Earlier quoted context omitted.
And if you are American, you are completely bound by the Foreign Corrupt Practices Act, so you can't even bribe that mobster or official. Your rule book is going to be different. Foreigners really shouldn't be starting businesses in China, the rules (or lack of them) are just not in your favor.
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Smaller Overseas Entrepreneurs Find China Too Frustrating
21–30 of 51 posts
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#22Biggest rules I've seen from working with chinese JV's; 1) Employees will attempt to steal IP and copy the business. This may happen while they are still working for you. If it's easy for your business to be stolen this way don't even bother setting up. 2) You need locals to handle staff. You're just a foreigner to be taken advantage of. They push rules and issues at you all day trying to get more. A local manager wi…
Employees will attempt to steal IP and copy the business. This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. You need locals to handle staff. You're just a foreigner to be taken advantage of. In my experience if you speak basic Chinese, personally hi…
> This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley.
Its much different. Mechanical drawings, materials processes, and electrical designs that might have taken thousands of man-hours to develop, test, and refine are actually valuable, unlike "this great app idea I came up with in the shower."
> If you are relying on security through obscurity to protect your business' viability, you're doing it wrong.
Security through obscurity refers to computer security processes. "Business by obscurity" is the industry standard, unless you think Apple, Microsoft, Coca Cola, and Wall Street traders are doing it wrong.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#23Biggest rules I've seen from working with chinese JV's; 1) Employees will attempt to steal IP and copy the business. This may happen while they are still working for you. If it's easy for your business to be stolen this way don't even bother setting up. 2) You need locals to handle staff. You're just a foreigner to be taken advantage of. They push rules and issues at you all day trying to get more. A local manager wi…
Speaking from my experiences in Shenzhen, so may be different in other cities (then again, Shenzhen is just next to Hong Kong, so it may be even worse up north) - and this feeds into your 1), 2) and 5): Nobody here speaks English. And I don't mean it like in typical Western way of "frankly, you must see that my language skills are indeed not suitably developed for this conversation" not speaking English. They'll roll…
I agree on this point, but at a cultural, not language level. It's important to understand the personal goals and challenges of employees, wherever in the world, and sometimes they're quite different.
On English in schools:
China's high school qualification requires a 2nd language, which contributes 150 points to the total score (750), at the same level as Maths and Chinese (it then gets a bit complex depending on city and stream, but around 10 subjects are usually studied in a comprehensive school). It is required to pass in order to get a high school graduation certificate.
Which is why the 9 year old can translate something.
The thing is, it's not based on speaking. It's rote memorisation of grammar rules. And hated, as there's little practical application.
On cross-cultural communication and hiring:
And foreigners often just don't get that, resulting in patronising slowing down of speaking but absolutely no change/simplification of vocabulary. Or just no adaptation. Hence the eye-rolling.
I'm in the Northeast, and it is indeed a challenge getting free-flowing conversation going with someone based on their selection itself based on paper qualifications. But it is a myth that English is a problem for the right people. Just interview for it.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#24I am an overseas entrepreneur in China. I don't consider this article to be very informative. If people invest money they shouldn't, without due diligence in environments they don't understand with partners they don't know, that doesn't reflect as much on the environment as the investor. China is very welcoming to foreign investment. Once you have done the paperwork, you can basically stay indefinitely on a work-rela…
I see too many Western news articles on China that present an us versus them attitude. Its unhealthy as commentary (if not the articles themselves) often contain undercurrents or direct statements of nationalism/racism.
In my experience trustworthy and competent employees are not any more difficult to find in China as the U.S. It does take work (and the frustrations stem from different places) but not in aggregate harder than in the U.S. Never had a bad employee in China. Never had to fire someone. Never had to discipline someone. I followed our written labor contracts and so did they.
As to people not following a written contract. It is true that you need to choose your partners carefully and manage your relationship as a written contract can often be ignored. That said, in ten years of running companies in Shanghai, every landlord I had for home and office was meticulous about following the contract. Never had a problem. I only spent four years in Chengdu and had fewer home and office leases but again, no problems.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#25Biggest rules I've seen from working with chinese JV's; 1) Employees will attempt to steal IP and copy the business. This may happen while they are still working for you. If it's easy for your business to be stolen this way don't even bother setting up. 2) You need locals to handle staff. You're just a foreigner to be taken advantage of. They push rules and issues at you all day trying to get more. A local manager wi…
Employees will attempt to steal IP and copy the business. This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. You need locals to handle staff. You're just a foreigner to be taken advantage of. In my experience if you speak basic Chinese, personally hi…
> This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong.
This is completely different. An idea itself doesn't have a lot of value without the business plan and capital to make it happen. The SV narrative is ridiculous because it has people asking for NDAs to tell you about their idea that hasn't even been incorporated yet.
What this person is referring to is the fact that employees and partner companies will take source code, blueprints and other confidential documents and attempt to sell it off or directly start competition. Your secret server sauce could show up at another company with source code, documentation, comments and everything. Many times they'll even use your logos and deliver a lesser product based on your brand name.
Flash memory is a good indicator of this - many chinese manufacturing companies have staff running off-hours manufacturing or pocketing wares that didn't pass QA for later sales. Microcontrollers also deal with this - there are several popular chips (like the FTDI usbserial interface chips) that have cheap clones made. Same with basic electronics - think back to all the replacement cables and laptop adapters you've seen with shortcuts taken in the components. There is simply no legal protection against this, and no legal recourse when it's a full company or a former staff member that does it. Especially if your partner is the nephew of a local government official. You wouldn't think it was possible, but corruption is actually worse over there.
This sort of thing happened a lot earlier in US history before corporate and industrial espionage became a thing you could legally sue over. There's actually a sort of industry built around sharing NDA'd spec sheets and documentation over there. Stealing IP is a fact of life. And you can nearly guarantee that the person who does it has a better stable of local contacts than you do.
We're also ignoring the fact that you can't even promise that the work from partner companies meets contractual obligations. Many western companies had manufacturing deals with Chinese electronics manufacturers who delivered inferior (or virus-infected) products. The Chinese milk scandal of 2008 is another sobering story of corruption covering multiple levels. Despite hundreds of thousands of victims, they just tried to ignore it and then buy their way out of it, initially.
> > You need locals to handle staff. You're just a foreigner to be taken advantage of.
> In my experience if you speak basic Chinese, personally hire and manage employees and pay and treat them fairly and offer income security, they will see you working hard and personally work hard and be extremely loyal to you, especially if you offer new skills and challenges.
With some industries, yes. Others no. There's some cultural differences that can cause a lot of friction. Public reputation (face) means a lot to people. But it's more important that others think you're honest than actually being honest. If a person with a strong reputation starts moving against you, in many cases locals and officials will side with them against you in order to curry favor. Favor trading is actually very important when doing major business over there.
It's a market that has a lot of opportunities, but the environment is so different that most attempts at an entrance just end up being swallowed up. Any attempts at redress can easily die an insignificant death mired in bureaucracy.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#26I am an overseas entrepreneur in China. I don't consider this article to be very informative. If people invest money they shouldn't, without due diligence in environments they don't understand with partners they don't know, that doesn't reflect as much on the environment as the investor. China is very welcoming to foreign investment. Once you have done the paperwork, you can basically stay indefinitely on a work-rela…
Doing business in China is definitely doing it in 'hard mode' from my experience. If you can become successful there, where contracts mean nothing and guanxi with people in power is everything, you will probably plow right through anything you find in the states.
China has 1.4 billion people. There are many that will follow a contract or work with you to adjust agreements to both parties' mutual benefit.
If you are leveraging guanxi, ask yourself why you feel it is ok to further empower a person that is causing harm to society. There are many in China that do represent your values. When you engage in guanxi, you are "feeding the dragon": empowering the wrong people and dis-empowering the right people.
note: when I say "you", I don't mean you personally.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#27Earlier quoted context omitted.
Employees will attempt to steal IP and copy the business. This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. You need locals to handle staff. You're just a foreigner to be taken advantage of. In my experience if you speak basic Chinese, personally hi…
>> Employees will attempt to steal IP and copy the business. > This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. Its much different. Mechanical drawings, materials processes, and electrical designs that might have taken thousands of man-hours to develop, test, and refine are actually valuable, unlike "this great app idea I came up with in the shower." > If…
Sure, but even these things are not valuable unless you can actually use them to start a successful rival business within a reasonable amount of time. In other words, if there are 10 idle factories tooled to copy your product for the same price or less and your only security is "nobody else has produced the same ballpark product yet" then you are walking on thin ice (even without internal bad actors), since market demand, reverse engineering and technological change will ensure your current sales run is short-lived. This was my point. Technology businesses often need a combination of reasonable speed product evolution, good client/partner relationships, adequate capital and good name and legal standing to effect a greater sense of business security. A single rogue employee is unlikely to have all of these, and thus appeal to clients.
To look at it another way, if your perspective of evil rogue employees duplicating products was correct, how do you think https://en.wikipedia.org/wiki/YKK_Group survive? There's no crown jewels to walk away with, and there is significant anti-Japanese sentiment from the Chinese government.
Security through obscurity refers to computer security processes
Much knowledge is transferable between different types of complex systems... apologies for not appealing your terminological preference.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#28Biggest rules I've seen from working with chinese JV's; 1) Employees will attempt to steal IP and copy the business. This may happen while they are still working for you. If it's easy for your business to be stolen this way don't even bother setting up. 2) You need locals to handle staff. You're just a foreigner to be taken advantage of. They push rules and issues at you all day trying to get more. A local manager wi…
Employees will attempt to steal IP and copy the business. This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. You need locals to handle staff. You're just a foreigner to be taken advantage of. In my experience if you speak basic Chinese, personally hi…
This story came from a coworker who worked in china trying to make a games business there for a year. I don't know if it was him or someone he knew.
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#29Earlier quoted context omitted.
Employees will attempt to steal IP and copy the business. This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. You need locals to handle staff. You're just a foreigner to be taken advantage of. In my experience if you speak basic Chinese, personally hi…
> > Employees will attempt to steal IP and copy the business. > This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. This is completely different. An idea itself doesn't have a lot of value without the business plan and capital to make it happen. The S…
If you rely on "secret server sauce", you are probably sunk anyway, since a half-decent reverse engineer can probably replicate your business just by looking at it as a black box system from a client's perspective.
Many times they'll even use your logos and deliver a lesser product based on your brand name.
{{citation-needed}}
Re: Smaller Overseas Entrepreneurs Find China Too Frustrating
#30Earlier quoted context omitted.
Employees will attempt to steal IP and copy the business. This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong. You need locals to handle staff. You're just a foreigner to be taken advantage of. In my experience if you speak basic Chinese, personally hi…
Let's say you are making a computer game. You've hired a team of 10 people. That team will work for you until you have a finished game, and then copy all of the source code, assets, etc and go sell the same game you just paid them to make. And it would be the majority of the staff. Maybe they'll swap out a name and few art assets to make it 'different'. And you can do shit all about it in china. This story came from…