Lessons of my personal experiences

There are many questions like this in recent years — Is China’s status as the ‘’world’s factory’’ is coming to an end? as other emerging economies offering cheaper labor and rising wages dull China’s competitive edge. In fact, the availability of large labor market is just one of the many factors that have made China a manufacturing hub. The business ecosystem in China has evolved quite a lot in the last thirty years. For example Shenzhen, a city bordering Hong Kong in the south-east, has evolved as a hub for the electronics industry. It has a cultivated an ecosystem to support the manufacturing supply chain, including component manufacturers, low cost workers, a technical workforce, assembly suppliers and customers. Without a doubt, there are still a huge number of products made in China, which in reality still put China as the world’s factory among many industries.

All these appealing factors attract western companies from startups to Fortune 500 touching down in China. They either look for partnership or ODM opportunities, or select a few contract manufacturers and work together. The process sounds very straightforward when it comes to finding a partner in business. In reality, there are many stories we have heard with regard to how the businesses cannot work due to the issue from Chinese manufacturers. An Australian footwear brand Bennetts Boots failed to deliver quality products after moving its production lines to China, that has cost the company to shut down. Product quality issue, production delayed, misunderstanding in delivering services, all these issues could significantly cause major fatal failures in manufacturing, or possibly the whole business.

Not only language barriers causing miscommunication, we’ve all heard the culture difference is a one of the major factors as to why western brands or companies failed in China. The whole culture difference thing is very complicated topic as it relates to business culture, consumption culture, communication method, the ‘guaxi’ network etc. It involves political, sociological and educational, all sorts of elements to form today’s Chinese culture. It’s a deep subject to learn. To truly understand it can take a few year time’s experiences and integration to know simply the fraction of it.

A typical view of Chinese factories

A few years ago, as a young professional, I came to Pearl River Delta area, China, the region was considered as the world’s largest density of manufacturers, as well as relatively richer areas in China due to its increasing number of job opportunities in manufacturing industry. Growing up in the city in Taiwan and later studying and working in the UK, I had never been to mainland China, never imagined experiencing the so called ‘’world’s factory’’. The first few weeks was difficult. Not only could I not get used to the polluted air, all the landscape presented in front of me are these same type of height/design building rolling one block after another. You can see factory operators wearing the same shirts playing pool in the middle of the road or crouching side by side on the street while smoking. The roads are dusty all the time and the overall infrastructure is very poor. To me it was totally out of my comfort zone considering I just moved from more of a civilisation world where the air is a lot nicer and more a constructed community.

However, though, I wouldn’t be surprised if someone told me that 70% of commodity in the world were made 70km within this area. And this is something that amazed me the most. I was ready to give it a try to see what inspiration will come up. I was working as a project management role where I spoke to the client in the US on a daily basis. In the meanwhile co-ordinate with in-house factory staff and outsourcing suppliers to ensure each project is on track.

The funny thing is, although my native language is Mandarin, sometime I found it harder to communicate with Chinese manufacturer side than my clients in the US; and I was aware that this has nothing to do with the language. It’s the culture thing.

An injection molding factory in China, me and our clients

Over the past few years’ experiences in dealing with Chinese suppliers and manufacturers, I have learned how to proceed things faster and more accurately with them when it comes to doing business together. Also, as a Taiwanese, sharing a common spoken language help realise quickly what’s on earth so different when working with Chinese people.