His proposition was simple: He knew all about China. He knew people and could set up meetings with key officials.
The exact nature of the business engagement was unclear. Still, he assured his client that delays in licensing and business operations could be addressed by paying a facilitation fee to the relevant third parties, who were friends of those responsible for issuing permits.
These were more like gifts, he explained. Given the money, he would arrange suitable gifts to facilitate business traction and ensure smooth operations and rapid approvals.
None of this was illegal, he stressed. It was simply the way business was done in China. He may have worked in China, but from his comments, it was doubtful he had worked at a level that would qualify him to become a business advisor.
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Similar pitches are found on social media sites, including LinkedIn.
His victim was all ears and impressed by the consultant’s knowledge of the Chinese business environment.
I have no idea how this proposal ended up as my coffee meeting ended before the wolf snared his victim.
See also: China bans below-cost car sales to end prolonged price war
Their conversation raises a significant question: Just how do you get a foothold in China?
One path is to work with reputable consultants who have an office and a signboard, rather than just a cheaply printed name card or a social media profile.
Where possible, talk to some of their clients to get feedback. Some people have a natural advantage and may be part of the expat Chinese community.
They can identify reliable people with the experience to assist you.
Other opportunities may emerge through engagement with Chinese companies and staff.
Tapping into their expertise or working with them provides a more reliable way to engage with China’s business.
However, one of the most significant ways to tap into these networks is through the activities of business councils.
For more stories about where money flows, click here for Capital Section
The Singapore Business Federation is an excellent starting point. Federation events bring together people with experience working in and with China.
They have a network of friends who can help, and some of them may be able to assist you.
Typically, membership is drawn from a wide cross-section of the business community. The lessons learned by the large companies are still useful for smaller companies.
The path to China is already well trodden. The pitfalls and problems are well known, so there is no need for those starting to repeat the mistakes others have made.
The cost of federation membership is recouped by just one deal that proceeds smoothly, or by avoiding one expensive problem because the business council introduced you to a colleague who can help.
The one path to avoid is the one that leads to an ambush by a wolf posing as an old China hand.
Technical outlook of the Shanghai market
The Shanghai index moved above the key resistance level near 4,100.
This is a good rally leading into the Spring Festival holiday period. The market bounce has developed from the support region indicated by the long-term group of averages in the Guppy Multiple Moving Average (GMMA) indicator.
The most important feature of the rebound is that the long-term GMMA did not compress during the market retreat.
This shows that investors remained confident in the stability of the longer-term uptrend. This is a very bullish reaction, particularly as we head into the holiday break.
A successful break above 4,100 has the previous uptrend line as the upside resistance level. This is currently near 4,250.
The target for the trading band calculation is 4,300. Reaching this target is hindered by the uptrend line’s placement.
This acts as a resistance feature, capping any rally behaviour above 4,100. The current value of the uptrend line is near 4,250.
The lower edge of the short-term GMMA touched the upper edge of the long-term GMMA.
This is sometimes an indication of a weakening trend, but in this case, the sustained width of the long-term GMMA suggests the trend remains strong.
The GMMA relationships suggest there is a good chance the uptrend will continue into the Spring festival holiday break.
This is bullish for the market when it resumes trading after the holidays.
Daryl Guppy is an international technical analysis expert in financial markets. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia China Business Council.
