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Building relationships key to business in China

Exporting goods to China requires connections, trust and a high tolerance for alcohol

China’s changing demographics have resulted in an emergent middle class seeking imported, luxury consumer goods.

That’s good news for Jim Stewart, CEO and founder of Bench 1775 Winery. He exports his Paradise Ranch Wines and Whistler Icewines products to more than 25 countries, and China has become a regular customer.

Bench 1775’s exporting work is handled solely by Stewart, who has a background in corporate law and international business, including extensive travel within Asia. According to Stewart, doing business in China has unique challenges. Paperwork is extensive and can vary from shipment to shipment as well as between regions.

The bigger issue, however, is making connections and then determining which leads are legitimate.

“It’s hard to tell who’s real and who’s not real,” said Stewart. “It’s easy to get business leads, but they’re hard to quantify; there’s no way to conduct due diligence. That said, I run every flag up the flagpole, and have been favourably surprised on occasion.”

During his regular trips to China, Stewart spends much of his time building relationships. Eating, drinking and late nights aren’t extracurricular to business trips, they’re a mandatory part of doing business in China.

“Dinner isn’t six to eight, it’s six until midnight,” said Stewart. “It can be endless and onerous. My family is at home, miles away, while I’m conducting business over shooters of white lightning.”

Engaging in the rituals of the culture is important if business connections are to become ongoing partnerships of trust and personal accountability.

Unlike Stewart, many business owners don’t have the background in law and international relations to independently pursue business in China.

Synergy Management Group is one Vancouver-area company that helps businesses connect with the Chinese marketplace. Synergy president Jay Silverberg works with those who have no connections or roots in China. He spends considerable time in China and describes the Chinese economy as having rampant capitalism with a strong entrepreneurial spirit.

Silverberg believes local businesses can have success in China if they’re motivated to do the necessary work. Selling products or services overseas is a process and requires concentrated time and effort.

“Doing business in China requires guanxi,” said Silverberg, referring to personal relationships and personal connections. “For the Chinese, it’s not enough to know the right people; it’s also about what you give back to those connections. It’s a two-way street.”

Synergy has associates in China who are familiar with the country’s norms and expectations for business dealings, and they work to make those connections for their clients. However, business owners must still be prepared to travel regularly to China.

“Face-to-face time is critical,” said Silverberg. “In China, having a relationship is worth more than a signed deal on paper.”

“Transport, customs, mechanics are just details,” said Silverberg. “The deal is the hard part.”

Stewart of Bench 1775 Winery offers the following tips to get your business afloat in China:

•walk the trade shows in China – they’re big and frequent. Be an attendee before becoming an exhibitor;

•contact the B.C. government for current exporting requirements;

•attend local seminars for small businesses and seek out information about exporting overseas;

•strive to obtain independent references for all business contacts; and

•prepare for longer transaction cycles. •