China Business

When NOT To Fire Your "China Guy"

Terminating a China employee

Went to dinner with a Shanghai friend the other night. This is someone who has been living in China nearly twenty years and speaks fluent Mandarin and Shanghainese. He really knows China.

A couple of his stories resonated. One was about how his best client fired him. Here’s that story. My friend was tasked with making sure his client’s product was made right and delivered on time. To a large extent, this meant his role was antagonistic to that of the Chinese manufacturer. My friend constantly had to make sure the Chinese manufacturer did things a certain way, and especially that no bad product get through. To put it more bluntly, my friend was costing the Chinese manufacturer money.

The Chinese manufacturer didn’t like that and so it mounted a campaign to get him fired.

For months, the Chinese manufacturer would tell my friend’s client of how my friend didn’t know China, didn’t know the product, and wasn’t doing a good job. These comments were the softening blows.

Then one day, the Chinese manufacturer intentionally did whatever it could to anger my friend.  It worked and he got angry. The Chinese manufacturer secretly taped my friend yelling and swearing at them and they sent that video to my friend’s client, explaining how this was what they constantly were having to face from my friend. The client fired my friend.

My friend also talked of how when he visits Chinese factories, it is fairly common for someone to run ahead of him, screaming that he speaks Shanghainese so as to be sure nobody reveals anything to him he should not know. He talked of how the Chinese manufacturers are always trying to undercut him because he knows what he is doing and knows how to keep them on the straight and narrow.

Before Shanghai, I had breakfast in Beijing with another very experienced China person — a European who has spent the last 13 years in Beijing assisting European companies. This person also speaks fluent Mandarin. He had two great “China stories” for me, both very similar. In both, he had — simply by being “a white guy who speaks Mandarin” — been able to hear about large scale bribery taking place. And in both cases, when he reported what he had heard to his European company clients, they both got angry at him and ceased to have anything more to do with him.

I know it may be stretching things a bit, but I see a commonality running through all three incidents, and I also see something with which my law firm’s China lawyers often must deal: nearly every time we try to help our clients better their negotiating position vis à vis their Chinese counter-party, the Chinese company tells our client that we are not licensed Chinese lawyers and therefore we don’t know Chinese law. We typically deal with this by pre-empting it; we tell our clients early in the process to expect the Chinese counter-party to say things like this and we describe how dividing and conquering is one of the oldest and most used tricks in the book. Then when it happens, our clients virtually always just take it in stride.

I don’t want to get all nationalistic here, but the reality is that the person you hire to assist you in China is ten thousand times more likely to be looking out for your interests than the Chinese company with whom you are doing business or seeking to do business.

That just makes sense, doesn’t it?

What do you think?

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