Local people may not talk or sound professional like MBA graduates, but they are generally very street smart. Global technology platforms may not work well in China because the market is immature so often things have to be customised.
The Toro Co was having a telephone negotiation with a Chinese supplier. The supplier seemed positive to the Sourcing Director, but a Chinese speaking buyer on Toro’s staff didn’t believe the talks were as direct as they appeared and initiated a follow-up call where it transpired there were concerns but the supplier had been uncomfortable discussing them with the American director.
Opening a representative office in China has many constraints including:
- The FE (foreign enterprise) must have been in existence for at least a year.
- The FE must demonstrate reasons to establish an office in China .
- These can only be in specifically designated buildings.
- The FE must enter in to a lease before submitting an application to set up a Representative Office.
- A FE cannot recruit directly but must use a FESCO (foreign employment service company).
Local expertise can solve problems that foreigners have difficulties understanding.
See also question 3 – bureaucracy.
