Australia - China - Poltics

[Crazy Dazz]

The following is a true story, when building a plant for Chinese owned company in WA:

We were notified that a new "Project Director" had been sent from Beijing. We expressed our condolences to the (Chinese) guy who had been managing the project to date. Don't worry he said, this new "Project Director" comes to work in his slippers, sleeps in his office till lunch time, then plays golf on his computer.

The approved budget was $60M. Even though we had been giving them a $120M forecast for months, they never passed on that on or sought approval. When we finally exceeded the approved budget we received a letter from the head of the corporation in Beijing, telling us to cease work and demob immediately.
Don't worry said the project manager, the letter is not signed, which mean that you can ignore it. From now on, we have "Gentlemen Agreement, just us three in this office" to finish project.
How do we get paid? "Don't worry, on Friday I go to play golf with my 'special friend', he will talk to his friend at the Bank of China, and I get you $20M." Next week I get a phone call from head office "the bank just rang, we've received a telegraphic transfer for $20M USD, with nothing but your name on it!"

The Chinese ARE ruthless, they do put "China First", AND think very long-term. But they are also corrupt, dishonest, and insanely xenophobic.

[shedcoupe]

Clive Palmer’s mine (asbestos with iron mixture ...) has a lot of Chinese staff such as engineers.
In their culture no one rocks the boat or challenges superiors, so when idiocy is approved it stays approved.

[Crazy Dazz]

Originally Posted by shedcoupe

Clive Palmer’s mine (asbestos with iron mixture ...) has a lot of Chinese staff such as engineers.
In their culture no one rocks the boat or challenges superiors, so when idiocy is approved it stays approved.

Correct.
I've known a few different corporations that have tried to do business in China.
Two Massive Problems:
Quality Control (or the complete absence thereof); and
Getting Paid.

Many years back, I worked for Bradken. At that time they had set up a Foundry in China. The initial goal was to leverage Bradken's expertise but use cheap Chinese Labour & Steel, to supply the burgeoning East Asian Mining Industry.
But the quality control was driving them nuts. The Chinese just wouldn't do it. Their whole culture is geared towards covering up mistakes, even when they are somebody else.
It's clearly not impossible, some companies have managed it, and some Chinese companies produce brilliant stuff. But most don't.

More recently I worked for a local Engineering firm. Their expertise was Engineering & Managing Industrial & Mining projects.
They were invited to be JV partners on a big project in China.
I wasn't in an advisory position, I was just the numbers guy, but I did warn the CM what would happen.
The Australian Bosses thought it was such a windfall being allowed to procure and supply a lot of the materials and specialised labour on a "Cost Plus" basis.
It didn't seem to occur to them that "Cost plus 15%" turns into "Cost minus 100%" when you don't get paid.