutches China

Immigration rules restrict business opportunities

I was reading-up on some of my favorite China blogs and came across a post that asks a great big question about China.  Is Bribery necessary in China?  Here is the source: The Rise of The Dragon: Is Bribery Really Necessary?

So back to the question.  I think corruption is a terrible thing, but having dabbled in international business (who am I kidding, US too) I would say that it is very real.  I hate to say necessary, but yeah, In China it is.  Foreign firms can not own land in China, so if you own a factory their you HAVE taken part in China’s exciting world of corruption.  In order to get a permit to build, you need government permission.  To get permission, on some level someone was bribed or “greased” somehow.  It is literally impossible, and incredibly nieve to think other wise.  My info comes from a few friends and other third party sources, so I may be wrong, but I doubt it.  There are so many levels of beuracracy in China, to think that you can avoid the built-in corruption is again, nieve.

But isn’t bribery illegal?  Yes.  And didn’t they execute the health minister a couple years ago for accepting bribes?  Yes.  Good show huh.  China is good at that.  There are a lot of illegal things in China that you would think their GDP depends on.  Prostitution, child labor (at least us American’s ignorant definition of it,) and environmental pollution just to name a couple.  You see these everyday.  In fact, unless you hide in a fort made of blankets in your hotel room with the phone off the hook and the blinds closed, you can hardly avoid the above three.  Bribery is not quite that bad, but you get my point.

Do Your Homework

By

Aaron Wong, CEO

AQI (Arrow Quality International)

Are you going to buy a house after the very first visit with no questions asked? Are you going to buy a car after only one test drive from the very first dealer you met? In the business world, there is a term called “due diligence”, which means to carefully investigate a business. Usual due diligence tasks may include finding out the financial history, past experience, company organization, and legal state of the company. You typically will not be able to find all of this information from your very first contact with a factory. It will take multiple contacts and a certain amount of time to complete proper due diligence. Factories are naturally skeptical of someone trying to find out detailed information about them.

There are many good factories in China; however, there are also many bad factories. With the advent of the internet, it is much easier for anyone to go global. What you must keep in mind is that this same technology also makes it easier for scams. You have got to also be very skeptical of factories you are in contact with. It will definitely be worth your time to do your due diligence with each factory to eliminate the factories that do not meet your needs, lack the experience, and are scams.

Some common questions to ask the factories you are interested in working with can include:

* Company. How long have they been doing business? How many employees

are working for them? What is the name, position title, email, and phone number of your factory contact?
* Supplier’s Supplier. Who supplies the materials used to make your products to the factory you are working with? You need to find out as much about your factory’s suppliers as you would about your factory. Mattel knew just about everything there is to know about their factory, but knew very little about their factory’s supplier.

* Work Experience. What type of products do they produce? What is the percentage breakdown of each product produced? What projects have they worked on in the past related to your project? (They may not drop names of specific companies. This is typical for privacy purposes.)
* Quality Control. What is there typical quality control procedure? How many times is quality control conducted during the

production process?
* Warranty Policy. What is their warranty policy for defective items? For how long is this warranty effective?
* Payment Policy. What is the down payment percentage and how is it to be paid? How and when is the remaining amount to be paid?

Get Real

By

Aaron Wong, CEO

AQI (Arrow Quality International)

Can you expect to get gas for $1 per gallon? If you could, what would the quality of that gas be? My guess is a little bit of gas and a lot of water. Realistically, you would be expecting to pay a few dollars per gallon for gas. Making products in China relies upon the same principle as buying gas-you have to be realistic in what you will be paying to make your products. If you expect to pay pennies for your products, then that is exactly the type of quality you will get from your product.

Products can be made cheaper with very high quality in China; however, you must also remember factories still need to make money. If you are willing to pay only an unfairly low price for a product, then factories are going to reduce the quality of materials used in your products to make what you want at the price you request.

Consider the following suggestions when planning your manufacturing in China:

* Purchase more. China is a volume-based market and in order to get the best prices, you need to purchase larger volumes compared to manufacturers in the U.S. Factories will always have a minimum order quantity required. Consider purchasing more than the minimum in order to lower the price per unit. This will require additional cash in the beginning, but will pay off in the long run since you will be making more money per sale.
* Pay more for quality. With the minimum order quantities required by factories, you will be making your products cheaper; therefore, be willing to pay more for higher quality materials in your products. Not only will your products last longer, you will make more long-term customers because of your product quality.

I wonder if they paint their planes with lead-paint? Ok, I am just kidding. This has been coming for a while but is still exciting. (At least I think so.) Large aircraft manufacturing is the top of the food chain when it comes to manufacturing sophistication. There are very few countries that have that capability let alone companies. From plastic pirate eye-patches to jumbo jets is not just a large step forward it is a Gulliver sized step.

It does help that they have over 7 billion USD in initial capital. Heck, I could build an airplane with 7 billion dollars. Not that any one or anything would ever want to fly in it

Get the entire article at the link below here or below:

Source: forbes.com

Get Down And Dirty

By

Aaron Wong, CEO

AQI (Arrow Quality International)

Do you even know what you are trying to make? If not, you better know before you go! You’ve got to be as detailed as possible in the type of product you are trying to make. If you have drawings or illustrations, make sure you also have the measurements, colors, and material for every part of your product.

It is difficult for the manufacturer to produce the product you want if there are holes in your design. There will always be questions the factory will have, but eliminate as many as you can before you begin. In this way, your product will be produced faster and better.

To help you become more specific with what you want, answer the following questions:

* What is the size of each part of your product? Remember to include the smallest pieces of your product and your logo.
* What material is used to make each part? Know exactly the type of material you want to use. The type of material you use many times will determine the quality of the product you get.
* What are the specific colors of your product and logo? Don’t say red, get specific. There are many different shades of red. Find the pantone and CMYK number for your color of choice. You can find these numbers online with the matching colors.
* What changes do you want to make to your sample or designs? There may be parts of your sample you want to make changes to, especially if you bought your sample product from a competitor. Know exactly what design or functional changes you want to make to it before you begin.
* How much do you want to order and what are your price points?

So I have not written in a few weeks and I apologize.  I have been in China the last two weeks and have a lot to share.  I will begin to post in the next few days.  To my newly found friends in China, thank you for Sharing your lovely country with me!

So I guess something can be done about smoggy air. If you have ever been to China (most of it anyway) you would know that the China air has a way of making a blue sky a weird hue of gray. And when I say weirdhue, I really mean pore cloggin, disgustingness. After a couple hours outside on a muggy summer day try the following experiment: take out a business card and scrape it across your forehead and marvel at the black sludge that you can collect. Take it home and call it a China souvenir. Congratulations to Beijing for making 146 new sunny days. I think it is quite ironic that they would do that for the rest of the world (Olympic visitors) but not for their own citizens.

March 11 (Bloomberg) — Beijing, the host city of this year’s summer Olympic Games, has spent 120 billion yuan ($17 billion) on more than 200 projects to improve the city’s air quality, a government official said.

The program has helped more than double the number of “blue sky days” in the city to 246 last year from 100 in 1998, Zhang Lijun, deputy head of the State Environmental Protection Agency, said at a press conference in Beijing today.

Source: www.bloomberg.com
http://www.bloomberg.com/apps/news?pid=email_en&refer=asia&sid=anQMdu3EdXm4

Good article by Matt Young about racial bias and it’s ugly face in Chinese Business.
http://www.atimes.com/atimes/China_Business/JB29Cb02.html

Source: Asia Times, www.atimes.com

At first I thought that this post was just another good, but trivial tid-bit on Chinese business culture. The entire post is a few paragraphs long, but one of those paragraphs was a good one. My main take-away is the following:

“…don’t fall into the trap of thinking that all Chinese are much the same. They have their own thoughts, hopes and dreams. Some are more introvert, some more extrovert and some are just plain weird, just like foreigners. They’re not all Little Red Book waving fanatics, or traditional Confucian sages or “insert stereotype here.”

I hate stereotypes, abhor racism and discrimination, (except against bad drivers!) and truly believe that “across the four seas, we are all brothers,” to quote a famous Confucian idiom. I know the post was really a super dumbed-down chinese networking tip, but I got more out of it than that. I have seen images of thousands of factory workers. (don’t worry, I shared some below) An apparent army of faceless people. There is approaching 1.5 billion Chinese citizens, lead by a conformist government. Rumored to be brainwashed by Party ideologies. Maybe they all can be stereotyped into one group. Sure would be easier then.

But you can not, and they are not faceless. They are families and mothers and brothers and sisters and friends. The girls love to shop and the boys love to pretend they like to go with the girls to shop. “But how can that be?” You may ask yourself. “That sounds similar to me and my friends.” Well here is a little piece of knowledge. What that little voice in your head is trying to tell you is not that the above mentioned people sound like you and your friends, but the above mentioned people are just that, they are people like you and your friends.

So, you thought I was going to write about a business article. Well I thought so too. But this thought over-ruled the original and I like it better anyways.

One last point that does have a little to do with Chinese business. Be careful that you do not read a book about how to do business with China, or read an article, hear a presentation, take a class etc… and think that what you have learned covers every one and everything Chinese. As School House Rock (I think) taught us, “knowledge is power.” So read that book on Chinese business. Take that class and attend that presentation. But be ready to use your brain and think. A lesson I wish I could learn myself.

I love these next few images. Curious what you guys think of them…