By Milad Nouri

China is known as the factory of the world where a wild variety of products are manufactured. Today the manufacturing in China does not concern only commodities and garments but in the past few years we have seen an increase in fabrication of high-tech and complex products manufacturing. The more complex and innovative is a product, the more difficult is the production process and this could involve more conflicts and longer time for the establishment of the manufacturing project.

Manufacturing in China can be very attractive for western companies because it allows them to be more competitive in their own market, but it can turn to a nightmare if the manufacturing project is not structured and closely controlled.

In this article main challenges of Manufacturing in China will be reviewed and some experience-based tips will be given to try to improve the manufacturing process and to avoid conflict situations in terms of production delays and quality requirements.

Learn about Chinese business ethic

One of the most important challenge in international business is the difference between the business ethic. This difference is closely related to the culture of the country. In theory, cultural difference should not affect the business because a business has the same goal anywhere in the world, but in practice it does. So the first step in exploring the business ethic is to learn about the culture and custom of the country.

Sometimes this task can be difficult in case of China, because many companies do not have precise ethical behavior in their business and the lack of corporate governance make the establishment of the ethic difficult. So in China we could rather learn about the business custom and the basic information about the way Chinese entrepreneurs do business.

This step will help you to understand for example the real meaning of “mei wenti” (no problem in Chinese) that you can very often get as reply from your Chinese partner concerning a problematic situation. In order to not “loose face” (important in Chinese culture) many Chinese partners will accept all your requirements even if they are not easy to achieve, but you should keep in mind this characteristic of Chinese custom to go deeper during negotiations to avoid unexpected situations.

Establish your manufacturing process

The following is the overall manufacturing process that could be followed to give an structure to your  project. Of course, it has to be adapted and completed regarding to your product, but it already gives you an idea of the main steps of manufacturing projects.

Milad Nouri, Managing Director of China Consultants Int’l Ltd.
This is the first part of “Manufacturing in China, main challenges and practical tips for SMEs”  next week we will publish the second part.