KEY POINTS:
The father of the Waikato University MBA programme, Dr Ed Weymes, says the West has much to learn about the Chinese business psyche, even in an age of global free trade and commercial openness.
Weymes, the associate dean responsible for executive education development and international programmes at the
Waikato Management School, doesn't expect an immediate fillip in bilateral trade as a result of the New Zealand-China Free Trade Agreement.
"It is not going to have much of a trade effect over time because we are not a manufacturing economy," he says.
"Basically, what you have with the FTA is quota coming off over anywhere from five to 12 years. But at the end of the day, business with the Chinese is conducted on the basis of relationships."
Weymes, who developed one of the first university exchange programmes with China and negotiated programmes with Shanghai International Studies University, says Western businesspeople often can't see past the contract they're negotiating. They become obsessed with winning the hearts and minds of the individuals involved, whereas the Chinese take a broader view of their relationship with the world as a whole.
"China takes time. You are not going to 'wow' somebody until they actually trust you - they have very strong bullshit detectors.
"When you build that trust and respect it is more important than the contract. Once you have started that relationship it is going to last for a lifetime."
Weymes, who visits China regularly and has been a visiting professor at Shandong University, Jinan, says Western businesspeople sometimes discover that they're not negotiating with the person who makes the ultimate decision at the other end.
"You are not always going to be doing business with the decision-maker."
He says that with the exception of some private companies and in Guangdong province (where business relationships with the West have existed much longer), contractual negotiations generally follow the Asian model.
"We have been brought up in the belief that a proposition can be true or false whereas in China you get yin and yang."
This yin and yang approach, literally meaning dark and bright, can bedevil Western companies which believe Chinese businesspeople are unabashed capitalists on socialist garb.
There is, of course, little question that China has travelled far down the capitalist road but the traditional view of deal-making that predates the Maoist revolution remains: Is this deal just good for business or is it good for China?
Weymes says New Zealand has a strong, positive reputation in China, not least through the veneration of the communist New Zealander, Rewi Alley, who spent much of his life in China.
He says the FTA won't necessarily lead to an upsurge in business with China; its strength is in its symbolism and its use as a template for other FTAs in the region, not least with the Asean bloc.
Weymes' experiences in dealing with the China are included in New Zealand Trade & Enterprise's "Navigating China" feature on its website (chinafta.nzte.govt.nz).
The feature is disarmingly honest about the challenges of doing business in the People's Republic.
"China is a tough market for an initial foray into exporting or establishing a physical presence in market," it warns. "It fails a number of tests regarding the advice of selecting easy markets first - it's not close, it has language barriers and the business environment is often radically different from New Zealand's."
"Navigating China" notes that many New Zealand companies with successful businesses in China admit that setting up shop in the People's Republic was a struggle.
"They say getting started was time-consuming and took a large commitment of their resources. Don't expect success to come quickly or easily."
NZTE warns that China is "one of the toughest markets of the world. You need to be confident that your product or service is sufficiently proven and developed to take to the Chinese market".
The future for New Zealand is probably more likely to be in services and consultancy rather than manufactured products. Education features prominently among the areas of potential growth.
NZTE runs an education sector team to promote New Zealand's capability to deliver education products and services. It also works with Education New Zealand, a charitable trust committed to exporting education services.
University exchanges and programmes are an important part of the education services offered but there is also the potential for huge growth in Chinese students coming to New Zealand to complete their education. In 2007 students from the Chinese mainland accounted for a third of the more than 90,000 foreign students coming to New Zealand.
The sheer size of China - 36 times the area of New Zealand, with 300 times the population - suggests the prospects for exporting more New Zealand education to the country are strong.
