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Pursuing Chinese Trade ‘Ins’

Like it or not, Los Angeles and China are connected at the hip. According to the Los Angeles Port Authority, $133.5 billion in trade with China in 2011 was transacted through the Port of Los Angeles. Furthermore, 35 percent of all import operations and 57 percent of all export activities at the L.A. port were with China.

As this relationship is likely to continue growing, more L.A.-based companies may begin to consider satellite or regional quarters in the People’s Republic of China. Good idea. But it’s not without challenge.

Forget what you think you know. There is so much bad, inaccurate and fraudulent information around that although there’s an actor on every corner in Los Angeles, don’t get caught “acting.”

With more Westerners in China than ever before, we are beginning to see three very diverse groups emerging. The problem is that these three groups are becoming more incompatible by the day.

The first group is the Tourist. These are the folks who went to the Great Wall and Forbidden City and “communicated” with hand gestures to a couple of Chinese.

The second is what I have coined as the Cliff’s Note Crowd or CNCs. They are the foreigners who pop in every four to six months, stay at the Grand Hyatt on the company tab, glad-hand for a few days and then think they understand the country.

Third, you have the Expatriates or Expats. He’s the person living, working, and residing as a resident; living like a Chinese national.

The Tourists believe they’ve developed some expertise based on 10 days of tourist traps. The tourist, however, is not a dangerous breed. They seek not to direct the national debate in their home countries, and neither the expats nor the CNCs take them seriously when they expound on their expertise. They are a bit like a fly buzzing around your head – annoying, but harmless.

More problematic

The CNCs are bit more problematic. They firmly believe they are the experts. The danger of the CNCs is they are the ones educating, writing, opining and framing the China debate in their home countries.

I recently spoke to Fons Tuinstra, president of the China Speakers Bureau. He had reached out to me based on my affiliation with the North Central China Real Estate Association in the hopes of recruiting me as a potential speaker. He said they are looking for people in the West with the ability to “speak up on China-related issues in the mainstream media.” When I told him I wasn’t residing in the United States or Europe, that I was actually in China, his voice sank. He suddenly felt we “didn’t have a match.” OK … you called me, Fons.

The more important fact is that actually being in China was a handicap; to speak on China-related issues from an actual current knowledge base of China was a negative. Many times the CNCs are those with media connections but little else in the way of authentic experience. That’s why they are CNCs. It’s a shame Fons doesn’t see that as a problem. But then again, Fons is not in China. He’s in Belgium (yes, Belgium) and clearly a charter member of the CNC.

The Expat is a different breed altogether. They are actually in China doing things with the Chinese every day.

Metaphorically speaking, the Tourist is the person who purchased “War and Peace” and is intending to read it but has not done so, yet has some very detailed opinions on the novel based on the cover art. The CNC bought the book, but has only read the first 10 pages then read the Cliff’s Notes and suddenly became the recognized authority on the subject. The Expat, however, not only bought the book, but went to Russia to read it and attended the Tolstoy lecture series at Lomonosov Moscow State University in order to better understand what the heck Tolstoy was talking about.

Given this, if you were the Expat, you’d likely get a little frosty when the Tourist or the CNC wanted to debate and contradict your knowledge of the motivations of Maria Feodorovna or Pierre Bezukhov.

As China grows and develops, the need for individuals who do understand and can explain to others the oddities, extremes, inconsistencies, changes in policy, shifts in attitude, pace of change, historical influences and national posturing that shape the experience called China will also grow.

If you’re going to do business here, if you are going to leverage the tremendous amount of business between Los Angeles and China, don’t act, don’t pretend. Do so from a position of factual knowledge. Understand the difference between these three groups and leverage the proper functionaries to get it done. Otherwise, you are just spinning your wheels, wasting your time and falling behind.

Jeff LoCastro is the founder and president of the North Central China Real Estate Association, chief executive of California Secured Investment, an expat living in China and a serial entrepreneur.

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