The real cost to China's businesses with government anti-corruption crackdown

Many news reports have been published about China's ongoing crackdown on corruption (tigers and flies), but now one of the world's biggest banks has put a price on the corruption.

The report published by the Bank of America Merrill Lynch this week, the Chinese government's anti-graft campaign could have cost China's economy more than $100bn this year alone. 

Many of the small effects of the anti-corruption drive have already been well documented; a slowdown in the restaurant trade and sales in luxury goods has seen Chinese business go out of business.

The gift giving culture is part of the Chinese business culture and required if doing business in China.

The past year has seen Shanghai's posh malls and boutique designer shops business slow to snails pace but the BofAML report suggests that the campaign is also having a significant and troubling macroeconomic effect.

Early last year, government bank deposits have been soaring, by almost 30% year on year and even honest officials are now terrified of starting new projects, for fear of being seen as corrupt that they're simply keeping public funds in the bank.

The cost to the economy of the prohibition on government consumption and the chill on admin spending is an estimated reduction in growth of at least 0.6% this year but it could, the report argues, be as high as 1.5% which gives us the figure of about $135bn of lost economic activity.

The report's authors admit their calculations are a back of the envelope estimate of fiscal contraction, but even if they are only half right it is an extraordinary amount of money and it highlights some of the challenges facing China's anti-corruption crusader in chief, President Xi Jinping.

Since taking office over a year ago Xi has made the cause his goal, warning that official graft and extravagance threaten the very survival of the ruling Communist Party.

Published by Go Frontiers (UK & China)

Boom expected in beer sales, in China for World Cup fever

Beer sales set to boom with the 2014 World Cup fever in China. This is aided by the increasing middle class drinking bottled and canned beers creating a good market for exporting to China, especially for British real ale and craft beers.

The second and third quarters of the year 2014 will see an increase in beer sales between June 12th and July 13th.

Even though there are lots of exported beers in China Tsingtao and Beijing's Yanjing are expected to do well. In China beer consumption is a seasonal tradition of doing well in the summer and but slowing down for the autum/winter due to the Chinese drinking hot drinks instead.

More can be read on our blog  

http://www.gofrontiers.co.uk/blog.php?varPgId=0012-2014-world-cup-approaching-beer-sales-set-to-boom-in-china

Published by Go Frontiers (UK & China)

Confucianism the key element to Chinese business culture

From 500 BC to the modern age Confucianism still plays a key role in Chinese business culture and China's character and behaviour to create harmony in society.

President Xi Jinping, the new Chinese President, and his government are now promoting the importance of Confucianism and its positive impact on Chinese society focusing not only on social but business values too in order to promote harmony in society and the working environment.

Confucianism is engrained in China's culture plays its role in social/work ethics, family and relationships. The theory of Confucianism is discussed regularly during dinner, especially between business people.

Learning some Confucianism will give you something to talk about at the dinner table and will help you to build relationships with your Chinese counterparts and agents when doing business in China.

Published by: Gary Rice, Go Frontiers (UK & China)

Exporting to China - the new SME buzz words in the Midlands

Exporting to China are the new buzz words being used by the SME's in the Midlands area. Two of the top destinations are India and China which highlights the issue of culture and doing business their way. Providing you want to be successful that is.

The common issue over looked until it is too late is culture. Culture in many countries is a big deal especially if you are doing business in China were you will need to grasp an understanding of the Chinese business culture and Chinese social culture.

Business in China is done very differently as the Chinese prefer to build trust before they do business. So it is important to spend the time and build a good relationship that will last.

To do this you need to know how to show your respect and portray your class. Developing your Face and others is equally important when building Chinese relationships.

Published by: Gary Rice, Go Frontiers (UK & China)

China: Dinner table etiquette whilst dinning out on business

Dinner table etiquette in China plays a special part in their social culture and family as a way to show and demonstrate your status and respect, Face and strength of your relationships.

These areas also play a key part in Chinese business culture which can mean the difference between you wining or losing a business deal.

In China dinning out has to be done correctly and with style. As a westerner you are expected to have good manors especially if you are competing for business.

Disappoint them and you will devalue your brand. Look at it as a game with a set of rules to abide by and you will win business.

Published by: Gary Rice, Go Frontiers (UK & China)
 

Beijing bans cheese imports from Britain

Food inspectors from China were dissatisfied with standards at a UK dairy during their visit.

In China most things are polluted and poisoned including the air, water and food. Recently in 2008, their was the milk scandal (melamine chemical poisoning) were six babies died and 300,000 left sick but largely unknown to the rest of the world was the poisoned and sick pets (dogs and cats) suffering with gallstone problems.

From these incidences China has new food safety laws which came into force on 1^st May. The UK prides its self with its high standards of food quality but if China has higher standards then dairy companies have to meet these standards if they want to continue to export to China.

Britain currently exports 11.5 tonnes of cheese to China each year. All though the cheese market in China is relatively small their has been a sharp increase in demand for this year. Export figures for January and February alone are already valued at £93,003 Pounds.

Posted by: Gary Rice, Chinese Business Culture Expert,
Director of Go Frontiers (UK and China) based in Derbyshire, UK.

Chinese Checkers: A local business man has helped prevent war with China!

During a trade trip there Gary Rice spotted a sign at a Buddhist theme park telling staff to 'execute tourists in the most advantageous manner'.

 

Gary and his interpreter pointed out the translation error and the sign will now be reworded.

 

His Loscoe firm Go Frontiers provides Chinese Business Culture, Etiquette and Protocol training and translations to UK companies doing business with China.

 

Extract from TopNews, Feb 2014. 

Go Frontiers: Using local heritage centre's good practice helps training provider bridge frontiers in Hainan Island, South China

A Loscoe businessman successfully used a local heritage centre as an example when showing owners and managers how to develop a theme park in China.

Gary Rice runs Go Frontiers which provides Chinese Business Culture, Etiquette and Protocol training courses and translations and, through a business partner, helps companies dealing with businesses in the fast-growing Chinese economy.

He recently returned from China after being approached by a consultancy advising on expanding the park at Hainan Island near the Vietnamese border, which has themes of tropical scenery and local heritage.

Read more here http://www.gofrontiers.co.uk/blog.php?varPgId=0004-dh-lawrence-heritage-ventre-dong-shanling-hainan-island-china

Understanding Chinese Tourism on Hainan Island, South China

Go Frontiers director Gary Rice, recently returned from China after being approached by a Chinese consultancy advising on expanding a 4A tropical and heritage Tourist Park at Hainan Island, near Vietnam.

Local Research
Gary researched a local heritage centre and surrounding towns to provide training on UK tourism concepts and ideas to the owners and managers on how to develop a theme park in China.

Before flying out Gary visited the local DH Lawrence Heritage Centre at Durban House in Eastwood which portrays the life and works of the famous author, whose books featured the dehumanizing industrialisation of the mines and heavy industry across Derbyshire and Nottinghamshire.

The research focus was on customer service and 'Access for All', including facilities for the different visitor age groups, disabled people, children's buggies and baby changing areas.
Other UK tourism concepts where researched in the landscapes and wildlife of the tourist towns of Buxton, Bakewell and Cromford canal.

Gary cited these examples of good practices during his presentations on the Chinese/foreign tourist's needs which required incorporating into the development plans.

"If one member of a family cannot access a tourist destination due to the lack of facilities and accessibility then that family will go else where, resulting in loss revenue, so it is important to get it correct in the planning and development stage," he said.

Arrive as Mystery Guests and Assess the Tropical Heritage Tourist Parks on Hainan Island's China as an ancient country is still a mystery to most westerners. However in the last thirty years much of China has advanced technologically but many places are still undeveloped.
 
China is a country full of attraction and surprises.

Therefore, arriving on Hainan Island (south China) as mystery guests and spending 10 days working in the jungle was no mean fete, but a great opportunity for Go Frontiers.

The people of Hainan Island are very friendly, honest, helpful and never hassle you into buy anything. Not sure if this was to do with the 'binlang' drug that many locals were seen chewing or sold in the local markets.

The Island has some of the very best scenic views, places to visit and lots to learn about the tropical environment and Island culture.

Accessing the tourist parks Gary noticed many attractions lacking in facilities and were not accessible to senior tourists, tourists with disabilities or young children/babies, resulting in loss revenue for the parks.

Basically, this is down to the tourist attractions not being family friendly, with too many steps, no hand rails, no ramps, no lifts or provide very few clean, seating areas, meaning that the parks where unsuitable for children's buggies, wheelchairs, and too many tripping hazards for the young and elderly.

 

Some places have made the effort to install disabled toilets but they have been designed wrong and so a wheelchair user can't get in the cubicle or the ramps have been made too steep making it a 'Herculean' effort.

On a lighter note many tourist parks had signs translated wrong. One sign said 'Staff Only', which was located next to a cliff edge. Basically only staff are allowed to climb over and fall to their death. It's the best HR policy I've seen for reducing staff levels. 

The second sign at the well known Nanshan Guanyinyuan Buddhist park explained the staff's duties. One of these duties was to 'Execute tourists in the most advantageous manor'.

 

These signs defiantly make you laugh.

Understanding Chinese Tourists

The biggest problems the tourist parks and hotels face are the Chinese tourist tour groups or should say social terrorists. Watching the Chinese tour groups arrive at the parks it was obvious that the Chinese have more human rights than any one in the west.

They drop litter every where, climb on the unprotected historical structures for photos and vandalise the bamboo, tropical plants and historical buildings by carving their names on it. In the UK where not allowed to do this. We'd get fined.  

The Chinese may have advanced technologically but they are slow to care about their environment, or history. What they don't understand is that once it's been damaged or destroyed it's gone forever.

The Chinese tour group's behavior wasn't much better when they descended on the five star Hna Hotel, where Gary stayed.

Watching the tour behavior in the hotel restaurant was appalling to see them shoving and pushing for the tables and food. Any one would have thought that the hotel was going to run out of food.

Many Chinese from the developed areas of China do have good social and table manors but the less developed Chinese are loud and at each meal would pile up two plates of food each, make chomping and slurping noises as they ate with their chins on the table and at intervals would make a load throat growl and then spit on the five star restaurant floor.

Several Chinese used the table cloth instead of a napkin to wipe their mouths and much of food went to waste.

The reason for this is that many of these Chinese used to be poor but with China becoming more developed they now have better living standards and more money to travel and see the world. Their social skills will improve in time.

Whenever you hear the load Chinese throat growl it's a question of which way do you move? Move left, move right or stay still and hope you don't get spat on. 

Attempting to use the natural hot spring (pool) wasn't much better. It was either being empted, filled or filthy. On inspection there was always a thick layer of skin and dirt floating on top of the water from the Chinese cleaning them selves. The idea of a hot spring is to lie back and relax but as always the Chinese had different ideas.

This really annoyed the pool manager as this became a full time job of emptying and refilling the pool throughout the day.

Understanding the Culture around the Parks
Even taking a walk to the nearest town had its dangers as many manhole covers were missing or badly damaged. It's not the place to go out walking at night.

Neither was it safe using the three wheeled taxi motorcycles which have no suspension and the roads have potholes. Gary found this out to his expense when his three wheeled taxi hit a pothole damaging his back for three days.  

Eating out most restaurants was hard going and too dirty to eat in. Most restaurant staff didn't understand what vegetarian meant even if you told them no meat, no fish and for this reason many dishes got sent back to the kitchen.

All the restaurants Go Frontiers ate in used far too much cooking oil and MSG causing stomach issues and having to use the dreaded Chinese style toilet (hole in the ground).
Most Chinese toilets didn't have soap for washing your hands.

Gary was really pleased to see more and more Chinese being able to afford holidays and travel abroad. The Chinese are really nice and welcoming people however their are many aspects that can be improved on with regards to social behaviour.  

Deliver Training to Owners and Managers
The training given by Gary and his business partner on Hainan Island was very successful, resulting in the consultancy winning the long term training contract. The park is planning to upgrade to a 5A park and develop the next phase, including a 'Golden Medicine Buddha', and luxury 5 star hotels at a cost of millions of pounds, with the prospect of Go Frontiers providing more training to make staff ready for the next challenge.

Councillor Ian Tyler, cabinet member for arts, leisure and culture at Broxtowe Borough Council, which manages the Eastwood centre with the University of Nottingham, said: “We are delighted that D. H. Lawrence Heritage has been used as an example of good practice for accessibility to public buildings.

"We get visitors from all over the world including China and we are more than happy to share our positive experience and knowledge with them."
The Chinese are great people to teach and are always interested to learn new ideas and concepts. This in its self is very rewarding for Gary and makes training in China so enjoyable.

UK People Lucky to have the NHS. In China you Pay for Hospital Treatment! Chinese Culture.

Well, its fourteen months since we had to drop every thing and fly to China to help a Chinese business friend recover from a serious operation.

Most westerners don't understand the importance of building Chinese business relationships (Guanxi) or Chinese culture but to the Chinese, business relationships include the social aspect too.

This can save your life!

This story will tell you how important it is to build a close Chinese business relationship and how lucky we are having the NHS. At least once a year visit the doctor and have an MOT and CT scan, even if you need to pay for the scan.

Our story can be read here http://www.gofrontiers.co.uk/blog.php?varPgId=0018-chinese-hospitals-nhs-expensive-do-not-get-ill-poor-service.


Author: Gary Rice, Chinese Business Culture Expert
Company: Go Frontiers (UK & China)

Doing Business in China's Regional Cities | Go Frontiers (UK & China) | Chinese business culture

Traditionally, business interest from UK companies has generally focused on a small number of large established cities such as Beijing, Shanghai, Shenzhen and Guangzhou. However, these markets are maturing, competition is intensifying and factor input costs (especially in relation to labour and land) are increasing.

As a consequence, companies are increasingly willing to consider alternative locations in China for business expansion and development. These emerging cities are also fast becoming the target of local and foreign investments as we witness their impressive rise following China’s economic development.

Led by Matthew Forbes OBE, Deputy Consul General in Shanghai, a team of six regional cities officers from China visited the Nottingham to introduce the overall business environment in the East China region (The Yangtze-River Delta, Zhejiang, Anhui and Jiangsu Province) and protocols in dealing with the local government.

Attend by: Gary Rice - Business Chinese culture expert
Company: Go Frontiers (UK & China)

Amber Valley Business Network Event (Marehay) | Go Frontiers (Chinese business culture)

Go Frontiers had a great time networking and the food at The Village Inn, located at Upper Marehay, was brilliant.

Had some great conversations about China and the Chinese business culture and how to eat with chopsticks.

The Guest Speaker for the day was David Negus from Ellis-Fermor & Negus Solicitors on HS2 Rail Line: Exceptional Hardship Scheme Phase II.