By Steven Chow

Despite rising costs in China, sourcing continues to be hot here - very hot - and I personally can attest to this.

Chinawhy.net, my company’s website, recently launched a Google AdWords campaign to promote our product sourcing service. AdWords works by creating ads and choosing keywords related to your business. When people search Google for those keywords, your ad may appear next to the search results.

We created our ad and chose our keywords, agreeing to pay US$1 per ad click. After all, paying a higher price per click is supposed to get your ad listed higher in ad results. But due to the popularity of China sourcing keywords, even with that high bid, we couldn’t make it into the first page of ad results.

Clearly, there are a lot of sourcing challenges out there. Many people are desperately in need of information, and that’s why it costs advertisers so much to reach them.

In this article, I’ll try to cover the basics of finding China suppliers. And who knows, maybe you’ll find me via this article on Google after all. Win-win, right?

So, you can find China suppliers at:

A) Chinese trade fairs

The best place to find reliable China suppliers is the Canton Fair, which is the biggest trade fair in China.

In 2008, more than 10,000 Chinese companies attended the Canton fair (in the spring session). Despite the enormity of the fair, you’ll find lot’s of quality suppliers there.

The Canton Fair organization committee has set a very high threshold for exhibition companies. Let us take the textile industry, for example. Only companies with more than $US3 million export turnover in the previous year are qualified to attend the Canton Fair (for companies from the Eastern part of China…the minimum for a western China company is $US1 million).

So the suppliers you meet at the Canton Fair are mostly big and authentic ones that are selected and recommended by the local government. Big buyers can always find big and ideal suppliers at the Canton Fair. But even if you are a smaller buyer, I would suggest you choose smaller, rapid-developing companies instead of big suppliers.

Big buyers like Wal-Mart and Target are priorities for big suppliers. Smaller buyers’ interests will be sacrificed first if they don’t have enough production capacity to fulfill all the orders at peak season.

On the other hand, your orders likely will be well cared for by smaller suppliers exhibiting at the Canton Fair.

The other reason I recommend smaller but quality suppliers from Canton Fair is that they quickly respond to your questions and concerns. That is very important, especially when your order is really complicated.

Meanwhile, the East China Fair is a large-scale trade fair that is second only to the Canton Fair.

Also if you are based in a country geographically connected to China - for example, if you are buyer from Russia - you might be interested in attending the Harbin Fair, which is close to Russia.

B) B2B websites

I have worked in several trade companies, and whenever I received an inquiry from foreign buyers, the first thing I always did was go to Alibaba.com to compile a list of suppliers, compare price and narrow down the list. That fact shows how useful it is to use B2B websites to find good suppliers.

There are many sourcing B2B websites out there, like Alibaba, Made-in-China.com, Globalsources.com, and Tradekey.com.

Globalsources set the highest quality threshold by charging an expensive supplier membership fee, so supplier quality is relatively higher than on other platforms. Alibaba, meanwhile, is a helpful resource. But not all companies are real – although most are. One thing I need to stress is that Gold Supplier and TrustPass members on Alibaba aren’t necessarily real companies. Check our article, “Gold Suppliers and TrustPass Suppliers on Alibaba“, to find out why.

C) Search engines

Use Google or Baidu.com to search China suppliers. Vary the search term to find a more comprehensive list of suppliers showing up in search results. Meanwhile, pay attention to the advertising results on Google or Baidu, like the ones I mentioned I was trying to use. This kind of advertising is pretty new in China, and companies that are pioneering enough to buy these ads are worth a look.

D) Industry associations

It’s always a good idea to search the industry association websites or buy industry publications from those related associations to search for reliable suppliers and buyers. We have compiled a list on Chinese industry associations, which might be worth a look. One thing I might add is that they are mostly very bureaucratic. You can do a search on their websites to find information and useful resources, but don’t expect that they will answer your email.

Editors’ note: Steven Chow is a Harbin-based business consultant and dear bizCult friend. You can ask Mr. Chow a China sourcing/business question here if you like. This article is reprinted with permission from Chinawhy.net.

China isn’t the world’s business panacea of yesteryear.

We’ve been realizing that lately on the low- to middle-end side of business things. Manufacturing took a hit in the Pearl River Delta region. New labor contract law drove up employee costs.

Now, a rather high-tech, high-end industry – gaming – is experiencing major turbulence, according to Asia Times Online.

The evidence…

Yesteryear:

Las Vegas Sands opened Macau’s first Vegas-style casino in 2004, getting its US$240 million construction cost back within a year of opening.

Today: In the second quarter, Sands Macao’s casino revenue fell 30 percent to US$262 million, and operating income plunged 58 percent to US$40 million. MGM Mirage and Australia’s Crown reported losses in their Macau operations in the same quarter. Overall, Macau’s gaming revenue fell 3 percent in the second quarter compared with the first quarter. And Macau’s gaming revenue may fall still next year, according to the zone’s Chief Executive Edmund Ho.

Reasons cited for the slowdown include the global credit crisis and discretionary spending under attack, as rising energy and food costs has hit some areas of the world very hard.

But, as it turns out, China isn’t so very different from the West. Read More →

TOKYO, Japan — I was impressed with this country before I even landed here this morning.

On a Japan Airlines flight to Tokyo, I was just another peasant on board - relegated to coach class.

But I was getting great treatment by the most gentlemanly of gentle ladies.

Would I like some more orange juice for the fourth time without me asking?

Was I finished with the empty container in my hand?

My response to that one must have been a touch too ambivalent, because as soon as the stewardess reached for it, she retracted her hand instantly at the slightest indication that I might not be finished, her face full of apology.

Things only got better on the ground, including:

-An information clerk at the airport providing copiously written English-language instructions on the best way to get downtown.

-A subway ticket vendor pulling out a city map, highlighter in hand, directing me more specifically.

-To my left and right, pedestrians waiting for traffic signals to cross empty roads. I’m pinching myself. Is this Asia?

All told, it’s the kind of civility that makes you wonder how this country ever went to war way back when.

Well, those days are long over, and Japan clearly is the land of polite.

There must be a point when this gets annoying in business, as communication has to get clouded by polite rhetoric.

But for the most part, the world could learn a few things about being polite from Japan - China definitely included.

theEnglishWeb.com has some suggestions on being polite in business.

The site advises:　”English speaking people value politeness over directness, and appearing rude when you write or speak is as much a mistake as getting the language wrong. In fact, people are more likely to forgive inaccuracies than rudeness.”

Some of the better tips include:

• Don’t say “I want….” Say “I would like…” or “I would be grateful for….” That way, you avoid sounding demanding.
• Care, even if you don’t know. If you don’t know, don’t be unfriendly or direct about it. Instead of “We can’t help” try “We are sorry we cannot help you further.” Who knows, the person may open up, thus engaged in friendly dialogue, and you may find something you can help them with.
• Add a little ambiguity to your language. theEnglishWeb notes:
  

  In particular, the past modals (would, could and might) are useful in situations when you want to sound less definite…. These verbs change the mood of a sentence and allow you to sound polite and diplomatic. They also make you sound less definite, and more open to other people’s ideas…. For this reason, they are useful in negotiations when you want to invite the other person to give you a better offer. For example, saying ‘Your price is too high for us’ sounds definite and could close the discussion. If you say ‘Your price would be too high for us’, you are inviting the other person to make a counter-offer.

• Put the present in the past. You may “want to know” something still. But doesn’t it sound more polite to say you “wanted to know something”? Yes.
• Apologize, regret and plain feel sorry when unfortunate circumstances arise for potential or actual clients. “We regret to inform you that your application has been unsuccessful” is slightly comforting - unless you’ve just been cut from the wait list of Harvard Business School. That sucks outright.
• Don’t accuse. “There seems to be a mistake” is better than “You made a mistake.”

Being polite doesn’t mean you have to dump your Machiavellian ways. It’s about using language to your advantage, and putting competition - albeit cutthroat - in a civil context.

Blogger Techyoung knows the positive impact civility has in business exchange:

I remember sitting in a dank tiny room in the last year of my first degree phoning round for information. I had a business idea I wanted to start and was looking for ways at vetting potential employees. I phoned up a business that turned out only took on clients who needed this service for a whole HR department over and above the 50 employee mark. They were very kind, told me that they wouldn’t be of much help, but then preceded to spend half an hour on the phone with me.

I left that conversation not only knowing what needed to be done and how to do it, but thinking these people were top class gentleman. If this is how they treat people they are not going to do business with, I envy the excellent service their clients get.

Each person you come into contact with might one day become a customer, or know someone who will. If even the receptionist is rude, than that is a lost relationship, a lost sale.

So wherever one learns to say “please” and “thank you” - whether in Japan, surfing the net for tips or from Mom - the benefits clearly outway the cost of a breath.

Thank you for your most kind attention.

Now that the lunacy of the Olympics is over, and business is getting back to normal-ish, it’s a good time to settle back into what Beijing’s all about - making money – and that begins with a good office.

Still waiting for that post-Olympics recession to get a good office space deal?

Hopefully you’ve got plenty of fake DVDs handy, because you could be in for a long wait.

According to a China Brief article by Eric Hirsch, a director of Jones Lang LaSalle in Beijing, “[office] demand should continue to be strong after the Olympics, especially considering that many financial firms have not yet expanded to the same levels seen in comparable service-sector cities.”

He also suggests that the Olympics was far removed from Beijing’s office space growth – and its filling up.

He noted Beijing’s office market doubling from 4.3 million square meters in early 2005 to more than 8.7 million at the end of the first quarter in 2008. Demand has kept pace, he noted, with space occupied up from 3.8 million square meters in 2005 to more than 7.3 million today. All lines of business are eager to sit in it.

“One bright spot from a renter’s perspective is that with all this new construction, corporate tenants have more choices when looking at office space and may be able to negotiate more competitive terms with some landlords as a result,” Mr. Hirsch wrote.

A more accessible subway system in Haidian and eastern Beijing also is good news for office workers in those areas, Mr. Hirsch noted. But be mindful of who you expect to work in newly conveniently located offices. Executives riding the subway to work is “unthinkable in Beijing, where a car, even stalled in traffic, represents social status,” writes Mark Godfrey in a recent issue of EuroBiz.

So, how do you rent office space in Beijing?

eHow.com has a rather specific answer in its article, “How to Rent Office Space in Beijing.”

“Renting an office in Beijing is more involved than renting an office in America,” the site reports.

We couldn’t agree more. See our article on how to get away with a home office – illegally – here.

eHow recommends renting using the following approach:

• Start with market research. “Do not let price be the final consideration, as lower priced office space is often located in the least accessible areas of the city.” Do be mindful of where new subway lines are opening up, though, because you may get better deals in what were previously considered remote areas that now are easily accessible.

Read More →

Whatever happened to the weekend getaway?

In Asia, it can be hard to do.

There’s the Friday night conference calls with executives back West. Congested roads all weekend long. Tourist spots that are too far from one another for a quick drive.

What’s a busy, but leisure-minded expat to do?

The Wall Street Journal suggests there are still good road trips in Asia, and recommended a three-hour drive from Shanghai to Moganshan, China for one.

There also are short drives that get you quickly into pseudo countryside.

A drive from Beijing to…well…outer Beijing (Shunyi) can hit the spot, at a place like Agrilandia. See our article here.

But based on my experience, the best three-day weekend involves some flight time.

A couple years back, I took a long weekend from Beijing to Hanoi, Vietnam in what was a perfectly comfortable, no-rush trip.

In three days, I did just about everything there was to do in Hanoi, including a side-trip to the majestic Ha Long Bay.

During my time in Asia, I’ve also learned:

• You don’t need much time in Singapore to experience all there is to do there. Enjoy the nightlife. Hit Santosa Island. You’re done. Unless you want to get a down and dirty glimpse of Malaysia across the border. Just get some delicious seafood on a Saturday night there, and you’ve tasted enough Malaysian culture for the time being.
• You can feel like you’ve experienced enough of Cambodia in a weekend. Siem Reap is the place to be to live it up like Angelina Jolie in Tomb Raider. Get in a sunrise at Ankor Wat on Sunday morning, and some sightseeing before and after at various temples. Hit the downtown (which feels more like some laid-back place in Latin America than Asia). And you’re ready to come home. Oh, but you wanted to see the Killing Fields in Phnom Penh? Dude, it’s the weekend. Give yourself a break.
• A Bangkok tuk tuk gets a decent sightseeing job done in a day. Somewhat obnoxious stops at a friend’s diamond shop and multiple tailor shops are included. But with this vehicle, part of the destination is the journey. You’ll see temples galore too. Save Phuket for a real vacation.
• Hitting up the cafés in Ho Chi Minh City is all you need to relax a weekend away. Oh, but you wanted beach time? No problem. Catch a speedy riverboat on the Saigon River and head to Vung Tau an hour or so away. Or take a motorbike, which is definitely – per se - an adventurous destination.

So you see, Clark Griswold, you don’t need weekend road trip to have fun in Asia.

You do need a set of wings, a little more spending cash than gas money, and hopefully, a lot more to go for business class. We guarantee, that’s better than a Chevy.

Doing business in Asia is challenging, thrilling and quite possibly very lucrative.

Sometimes, it’s also heartbreaking.

My grandfather died yesterday and I was one of the last family members to know.

You can listen to why I believe coping with a family death from faraway is the greatest of expat sorrows here.

If you live in China or Asia, you can also visit family back West a little more often, or at least send flowers from time to time and call more frequently. I’m sorry I didn’t do enough of this, granddad.

It’s interesting to read in today’s Wall Street Journal that China’s insurers legally may be able to invest in real estate soon – but they’re already doing it.

According to the Journal:

Compared with their counterparts in the West, Chinese insurers are relatively restricted in which assets they are allowed to invest in, and they have been lobbying for longer-term assets to match the big payouts they are expecting to make as China’s rapidly aging population retires. Jeanne Kang, a real-estate lawyer with Jones Day in Beijing, described the rule change as a victory for an insurance industry that has long pushed for more freedom to invest in the property market.

The insurance industry correctly recognized though, that in China, while lobbying may be a long-term strategy (and we noted how to do so here), finding today’s loopholes is the bread and butter of Chinese business.

The Journal continues:

Mei Jianping, a finance professor at the Cheung Kong Graduate School of Business in Beijing, said some insurers already have taken advantage of loopholes that allow them to buy properties they occupy, using 10% of the building and leasing out the rest.

That’s how it is in China.

Finding ways around the law often is more important than finding ways to abide by the law.

The article officer further insight into why this is the case:

[Ms. Kang] said how much [the new regulations help] the real-estate industry will depend on what she calls the “micro rules” — the notices, circulars, guidelines and administrative orders issued from China’s myriad ministries and government bodies.

Often in China, administrators or lower level authorities are what matter most to whether or not you can successfully set up shop or go after new business. The old Chinese saying, “The mountains are high and the emperor is far away” is no less certain in China business today. What Beijing proclaims as law is open to interpretation – or even refusal to comply – elsewhere.

What greases those administrators’ wheels often are corrupt practices.

James McGregor’s book, One Billion Customers: Lessons from the Front Lines of Doing Business in China, suggests: “China’s modernization is aiming at ‘rule by law’ not the ‘rule of law,’ so relationships and personal power reign supreme.’

He adds: “If you decide to sell your soul and succumb to China’s corruption, get a good price and focus on charity work in your old age.”

There’s still a lot to be said for following the law in China.

We’ve done a lot on correctly reading the tea leaves in China (here, here and here) in undertaking new business because what the government decrees does matter.

But we’ve also done a lot on ways to make headway in restricted industries, like media (here and here).

Perhaps the best advice with regard to the law in China is to try to follow it like you would in a developed Western country, but don’t be a slave to it. There’s a lot of law-subverting competition out there that’s quite willing to eat you alive.

There’s no doubt about it now: London has a tough act to follow hosting the summer Games in 2012.

Indeed, the mayor of London recently said, “I think I speak for millions of people in the UK, when I say we have been dazzled, we have impressed, we have been blown away by these Beijing Games but we have not been intimidated. And in our own sweet way, without wasting taxpayers money, I am absolutely convinced that we can do just as well in 2012.”

Despite some obvious detractions, Beijing is clearly basking in the limelight right now and relishing the possibility of intimidating and “showing up” a developed country’s games - and rightfully so.

When faced with a formidable challenger, London’s mayor is sticking to his guns, and to this point being quite respectful. But what happens when doing business in China, a formidable challenger bullies you and doesn’t live up to his side of the bargain?

Steve Dickinson of China Law Blow believes that not succumbing to intimidating Chinese opponents is crucial, especially in regards to taking on the local legal system.

Mr. Dickinson recently represented a Japanese client who was owed a sum of money by a Chinese partner, but in no explicit written terms. When a new contract was agreed upon, and a specific sum of money and date of payment agreed to, Mr. Dickinson pushed for China law jurisdiction for all future proceedings should they become necessary. The Japanese client feared bias in the Chinese court system, but eventually agreed to Mr. Dickinson’s legal plan.

Mr. Dickinson continues: “As we expected, the Chinese party did not pay on the due date. We then hired a local lawyer to file suit in the hometown of the Chinese defendant and as we usually do in commercial litigation, we had the local lawyer seize assets from the defendant in a prejudgment writ of attachment. This required our client post a money bond, which we had arranged in advance using our contacts in the local bonding community. Within three weeks of our filing suit, the Chinese defendant paid all amounts owing, together with interest, court costs and attorneys’ fees.”

Had Mr. Dickinson’s firm bowed to pressure from the client and proceeded with arbitration in Hong Kong, the firm never would have been able to seize assets in prejudgment, which had the desired effect on the defendant of relinquishing payment.

Of course, leaving it to the professionals - in this case lawyers - helps when trying to overcome an intimidating bully. But ultimately, courage is a personal choice – not a consultation.

If you’re on the verge of succumbing to cowardice, check out these modified tips from eHow.com so you don’t: Read More →

Nothing brings out responsible marketing messages like big-time Olympic sponsorships.

From Exxon Mobil touting its “green” initiatives endlessly on U.S. commercial breaks, to the ubiquitous McDonald’s ads showing truly ripped athletes biting into their favorite deep-fried sandwich, Olympic tie-ins really seem to be stretching the limits of common sense.

In fact, only McDonald’s is allowed on the Olympic Green, leaving many lamenting the lack of food options, much less healthy ones.

Even golden boy Michael Phelps can’t escape some of the criticism with his decision to endorse Kellogg’s Frosted Flakes over the traditional Wheaties cereal box. With 1/3 the fiber, and 3 times the sugar, obesity experts are wondering what message this sends to kids, according to NYDailyNews.com.

Perhaps the message that a few extra zeroes on a paycheck really do make a difference.

Or maybe that life is full of contradictions?

Yes, contradictions like these are all too common in business and marketing today, and one can look to the streets of China to see a lot more of them. Even amid rising gas prices, worsening traffic, and small families, the demand for SUVs and Hummers is through the roof. Read More →

When speaking of cultural differences between China and the West, much is often made of the collectivist Asian society versus the individualistic Westerners.

But a look at some of the performances of Chinese teams in the Olympics doesn’t make a strong case for being communal today. And in many cases, Chinese aren’t.

The basketball team lost its opener to the U.S.A. even with the home crowd support of superstar Yao Ming, and the men’s soccer team is a consistent source of embarrassment. China is relying on medals in more individualistic or partner sports such as diving, gymnastics, and ping-pong in its quest for the top of the medal leaderboard.

Confucian cultural norms and traditions aren’t holding true in the sports arena, and who’s to blame?

Maybe management.

The men’s soccer team has only made it to the World Cup once, yet players are making in excess of one million yuan per year, and their playboy lifestyle is followed in the news, says the New York Times.

But it’s not just the state that is having a hard time managing teams and getting them up to a competitive, international level. Businesses have to work hard to foster an atmosphere of community in order to survive China’s human resources nightmare and thrive. Read More →