What It Takes to Operate A Successful Business in China

The basic qualities of successful entrepreneurs are the same across countries, said Lanfang Lin, chairman of Huzhou Silk Materials Co., Ltd. “Besides the common qualities like vision and strategy, what I think are more important are honesty and innovation,” Lin said through an interpreter during a panel at the Meeting Entrepreneurs From China conference, sponsored by the Chicago Asia Pacific Group, at Gleacher Center on April 11.

“Honesty becomes very important in difficult times,” he added. “You have to be able to team with other people and innovation is also key here. The most important qualities for a successful businessman are IQ, EQ, daring, and kindness, which means devotion to the course of the business.”

Lin’s comments perfectly capture Chinese culture, said Dingzin Zhao, university professor of sociology, who moderated the panel. “There is an IQ, EQ, and even a compassion quotient,” Zhao said. “There is a courageous and daring quotient in times of difficulty.”

In providing outsourcing at a strategic level, Chinese companies can follow India’s lead or attempt to develop their own innovation capabilities as part of the process, said Hong Chen, vice president of Hundsun Technologies, Inc., a local partner in China with Nokia. “For example, I am hoping we can develop our own technology as part of our cooperation with Nokia,” Chen said through an interpreter.

Although intellectual property (IP) is a “hot topic” in China, laws enforcing such ownership have greatly improved in the last 25 years, said Jiqiang Hu, chairman of Conba Group Co., Ltd. pharmaceuticals.  When Hu’s former company developed a leading prostate product, it was not permitted to apply for a patent and within two years competitors imitated the product and even used its name, he said.

Since chemical compositions became copyrighted in 1993, his group has received more than 600 trademarks in China and has been awarded 23 of 37 patents for which it applied, Hu said. “During this time, we have also gone through the court process defending our trademarks,” he said through an interpreter. “Each time we have been very successful so you can see that the legal protection for IP is getting better and better in China. IP coming from the U.S. or abroad will see protection as well.”

As China faces international pressure over issues such as Tibet’s desire for independence, Americans assume China will change to become more like the U.S., said Ted Fishman bestselling author and consultant to the U.S. government on the global impact of China.. “That may be an unrealistic expectation,” Fishman said. “This is true even in the boardroom.”

For example, media companies operate very differently in China, he said. “The restrictions in China are greater but media is growing faster than here,” Fishman said. “In America you can put any kind of dirty laundry into the newspaper and on television, and our media is shrinking. The biggest challenge for everybody on a business level and on a humanistic level is deciding, what are your basic values and where will you draw the line?”

Ling’s story was an excellent illustration of the Chinese “revolution” in free enterprise, said second-year student Ping Ping, former co-chair of Chicago Asia Pacific Group. “A whole generation of people like him got laid off,” Ping said. “Many of them became entrepreneurs in their late 40s, not in their early 20s, like many U.S. entrepreneurs. They have nothing to lose. Mr. Ling’s story touched my heart.”

—Phil Rockrohr