China’s evolution has fascinated the world for three decades. Arguably no other country in human history has seen as swift a rise in its global role in such a short time. Since re-opening its doors to the West in the early eighties, China’s economy has continued to grow at an unmatched pace and has forever changed the global economy. In Mandarin language, “China” is pronounced “Zhong Guo,” which in English roughly translates to “middle kingdom.” Recent history has shown China becoming a center of development and a desirable place for growth in many business sectors, including direct selling.

The greatest resource a country or business could ask for is people. The most populous nation in the world (1.35 billion people) has already shown a large influence on direct selling, both inside and outside mainland China, and represents amazing opportunities for growth. Put in perspective, China’s population is equivalent to that of North America, South America, Australia, New Zealand, and all of Western Europe combined. Today there are over 40 million overseas Chinese, mostly living in Southeast Asia, where they make up a majority of the population of Singapore, and significant minority populations in Indonesia, Malaysia, Thailand, the Philippines and Vietnam—all growing markets for direct selling. Overseas Chinese not only have tightly connected communities where they live, but they also have strong ties back home, which makes networking and building international businesses quite simple. There are nearly 5 million people with some Chinese descent living in the U.S. and Canada alone, with the majority of them being only one or two generations removed from China. Most still have friends, family, and business connections in the mainland.

Direct Selling in China
Direct selling inside mainland China comes with unique government regulations. While foreigners are officially prohibited from being directly involved and multilevel marketing is officially illegal, the business continues to grow at a rapid pace. It began in the early nineties and saw rapid expansions as the Chinese began to learn about this powerful and new way of marketing and building a business. Because of that initial growth surge, the government banned all direct selling businesses for a number of years starting in 1998 while taking time to define rules around how legitimate direct selling companies should operate in China. At the time of this article, the government has granted direct selling licenses to 45 companies, 22 of them foreign companies—nine from the West and thirteen from Hong Kong or Taiwan. The largest is an American company creating over $4 billion in sales annually inside the mainland alone. That’s a staggering number by U.S. standards. Most people believe the near future will show the Chinese government continuing to loosen certain regulations, grant more licenses to legitimate companies, and eventually become the number one market in the world for direct selling. Current estimates show combined direct selling revenues in the Greater China region growing at more than 20 percent each year, with total sales equivalent to $27.3 billion and predicted to hit $90 billion in the next ten to fifteen years. In comparison, total U.S. direct selling revenues stand at $32 billion annually.

Why Are the Chinese Great at Networking?

  1. Chinese people are incredibly passionate, committed, hard working, and are willing to sacrifice a lot to achieve their dreams. Rather than having a sense of entitlement, they believe they should earn their success. They savor opportunity.
  2. The Chinese care about family. Many working-age mainland Chinese have one set of parents living with them and, while government regulations are changing, still have only one child. Working parents will do everything they can to give their child opportunities they didn’t have, while at the same time providing for their own aging parents.
  3. Chinese people place a high value on education and personal growth. A dream for many mainland Chinese is sending their child to receive an overseas education and they will work diligently to accomplish this. While many go back to China after completing their degree, many also choose to stay abroad to live and work, expanding the global influence of the Chinese work ethic, heritage, and culture. The ages of Chinese students going to study overseas varies from post-graduate all the way down to elementary school. There are currently over 500,000 new Chinese students going abroad to study each year and the number coming to the U.S. alone for college is increasing 25 percent each year. That said, more and more Chinese educational institutions have approached and rivaled some of the best international standards and the inverse is also true: many global students are choosing China as a place for their own international studies.
  4. Chinese people thrive on strong leadership, are inspired by a vision for the future, and want to work as a team. They think big. Today their definition of personal and business success is much larger than a generation ago. Continued learning and personal development are top of mind in the Chinese psyche. People will spend thousands of dollars on training courses to increase and improve their abilities to succeed and provide a better life for themselves and their family. They want to learn, to grow, to become better—and not just during formal education periods in life.
  5. “Guanxi” (relationship) is essential to the Chinese mind and heart. Chinese people are some of the best networked people in the world. They care about and want to do business with their network. They are loyal to and grateful for their friends, family, and teams. It’s common to sit at a late dinner and see people toasting the good qualities and their appreciation for their friends and/or team. There is a historical sense of respect and care for others. On a crowded bus people will give up their seat for a child or elderly person in an instant. This is true of Chinese culture inside and outside mainland China.

Challenges and Caveats
Quick change and rapid growth always come with challenges. China is no exception, as “generation gaps” almost take place not in decades but seemingly every few years.

  1. Millions of Chinese, for the first time in thousands of years of their family history, are now having an opportunity to create personal wealth. One side effect of this is a lot of pressure to succeed materially. For some people it can cause an imbalance in life, leading to depression, anxiety, high stress levels, and general feelings of being unfulfilled as they struggle to put into context this unprecedented opportunity to succeed.
  2. The competition and desire for success also translates into high expectations being placed on children. Many parents find it difficult to manage the rapid pace and competitive nature of the traditional education curriculum, placing pressures on children at a much younger age than seen in other parts of the world.
  3. China’s population is aging quickly. The health care system is convoluted, making it difficult for the average person to get good care.
  4. There is also some distrust of certain government policy and decision-making. There have been food scares concerning milk, beef, baby formula, and many more. People are demanding transparency and don’t always trust the perspectives shared by their government.
  5. Despite a rising cost of living, a four-year-college graduate still starts at well under $1,000 USD/month in their first job and hundreds of millions in China still live below the poverty level.
  6. Many people are dissatisfied with how the government is handling pollution and environmental concerns, the housing market bubble that’s beginning to burst, and the continued suppression of certain civil liberties.

While China is working to make progress in many of these areas, it is reasonable to assert that they have much work ahead of them.

What Do Chinese People Want?
The Chinese get excited about and will spend money for sophisticated travel, luxurious goods, social status, recognition, financial freedom, health, and control of their own destiny. By some estimates Chinese people will purchase half of all luxury goods worldwide next year. They are motivated to stay young, beautiful, thin, and healthy. The health and beauty market in China is projected to become the largest in the world in the coming years.

Thirty years ago it was difficult for the Chinese to leave their country and travel overseas. Today any significant tourist destination in the world is fully staffed with Chinese speaking employees and tours designed only for Chinese travelers. According to government estimates, Chinese tourists spend nearly $50 billion abroad each year. Experiencing the world is obviously important to many Chinese.

It’s human nature to want to feel important, to realize achievement in front of peers, to be listened to and respected. However, the importance of genuine recognition can not be overemphasized when doing business in Chinese communities around the world.

For mainlanders especially, coming from an environment where only the top performers are awarded, it goes without saying that recognition is a critical element to building a team. There are high levels of expectation placed upon traditional workers and competition is fierce. Therefore, giving people recognition, rewards, and appreciation for their efforts and results while building their team should be a top priority for all leaders.

Global Impact
People are learning Chinese language all over the world. Thirty years ago Chinese people had a difficult time traveling anywhere, for either leisure or business, and speaking their native language. Today, it’s commonplace. In a few short years the Chinese economy will eclipse the U.S economy as the largest in the world, having recently outgrown Japan for the number two spot.

The significant impact of Chinese spirit, work ethic, culture, and education to this point in human history is undeniable. All signs point to this impact only growing in the decades to come. Regardless of where you live, it would be wise to intentionally include in your business plan this amazing group of people!

SHAWN GRAY has been building his network marketing business mainly in Greater China for the past five years. Previously featured in the Jan/Feb 2010 issue of Networking Times, Shawn and his wife Carmen are featured Master Networker in this issue here.

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