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Doing business in China

Christine St Anne  |  31 Jan 2013Text size  Decrease  Increase  |  

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Christine St Anne is Morningstar's online editor.


A business dinner in China is often followed up by an invitation to san bu - a short stroll - with important guests. This post-dinner walk it not only believed to be good for digestion, but it allows the host to talk in private, and importantly, shows the host as being considerate of his/her guests.

This walk may simply take guests back to their hotel - even if it is 10 or 15 minutes away. At the very least, the host must accompany the guests to the pavement and ensure they are safely in a taxi.

This is one of many advice "bites" offered by author and chief executive of Guppy Traders, Daryl Guppy, in his latest book titled China Business Bites.

Guppy, who sits on the board of the Australia China Business Council and provides support for chief ministers and cabinet ministers, has provided a captivating insight into doing business in China.

Like a Chinese banquet made up of a range of dishes, Guppy covers a range of areas that businesses need to look at when working in China, including people, language and the role of host and guest.

The spectacular growth of China has been the big story of the last decade - and was a big part of why Australia did not slip deeper into the global financial crisis. Doing business in China is now a given if a company wants tap into a growing part of the region.

Australia's mining giants have been the most notable companies that have tapped into the region, but non-resource companies including Blackmores (BKL) and Brambles (BXB) are expanding into China, while Crown (CWN) and Echo Entertainment (EGP) are targeting Chinese consumers for their gambling empires.

But there is an art and fine balance to conducting trade in China. Claims around corruption and espionage continue to be associated with business dealings in the country.

It was only back in 2011 when a WikiLeaks cable revealed that BHP Billiton (BHP) chief Marius Kloppers had offered to share information about China with the US on the back of concerns about espionage from China. It was one of the key reasons why BHP pushed market-clearing practices.

Two years later and such concerns remain. This week, Australian businessman Carl Mather became the fifth Australian to be imprisoned in China over a business dispute.

While there are fears over espionage and corruption, Guppy says it would appear there is more involved in that case than what has been presented to the Australian media.