Americans interested in doing business in China are savvy enough to realize that an awareness of guanxi, the Chinese word for relationships and networking, is critical for success.

That is, however, just the first step. It’s having those relationships in place – and deepening your understanding of the Chinese business culture – that will advance your endeavors.

There is opportunity to be found in China, says Dan Paulson, president of Madison-based InVision Business Development, which recently opened an office in Tianjin, China, a location now designated by the Chinese government as its next economic center.

“It’s not a matter of taking jobs from here and moving them overseas,” stresses Paulson. “We’re now doing business in a global market, and it’s about tapping into the growing market that China provides.”

Paulson notes that most Fortune 500 companies have a recognizable branding presence in China.

“And some of them do make products at a lower cost there because there is a difference in the cost of labor,” he says. “But sometimes that isn’t always the best choice.”

Paulson’s focus is not on exclusively outsourcing American production in China. Rather, his efforts are targeted at helping American companies do business in the country. InVision Business Development’s decision to open its Tianjin office is an example of developing and sustaining that critical guanxi for his clients.

After a recent trip to Tianjin, Paulson became committed to helping U.S. and Chinese businesses create a better understanding of each other’s cultures and business practices to increase trade relationships between the two countries.

“China and America share the same set of values and beliefs,” he says. “The critical difference is that each culture puts a different spin on them.”

For example, workers in China will typically not tell their boss or company owner if there is a problem.

“It’s part of their culture not to tell their supervisor how to do his or her job,” he explains, noting that this would be considered disrespectful. “They will do exactly what you tell them to do, even if they personally know it might be the incorrect way of doing it.”

Made in America

Somewhat ironically, Paulson says that one area where American companies have a leg up on their Chinese counterparts is in the origin of their goods.

“The Chinese embrace anything that says ‘Made in America,’” he notes. “They are infatuated with the West … and if you have a company that applies to, you’re looking at a billion and a half potential new consumers of your product.”

How enthused are the Chinese about American products and culture?

“Coke and Pepsi are now widely recognized brands in China, but when Coke first arrived, the Chinese people didn’t like it,” says Paulson. “They thought it tasted like medicine. But that has definitely changed.”

Wisconsin, in particular, might just be able to tap into a new marketing niche in China with one our most famous state products: Cheese.

“The Chinese do not understand cheese,” says Paulson. “It’s not part of their traditional diet. While something like string cheese is a mainstay in the diet of American children, Chinese children have never experienced it. They’ve never seen the stuff.”

It’s opportunities like these that Paulson says is just waiting to be tapped in China.

“Wisconsin already has some good connections in China,” he says. “You don’t have to be a large corporation to seek them out, either. It’s more about being conscious about how you spend your business dollars; you don’t grow by holding on to the status quo.”

This September, Paulson will be leading a small group of interested business owners to China for a tour of Chinese companies and to meet with Chinese economic and governmental authorities. For more information about participating in the tour, contact Dan Paulson at:  (608) 467-0223 or dan@invisionbusinessdevelopment.com.