There are a lot of books about how to do business in China, and most of the foreign entrepreneurs here read at least one or two of them before they started out. But it seems not everybody did so, or at least not everybody followed the basic advice in these books, which may lead to disastrous results. You may have seen yesterday’s article in the Financial Times about the fate of a German business man in China already on other sites or on Twitter, but it’s too good not to post it here as well.
The story in short: A German business man with supposedly lots of China experience under his belt made all the classic mistakes in setting up and running a company in China. In 2004 he founded Business Media China, a company selling billboard advertising space at railway stations and airports all over China (and even listed it on the Frankfurt Stock Exchange). He trusted his Chinese associates (a male and a female) completely without checking them or trying to control them. When the two become romantically involved and realize their boss has no clue about what is going on, they eventually start to defraud the company. They go so far as to set up another company within the company that takes away all the business. The German business man does not realize what is happening behind his back and finally has to raid his own office to get evidence.
A great article to read if you do business in China, or if you ever plan to do so in the future. Some things I have seen myself as well over the past years here (I even had people trying to set up a company within my company, but found out about it on time), but most things are easily avoidable. Most important is to never give complete control away. You could probably do this in Europe or the US, but China is different. That does not mean that Chinese cannot be trusted (to the contrary, many of my Chinese business friends I trust more than Europeans I did business with in the past), but you just have to be more careful. Just don’t give people the opportunity to try things, then they won’t happen.
You can find the full article in the Financial Times here.