Short Answers 3-2: Beijing, Here We Come!
1. The likelihood of Canada coming to an agreement with China can go both ways. The interest of their Chinese counterparts seems good especially since they traveled to the U.S. already to discuss a business proposition. The Canadians should definitely be prepared to wait and make several trips before the deal is completed.
“It starts with the language, but goes much deeper. We couldn’t do business on the phone or by fax. …..We had to do everything in person, and considering the traffic in Beijing, you could kill three hours so someone could see your face.”(Grossmann, John, 2013)
It is very common for the Chinese to feel more apt to taking time on their decision if the eagerness of westerner comes on strong; so Canada must have patience. They should also be prepared to have many technical experts traveling on site to make sure they can explain in full depth technically of all processes. This will be greatly appreciated by the Chinese (PRC) and will create confidence in your company’s competency for them. The upside to having a two percent cap on increasing costs yearly is an import step. Public policy is always changing, especially in China, and these factors could be detrimental to production.
2. Letting the Chinese take all control over production could be hazardous for the Canadians. They should have a more active role for several reasons. Quality control may not be highly enforced, volume and speed are acceptable over quality at times. Demanding a couple of prototypes before entering in the contract is key, they may not create exactly what the vision had entailed (since the Canadians already have a business model in place the “prototypes” it would just need to be replicated). Make sure all materials and sourcing are what you are expecting, play an active role in selecting what you would be using. My suggestion would be to have a couple key people (probably 3) working on site. A quality control person, a logistics person and a design person. This way all areas are covered. I would also suggest that they are fluent in the language to not create any language barriers with the Chinese.
3. I think coming on dedicated and committed to the vision is very important to the Chinese.
“If they sense the opposite, Chinese manufacturers will not maintain the high level of scrutiny on quality control, safety issues and on time performance needed to prevent mistakes and drive quality and on-time production “