“I hired a student from a local university to do my translation…and it ended up hurting my reputation.”

This was the story I heard from a business contact I met with a couple of weeks ago. He works for a large chemical manufacturer with a presence in China, and they needed their website translated into Chinese. His choice was to hire a local student from China for the job. Once he presented the translation to his Chinese business partners, they weren’t impressed — the errors actually made him and his company look less professional in their eyes. (more…)

By Gregory Sy

Wholly Foreign Owned Enterprises (WFOEs) or limited liability companies whose investors are purely foreign are quickly becoming the most popular method of foreign investment in China. While foreign companies once thought (and were often compelled by laws) that a local partner was necessary to operate business in China, this is increasingly no longer the case in a wide range of industries.

Characteristics of WFOEs:
- Between one to fifty shareholders
- Restricts the right to transfer shares
- Prohibits public offering of shares
- Equity is divided based on contribution to registered capital and not allocation of shares
- Liability is limited to the amount of registered capital contributed (more…)

Building a talent pipeline is not easy in China and you will need all the help you can get.

Those who get to know you or to know about you through a third party grant you a higher level of confidence, credibility and loyalty. According to Dr. Robert Cialdini in his amazing book; Influence: The Psychology of Persuasion, this is social proof in action.

This is precisely why the proper care of candidates is so important to your recruiting efforts. China is currently a high-volume type of place. Many of the recruiting systems in place here are based on the more-is-more philosophy. If you are not finding the candidates you need, get more! The problem with this approach is that it is often implemented at the expense of quality and in a candidate short market like this every candidate counts. (more…)

In terms of human resources, the current debate is focused on the continued need for multinational corporations in China to increase hiring of local staff, particularly for operations management, while decreasing or completely removing expatriate staff. Reasons for this shift away from expatriate staff include the high cost of salary and benefit packages, questionable value (in terms of productivity and ability to drive the business), high failure rates and most recently, the large readily available talent pool of expatriates already based in China (“halfpats”).

Many within China agree that there is a shortage of local talent in the middle management sector. In the past, this was a significant issue as companies had only two options – to hire and relocate expensive expatriate staff from overseas, or inexpensive, inexperienced local staff. (more…)

While massive amounts of money is being spent on marketing in the run-up to the Olympics to capture China 250 million strong emerging middle class, unfortunately most marketing campaigns are failing to deliver the results that the sponsors like Coca-Cola or Adidas were hoping for. My latest piece looks at the effectiveness of Olympics sponsorship and whether or not it is helping companies win the hearts, minds, and wallets of China’s middle class. Some of the results were surprising:
 
1) the vast majority of respondents said that they did not care who the official sponsor was when trying to make a purchase and in most categories people had little idea who the official sponsor was. Instead, consumers were more concerned with the quality and safety of the product and how the brand image fit with their lifestyle. (more…)

J.P. Morgan’s recent decision to hire Elaine La Roche as its China vice-chairman may have not been a difficult one, given her qualifications as a former chief executive of China International Capital Corporation.

Leading the large, successful, foreign-owned investment banking business left no shadow of a doubt on her capabilities, with many public decisions and achievements made through her run.

But what about companies looking to hire candidates without such an extensive and verifiable paper trail of credentials? (more…)

While domestic companies have a wide range of alternatives in establishing business operations in China, foreign companies are more restricted, with the most common business vehicles for foreign investors being:

- Representative Offices
- Wholly Foreign Owned Enterprises 
- Joint Ventures (Cooperative and Contractual)

1. Representative Offices

General
The fastest and easiest method for a foreign company to establish a presence or ‘footprint’ in China is through registration of a Representative Office of a foreign company. (more…)

By Russel Beron

Similar to Haier Group, China’s automotive industry has an array of suppliers which require sophisticated systems to manage them. China’s auto market, an ongoing hot topic is becoming more competitive and manufacturers have to look at the entire supply chain to cut costs.

BeijingBenzDaimlerChrysler (BBDC) is a more recent joint auto venture which built a new manufacturing facility in Beijing in early 2007 to build the EClass Mercedes and Chrysler 300C. Recognizing the importance of communication with their suppliers, BBDC implemented a web-based EDI system which is user friendly for all levels of BBDC suppliers. This implementation earned Seeburger the CHaINA award of Best IT Supply Chain Solution for China. (more…)

When a company sets up operations in China they appear to be faced with two distinct choices: ‘going local’, or imposing the dominant business culture of their organization.

It’s not an easy choice, and there are no clear cut answers as to which route will bring you the best results. In the absence of a definite conclusion it can become a battle of wills to see which culture will win.

Choose the local culture and you will be in a position to motivate local staff more effectively, but much of the operations of the business will become opaque to non-locals. Things will get done but not necessarily the way the Headquarters wants them to. What you gain in effectiveness, as defined locally, you lose in visibility. (more…)

In this issue I am venturing beyond European borders to China, a fast growing marketplace. But starting operations in a new market is not easy.Will you move your own people to the new location or will you start hiring locally? And if you hire locally, how do you attract the best candidates and what do these new recruits expect?

Campus recruitment

Kevin Ng, Partner at the Beijing office of Deloitte, is clear about the type of graduates Deloitte targets. “We will only approach the first-tier universities in China to be assured of quality graduates,” he says. “We conduct campus recruitment to introduce our firm and the attributes of graduates we are looking for.” (more…)