I've been privileged to be in China for the past 10 days as we are here to pack up and bring our daughter home after almost two years of time learning the language here and sharing life with students.  During that time I have been able to mingle with dozens of college and graduate students.  They have a very positive view of US business and I often felt like a rock star as they surrounded me and wanted to talk about what it was like to lead a company in America.

The business climate here is changing rapidly.  There is no question that this economy thrives around small business.  There are tens of thousands of them - almost every building has the first floor filled with small 10 X 20 or so sized small businesses.  They typically sell only a very narrow product set, and often their block is filled with others selling the same kinds of products or services.  People tend to buy all their needs in the area they work and live, so you see replicated businesses all over the country in areas of cities and villages.

That is one noticeable difference here in China.  Even in malls, they tend to bunch types of businesses together.  It makes it easier to compare pricing and get the best deal, but it is a different approach from the US business environment where there is often space between competitors.  It is not unusual to see a row of businesses along a block in the same building all selling women's clothes, or food, or convenience items.  Our visit to a recent mall had all the furniture stores on one floor, the bathroom and plumbing fixtures on another, home decor on yet another.  Interesting concept and how they seem to do things here.

One of the most engaging discussions I had was with a business graduate student who has been studying the differences between US and Chinese business.  Her major finding is that there is a significant difference in the level of trust, and honesty, between the two business environments.  US business runs on integrity.  In China, there is not only a lack of integrity and trust, but almost an expectation and some level of achievement if you are able to outwit someone and take advantage.  That makes it difficult to do business here.  You can't trust anyone, so every transaction requires significant oversight.

That is never more true than on TaoBao - an online site similar to EBay.  Rather than a bidding site, it is a barter site.  It is between the buyer and the seller to negotiate a price.  The problem is that there is a lot of fraud and deception that occurs there.  In fact, the grad student wanted to discuss how much EBay stores pay to get people to give them good ratings artificially so they are percieved as better than others.  It is a huge problem on TaoBao - they pay people to give them the best ratings so people will think they are the best - but it is a rouse to get people to do business so they can take advantage of them. 

The economy here is growing rapidly, even with the issue of integrity.  But it will become a problem over time as the world begins to back away from doing business with people they can't trust.  Price only goes so far.  People do business with folks they know, like and TRUST.  That last part is where the Chinese business community has a lot of work to do.

That said, we need to be sure we operate at the highest level of integrity as this global economy continues to make the earth smaller and smaller each day.  It begins in how we do business with our customers, but it extends to the way our govenment interacts with other countries as that will flow down to us at some point in the future.  We have a lot of competition coming.  The good news for now is that they are missing one key to business success - the basic foundation of trust.  You may take me once, but it likely won't happen a second time.

Are you ready for a global market?  Do you have a plan for how to address the coming competition from around the world?  It is only a matter of time.  We all need to be preparing for some tough competitors.  Relationship will win in the end - so we need to invest now to build deep and lasting relationships.  Trust and integrity are the foundation for that.  Now is the time to make those investments!