East vs West
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Cultural Differences: Doing Business In China vs Australia

Opening Shop In China vs Australia

In China, Guangzhou, while conducting a regular English class with Chinese students, the topic of Chinese and Western business culture arose.

One student asked, “What is business like in Australia?  Is it similar to China?”

The Barest Business Model In China

I began to explain, “One big difference between Australian business culture and Chinese business culture is that the bottom in Australia would be a business like McDonalds.  That is the bottom.  But in China, you have a small district (小区).”

Everybody turned to each other and muttered, “What is 小区?”

To explain a small community district (小区) to a Westerner, it is like a gated area of worn-down 7-level apartment blocks closed-off from and enclosed by more modern high-rise apartments, an area where business and residential zones mix, where animals and kids run around, and piles of rubbish stack up.

I had to write it on the white board.

I then said, “In a Xiaoqu (小区), the bottom of the apartment buildings have small family shops.  The owners will lease a two by three meter hole in the wall, and they will sell all kinds of things from there.”

“You don’t have that in Australia.”

The Starting Point Of Business In Australia

The English students then listened as I explained Western business standards.

“The starting point for a job in Australia would be McDonald’s or Seven Eleven (7/11).  Then you would go up from there.”

“Whereas, in China, the starting point would be the little shop on the ground floor of the apartment building, where teenagers from the countryside could be hired to look after the shop.”

“You could even sell products on the street outside a mall.  That is a legitimate business model in China.”

“You will never get this kind of company in Australia.”

“There are no small community districts (小区) in Australia”.

Australian Business Professionalism

“Australia is a modern country, and everyone there is expected to be a professional.”

“Only you can do your job in Australia.”

“But when I come to China, there are many people who can do my job.  There are three or four people that can fill in for what I do.  I am not as special as I would be in Australia.”

“And because Australia relies on professionals, then the competition for those jobs is more intense.”

The Cost Of Doing Business In China

I tried to make it sound pleasant by saying, “In China, you get a mixture of modern business and also small shops like this one, which are made profitable by a dense population in China.”

“No matter where you open a shop, thousands of people will pass your business and walk in.  If you open a shop up in a small community (小区), it will be convenient for people.”

The Cost Of Doing Business In Australia

“But for that to happen in Australia, the government would have to deem those small shops lawful.”

“All business needs lawful permission to open up, and the business is required to pay taxes too.  The costs in Australia for small business is not worthwhile, so people don’t do it.”

“Australian businesses also have to comply with occupational health and safety regulations, and food safety laws, for example, so that clean water is used to cook food, and to ensure food that falls on the floor is not served to customers.”

Houses On Australian Residential Land

“Also, in Australia it is not feasible to have Chinese-style small businesses, because many suburbs have built houses on their land, rather than apartments, so there is no physical space to put such a small shop.”

“Many houses in Australia are one-story high.  Everything is on the ground level.”

“There are garage sales, which is the only kind of example Australia can provide, but these are sporadic, and only sell second-hand goods from one individual house.”

Australian Residential And Commercial Zones

“Also, Australian cities are zoned in a way that separates commercial, residential, and industrial areas.”

“The land for each house however is big, so you would need to walk great distances to reach the shops, which makes these kinds of Chinese-style small shops impractical.”

“Commercial shops are forbidden in residential zones, but a residential zone can have one small internal zone for a small shopping district.

“You would not be leased commercial space in a small suburban shopping complex if you were a small, family business.”

“It would not be feasible in Australia.”

Chinese Assumptions Of Western Business Models

As I summarized this to the Chinese students in my English class, it helped everyone in class better understand the cultural differences between the starting point of opening a business in Australia or China.

It made me remember two rich Chinese ladies I had met in Sydney who specifically came to Australia to start a business.  They had no idea.

They assumed they could throw a million dollars into a business – with the intent to help their children immigrate abroad – and it would run as effectively as a business in China.  They had no clue about Australian workplace laws, or what denotes success in Australia.

In the end they gave up.

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