The China Experience

The challenges of working in China are numerous. There are cultural issues, language and general communication issues, and even something as basic as dealing with time zone differences. If you travel there as part of business, there are many other challenges related to obtaining the necessary travel documents. However, once you make it through the initial maze of bureaucracy and lack of familiarity, working in China can be a very rewarding experience.

My history in China business dealings is rather unique. While most U.S. businesses are aggressively seeking opportunities to break into a market of over a billion consumers, I was in the unusual situation of being approached by a Chinese company looking for a U.S. partner. During a 2003 trade show in Las Vegas, I was approached by a senior manager with Beijing Bowei Airport Support (BBAS).

BBAS was responsible for the maintenance of the airport, as well as the manufacturing of much of the equipment utilized by the airport. BBAS was also a sister company of the organization that owned the Beijing Capital International Airport, as was Civil Airport Management Company, Ltd. (CAMC), which was in the process of acquiring up to 40 small and medium-sized airports from China’s Central Government. CAMC was seeking a U.S. partner to assist with this acquisition, primarily in evaluating the airports as to the potential each offered. In addition, I was to assist with integrating them into a viable business model upon transfer from the Central Government.

The expediency of my participation in the aviation business world in China was very unique, especially by their standards. While business relationships in the U.S. are often forged over a single meeting or lunch, this is not the case in China. Typical business relationships in China are developed over a long period of meetings and correspondence, sometimes spanning six to 12 months. Even if one is invited for an evening of karaoke with management, that does not mean that a deal will be reached as a result. The building of trust is a long process in the Chinese business culture, which is why my situation was so unique. From the time that I was first approached to the time that I was in Beijing meeting senior management and signing a long-term agreement, was less than two months. I can guarantee that from discussions with other U.S. businessmen that I met there, as well as conversations with U.S. government officials, I was the exception to the rule.

Over the next four years, I was traveling to Beijing on a regular basis. Many of these trips would include day-trips to outlying airports that were being considered by the group, as well as a few overnight trips to other locations. A typical day in Beijing consisted of several meetings with senior management officials, as well as attending weekly staff meetings. The typical day would consist of being picked up at my hotel around 9:00 a.m. and driven to the company’s headquarters. We would meet for a couple of hours, and then have lunch. Lunches were generally long affairs with enough food to feed a high school baseball team . Lunch usually was a mix of business discussions, with some limited personal talk. Very little personal information is offered in business meetings.

Seating at lunches is based upon seniority and a specific “pattern” with guests seated immediately next to the most senior person there. Everyone defers to seniority, with the junior staff generally following a “do not speak unless spoken to” attitude. Anyone lucky enough to attend some type of signing ceremony or management transition celebration (I attended several) will enjoy a continuous celebration that includes a requirement for everyone to propose a toast to the honoree(s).

One benefit of working in the aviation business in China is that most people, at least upper management, speak a reasonable level of English. And, most understand some amount of English, but aren’t comfortable attempting to speak it in return. As a result, it’s not necessary to learn Chinese in order to do business there, but it does help to learn some of the basic words or phrases as a courtesy to your hosts. Knowing a few words such as “nee how” (hello) and “sheh sheh” (thank you) can take one a long way.

Outside of the building relationships, the most important things to know about doing business in China are the importance of honor, the attitude regarding time, and the best approach to problem-solving. As with most businesses, it is very important to show a high level of respect for seniority and authority. While one may clearly see that there are better ways to reach a goal or solve a problem, it’s important to make sure that one is very careful in presenting ideas in a way that allows others to follow appropriate protocols, or even to “save face” if there were errors in processes or procedures.

I found people to be very accepting and appreciative of new and innovative ideas; but it was still important that those ideas were presented in a certain manner. In initial staff meetings I attended, there was significant fascination with capitalism and market-based ideas designed to increase revenues and manage expenses.

The second item noted was the attitude regarding time. I mention this because “hurry up and wait” seems to be alive and well in China’s business culture. While they are very appreciative of new ideas, concepts, and ways to improve processes and procedures, they do not make decisions in a hasty manner. Consistent with the approach to building business relationships, the decisionmaking process is often drawn out while all possible scenarios and alternatives are evaluated, and all pertinent parties are consulted. Because of this approach, it’s important to be careful in the wording of deadlines and delivery dates in any proposal. Submit a proposal in August and indicate a delivery date by the end of the year, even if a notice-to-proceed is not issued until mid-October, there is an expectation that the delivery date of December 31 is still viable.

China’s greatest resource is people — billions ready and willing to do more than a day’s work for what we would consider much less than a day’s reasonable wage. As a result, the answer to many of China’s perceived aviation problems are to “throw manpower at it.” At times, there was a hesitancy to address efficiency issues that would result in fewer employees doing the same job. In my experience, the typical airport maintained ten times the number of staff for a similar size/activity airport in the U.S. Much of this goes back to the time when the Central Government owned all airports and were used as employment bases, without regard to potential inefficiencies. Thus, while many recommendations regarding staffing reductions and employee cross-training were very well received, they were never implemented due to political pressures and requirements of the transition to private ownership.

Since my work with CMAC ended, I have completed many other projects throughout China for other organizations. I teamed up with an investment banker in Hong Kong to form Kompass Partnerships, Ltd., a company that pairs U.S. and Chinese aviation companies. While the opportunities for U.S. companies in China are somewhat endless, most U.S. businesses will be unable to develop a relationship with a Chinese partner due to a number of challenges. Finding the right partner is the obvious challenge; developing that relationship through the barriers of language and culture is another. Different parts of China exhibit very different cultures and business attitudes. Foods are unique in different regions, dialects vary, and the attitudes toward “outsiders” can be different. One must continuously exhibit flexibility, tolerance, patience, and most of all respect.

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Michael A. Hodges, MAI is president and CEO of Airport Business Solutions, a Tampa-based aviation valuation and consulting firm.