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Feb 5, 2013

Making a Cake in China: Insanely Complicated and How your Business and Legal Advisors can Assist

Most of the time I prefer to write about the cultural differences in the Jungle and how they impact foreigners doing business here. Sure, I can write about the law and it’s changes and provide a list of things that you must do if attempting to do business here.   As I have said before, there are many other websites that do this and at the end of the day you probably don’t want to know or don’t care and in fact should leave this to your lawyer and concentrate on your business.

With that in mind, I had an interesting experience recently when I went to buy a birthday cake for the 237th birthday of the United States Marine Corps. As a former Marine, it is a tradition to celebrate the birthday each year and I thought I would have a cake made and share it and some drinks with some friends here in the Jungle.

So I marched into the cake shop with my assistant, who is a very competent translator (I can speak and understand Chinese, but not cake Chinese as it’s not something I usually need to talk about) and a detailed diagram of the cake that I wanted. You would have thought that I wanted them to make a nuclear reactor or enrich uranium.

They immediately said no. So I asked why and they said “we don’t have a box that big.” I was asking for a plain white sheet cake with some writing on top. "So, you don’t want my money because you can’t figure out what to put the freakin cake on? I’ll bring my own box" and that led to “okay go get your own box and come back and then we will make the cake.” "How about you make the cake and then I’ll bring the box when I pick it up?" “No, we need the box now.” "How about if you take two of your boxes and put them together and then you will have one box?" The look they gave me was the same look I get from my clients when trying to explain the intricacies of cross border mergers and acquisitions and the impact of the Internal Revenue Code.

Okay forget about the 30 second chore of putting two boxes together, I’ll bring a box tomorrow when I come. “Okay.” Whew, crossed that hurdle. “Now what kind of cake do you want?” It says right there on the intricate diagram that I drew. HAPPY 237th BIRTHDAY and then the Marine Corps Logo below it. “Okay?” So, I stood there for a few minutes because when they say “Okay” in the Jungle, you should be nervous. Then they did nothing but just stand there staring at me like I had three heads. Okay, so do you want to write this stuff down? “Okay” Nervous. So, I started telling them how to do their job. I will pick up the cake at 4 pm tomorrow, is that okay? “Okay” Nervous. How much will it cost? “68 RMB per pound.”

And, would you like to tell me how many pounds it’s going to be? “Oh, about seven pounds”. So, I’m paying the equivalent of $70 dollars to get a 14×14 sheet cake? “Yes, that is the price”. Okay, nervously. So, they proceeded to write everything down and then we moved over to speak with the actual baker, who was within three feet of us during the entire 1 hour conversation to make sure he understood. I provided him with the diagram and a color copy of the logo. Here we go again. “We can’t do this.” Why? “We don’t have a box big enough” I’ll bring my own box. “Yes, but I don’t have anything to put the cake on after I bake it.”

How about you put two of those flat pieces of cardboard together and then you can put it on that. “Grunt, okay” “Now where do you want the writing?” Exactly how it is shown on the diagram. “Okay, I can write it in black” Okay. What about the logo? “I’m going to cut out the piece of paper you gave me and put it on top of the cake, where do you want it?” You gotta be kidding me, you need to make the logo out of that edible writing stuff that cake makers use. Haven’t you seen the Cake Boss? “I can’t make the logo.” Why not? “Too difficult.” Well just make it close. “Okay” Nervous. “I can make it in black only.” Why? “It’s the only color we have.” You gotta be kidding? “No.” Okay just don’t put a logo on there and I’ll figure out something later. Well, this went on for another hour, and fortunately I was joined by a Chinese-American friend who has infinitely more patience than me and figured out a way to make the logo out of chocolate from a local friend of his.

If it wasn’t for his help I would have never got the cake and in the end it turned out awesome. So, this story isn’t about the law or how to structure a cross border acquisition or even how to comply with the confusing tax regulations in the Jungle.

It’s about the difficulty of doing business here and how something as simple as ordering a birthday cake can be a huge ordeal. Imagine purchasing custom products from a manufacturer or entering into a Joint Venture with a Chinese company or bringing your products into this market.

A great deal of patience along with competent advisors to help you will save you time and money, but most of all sanity.

By Frank Caruso.  Chair, China Practice Team

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.