Blinders

I find that Americans who work in China, even the ones that have been involved in business for more than 10 years, have blinders on how things really work in China. The simple view that "I know how things work" is the exact blinders that keeps you from reaching that point. When you are American, you will always be treated with a different approach, with different information than Chinese. And this differs even for expat chinese vs. the local. Who you are automatically self selects you out of encounter with a great many portion of the business workings. A smart American is one who knows there will always be things that they know nothing of, no matter how long you've worked and no matter how hard you try. I say this because I brought in a 10-year veteran of china business CFO/COO advisor who is an American to advise on the best steps for a company that needed funding. This is a man extremely good at what he does in knowing the best way to operate a company to attract funding, but we're almost at an impasse because the CEO sees separate pathways to take when the advisor doesn't. I can tell you that if the company was a US company, the advisor would be absolutely right. You have to fix your accounting and sales so you can show increasing profit and report it on a monthly/quarterly basis to get solid private equity. Even getting loans or government grants is based on your income and income growth, but this is not the case in China. There are intricacies in dealing with the government that if you were skillful and had the right connections you can be rewarded with funding with almost no cost in stock, or reporting what was done with the money. And getting these central government funding will cause other local government funding, grants and loans to follow where previously weren't available. This is even possible for Chinese VC's. Not the VC's run by expat chinese, but truely Chinese VC's who signs the check after 7 meals of heavy drinking and only follow up if you send him a check or a request for more money. But in speaking with the American advisor, these other paths don't exist. The Chinese VC's he knows operates exactly like the ones in the US, and the government grants and loans require just as much accountability. Before you inhale a breath of shock and terror on how money can be given to a business without accountability for how it's spent, you need to understand that the chinese are simply very flexible and adaptable people who work within an imperfect/unfair system to do what they need to get done. So if you're going over to China, please remember that there will always be things you don't know or even encounter. The chinese always like to present their best face forward, knowing that and allowing for the existence of possibilities that you can't imagine will get you a long way to working with the Chinese.