We have gained insight into the problems that can result. Imagine receiving a shipment of thousands of parts, but all with the wrong dimensions. Even when working with China, you get what you pay for — the cheapest possible part is not necessarily the right part. Barriers in communication, time and distance can lead to major oversights. A local presence and strong quality assurance practice is mandatory for Canadian companies who do business with China — particularly considering that any new relationship with a partner in China will be on pre-paid terms.
Underlying false starts like these is a misconception here in the West that the only value China can offer is "cheap stuff." But China has much more to offer, including rich and effective business relationships … relationships like that can't be formed over the Internet.
It also amazes me how few Canadian companies doing business in China think to seek patent protection there, although China has an established, three-tiered patent process. This is another aspect of the services that we attend to on behalf of our customers, and it is useful to do it in person.
In China, trust and one's word remain stronger forces than legal documents, and the best patent protection there today may well be to have strong relationships with local factory owners and a local presence to maintain those relationships. Yearly visits to our operations in China — and to personally meet with factory owners and inspect their facilities — are core aspects of our business model in China. Between visits, we remember our Chinese partners and suppliers with common niceties such as holiday greetings — things that one would do with any North American partner.
Rethinking Canada's Role
Although even small Western manufacturers can no longer ignore China, the debate over whether China is a "necessary evil" continues. Is China a threat to North American economies? Is its rapid entry into the global economy a threat to employment and other opportunities here in Canada?
I believe it is a threat as long as we continue to not give China its due respect. The West regards China as an expendable labour force at its peril. The fact is, even as a relatively small player, our business is valued by the Chinese factories we deal with (some of which are very large, producing tends of thousands of batteries a day, for example). And, they are excellent to deal with under most of the same conditions of business that we have in North America: trust, mutual respect, win-win negotiating, and personal relationships.
For Canadians who are uncomfortable with what this may mean, it is time to rethink our own role in the global economy. Certainly, our sparse and geographically dispersed labour population will never compete with that of China's.
But consider this experience. In one of the factories I visited, they were manufacturing a shopping cart caster for a Western buyer. The special caster was brilliantly designed to lock up if the cart traveled beyond a certain radius from the grocery store. This is not an idea that any Chinese could have had — the need for and use of the product is light years away from China's reality.
In Canada, we excel at innovation. We're well educated, well-heeled consumers, and our physical, cultural and linguistic proximity to major markets in North America and Europe makes us ideally suited to innovating and marketing our innovations. Canadian companies do have to go to China. Their success will depend on how they choose to do it and their expectations about what business with China means.
Dr. Michel Jullian is President of OCM Manufacturing in Ottawa. michel.jullian@ocmmanufacturing.com
