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    The 2009 UCBC breakfast meeting series was kicked off by new member Dr. Xiang Sheng Yin from Cargill. Based on his personal studies and 17 years of experience at Cargill, he has focused on the effective establishment of trust and credibility with customers in China. The presentation included many of his personal stories describing the business environment in China.  A UCBC member commented afterwards that Xiang’s “sense of humor definitely [added] color to the already well prepared material”.

The 2009 UCBC breakfast meeting series was kicked off by new member Dr. Xiang Sheng Yin from Cargill. Based on his personal studies and 17 years of experience at Cargill, he has focused on the effective establishment of trust and credibility with customers in China. The presentation included many of his personal stories describing the business environment in China.  A UCBC member commented afterwards that Xiang’s “sense of humor definitely [added] color to the already well prepared material”.

ucbc_webDr. Yin started the presentation by briefly introducing Cargill’s business in China. Cargill started trading with China in the 1970s, and it made its first investment in China in 1987. Due to more than 20 years dedication in the country, Cargill now operates 34 wholly owned companies and joint ventures in 20 provinces. These investments include the production of many food ingredients, as well as products for farmers such as feed and fertilizers. The total investment of Cargill and joint venture partners in China is over US$700, employing over 4,400 people. The company’s annual trade with China is approximately US$5 billion. Due to the fast pace of growth, China is a target market for many of Cargill’s customers worldwide. Being trustworthy, creative and enterprising is Cargill’s approach in working with customers in China.

People in different cultures value trust differently. Dr. Yin used a simple analogy to describe the types of personal relationships. The first type follows the peach model, i.e. easy to enter a relationship but hard to get into the personal core.  The second is the ping pong ball scenario, hard to break-in but wide open once inside. The third is like a head of onion, one layer at a time. These models of relationship very much represent those of American, Japanese and Chinese respectively. In China, each time one fulfills the needs of the customer, she gains a layer deeper into a relationship. Therefore, building trust and credibility is a constant investment.

So how can one fulfill the real needs of the customers in China? The process of the layer cycle calls for “learn – develop – delivery”.  Learn is to explore and discover what the customer needs. Develop is to build our offer to solve customers issues. Deliver is to present the value proposition. Following such a cyclic progress, one can accelerate the effective establishment of credibility, leading to major successes with customers in China.

Cargill places a high cultural value on its operations. Here is the vision for Cargill in China:

  • Our purpose is to promote sustainable agriculture and a secure food supply for China
  • Our mission is to improve efficiency and add value in the production, processing, distribution and trade of food and agriculture products in China
  • Our approach:   
    • Add value to our customers and rural communities by training farmers, continuing investments and providing jobs and opportunitie
    • Improve the efficiency of distribution systems for food and agricultural product
    • Share our worldwide agriculture and food expertise with the Chinese government and customers
    • Enrich the communities where we work and live  

 

It is evident that Cargill is closely aligning to support local customers and communities in China.

In exploring and discovering opportunities and customer’s needs in China, Xiang shared his insights in the following areas: space for harmony, the role of an agent/distributor, customer’s maturity in international practice, and your opportunity space (as demonstrated through the example of the introduction of premium light beer in 1990’s).  This learning stage is a strategic step to enter the market.  The importance is reflected by the well-known statement of Sun Tzu’s Art of War: “ … elements of the art of the war are first, measurement of space; second, estimates of quantities; third, calculations; fourth, comparisons; and fifth, chances of victory…”.  To the customer, devoting effort to develop understanding is a sign of the long-term commitment to the market.   

In developing solutions to meet customer’s needs, Xiang introduced the concept of “glocalization” in managing regional versus national demands. For the delivery, speed, scale, and supply chain management will be factors that are significantly different in China than in the United States.  For example, the beer output of China has been tripled over the last 15 years, making China the largest beer producer of the world. In contrast, the production in United States has virtually remained the same (See graph). In 2007, China’s beer production grew at 14 percent, i.e. an additional 40 million barrels, which is equal to two times Canada’s total annual output. Being a part of that growth is exhilarating, but one also needs to prepare to invest the resources and energy to take the ride. As one of Xiang’s expat colleagues in Shanghai puts it “what happens here in China in one year would normally take five years to achieve in the USA”.

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By delivering one’s solutions in a mutually beneficial manner, one gains a higher level of trust from the customer. This will speed up the fostering of a strategic partnership with the customer in China. Each time one completes a cycle, he is one step closer towards the core of the relationship. Dr. Yin concluded the presentation by reinforcing that the progress of developing trust and credibility in China is cyclic, but can be accelerated. Establishing trust and credibility is a journey, and the ultimate partnership is for the long term. He encouraged everyone to pursue his/her dream in the China market and enjoy the experience in person, with a positive outlook.

Xiang Yin is the Global Technology Director for Cargill Malt.  His 22 years of working experience covers a number of geographies including China, UK, Canada and the United States. He was instrumental in setting up one of the Cargill operations in China in the early 1990s, and served on the Board of Directors of the joint venture as well as offering technical services to the customers. Xiang has traveled extensively to work with customers worldwide in leading the technical services for Cargill Malt.

Xiang holds his first degree from China and a PhD from the UK. He is the President of the American Society of Brewing Chemists (ASBC), and recently served as the Chairman of the Board of Directors for the Brewing and Malting Barley Research Institute, Canada. Xiang is the author or coauthor of over 40 patents and scientific and technical papers for international conventions and publications. He is an editor of the Journal of ASBC.

Cargill recognized by the U.S. State Department

In November 2008, Cargill won the U.S. State Department’s 2008 Award for Corporate Excellence for being the leading international business in corporate citizenship.  Cargill won the award because of their work in China which includes a free training program for farmers called Cargill Animal Nutrition (CAN).  Two million Chinese farmers have gone through the CAN program.

Cargill is also working on China food-safety education, has rebuilt over 40 schools through the Cargill Cares Rural Education program, and has donated over US$1 million for earthquake relief in Sichuan Province.

 

Upcoming UCBC monthly meetings

The February meeting of UCBC will be Feb. 4.  The topic will be “China Resources and Services at the University of Minnesota”.  The presenters will be Dr. Yongwei Zhang, Director, and Joan Brzezinski, Assistant Director, of the China Center at the University of Minnesota.

The March meeting of UCBC will be Mar. 4.  The topic will be “Culture Clashes - United States vs. China”.  This will be a panel presentation featuring Mike Xiong of Thomson Reuters (also cofounder of UCBC) as well as Hong Cia and Sam Wils of US Bank.

To register e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. or call Jim Smith at 612-865-6543.  The fee is US$20 to attend.  The meetings are free for UCBC members and for college students.

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About

CHINAINSIGHT (CI) is published monthly ((except July/August and November/December are combined) by China Insight, Inc., an independent, privately owned company started in 2001 and headquartered in the Twin Cities area of Minnesota.

CHINAINSIGHT is the only English-language American newspaper to focus exclusively on connections between the United States and the People’s Republic of China (PRC).

Our goal is to develop a mutual understanding of each other’s cultures and business environments and to foster U.S.-China cultural and business harmony.