China and Italy International Business Practices

Introduction:

I have experience in both Italy and China while working with SAE International as Engineering Events Production Manager. A long and fancy title for managing a team of 11 staff that produced on average 40 events worldwide. SAE International is a non-profit “mobility” engineering professional association. It was created over 100 years ago as the Society of Automotive Engineers and initially it was a way for early U.S. automobile manufacturers to create and establish automotive standards. Today it has grown to include engineers from the aerospace and commercial vehicle sectors; as a result the product offerings go well beyond industry standards to include publications, education, and STEM student outreach. It also has developed a portfolio of global symposiums, conferences and congresses, delivering technical engineering content in an unbiased, open forum. Creating and producing events, trade shows, even designing and fabricating trade show exhibits is my profession and passion. My hands on experience producing SAE events globally and specifically in Italy and China are the basis of my primary research. However, this will be supplemented with secondary research as well as literature review.  

Executive Summary:

China and Italy share a similar background, two ancient cultures, which for centuries have developed closeness when merchants and missionaries, like Marco Polo and Father Matteo Ricci, a Jesuit priest, began opening up trade routes with China. Recently (2015) Italy and China celebrated the 45th anniversary of the establishment of diplomatic relations. This actually preceded the rest of the European community. The business interaction between cultural, political and economic systems is not easy. The current Sino-Italian relationship has China focused on investments while Italy fosters cultural exchanges, tourism and the “Italian lifestyle”. The investment by China certainly has had a positive impact, especially with job development at a time when Italy’s unemployment rate is one of the highest in the EU. However, the majority Italians hold negative views regarding China. The Italian public sees China as an economic threat. The argument is that China is invading the Italian market, providing cheap, low quality products that reduce Italian manufacturing jobs. This sounds familiar to the U.S. and even global public concerns with China. And to a degree it is substantiated by China’s industrial policy, turning the country into a low cost competitor in medium and high skilled industries. This is a significant and direct threat to Italian SMEs.  

China:

China is a reality made up of many provinces that offer many opportunities for businesses able to grasp the differences. Today China continues to offer huge business opportunities but needs preparation and well defined strategies. These strategies require attention to location and localization. The general Chinese market is massive, what is common or acceptable in Shanghai can be very different in Beijing. To establish a business in China requires adapting to an evolving country and managing to be part of the locality without losing your identity. Western businesses to be successful, must first establish the ability to meet and exchange dialogue with Chinese partners and representatives.  In short, act like Chinese while keeping intact (or disguising) some of your own character.