Business Expansion Woven From Trust

by Dr Bob March
This negotiation case is published with permission from Dr Bob March's excellent book "Chinese Negotiator".

Another example of someone who fitted in completely with the Chinese is the China trader Paul Winestock, who had been dealing with the Chinese since the 1960s. As a trader of textiles in China during the 1960s and 1970s, Winestock built up a large network of customers and friendly officials. One of the latter, who had known him since he was a young man living in drafty provincial hotels with no dining room, was Li Haoran, who had first appointed Winestock as a selling agent for the Textile Import-Export Corporation. When Li moved on to become managing director of the Animal By-Products Import-Export Corporation, Winestock approached him and asked to be appointed the exclusive distributor and wholesaler of Chinese leather shoes in Australia. Eventually, he was given control of twenty-five percent of China’s shoe exports, with agreements for the regions where the best shoes were made, namely, Beijing and Shanghai.

In 1982, Winestock sold his business to the multinational corporation Pacific Dunlop and was asked to train George Preston, one of its senior managers. Preston had this to say about Winestock:

“Winestock’s reasoning was this: When you made money in the good days, you had to remember that, if the Chinese needed to sell at a higher price, you had to be able to give it to them somehow."

“Winestock had an advantage: He ran his own private company. He didn’t have to report to a board. He was able to take a long-term view. So he had the freedom to say, ‘Well, I don’t need to make so much profit this year. I can live without making $2 million this year. It’s going to cost me half a million, but I know I’m going to get it back.’ ”

Winestock’s style was blunt, but such was his acceptance by the Chinese that they are said not to be have been offended. He says, “I can tell them off and they take it from me. But before I do, I think” (Blackman 1993, 1997).

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