By James Chan

My name is James Chan. I live and work in Philadelphia. I’ve been in Philadelphia for 25 years. And I also have been running a consultancy based in Center City (downtown Philadelphia) for 25 years. The name of my consultancy is Asia marketing and management; and the focus is to help companies build business relationships in China. And more specifically, my specialty is to help American companies export 100-percent, American-made products and services to the Chinese market.

I have tried over the past 25 years to balance our trade deficit with China (laughs from the audience) and you know that I’m succeeding slowly, but I am not giving up (more laughs from the audience.) Well, that’s what I want to do.

But, I’m very happy doing what I do because the first thing I’d like to share with you in terms of my 25 years helping companies export (to China) is that it can be done. There is money to be made. But for companies that want to do that, and want to be successful, people really need to, kind of, know five (5) very important pieces of the Chinese mindset, which I, for the ease of making it easy for you to remember, call “the China formula,” which is the acronym ‘C.H.I.N.A.’

Now, I’m going to use my next four (4) minutes describing what is C.H.I.N.A. and why it is important to keep this in mind, if you want to succeed in making the Chinese spend money on you.

The first one is C, which stands for Confidence. All my clients who do export and are very profitable have confidence in their products and services. We all know, when we walk into the China market, that there are “pirates,” there are people who want to duplicate our products, and my clients are people who either invent their products or they invent their services. And no matter how hard people are trying to “pirate” our things, our procedures, our know-how and our technology, they just don’t do it very well. So, this is confidence. So, if you don’t have that confidence, you are not China-ready in terms of exporting to the Chinese market.

There is another thing about confidence that you need to know. When you are an exporter, you need to find distributors and agents and salespeople in China who want to work for you … who have to work for you. But it’s not enough just to find people and throw money at them. Because you can always throw money at people but what if they don’t have confidence that your products can sell? So the word confidence here also means: you have to find people and make them feel confident that helping you is not a one-year or two-year deal.

It’s not enough to have confidence. The next word is H, Hunger. H stands for hunger. My clients, the best clients that I have, are people who feel hungry. They are motivated to sell to China. When companies are fat and happy, they don’t go overseas. So, if you don’t have the hunger, you’re not ready. The word hunger also refers to customers in China. We don’t sell to anyone in China. We only sell to people who are “hungry” for our products. When I say “hungry,” I mean people who really desire what we can do, and price normally is not a barrier.

Let’s go to the third one for the ‘I.’ ‘I’ stands for “Insider.” Any company that succeeds in selling to the Chinese has to have one or more “insiders.” An insider can be a customer, can be your agent, can be your friend, can be your employee’s mother in-law’s husband’s brother … somebody who is trusting of you, who feels comfortable with you, who is willing to tip you off. Without an insider in that marketplace, you are going nowhere. And so one of the things I do for my clients is to help them find and then groom those “insiders.” We don’t call them spies, because we are not in defense and military. But, you know, they are “insiders.”

The next word in the formula for N is ‘NO!’ To succeed selling to the Chinese, you have to have the courage and ability and the timing to say “no!” to your customer. If you keep saying yes, if you are only willing to sell to anybody who throws money at you, you get pirated. You won’t be able to establish your brand recognition.

Finally, ‘A’ for Acceptance. ‘A’ stands for acceptance. There is one thing many Westerners don’t think about when they walk into China. The Chinese have … what they really, really, really, really want from the West is acceptance. If you want to sell anything to the Chinese or, for that matter, build relationships with the Chinese, you must make your customers, your contacts, your associates, your partners feel you are not walking in as a marauder, as a barbarian. You are walking in, you are accepting them; and that will help you tremendously in finding the “insiders” in building relationships.

And, there is one more thing, the final note about acceptance is: while you have to make the Chinese feel that you are accepting them, there is one thing about acceptance that only depends on you: you have also to be able to accept the Chinese as they are. You only want to do business with China; you don’t want to change China! The moment you want to walk into that market, looking like you want to change the way they run their lives, you will be resisted; and that it is not a good strategy. So that is my C.H.I.N.A. formula and I thank you very much!

James Chan

Transcript of James Chan’s speech on December 9, 2008 at The Entrepreneurs’ Forum of Greater Philadelphia, The Federal Bank of Philadelphia, Pennsylvania.