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Can China be a leader in the circular economy?

china factory worker

 

Alexander Collot d’Escury examines whether China, with one of the world’s biggest manufacturing economies, can lead the global pursuit of a circular economy.

Manufacturers today are at a crossroads. One way is the business-as-usual approach based on the linear economy, in which goods are made to be used for a short time by consumers and then mostly dumped or incinerated. But with a growing world population and the emergence of billions of new consumers in the rising markets, most people realize this is not sustainable.

In addition, the linear system contributes to climate change and damages other ecosystems such as rivers. It also lacks a focus on excluding toxicity in products. A better system needs to be created and one avenue which is gaining ground is the circular economy, in which goods are designed to be remade in an ongoing non-toxic closed-loop system.

Asia is well aware of the need to change, not least because much of the world’s waste ends up in its backyard as well as in other emerging markets. As one writer put it recently in The Guardian newspaper:

“The developing world is becoming the West’s digital dumping ground. Every year around 50 million tonnes of unwanted electronic devices make their way to vast e-waste dumps in Guiyu in China and Agbogbloshie in Ghana – often illegally. Some of them will be repaired and resold. Others will be broken into their components, at considerable expense to the environment and people’s health, and sold as raw materials to manufacturers. Yet more will be left as piles of toxic litter.”

If this continues the problem will only get worse. The article continues: “In fact, only around 13% of the e-waste generated each year is recycled. The increasing amounts of digital tech brought by middle-class consumers in China, India and Africa is a growing part of the problem. If the trend continues, the annual amount of global e-waste will be 65 million tonnes by 2017.”

It is not just about designing products so that they can be returned, disassembled and recycled. It is about thinking about how to make a product good from the start, so that it has a positive impact on the environment and human health.

Cradle-to-cradle pioneers Dr Michael Braungart and William McDonough have inspired many businesses with their call for designing for “eco-effectiveness”, as described in their latest book, The Upcycle: “Human beings don’t have a pollution problem; they have a design problem. If humans were to devise products, tools, furniture, homes, factories and cities more intelligently from the start, they wouldn’t even need to think in terms of waste, or contamination, or scarcity. Good design would allow for abundance, endless reuse, and pleasure.”

That is the vision. But can this be adopted by manufacturers at scale? There are important pioneers in this area showing the way. For example, electronics company Philips does not sell light, it leases it. This service-based model encourages manufacturers to make durable products that can be disassembled later and recycled, reused or remanufactured in a healthy and responsible way. And Philips is showing the model can be profitable and popular with customers.

 

Written By: Alexander Collot d’Escury
Published: 10 September 2014
Source: Eco-Business

Posted in Doing Business with China, International, Living in China, Manufacturing | Leave a comment

How to make business in China: Guanxi

“Guanxi ( Traditional Chinese 關係 / Simplified Chinese 关系 / guānxi)” is a general Chinese term used to describe relationships that may result in the exchanges of favors or “connections” that are beneficial for the parties involved.

The Chinese term “guanxi” can, at times, equal the term “networking.” The elements of exchanges based on “guanxi” carry a long tradition in doing business in China and Chinese communities. Good “guanxi” can be the key needed to opening doors otherwise closed. The types of relationship building are almost unlimited but exclusive. Not creating situations where others may “lose face (丟臉 / 丢脸 diūliăn)” is an important balancing act that those taking part must be constantly aware of. So good “guanxi” can be created in many ways and should appear to be offered voluntarily. Good “guanxi” can minimize natural or manmade obstacles in doing business in China. Over time it may take some effort to maintain and nurture the needed amount of “guanxi” to do business at different levels. Remember that good “guanxi” can mean more than just going from the back of the line to the front. Those taking part in the acceptance of “guanxi” are required to return “guanxi” given measured on the amount of previous “guanxi” accepted.

 In simple terms “guanxi” appears to carry an element of trust. It’s true that a lot of business in China revolves around circles of personal and mutual trust. So for any outsider to do business in China they must take the time to form relationships or “guanxi.” This has been a big obstacle for many western businesses trying to enter the Chinese market. Business connections made through “guanxi” must be maintained to ensure proper positioning for future business. I call this “relationship after service.”

Now that we have a general idea what “guanxi” is, how can good “guanxi” be created and maintained? Most western educated businessmen think that this kind of relationship is only based on direct cash exchanges. Although this is correct on some levels it isn’t the norm today. Often “guanxi” transactions are “hidden” and not made obvious to the casual observer. Although the direct giving of “gifts” is a common form of building “guanxi” it isn’t the only way. Inviting or hosting dinners for prospective clients or business partners can create an environment for “guanxi.” Also the exchange of favors or “inside information” may amount to good “guanxi.” However, not all “guanxi” is good “guanxi.” Relationships built on “guanxi” can quickly fade or disappear if part of the “relationship chain” is put into question for any reason. There is a fine line between “guanxi” and bribery. The path to good “guanxi” isn’t an easy path to follow. Tipping to one side can put relationships made in this way a case for legal action. As China is creating its own terms for capitalism and legal business transactions the distinction many not become any clearer. So creating “guanxi” is like walking into a thick mist where you constantly have to feel your way through.

Why Guanxi is Important in China and for Your Business

Guanxi‘s importance in China has developed as a result of the cultural implications of the rule of law and the concept of face. For millennia, China has lacked a strong rule of law. Because the law has not often been able to provide the legal protections which it does in the west, Chinese people needed to develop another means of ensuring trust amongst themselves in personal and business matters. Maintaining face, or reputation, among people within one’s own network is also an important characteristic of Chinese culture. Because of the importance of maintaining face, Chinese people will usually not take advantage of a person with whom they have guanxi. This is true because if they develop guanxi with them and they were to take advantage of them, all of the people in their network would know what they had done and they would lose face with this network. By losing face they would also lose the respect of others in the group and potentially lose their connection with their network. Therefore guanxi has become a means of building trust that law cannot always provide for Chinese people in personal and business matters.

For these reasons, a Chinese company will feel far more comfortable doing business with a company which they have strong guanxi because they believe it will make it far easier for them to trust their business counterpart. It is equally important for foreign companies to develop strong guanxi with Chinese companies and government organisations. This guanxi will help your company in case you run into problems doing business in China. In addition, Chinese companies will feel more comfortable doing business with you if they have strong guanxi with your either because you have built a strong relationship with them or you were introduced to them by someone in their network.

How to Develop and Maintain Guanxi

While developing guanxi is important to doing business in China it is not necessarily easy to develop, especially for a foreign company. Having a full-time, long-term presence in China is essential to developing and maintaining guanxi. In addition, to effectively develop guanxi your company it will be helpful to have a native-born Chinese person to be responsible for developing these relationships. A native Chinese person will be familiar and comfortable with the cultural niceties of developing guanxi in China. Your local Chinese staff or representative should meet regularly, in both formal and informal settings, with potential and current customers and relevant government agencies to develop strong relationships on behalf of your company. If government relations are important to your business your company may also want to consider hiring someone experienced working with the Chinese government on a full or part-time basis to leverage their contacts and experience with the government on your company’s behalf.

 

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30 Books to understand China

The idea of manufacturing or even visit China in order to look up for new suppliers or joint ventures for your business, might seem to be really hard, because sometimes we don’t have enough information for understanding what’s going on in this always evolving country. Based on the list  John Sullivan a lecturer in the University of Nottingham, specialized on Contemporary China, we post this list of 30 books which most were published in the last year or two, with a couple of recently remembered golden oldies thrown in. Covering a huge amount of ground from the economy and domestic politics to foreign relations and civil society, was to choose texts on the basis of excellence, accessibility, balance, recency and ‘pep’. 

China in the 21st Century: What Everyone Needs to Know (Oxford, 2013) by @jwassers with@mauracunningham

Intimate Politics: Marriage, the Market, and State Power in Southeastern China (Harvard 2006) by Sara Friedman

The New Emperors: Power and the Princelings in China (Tauris, 2014) by @Bkerrychina

Contagious Capitalism: Globalization and the Politics of Labor in China (Princeton 2007) by Mary Gallagher

China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa (Knopf, 2014) by @hofrench. My review is here

China’s Trapped Transition: The Limits of Developmental Autocracy (Harvard 2008) by Minxin Pei

The People’s Republic of Amnesia (Oxford, 2014) by @limlouisa

Tombstone: The Untold Story of Mao’s Great Famine (Penguin, 2013) by Yang Jisheng

Gifts, Favours, and Banquets: The Art of Social Relationships in China (Cornell 1994) by Mayfair Yang

Collective Resistance in China: Why Popular Protests Succeed or Fail (Stanford, 2009) by Cai Yongshun

Remaking the Chinese Leviathan: Market Transition and Governance (Stanford 2006) by @Dali_Yang

From Mao to Market: Rent Seeking, Local Protectionism, and Marketization in China (Cambridge 2009) by Andrew Wedeman

The Industrialization of Rural China (Oxford 2007) by Chris Bramall (Editor of @chinaquarterly)

Media Commercialization and Authoritarian Rule in China (Cambridge, 2013) by Daniela Stockmann

On China (Penguin, 2012) by Henry Kissinger

Powerful Patriots: Nationalist Protest in China’s Foreign Relations (Oxford, 2014) by @jessicacweiss

The Chinese Army Today: Tradition and Transformation for the 21st Century (Routledge 2011) by Dennis Blasko

A War Like No Other: The Truth About China’s Challenge to America (Wiley 2007) by @RichardBushIII 

Why Taiwan Matters: Small Island, Global Powerhouse (Rowman Littlefield, 2013) by Shelley Rigger

Northeast Asia’s Stunted Regionalism: Bilateral Distrust in the Shadow of Globalization (Cambridge 2004) by Gilbert Rozman

Leftover Women: The Resurgence of Gender Inequality in China (Zed, 2014) by @LetaHong

Cities and Stability: Urbanization, Redistribution, and Regime Survival in China (Oxford, 2014) by @jerometenk

Age of Ambition: Chasing Fortune, Truth and Faith in the New China (Random House, 2014) by @eosnos

Demystifying the Chinese Economy (Cambridge, 2011) by Justin Yifan Lin

The Uyghurs: Strangers in Their Own Land (Columbia, 2010) by Gardner Bovingdon

Tibet: A History (Yale, 2013) by @sam_vanschaik

This Generation: Dispatches from China’s Most Popular Blogger (Simon & Schuster, 2012) by Han Han. My review here

Technomobility in China: Young Migrant Women and Mobile Phones (NYU, 2013) by @carawallis. My review here

By All Means Necessary: How China’s Resource Quest is Changing the World (Oxford, 2014) by @LizEconomy and @levi_m

Shadow of the Silk Road (Vintage, 2007) by Colin Thubron

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TÜV Rheinland Laboratory

One of our Interns attended  the TÜV Rheinland  facilities in Shenzhen, Guangdong  Province, to Learn how they help to build a future that does lasting justice to the requirements of humankind and the environment trough QC inspections and tests to hundreds of products and factories all over the world.

TÜV Rheinland is a leading provider of technical services worldwide. Since the foundation in 1872, TÜV Rheinland has been developing safe and sustainable solutions for the challenges arising from the interaction between man, the environment and technology.

 Sven-Olaf Steinke Vice General Manager of TUV Rheinland in China _IGP3027_[4847]

The tour took the assistants to the TÜV Rheinland facilities, by showing to them how do they perform several tests and QC procedures, that cover a wide area of products from batteries and high-tech devices to edible products and garments . Ending with a recreational time for letting the assistants to exchange ideas and interact among them.

Leisure time in TUV

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Corporate Training Session with International Futures

In May we signed a corporate training contract with Business English specialists International Futures based in the PRD, www.international-futures.com, the first lesson that our first team of students learnt was Negotiation Techniques.

The staff commented that they learnt a lot and as you can see from the photos they all had fun. We’ll be continuing the training sessions in the future to continually improve our staff in more skills to help you get the best out of your China Manufacturing and China Sourcing through C2W.

International Futures China 2 West Training 01

International Futures China 2 West Training 02International Futures China 2 West Training 03

Posted in C2W Updates, Doing Business with China, Just for Fun | Tagged , , , , | Leave a comment