|View from my Hotel in Shanghai|
I've often described business here as an episode of TV show Madmen. Done in smoke filled rooms with significant quantities of liquor flowing freely. A business scene dominated by influence. Who you know and who you can introduce are central. A social network based on degrees of separation in the most human of ways. Your social graph in China is your currency and how you leverage it is key to your success here.
Another observation is that money and access to it is extremely accessible. This is thanks in part to strong government support for international joint ventures (such of my previous JV) makes funding potentially much more attainable. In order to be successful in this market requires that government (or at least it's money) plays a central role in your business venture. It's not a relationship based on control so much as support. Assuming your ok with the rules of engagement, the opportunities are vast. But there are caveats, IP controls are lacking and the Chinese are highly dependent on foreign innovation and technology to offset a lack of home grown options. I believe a big reason for the heavy investment in these types of foreign joint ventures is a kind of indirect flow of knowledge. It's not a blatant copying of IP so much as a loose knowledge transfer. Understand that a international joint venture is essentially a training vehicle. Once you understand this, you can properly address the market and the opportunities it holds. Mainly access to one of the largest fastest growing markets on the planet today. A planet currently dominated by stagnating growth in the established western markets. What's going on in Europe these days? Not much. Of course with risk comes great reward. In my case the ability to build and ultimately sell a venture in less a year and half. Try that in Canada? Unlikely.
I'll be posting more details of my discoveries in the coming days, in the mean time. Some food for thought.