A fascinating post by Jason @ Spend Matters on China sourcing and some of the cross cultural issues involved
“I recently came across an interview with an expert from BCG in China Sourcing (the sixth in a series) with some great insights to help understand the Chinese mindset. Among other issues, the story introduces and explains the concept of cheng bao. According to the interview, many Chinese companies like to operate with “arm’s length” contracts that may incorporate multiple parties without the end-customer knowing about all of the parties taking part in the sausage making. The word for this is cheng bao. Here is a great example to explain it (taken verbatim from the piece).”
