Business Advice - Common Problems in Emerging Markets

In this business tv show, the experts tell why anticipating issues early is the smart move. find out what to look out for from Stephen Philips, Chief Executive, China-Britain Business Council, Ian Coleman, Partner, Head of emerging markets, PricewaterhouseCoopers UK, Chris Runckel, President, Runckel and Associates, Chee Weng Lee, Tax Partner, Deloitte, and Tony Dickel, CEO, MRI China.

Stephen Philips: China offers huge opportunity but it remains one of the most challenging places to do business in the world.

Chris Runckel: I think on the surface things can often look very similar but when you although get into the actual agreement and how things really work in practice instead of theory I think you really find that business is still quite different in many respects.

Tony Dickel: In China, particularly in the mainland contracts are less important than relationships so it’s a Guanxi basis idea. Guanxi means connections in Chinese and the culture is really driven by connections and the culture really kind of… the moral code that exists between someone’s extended connections replaces the contractual code that tends to govern what goes on in the West.

Chris Runckel: Dealing with Chinese is very different than dealing with Vietnamese or dealing with Thai’s or Koreans, Malaysians, each one of them has differences. Also in many of these countries you’re dealing with not only say in the case of Thailand you’re dealing with Thai’s but so much of the business was originally started and has been monopolised to some extent by Chinese Thai’s so you’re dealing with a sub set really of the larger population and you have to keep that in mind when you’re dealing with them.

Chee Weng Lee: Think globally but you should act locally and the reason I say that is as a foreign investor coming in and you are new to the culture, when you ask one of your employees or your joint venture partners, in the way you talk with them, in the way you interact with them, you have to sometimes be careful with the choice of words you use, whether you are dressed properly. You wouldn’t want to see a joint venture partner on the first day wearing a black tie, because black to the Chinese is not a good colour. Maybe to a different culture black is a good colour. So even from the tact perspective, because china is so big, and even though china has one law, the practices in different regions may be different, so you really have to talk to your advisors, talk to your people ion the ground, and get to learn from their experiences before you really act on something.

Ian Coleman: I do think that we will see some fairly spectacular failures as well as successes because we are still in relatively early days in regards to the journey of exploration that many western companies are experiencing as they look at these emerging markets. It seems inconceivable to me that that will go completely smoothly.

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