I approach the world with gratitude, and I am thankful for my many blessings. I share that with you so that you will not think too poorly of me when I tell you that I really don’t care for most gifts that people give me.
This goes all the way back to my childhood. At my fifth birthday party, after opening all of my gifts, I expressed my disappointment at the lack of planning and understanding of me that they revealed. Not much has changed as an adult, except that I have learned to keep my mouth shut.
In China, though, my beliefs fit right in. Gifts are an essential part of friendships and business relationships, and Chinese people share my attitude that a gift should be special, with substance.
That doesn’t mean expensive. It means thoughtful.
In America, for example, it wouldn’t be uncommon for a friend to come to a dinner at your home and bring a candle. But in China, if you received a candle, it would have to be very, very special — such as a candle made only in the southern provinces of China from tallow tree berries, using techniques that have been in place for more than 1,500 years. Now that’s a gift.
I have received some beautiful gifts from my Chinese associates, including rare silk embroideries, antique vases, tea sets made specially for me, hand-carved bookmarks, hand-painted fans, jewelry made from the shards of ancient Chinese pottery, beautiful cashmere, paintings and many books with special significance.
In turn, I must give gifts. Understanding when and how to present them is an important part of doing business in China.
You should always bring gifts to a first meeting. The gifts, because they are for people you have just met, should be generic and from near your home. If someone refuses the gift, listen carefully to determine whether they are simply being polite or whether they really don’t want to accept a gift from you. That’s unusual, but with changes in the Chinese government, there are now more officials who are hesitant about receiving any gift.
I have three standard gifts I use for first meetings: a coffee table book of Arizona photos, an Arizona snow globe and candy made from cactus.
The coffee table book goes first and is given to the most important person (often a chief executive), typically in a gift bag so it doesn’t have to be unwrapped. I like to use gift bags that are red or gold, colors associated with luck (red) and prosperity (gold). I tell the recipient what the gift is and explain a few things about what they will find in the book.
The snow globes are given to the next most important group of people, of whom there can be a few, such as managers. I also give a short explanation about the gift.
Then I give the cactus candy to junior managers or anyone else who should be presented with a gift. These I have wrapped, and I simply explain that they are special candies made from the inside pulp of a prickly pear plant.
In exchange for all of these gifts, I generally receive a gift of something made specifically for my company, maybe a private-label bottle of Chinese wine or a special bowl with an artist’s rendition of the company logo.
During a first meeting, I listen very carefully for clues about my hosts’ business and interests. This is all to gather information for future gifts. Once again, these don’t have to be expensive — they just show that you were listening and are thoughtful.
One client I see quite often makes her own homemade wine. I have given her personally embossed wine bottle foils, an apron with her name on it and the slogan “2014 homemade wine-making champion,” and other, more substantial gifts, like an old photo of a Navajo Indian woman’s prayer for becoming better at her craft.
Sometimes the gifts I give are practical things that my associates have requested from America, such as vitamins, supplements and cosmetics not available in China. My assistant and I spend a great deal of time looking for gifts — anytime I’m out shopping or attending my company’s auctions, I keep my eyes open. I use an Excel sheet to track people and the gifts I have given them in the past. This keeps me from repeating the same gift theme too many times, but it also offers ideas for other gifts when I am struggling to come up with an idea.
When you receive a gift, you should open it only if your hosts ask you to do so, or if they begin telling you about the gift and you ask permission to open it. Otherwise, the polite approach is to wait until you have left to open the gift. If you open it later, you should call and thank them for the gift, or send a note or email expressing gratitude.
As I travel throughout America I keep my eyes open for unusual regional gifts, like “tobacco spit” pottery from Kentucky, any “I Love N.Y.” items, United States Congress pens from the Capitol gift shop, California wines or polished semi-precious gems from the Southwest. I keep a large box of gifts in my apartment in Shanghai that I am always restocking as I go back and forth from the United States.
Thanks to my frequent gift exchanges, I have received some amazing things that I truly cherish — and I am glad to finally have found kindred spirits who enjoy giving and receiving meaningful gifts.
Deb Weidenhamer is chief executive of Auction Systems Auctioneers and Appraisers.
The Contract Is Signed. And Now the Negotiation Begins.
By Deb Weidenhamer
January 28, 2014 7:00 am January 28, 2014 7:00 am 4
An American tries to expand into China.
We are trained in business that the ultimate goal is to get our client to sign on the dotted line. Once there’s a signature on a contract, our job as deal maker is done. All that’s left is to deliver on our end of the agreement.
Growing up in Texas, where my first job as a teenager was working for a Houston oil man, I learned this a bit differently. Every deal he did with a fellow Texan was sealed with a handshake, and he never had any concern trusting in the my-word-is-my-bond code. I wish all my deals could be done this way — especially now that I have expanded my auction business into China.
China is a more complex business climate when it comes to negotiating. Sales presentations will be accompanied by dinners, lunches and drinks, and it takes time to get a deal. Your customer wants to know you before doing business with you. This isn’t about knowing your company. It’s about understanding your habits, traits and personality.
So imagine this: You do all of the work of developing a deep and sincere relationship with your client, and you finally get a contract signed. You are excited about delivering on the terms — but that isn’t what happens. Instead, there are more negotiations, and the terms change.
The natural inclination is to be annoyed, possibly even verging on physical anger. You’ll be tempted to utter some specialized vocabulary that only Americans speak fluently.
I liken it to remodeling a home. I’ve been through the experience a few times, and it’s inevitably full of disappointment, deceit, frustration, tears, anger and bitterness. Service providers promise a date for an installation, then tell you they won’t be able to meet the deadline they gave you. Sorry, you’ll have to live with it. The general contractor throws up his hands; he can’t do anything about it. You are going to be the one to adjust. You are going to be the one who comes up with the solution.
If you understand remodeling, you probably can imagine contract negotiations in China. I don’t care who you are and what your relationship is with your client, the contract will be renegotiated. It is simply the way business is done.
I think it happens for a few reasons, one of which is that argument is considered sport. Banter and bickering are fun. Another reason is that conceptually, a win-win deal is considered impossible. The Chinese belief is that there can only be one winner and one loser — and that foreigners aren’t as clever or as capable. They’re perceived as easy targets.
Here’s an example from my own business: We negotiated a deal to auction goods from a luxury watch maker. Our terms were that the retailer had to allow us to start the bidding at 80 percent off the retail price. Our business model calls for a low starting point, competitive bids, and then raising the price. This is always our toughest negotiation point in any contract, but it is standard for every single client.
When the inventory was to be delivered, the client came by with his watches and said he couldn’t abide the starting price we had agreed upon. He had changed his mind and decided that he needed the starting price to be 50 percent off retail. That simply wasn’t possible. We had already advertised and marketed his auction, so walking away wasn’t an option.
We didn’t remind him that there was a signed contract — that would have been pointless. After several long meetings, we offered him something not part of the original agreement: We would give him the contact information for those attending the auction. And we would make our buyers aware that we would be sharing their information with the brand.
In the end, it was a win-win settlement. Our client was able to grow his database of luxury buyers, and we gained credibility by being associated with a respected brand. The process of reaching that deal was far from serene but our approach was to stay steady and keep repeating our points. In the end, we had an exceptionally good auction. The client remains a customer and has become one of our best advocates.
The lesson I have learned is that while renegotiation can’t be avoided, it can be managed. There is no point in getting angry when someone asks for the terms to be changed. Take a deep breath and understand that this is just part of the process. Learn to leave yourself some room in the numbers or keep some add-in services in play — you will need them.
You can also set the rules for renegotiating by establishing, for example, that you can only take this contract back to your board two more times. Clients in China understand that higher powers will direct your negotiations, and they respect authority.
Learn the word impossible. You will hear it many times, and you will need to use it when it isn’t possible to negotiate further. But never walk away in anger. If you don’t exit gracefully, you will cause your client to lose face. Leave the negotiation on a high note, or if you need to step away and think calmly about ways to sweeten the deal, you can stop the negotiation by saying you are going to review the agreement and see what can be done. Having a Chinese colleague involved in the discussions will help you understand the subtleties and help keep you relaxed.
Just like the house remodeling, the contract will get done — and you will forget all the delays, budget overruns and hassles when you get to enjoy the results.
Deb Weidenhamer is chief executive of Auction Systems Auctioneers & Appraisers.
Mastering the Chinese Chop System
By Deb Weidenhamer
December 17, 2013 2:00 pm December 17, 2013 2:00 pm 5
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Deb Weidenhamer: “That little stamp grants great power.”Credit Zach Brown
An American tries to expand into China.
Imagine giving away your signature and allowing anyone to use it.
Some American business owners have signature stamps that are shared with a trusted assistant, but that is very different from handing over your signatory authority to everyone in the office.
That’s essentially how China’s chop system works. Documents are rarely ratified in the Western manner with a physical signature. Instead, a printed seal — a chop — is affixed.
Chops date back to 1000 B.C. They have advanced from the dripped-wax seal of the past to modern, preinked stamps, but they still carry the same weight they have for millenniums. A document with a company’s chop affixed is a binding commitment on the company’s legal representative, typically the owner.
When I opened my business in China, it was difficult to find information on the chop system. It’s such a common practice that for natives it needs no explanation. That little stamp grants great power, though. Using a company chop, someone could actually change the stock structure of your Chinese company and allow control of it to be “signed over” to another group or individual.
My first Chinese general manager reminded me of that the day I asked for his resignation. Taking my company chop hostage, he told me: “The controller of the chop is the controller of the company — good luck without it.” (In the end, through a great deal of negotiation, I was able to get my chop back.)
There are different types of chops for different purposes. Here is a rundown on the standard set:
• A company chop is used to sign all legal documents. Possession of the stamp is considered sufficient identification of the person using it to establish the person’s authority to bind the company.
• A contract chop is used by sales representatives when executing a contract with a client. It grants less authority to its keeper than the company chop and is not a required chop.
• A finance chop is used for all transactions with banks, including writing checks or making electronic funds transfers.
• A fapiao chop, also known as the invoice chop, is stamped on all invoices issued by the company. Without the fapiao, customers cannot furnish the document to tax authorities as evidence of a business expense.
• A tax chop is used on all payments and documents given to tax authorities.
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A name chop.Credit Zach Brown
• A personal chop is the name chop of the company’s legal representative, and is sometimes used as a signature for letters. This is not a stamp that mimics a physical signature — it simply has the carved-out letters of the representative’s name.
As a part-time resident of China, I have entrusted my chops to two American managers who are permanently stationed at my firm’s Shanghai office. Every time the chops are used, they must log in a spreadsheet the date, the purpose, and the name of the person who did the stamping. Consider how many times you sign your name on an ordinary day in the United States and you will get an idea of how often the chops are used.
The chop system has many inherent security risks, but there is one feature that I really like: the “fan chop” used for multipage documents.
When a document is executed, the company chop is used on the final page. Then all of the document’s pages are fanned out so that just a small section of each is showing. The company chop is affixed across all the pages (see the photo below).
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A fan chop.Credit Zach Brown
Later, you can check to make sure all of the chop marks line up. It’s a way to be certain that a page was not substituted.
That’s a very important safeguard for me, as someone who does not read Chinese. I have my company’s documents translated into English paragraph by paragraph, with the Chinese appearing in the first paragraph and the English translation following it.
But here is a fun fact about how Chinese courts interpret contracts executed with dual translation: The Chinese supersedes the translated language, and the testimony of a foreigner is not considered credible.
When I set out to get my company’s chops, I ran into a bit of a Catch-22. You need to have a registered Chinese company to get a company chop, but you have to have a chop to sign the documents to register a company. As a consequence, obtaining a chop requires a Chinese lawyer who has a good relationship with a chop maker that can get you a chop before your registration is complete.
The system seems archaic and cumbersome at times, but speaking as someone with 21 characters in my signature, I’ve found a silver lining: Chops may save me from carpal tunnel in the end.
Deb Weidenhamer is chief executive of Auction Systems Auctioneers & Appraisers.
There has been much buzz about the initial public offering of Alibaba, China’s e-commerce giant. The company is the top player in an increasingly crowded and diverse Chinese online sales market that features corporations looking to order large quantities of manufactured goods; small business buying items in lots of, say, 25 pieces; and consumers looking for a single product.
The online market includes both local competitors like DHGate, which sells goods for export from China, and international sites selling directly to Chinese consumers — including Amazon, which is beginning to gain mainland customers after a slow start.
There are at least three major differences between American and Chinese online sales. Those differences illustrate both the challenges and the potential for growth in China.
1. Quality and returns. Most American retailers guarantee their products against defects and allow returns for various reasons, including the buyer simply changing his or her mind.
Chinese retailers rarely allow for this scenario, so buyers must be very sure of what they are purchasing before they click “buy.” Also, while the sale of counterfeit products is rare in the United States, it is prevalent on Chinese sites. Buyers in China often pick an item with a midrange price instead of the lowest, because choosing the lowest price is seen as a tacit agreement to accept a knockoff.
2. Delivery. Except in a few larger markets, delivery in the United States is rarely made on the same day, and it can involve big fees. It is easy to buy something for $4.95 and pay $10 to have it delivered.
But in China, the efficient and inexpensive “kuai di” (pronounced KWHY-dee) express delivery services typically charge five to six renminbi — or less than $1 — payable in cash for same-day delivery. Buying something online is often both faster and cheaper than going to the corner store. Even businesses order big deliveries this way, leading to overloaded bicycles and electric scooters.
3. Communication. In America, online buyers often get most of the information about items they want to buy right on the merchant’s website, through photos, user ratings, videos and other descriptive details. Knowing that they can return anything they don’t like, buyers feel secure purchasing without further interaction with the seller.
In China, most purchases — even very small ones — are discussed via telephone, email or chat before the purchase is made. Negotiations and modifications are made before the order is placed. The sales process often involves as much labor as it would if it were done on a retail floor — all while trying to compete at a discounted rate.
I buy most of my groceries online whether I’m in the United States or China. In America, the process takes 10 minutes, and groceries are delivered by the day’s end. In China, the ordering is simple but always involves many subsequent back-and-forth phone calls with the company that fulfills the order. Simple items like bread or bottled water can generate a call to discuss substitutions of brand or bottle size I will accept. The follow-up calls typically take up an additional half-hour.
I recently purchased a heating pad from an independent vendor on Taobao, an Alibaba site. After reviewing several options, I picked a midrange pad for about $16. It came promptly, and I happily snuggled in as it warmed up. Ten minutes later, it quit working. Disappointed, I turned instead to the hands of a very good and inexpensive masseuse.
The next day, my office called the vendor. The representative apologized and sent me a replacement without requiring me to return the faulty product (much to the surprise of my team). I was encouraged and figured the initial item must have been a fluke. Two days later, after light use, the new pad also failed.
One of my colleagues called the company again. This time, the representative said I was using it wrong and that the company would not do anything to correct the problem. I am now on my fifth heating pad in China. My continued efforts have become a running joke, but it illustrates the frustration that many buyers experience and expect with online retailers in China.
The company’s e-commerce market is now bigger than any in the United States, but all things aren’t equal. As labor in China becomes more expensive, it is an open question whether online sellers can sustain the cost advantages that drove the explosive growth.
Deb Weidenhamer is chief executive of Auction Systems Auctioneers and Appraisers.
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Celebrating Christmas in China
By Deb Weidenhamer
December 25, 2013 7:00 am December 25, 2013 7:00 am 18
Capitalizing on China
An American tries to expand into China.
When I was a little girl, I raised money for missionaries who were taking Bibles into China. As the daughter of a preacher, it was one of many similar projects I undertook, like going door to door to collect money for starving children in Africa and gathering wheelchairs and crutches to send to missionary doctors in South America.
So the first time I walked into a church in China and saw Bibles sitting in the bench shelves, it was an emotional moment for me. Was it possible that these were some of the Bibles brought over all those years ago? Did they bring comfort? These are the questions we all wrestle with throughout life, wondering if our small contributions make a difference.
As Christianity continues to grow in mainland China, with an estimated 85 million believers, so has the celebration of Christmas. There is very little understanding, though, of why Westerners treat this particular holy day in such a different way from others. There are no official religious holidays celebrated in China, so the observation of Christmas requires explanation here.
In the office building where I have set up my auction company, the property managers put up printed descriptions of the holiday to accompany their Christmas decorations. The translations from Chinese to English are a bit rough, but the perspective is fascinating. My favorite storyboard tells of how the Bible says “Santa came for Christmas.”
Even for Chinese Christians, the holiday passes without the fanfare and busyness of the Western celebration. Christmas is a commercial holiday and is viewed as a time when a kindly grandfather figure gives out token presents, similar to what we call “stocking stuffers.” Some families and friends, regardless of their beliefs, exchange small gifts — a custom of growing popularity throughout China.
Most expats in China for the holiday take the day off, celebrating at the Western hotels, dining in their homes with other expats or attending church services. I attend a nondenominational church in Shanghai called the Shanghai Community Fellowship. I found the church through a colleague who thought I would enjoy seeing a church service in China. I began attending with him and typically go every Sunday that I am in Shanghai.
The church holds separate services for Chinese nationals and for foreign passport holders. It proudly claims to host believers from more than 68 nations every Sunday. The church’s home is a cathedral that was built in the 1920s and holds 1,500 people. The story goes that American missionaries built the cathedral in the English style — which doesn’t really explain all of the French fleurs-de-lis in the architecture.
This church is always packed, and it’s difficult to get a seat if you are late. Services begin with worship music and prayer. Many in the congregation are in China temporarily, and at one point in the service, those who have been attending for more than six months and are about to return home or take a different assignment are invited to speak. As many as 10 congregants rise to share their stories of how the church has been a refuge for them and a place to find some of the comforts of home.
The farewells are followed by contemporary Christian music from a band. The pastor preaches, or a special foreign visitor speaks and shares from the Bible. The service ends with a prayer for the week. As attendees flock out the doors, most gather in the huge courtyards outside to socialize.
In America, it’s easy to become caught up during the holidays in the whirlwind of parties and gifts. I have found it refreshing to be in China, where things carry on as usual during December — with a few extra holiday touches. There are beautiful Christmas displays in all of the stores, with piped-in English Christmas music. There is also local holiday music. Last year, a very popular Chinese Christmas rap song with a catchy tune and “Jingle Bells” played everywhere.
The relative lack of fanfare puts in perspective why we celebrate the birth of Christ at this time. Without all the noise from advertisers and marketers, I find my way back to the very simple days when I was a child who hoped to bring a little comfort to others.
Deb Weidenhamer is chief executive of Auction Systems Auctioneers & Appraisers.