Truth or Dare: Do you still want to enter the China market?

If you know the truth, you won’t dare. I won’t, for at least the next 10 years.

China boasts of 1.3billion consumers. That’s 4 times larger than US. Even with that, I have my reservations of doing any business there.

Let me share some personal observations, and you can decide if you’d want to bring your business in.

1. Corruption will be your norm

Their system is designed for cheating.

Something as simple as buying a ferry ticket unveiled a decaying core. I wanted to get a ferry ticket from Xiamen to Gulang Island which was just 500m away. The official ticket booth wrote that each ticket will be RMB 35 for foreigners (RMB 8 for locals), but there is no way anyone can get these tickets. They don’t exist (Read: Why Hawaii, when you can Gulang Island). Even the locals who booked online, never saw their reserved tickets. There was a sign next to the official ticket booth stating: “Do not purchase from the black market peddlers”. Yet, to get to the island, you must go through these illegal peddlers. In case you need a Chinese ID, they offer to lend fake IDs too. All these happened while policemen, or at least some guys in uniform, patrolled the area. By determination, I got to the island after transiting through 3 ferry terminals.

On paper, all is well. There’s an official ticket booth. There’re police officers. But they do nothing they are supposed to do.

A straightforward ferry ride of 5mins, took 3 detours and 3 hours with a ticket costing 3X higher than the official price.

This is the first warning.

2. Your consumers have no credit

We went to get a telephone line (they said they didn’t have prepaid SIM cards), and we must pay 3 months worth of bills up front. We went to a high-end shopping mall at the FINANCIAL DISTRICT (isn’t it where all processes are in place for an international crowd), and to place your kid (or yourself, if you still want some fun) at the playground, you must pay 15 entry coupons upfront. To shop on their major online stores, you must put cash in their e-wallet first because they don’t accept credit cards.

This means, if you want to do your business there, you need to know that your customers will most likely not pay you. This market lacks credit.

3. You need to buy your way through

Cheating isn’t just a consumer issue. Your staff will cheat you, your suppliers will cheat you, the government administrators will cheat you.

I was in China assigned with a known chauffeur. He remains a chauffeur because he wasn’t selected to pass his civil police entrance test. Despite having the best physique score, those who can bribe will get in. In fact, he serves a family who bought the transport authority’s officials banquet dinners, cigarettes, and other goodies like subsidising the official’s son to study in Singapore, to help their own son get an official driving license. The son showed up at the test centre, knew nothing about what he will be tested, but got his license. Don’t ask me how. The family also bought an authorised Permanent Residence visa for the son so that he gets all the PR benefits despite not contributing the full PR criteria. These are basic things about ability and eligibility.

How else can we trust who we can engage and hire in China?

4. The sick Fapiao (, receipt or invoice) syndrome: Tax evasion as a mode to maintain competitiveness

Lastly, your fellow business competitors will cheat too.

It’s prevalent in China to collect all sorts of invoices, aka Fa-piao, to charge as company expenses and thus evade profit tax. A distant business host told me to pass him all my receipts for him to claim from his own company. The invoices can be from supermarts for tissue paper to food items (what?), to as ridiculous as having an invoice booklet from the bookstore where you can write the receipts for yourself. I feel how torn this teacher felt when she was told to collect Fapiaos while working in China. A teacher! Why make a teacher, who needs to nurture our kids, cheat. Why. (Read Straits Times: The runaround to evade tax in China)

This forces you into a slippery slope of cheating. If you don’t cheat, you’ll be punished for being a clean and honest business, while the cheaters get ahead of you.

I won’t want to deal with China, at least for the next 10 years

I’m not being naive to say that this only happens in China. Corruption happens everywhere in their own manner. However, being corrupted should be something secret, something shameful. Yet, China allows corruption to happen too easily, and too pervasively even to a layman. The worst is they’ve accepted it as a proud norm (i.e. Look, I’m CAPABLE (sic) of bribing and evading tax). Weigh your costs and benefits, and manage the risks well. Enter China if you’re ready to battle the giant filth ball.

Look out for these interesting observations while you’re traveling in China next time.

Will you enter?


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Click: WHY HAWAII, WHEN YOU CAN GULANG ISLAND
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Click: A SECRET PART OF SEOUL WHERE THEY DON’T SPEAK ENGLISH ANYMORE. Praying at the peak: I thought he walked out of a movie. That white hair and white traditional linen hanbok.

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