THE CANTONESE AS A
B U S I N E S S PA R T N E R
How to do business
successfully in
Southern China
INTRO OF THE TOPIC - FEEDBACK ROUND WITH WORKSHOP
PARTICIPANTS
Who conducts business in Canton / Guangdong?
Who lives in Canton / Guangdong?
Who is Cantonese?
EXPERIENCE IN DOING BUSINESS IN CANTON
What do you know about Canton / Guangdong?
Based on your experience, how is doing business in Canton /
Guangdong different compared to other regions in China especially
compared to the North?
INTERNATIONAL EXPOSURE – MACAU & IMPLICATIONS FOR
INTERNATIONAL TRADE
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June 1523: Jorge Alvarez lands in Southern China
Erection of a port in Macau
1576: Christianity arrives in China (brought along: science & education)
1750-1840: shift of trade to Canton
Blend of Chinese & Portuguese culture
1844: legalization of gambling as alternative
INTERNATIONAL EXPOSURE – THE OPIUM WAR
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Main goods traded: opium, raw cotton, tea, silver
LIN Zexun in charge of eliminating opium trade in Canton
1839-1842: The 1st Opium War
August 29, 1842: signing of the Treaty of Nanjing
End of Guangzhou‘s monopoly as a port
Establishment of Hong Kong
INTERNATIONAL EXPOSURE – KAIPING & CANTONESE OVERSEAS
WORKERS
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Time period: 1842 – 1937
A difficult time in history: Treaty of Nanking, Taiping Rebellion (1854-1856), war
between Punti & Hakka (1856-1867), period of the warlords (1916-1926)
The „Huaqiao“ (Overseas Chinese)
Period of emigration: USA, Canada, South-East Asia
Influence of emigration & changes in the language; adaption of English terms
The „Fengfu Lou“
The purpose of the „Diaolou“
Architectural styles: Chinese, Japanese,
Mexican, US, French,…
The role of Hong Kong for Canton
INTERNATIONAL EXPOSURE – HISTORIC ROLE OF HONG KONG
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The Treaty of Nanjing (1842)
A harbor and a base for trade
The role of Hong Kong for the „Huaqiao“
ENTREPRENEURSHIP – THE ESTABLISHMENT OF SPECIAL ECONOMIC
ZONES
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1980: Establishing the SEZs: Shenzhen, Zhuhai, Shantou, Xiamen
Foreign capital
Participation of the Cantonese
Internationalization
The Japanese
GEOGRAPHICAL ASPECTS – CANTON‘S REMOTE LOCATION FAR AWAY
FROM BEIJING
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Politics in Guangdong Province
The tax issue
Integration of Canton into Beijing politics
The distance
GEOGRAPHICAL ASPECTS – THE PEARL RIVER DELTA
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Population: 42 million (#1 in the world)
Cities: Guangzhou, Foshan, Dongguan, Shenzhen, Hong Kong
GEOGRAPHICAL ASPECTS - FUNDAMENTAL CULTURAL DIFFERENCES
BETWEEN NORTH AND SOUTH & FURTHER OBSERVATIONS
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Different rituals
How Northerners think about the Southerners and vice versa
GEOGRAPHICAL DIFFERENCES BASED ON
Geography, climate, religion, social issues, trade, politics
NORTH
SOUTH
Rational / functional
Emotional
Subtility
Reputation and appearance
Barren and ferocious
Fertile and hospitable
Leadership
Traditional culture
GEOGRAPHICAL ASPECTS - FUNDAMENTAL CULTURAL DIFFERENCES
BETWEEN NORTH AND SOUTH: THE WHEAT VERSUS THE RICE EATER
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Thalham: study among 1,162 Chinese college students
TRAIN
BUS
TRACKS
火车
大巴车
轨道
Cognitive perception
NORTH
SOUTH
Wheat
Rice
Analytical mindset / individualistic
Holistic / functional relationships
Independant
Interdependant
WAYS OF DOING BUSINESS – ENCOUNTERING THE CANTONESE AND
CONTROL OF BUSINESS
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Business dealings with Cantonese
Reputation and references as an entry ticket
Self-made billionaires: 5 out of 10 China‘s richest from Guangdong
Oligopolies
Becoming rich as a foreigner in Canton
BUSINESS STRONGHOLDS IN CANTON
Why is Canton still so strong in certain fields of cheap
manufacturing such as lighting and shoes?
Heading towards high tech
Case Study 1: Choosing the right supplier (10 min)
The Flash Cooperation is a global lighting company and supplies lightings to individual
customers worldwide (B2C). To serve the market, there are sales subsidiaries in all major
markets in Europe, North America, and Australia. About 80 per cent of the lightings sold are
all produced in Zhongshan, Guangdong Province, in their own Wholly Foreign Owned
Enterprise called FlashLight. The company was bought up from local owners seven years ago.
In the last years, cost in the production is increasing above average and is putting a high
pressure to still achieve competitive prices in the sales markets. Headquarters arranges an
internal audit and finds out that material cost is too high and that major components are
sourced from exclusive suppliers. The Chinese general manager who was one of the former
owners and the purchasing team have a long and excellent relationship with the suppliers.
You confront the general manager with the current issue but even after six months, there are
no major changes in regard of bringing down the component prices. A new approach to
change the current situation has to be found.
How do deal with the current situation; what measures do you propose?
Is there a difference in dealing with such a situation in Canton compared to
certain other regions in China?
STRATEGY - Your Decision & Lesson Learnt
I T WA S G R E AT H AV I N G
YOU IN MY WORKSHOP!
WISH YOU LOTS OF
SUCCESS WITH YOUR
BUSINESS IN CANTON!
SERES Management
Rosasgasse 28/14
1120 Vienna
Austria
+43 664 188 16 99
[email protected]
www.seres-management.com