The first thing you do as an expat when arriving in China (or any country), is look for a home! Finding a home in China is easy. There are numerous property agents located at most street corners or outside apartment buildings. The only issue is that if you don't speak Mandarin or Cantonese, then you may need to take a friend or colleague with you. Most Western firms that send out expats have an HR personal responsible for the expats and they will take care of showing you the homes. The next big process is getting the medical, work permit and the resident visa- all of which can take at least two months to fully complete. So, if you are thinking of coming to China and work here, then be prepared to go through the long process of first settling into your new life.
The only major risk is going to be: if you are still in the probation period (which is at least 3-6 months), then you may risk renting a flat for a year if you don't pass your probation period (that's IF you decide not to stay in China or if you decide to move to another city in China). Most landlords require you to sign a one-year lease with a two month deposit - in Beijing you may be required to give a six-month rental deposit up front. So think very carefully of the financial and personal risks you may face if things don't go as planned with your job. China is NOT cheap anymore.
The cost of rental in Shenzhen is on the increase. Back in 2009, a one-bedroom home with a 39sqm would have been around 2,500RMB a month (250 GBP), however in 2015 it is around 4,500 RMB a month (approx. 450 GBP per month). For a two-bedroom home in a nice area, you are looking at paying around 6,500RMB a month: Photo Copyright Navjot Singh
Just when I thought that I would be back in the UK for good, I was whisked back to Shenzhen (China) for a short fixed-term project for a company called DJI, the world's leading manufacturer of civilian drones.
After arriving at Hong Kong airport in the afternoon (around 4pm), it took me a further two hours to cross the border. Usually it should take around an hour, but had to wait for a coach with my four pieces of luggage (each weighing 23kg). Having left cold London, I arrived in a hot, humid and wet (raining) Shenzhen. My first meal was a chicken with rice from the local Yoshinoya Japanese restaurant in Ke Ji Yuan: Photo Copyright Navjot Singh
Western firms that want to get their ‘Made in China’ products checked for quality need to scoop out the territory and choose reliable business partners at the ground level.
Perhaps the most talked about topic of the 21st century in the financial and manufacturing industries has been the emergence of China's booming economy, particularly in relation to global commodity markets. China is now not just the world's second largest economy but also a country undergoing a myriad of cultural and economic changes at a dizzying pace. These days, for newcomers to China, it doesn't take long to realise that the cost of living in a tier-one city, such as Shanghai and Beijing for example, is perhaps not much different from, say London or Singapore. This may also be true for second-tier cities that not many Westerners may have heard about, such as, for example, Guangzhou, Wuhan, Shenzhen, Chengdu and Chongqing.
Of course, it goes without saying that you are still going to find a few towns and rural places where you can live a relatively inexpensive lifestyle compared to the bigger cities (Guiyang, the provincial capital of Guizhou Province is a prime example); however, on the whole, the country is not cheap anymore. Nevertheless, there is still one aspect of this booming economy that has most Western firms worried and one that is taken very seriously. I am talking about the quality control checks done on 'Made in China' products and especially the condition of the factories where those products are manufactured before they are exported and end up in luxury high-street stores in the West. At the same time, China is at a crossroads where the stance is slowly moving away from its image as a global hub full of 'sweatshops' to a consumer society.
In recent years, China has considerably shifted from being a global manufacturing hub to one that caters for value-added sectors, such as in the innovation and design industry. Because land is becoming expensive in tier-one cities, the vast majority of manufacturers (both local and Western firms) are relocating to cities where land is cheaper. This has resulted in some cases where safety or the quality of the products has been compromised because manufacturers want to save costs.
Nevertheless, many supply chain professionals in the West remain unusually unalarmed. "Oh, don't worry, everything will be fine," said one American importer at the Canton Trade Fair in Guangzhou earlier this year. "As the country continues to develop, the quality of its products and the factory conditions will improve."
For a foreign company that is purchasing goods from China, knowing some of the major business principles that can determine the difference between success and failure in the quality of the products received across the globe, is crucial even before proceeding with the order online or on the phone. When choosing factories or companies, executives need to work out how the capital, product and labour markets work (or don't work) in the target country; and with China, this is absolute crucial.
Sure, there are fake or bad quality products available in every country; however, the fact remains that the spotlight is especially put more on China. A number of high-profile cases of poor quality control in China in the past few years have raised question about how companies, both foreign and Chinese, can make sure that goods they produce in or source from China meet international quality, health and safety requirements.
China, being the emerging market that it is, provides unique challenges, but they can be addressed, and eventually overcome, by a thorough, well prepared and well researched entry strategy. There is a whole range of advice about finding the right factories or checking the QC of products, provided by chambers of commerce, embassies, the home country's trade and industry organisations, expatriate blogs and groups, as well as other corporate professionals who have lived and worked in the host country.
It's 2015 and while China has come a long way in the past 12 years or so and is pledging to clean up the image of a country that was known widely to manufacture fake products, there are still a few loopholes exposed here and there.
Use every source available to find out about the local factory. Check references, particularly those of other foreign firms who have operated there. Hire a local lawyer or investigator to confirm that a potential local company or factory is in good standing with all QC checks, creditors and taxing authorities.
If the destination is Shanghai or Chongqing, hiring a lawyer in Dalian or Macau will probably not be productive. It is best to find someone you can trust with contacts in the location where the potential factory or company conducts their manufacturing.
In comparison, the factory information structure in a socialist society, such as China, is moderately frail. Workers cannot form independent trade unions in the labour market like in the West, which affects wage levels. Sound advice like this is priceless before entering this massive Asian dragon.
Most Western businesses are unfamiliar with their industry markets in emerging economies, such as China. Therefore, it is vital that business owners and importers, especially newcomers to China, do not just look for advice from their management consultants, as the view from the ivory towers in London sometimes looks rather different from the reality on the ground in, say the outfields of Tianjin. Getting it right at the end means getting it right at the start; therefore preparation is crucial to success.
The quality and reliability of the local partner are two key components of success in China. Prior to commencing business with a factory, first establish what precisely is needed from them. Foreign companies need a local partner who is reliable, understanding, co-operative and trustworthy. They must also have a global mindset.
The legal systems in China are often not in line with international standards or with Western laws. Local laws are often biased towards their governments and absent from free markets. Therefore any issues with your products relating to bad quality can create a complicated situation and court cases can take months, if not years, and often they are corrupt - though in recent years, both India and China have been trying to clean this stained image.
Form takes preference over substance in ways completely unfamiliar to those in China. One minor methodological miscue on the foreign company’s part might negate its right to sue the local partner later on. In unfortunate circumstances it may even lead to the foreign company being expelled from the country, while its assets remain.
A good partner may not necessarily have political connections. Usually as a business partner it is best practice not to be engaged politically for any non-business related issues, as this can prove to be risky for the executives and their business.
Put in the personal time - hands down is the most important facet to doing business in China is building relationships. This is important in the West too, but not to the same degree. If you try hide behind emails and text messages in China you will get nowhere fast. Pick up the phone more often than you are comfortable with, and meet people face-to-face on every possible occasion. As soon as you do, you will start to notice the effects immediately.
Visiting the Factory Premises
Paying a visit to the manufacturing facility of the company in China you wish to source from is an essential first step of quality control. By going to the factory in person along with local experts who understand the product in detail will give you a first-hand perspective of what the conditions are like at the ground level. It may be worthwhile to take QC professionals who can help you to carry out detailed technical and non-technical checks.
Andrew Reich*, CEO and Founder of InTouch Services based in the southern Chinese city of Shenzhen, lives by the word when it comes to checking the quality of ‘Made in China’ products. Reich, who started the company nine years ago with the help of a few American investors, says: “One of the most central concerns faced by Western businesses making strategic decisions in China is obtaining accurate market information. I am sometimes shocked at the attitude of many importers of ‘Made in China’ products in the US because they buy in bulk without knowing the true production history of the product’s lifecycle and then later come back with complaints when the products don’t work properly or are unsafe for domestic usage. If foreign executives can carry out the research for QC checks in Chinese factories before they enter China then a lot of hassle can be avoided from their part”.
It’s important to get to know potential partners because if they are legitimate and want to work with you for the long term, they will expect you to want to get to know them better and think nothing of your wanting multiple meetings before signing any deal to export ‘Made in China’ goods. It may also be very useful to have your own people on the ground along with local QC inspectors, leading, training and instructing the local staff on business methods, business ethics, efficiency and quality control, among other things. Another approach is to have one local manager working alongside an expat manager to make joint decisions and avoid any cultural differences and conflicts in the workplace.
Reich goes on to say: “People don’t realise the challenges involved but are just thinking about how much money they can make from coming to China, and it really is not that simple. China is an enormous, complex and unique market. The market information configuration about quality control is such that businesses have often been operating in their economies long enough to have built up a strong understanding and acceptance of their markets”.
Monitoring the manufacturing process is crucial yet challenging when you have limited time during a factory visit, therefore it is best to rely on a well-known and trusted quality control company that can place professionals on your behalf to monitor the manufacturing process, right throughout the whole product lifecycle.
Be careful and know the local rules and regulations prior to entering the country. The easiest way for a local competitor to force a foreign company out is for the company to engage in something illegal, although in some cases that may not be deemed ‘illegal’ in the company’s home country.
For your peace of mind, it’s probably in your best of interests to request relevant references and customer endorsements from the manufacturers. This will enable you to gain more detailed knowledge and trust about the quality of the company’s manufacturing process.
Many executives find that if a project or task takes twice as long in the developed world, then most likely it will take at least four times that in emerging markets. The challenge lies in the fact that business hosts in China will treat a foreign executive both as a businessperson and a professional coach because they will want to learn about how the company operates in Western economies.
For the foreign executive, patience will be tested to the limit, especially if he or she has been sent to manage a start-up from scratch. Nevertheless, patience will be required in abundance because it could take many months before there is any sign of return on investment for the business.
Engaging in quality control checks in China means taking nothing for granted because the things a Westerner is accustomed to, or any creature comforts that one is used to back home, might not exist in the emerging market. Culture shock will not only affect an executive’s personal lifestyle, but the corporate one too, and this is where an expat needs to find the balance to lead a successful life in an emerging market.
China is not the West, and it's really important to embrace the cultural differences, not alienate yourself because of them. For example, I've found that whereas foreigners place more emphasis on things like contracts and punctuality, my Chinese friends and colleagues are more focused on building strong relationships and trust. If you're a foreigner trying to do business in China, don't get caught up on things that are only important to the Western mentality. Sometimes you need to "let go" of your previous ideals in order to find new opportunities in China.
At the same time, it's still OK to be different. Your Chinese friends and colleagues understand that you come from a different culture, and that naturally you are going to act and display characteristics that are different from theirs. Don't be shy about saying what you feel and explaining the things that are important to you and your culture, and why. Others will appreciate this education.
It is absolutely imperative that the manufacturer should be clear from your communications about your company’s specific requirements for quality standards. This will result from your company building a long-standing professional relationship and one that eliminates all the negativities that come along with cultural differences and misunderstandings.
* Andrew Reich is the CEO of InTouch Manufacturing Services, a QC firm that performs product inspections and factory audits in China for US and EU clients. Andrew also maintains a QC-related blog, Quality Wars.
Half dragon, half horse...the Chinese mythical birds have so much power that they mange to fly through buildings...magic!
My article on my favorite city, Shenzhen, in the March issue of NIHAO- the in-flight magazine for China Southern Airlines. Go there, and see it as soon as you can...it's awesome!
Just like as in the majority of Asian cultures, one of the events that Chinese people like to splash out their wealth on are weddings (and birthdays too). The average price of a Chinese wedding can run into hundreds of thousands of Renmenbi. Seen here is a lavish wedding party taking place at The Ritz-Carlton, Shenzhen.
Dubai-based Emirates Airline placed an order for 150 of Boeing's new 777 mini-jumbos (nicknamed 777-X), in a $76bn (£47bn) deal at the 2013 Dubai Air Show. These will be a combination of 35 Boeing 777-8Xs and 115 Boeing 777-9Xs; plus 50 purchase rights. It is the single largest aircraft order by value in the history of US commercial aviation, creating and supporting an estimated 436,000 jobs in the US. Emirates currently operates 131 Boeing 777s and has a further 214 Boeing 777s on order. The 777-X, which has FOLD-UP carbon fibre wing tips will be delivered in 2020 (without the bendy wings, the wingspan is about the same as the Airbus A380).
Emirates has also ordered FIFTY Airbus A380s, in a deal worth $23 billion. The airline is already the biggest customer of the A380.
So where will they be parked? Dubai is a tiny place, and indeed, so is it’s airport. The answer is going to be ‘Dubai World Central - Al Maktoum International Airport’. The airport is planned to become the world's largest passenger and cargo hub, ten times larger than the current Dubai International Airport which covers an area of 29 square kilometres (7,200 acres) and Dubai Cargo Village combined. One terminal is going to be for ALL THE OTHER AIRLINES except Emirates (& Qantas Airways two daily appearances). The latter two will enjoy having Terminals A, B & C to themselves. When they move to DXB World - it'll be in one hit, in about 2020 - when the first 777-X arrives.
Meanwhile, all the freight aircraft and the VIP aircraft will be sent to DXB World before the runway works next year (DXB World is going to have FIVE runways). So, now you know where they’re gonna park the 140 A380s, 150 777xs, 100 777s and 70 A350s as from 2020.
While the aviation industry is suffering financially in the Americas and Europe, it is booming in the Asia Pacific and Middle Eastern regions. Huge airport construction projects are well under way in cities such as Shenzhen (new airport terminal will open on 28th November), Doha, Dubai, Mumbai, Delhi, Kunming, and many others (mostly in China and the Middle East).
One of the key tourist attractions in Shenzhen is 'Window of the World', a 480,000-square-meter miniature 'global village' theme park. The theme park is located close to the affluent 'Overseas Chinese Town' (华侨城) where you are most likely to find some villas worth hundreds of millions (in USD not CNY).
At the theme park, skyscrapers peek over the splendid view of the Tower of London, and the Champs Elysees. During a half day tour, visitors can see the Statue of Liberty and Sydney Harbor Bridge, then take a leisurely stroll to the Taj Mahal, and then pay a visit to the Pyramids which are a stone throw's away. Worth a visit if you are here.
It is safe to say that the majority of the world has come to accept that China is not cheap anymore. However, there are still some people who treat her as a country that is made up of sweatshops. Those people are living in the past because this country has developed quickly.
While there may be some local companies that would be considered as a typical 'sweatshop', the majority of factories that are foreign owned and operated are a far cry away from the 'sweatshop' image that many Westerners may have of factories that manufacture your 'Made in China' goods.
I was fortunate to have been given a behind the scenes tour of a factory that produces bottles and nasal sprays for the medical/retail industry. It was by no means a sweatshop. This particular factory (which I am not allowed to name for legal reasons) had pool tables, air conditioned rooms, air purifying shower rooms for all the staff, healthy complimentary food (3 meals a day), and even a yoga room that serves as an after-work centre of reflection for overburdened employees.
The Taiwanese company Foxconn is responsible for manufacturing the majority of Apple Corporation's products. Their manufacturing plant in Bantian (Shenzhen) which makes the majority (over 90%) of your favorite Apple products is perhaps the most advanced plant I have seen anywhere - I can only talk from experience as as a former Electronic Engineer who used to work in wafer fab plants in the U.K. and China - Foxconn is no less to them.
As China becomes expensive and as her economy continues to increase at a respectably dizzying pace, I personally believe that the amazing twist would be when the world starts to really feel the strength of the Renmenbi (I think it is already hurting the Pound and the US Dollar).
While the world's media commented on how destructive typhoon Usagi was; in Shenzhen and Hong Kong it hardly felt as if a typhoon had arrived. There was plenty of rain and wind, but nothing compared to what one may define as a typhoon. Usagi - which means rabbit in Japanese - had produced winds of 165 km/h (103 mph) as it closed in on China's densely populated Pearl River Delta.
Sadly 25 souls lost their lives in Guangdong Province (including 3 sailors who went fishing from Xiaoshan Island near Taishan - but never returned and were never found). What the media failed to mention to the world is that Guangdong Province is not tiny as they made it out to be. It is just over 2/3 the size of the U.K. (Guangdong Province is 177,900 km² and the U.K. is 243,610 km²), and so when the media mentions that typhoon Usagi hit Guangdong Province, in fact it did not hit the whole of the province but a portion of the province that is close to the sea (very close to the southern part near Hainan Island, and towards the Vietnam Border).
Thankfully there was minimal damage in Shenzhen, and Hong Kong. I live in Futian District, and there was hardly any damage done, and no floods. In fact, a thunder storm which we experience about 2 weeks ago was worse than the weather we experienced last night
Typhoon Usagi, which is predicted to be the most powerful typhoon of 2013, is set to drench Southern China with a month's rainfall in just a few days. The typhoon has made it's way in from the Philippines, and Taiwan where it caused severe destruction.
Thankfully my only experience of a close enough encounter of such a fierce storm was the hurricane that hit the United Kingdom in 1987. I clearly remember it as if it was yesterday. So when I read the news reports that a bigger and much stronger storm was heading right towards Shenzhen, I was all ready and prepared for the worst.
Typhoon Usagi was over 1000km (620 miles) in diameter. Winds of up to 180 km/h (110 mph) were recorded in some areas, toppling trees and blowing cars off roads. Its victims drowned or were hit by debris.
With such unstable air, sees seemingly innocent Strato Cumumlous clouds suddenly trigger into thunderstorms - rising faster than your average elevator. They take around 20 minutes to build - are active for about 20 minutes and then dissipate into high level cirrus clouds and low level stratus clouds. Scary stuff, and no pilot should fly into them.
Typhoons are common during the summer in parts of South, South-East, and East Asia, where the warm moist air and low pressure conditions enable tropical cyclones to form. It was clear that the average person on the street was hit hard. Shenzheners started panicking and all the supermarket shelves were almost EMPTY on the eve of the storm.
I took the below two photos on the eve of the typhoon approaching Shenzhen. The only indication that a storm was approaching our city was the strong breeze which interrupted the otherwise tropically warm and humid weather that Shenzhen experiences at this time of the year.
Hundreds of flights from Guangzhou, Shenzhen, and Hong Kong have been cancelled. The normally active Nanshan Heliport, which has daily shuttle helicopter flights that take oil and gas workers to the oil platforms in the South China Sea, was quiet.
The future of Shenzhen (and China)? Assured...if traffic is an indicator. These two photos are NOT taken during the morning or evening rush hour. The above photo was taken at around 2pm, and the below photo at around 9pm. With the number of cars in China, traffic jams stretching for miles on the roads of major Chinese cities have become the norm (at anytime of the day). Ironically, most roads during the National Holidays (with the Mid-Autumn festival this week), are almost deserted...(as everyone is on holiday away back to their hometowns, or just whiling away their time at home...)
...shopping in Sainsbury's supermarket in Croydon...and he's emptied the shelves of ALL the cereal bars, crunchy nut corn flakes, and PG Tips teabags (oh, and Nutella jars as well...which costs at least RMB75/GBP£8 a jar in China...in the UK it costs around £2.30 a jar (about RMB20))! Shopping for groceries never felt so good (!)
Yes, in Hong Kong, Suzhou, Shanghai, and other Chinese cities with an expat population we can get such goods, but they are mostly imported (i.e. they've most probably have been on a container ship for at least 3 months), and cost at least 3 or 4 times the price we pay in the U.K. (Tesco in China is nothing like the Tesco in the U.K. - it's localized to the Chinese consumer).
When you are living for 90% of the year in a country where not many local retailers understand why foreigners drink black tea with milk at 4pm with cakes and biscuits (I can't live without it!), and why we eat cereal with milk every morning, your homesick body craves for such stuff when living 6,000 miles away (my Chinese/Australian/American and other expat friends who live in the U.K. do the same when they go back home for THEIR holidays to their countries).
Opened to the public around the latter part of 2006, Coastal City is a nice modern shopping area in Shenzhen's Nanshan District. But you would never know that before it was built this land was all part of Shenzhen Bay, and the surrounding seabed. There was nothing here except pebbles, sand and water. The roads, luxury shopping mall, and the Kempinski Hotel Shenzhen are all built on the former seabed. This is where Shenzhen's new Middle -Class come to while away their evenings to dine and wine at fine restaurants!
From my experience, in China if a vehicle has been involved in an accident (either in a crash or has broken down due to mechanical failure for example), then the driver will seldom move the car to the side of the road, Instead what you normally find is that the damaged vehicle will remain at the exact spot where the accident happened until the police arrive. While this may be a good thing when trying to claim back insurance (and proof for the police), it sure is an annoying and excruciating experience for the other drivers who have to wait for the drama to unfold. Took this photo from the Horizon Club at the Shangri-La, Shenzhen. The taxi on the far left has broken down, and the driver only moved it to the side once the police arrived about 35 minutes later! I'd be interested to know if other countries experience this type of situation too.
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