Business in China. Redefinition of business development directions
There is one basic assumption in geopolitics and business – constant widening of influence and looking for prosperity. Through the last 30 years, we have run blindly towards the West, forgetting about the East. In the thirties of the last century, Józef Piłsudski already pointed out that the strength of our economy is measured by the ability to operate on eastern markets. This is exactly what Radosław Pyffel writes about in his newest book “Business in China”. It seems that we have forgotten about this direction for the last decades. But we are talking about the biggest economy in the world. As a businessman operating within Poland and the United States, I see substantial, unused potential in this direction, as well as in this Chinese one presented in the book. I have written this text not only for a review purpose but also to show how a different and rich direction of economic development is, to put it simply, ignored by us, the Poles. Pyffel, in his publication, which is an extended interview with over twenty eminent people from the business world, indicates where the money lies. Will we, the Poles, dare to pick it up?
China, China, China
Donald Trump has talked about this country endlessly. Has he been right? China has increased its GDP 20 times since it had entered the WTO (World Trade Organization) in 2011. The amount of concrete used during the last 30 years is larger than the United States has utilized in the 20th century. 130 thousand kilometers of modern motorways and nearly 30 thousand fast railway routes have been built only in this period. The middle class of the Middle Kingdom has almost 400 million citizens – it is more than in the United States and in the European Union in total.
China wants to build a stationary base on the Moon and recently they have preponed the date of this operation from 2032 to 2027. It is awesome! The United States empire has been losing its advantage since the beginning of the 20th century and it is simply afraid of losing the position of a leader: at first, the economic one, and finally, the military one. It is quite a novum for West people, but from China’s point of view, it is rather a return to its rightful place – the Middle Kingdom. Certainly, China has problems, in particular, the demographic ones or co-called internal debt ones, but it makes no difference that, according to the aforementioned data, not only have they become a significant world power, but also have been competing for a position of the largest economy of the world.
Yuans to get!
Our, the Poles’, answer to this growth should be a strategy of entering the Chinese market and simultaneously a legal-financial incentive to enter the Polish market and to the European Union. Listening to the answers that Pyffel is pertinently asking, what draws the attention is the fact that experts operating on the Chinese market are complete outsiders. Despite appearances, it is not different from operating on the US market. I know from my own experience how a Polish entrepreneur is on his own there.
It must be clearly said that Polish export to the Chinese/eastern market needs to be supported by programs including real financial instruments. Economic success will be impossible without the common and trustful activities of private companies and public institutions. It is time to stop mutual dislike and suspicion. Money lies on the Chinese market and we will be idiots if we don’t act together.
China is not the USA
It makes no difference if we do business in New York or Pekin. Real money is what counts at the end of each day. However, it is worth pointing some differences up, in particular, on the legal and cultural level. Being in the USA many times, I have learned that the most important is an agreement and each its aspect actually, and to business matters, which means, money, the parties come very quickly. Feedback in the USA comes very quickly and directly. To say it simply: if a product is a dead duck, we will know it very quickly, and, what’s more, we should be grateful that somebody was frank with us. It is not like that in China. Every interviewed person clearly emphasizes this, in particular Krzysztof Domarecki. Custom and a sense of propriety don’t allow to ask direct questions and, the same, expect unequivocal answers, especially at the very beginning of business meetings. When somebody presents us their product or idea, one shouldn’t ask them questions, because it can be taken as rude. Relations of company chiefs are very important as well as some kind of familiarity, even on a private level. Such a bond is much more important than a contract. The same refers to gifts that must be handed in after a dinner together. Here it’s worth mentioning that the Chinese culture is a culture of symbols. The gift and its meaning are significant. For example, a clock can be some kind of misunderstanding and impoliteness because a clock denotes the time running to death. I don’t have to add how unlucky such a gift is.
Fit to market
Let’s come back to the contract issue. No matter what they include, first, the relationship of company chiefs is important. Let’s arrange it in the first place. Of course, the contract itself should be drawn up by a law firm operating on the Chinese market. It looks similar in the United States. Nobody will persuade me that a Polish lawyer from Warsaw (not to take anything away from anybody) understands and knows American law. Believe me, completely they don’t. I know it from my own experience. If you want to act in the USA, you must have a law firm there. It is similar in China. Domarecki draws attention to a hybrid model for the process of creation of the Research and Development department where we delegate one engineer from Poland to China and the remaining part of the team we recruit on-site. In my opinion, it is the most effective way of building the intellectual base in such areas as law, engineering in a broad sense, and marketing. Do you remember the disgrace of the Chinese company Covec on the construction of the A2 Motorway? An open secret is that they employed Chinese marketing agencies, and at the beginning, even from the law firms from their market… Look at another, my well-known example from the American market. The energetic drink Black was to be sold on the Chicago market because a group of managers from Warsaw came up with this crazy idea. A brand hero of the project was Mike Tyson. It was taken for granted that the product presented in this way would fit Afro-American consumers’ needs. It turned out that a simple thing was not checked – Mike is disliked in his community. A couple of containers of this drink was poured away to the Chicago River. Entering such markets as the United States or China one must understand that it is not export, pardon the expression, of meat to our neighbours from over the Oder River. These are, de facto, other worlds, completely different in terms of law, culture and mentality. Fitting product to market is crucial. Don’t delude ourselves that we will do it ourselves, here from Warsaw. The power of our product will be estimated in terms of our flexibility and our ability to understand a local market. Let the example of the Mlekovita company be the pattern for financial success. Only in 2020, they exported milk for 75 million euros. Is it possible? Yes, it is!
I was over 10 when Jacek Bartosiak, saying literally, enlightened us, the Poles, with the term “geopolitics”. The passing decades show how right he was. It turns out that, in the dynamically changing reality, the terms presented as the Rimland and Heartland are topical absolutely and possible to exist (a struggle for spheres of influence, conflict of interest, etc.). China has been coming back to its rightful place – according to the governmental rhetoric of the Middle Kingdom. Whether the Anglo-Saxon countries want it or not, it has been becoming a fact. We, the Poles, should take advantage of this growth. Developing internationalization of my capital group, I have to make a correction and consider the Far Eastern direction very seriously. Let money decide.