Learning to Do Business in China

Rabbi Luntz lives in Perth, Australia, with his young family and has been an RFR for the OU in China since 2014. 

Question: When was the first time you went to China?  

Answer: The first time I went to China was a stopover in Hong Kong, and I spent a Sabbath in Guan Zhou, the next-door city to Hong Kong. That was just a short stop but every time I would fly between Australia and Israel or Europe, I stopped over in China. I always enjoyed it.  

Question: When did you begin working there?  

Answer: I was studying in Israel for about three years, and I realized, “I’ve basically run out of money; it’s time to go to work.” I was flying back home to Australia and I figured I would try to find work in China. I was in Guang Zhou and a businessman said to me, “Now is the Canton fair. I’m looking for employees.” He said I could work with him for a month; the two of us would see if we liked it.  

That was suitable for me. I worked for him for a month and found it to be interesting, satisfying work. After a month I told this businessman that I wanted to start my own business; I would function as a buyer’s agent. The first time you come to China you don’t know where to find places, how to make a purchase, how to pay taxes — you don’t know anything. The buyer’s agent will help find a supplier, help you negotiate the product, find the best deal, organize quality control and make sure you’re getting what you paid for.  

I was working with people from all over the world. There were a lot of Latin Americans. In general, they don’t know English, so they really couldn’t communicate with Chinese people. I worked a lot with people from Mexico and Brazil (I also speak Spanish and Portuguese). And I have some customers from France (I speak French as well).  

Question: How did you come to the OU?  

Answer: I met Rabbi Motti Grunberg, the OU’s rabbinic field representative for China, and he asked if I’d be interested in work certifying food as kosher. I thought “why not?” and that’s how I started. I went with him a couple of times; he showed me how it works. Slowly, slowly I started working more and more. It’s been about seven years – I started in 2014.  

Question: What are some things that you have learned?  

I learned a lot about doing factory audits from Rabbis Greenblatt and Grunberg.  

Rabbi Greenblatt really used to put his head into it. He used to quantify what is incoming and cross-check to see the output and input to ensure that everything equates. He would also independently corroborate everything. He wants to make sure that a flow can only go in one direction and not somewhere else. We need to be able to track the products and ingredients. 

Rabbi Grunberg would spend a lot of time in the meeting room and try to understand everything thoroughly before even stepping into the production area. He was very methodical and careful to understand everything.  

Question. What do you enjoy most about your work?  

Answer: I love the challenge of it. I guess it’s exciting because you have to check that what the customers – the manufacturers are saying is accurate.  I like to do it in a really soft way. Everyone has a unique style.  I actually find it very exciting to learn to do that. 

Question: What is something you would like Chinese companies to know about our work? 

Answer: It is hard to communicate what “kosher” means to us. How important it is.  I try to explain that this is a form of restriction, and a development of our spirituality as Jews, our connection to God. We look at it as a struggle between the soul and the body. I think they should understand that we want to strengthen the soul, and eating kosher food, and avoiding non-kosher food, is a way of doing that.  

Question: What have you learned in terms of food technology?  

Answer: For someone who is not used to it, it’s much, much more complicated than you can imagine. Perhaps that’s the case even in the West. Not all countries have as much food technology as China. For example, here in Australia there are a lot of food factories that make consumer, that is, retail products. But in China there are mostly companies making ingredients that are central to the ingredients supply chain. The retail products are then assembled elsewhere.  

Question: Have you seen any changes in the supply chain recently?  

Answer: When I do audits with my companies now, they show me the finished goods warehouse, and it’s totally full, and they can’t send anything. It’s not worth it. The cost of shipping can be $20,000 whereas before it was one twentieth of that. One that I remember was salt and pepper, another was one-time-use plastic cutlery. A lot of factories are not producing because the cost of shipping is too expensive. We have a customer who sent a container to America and the entire container got put aside; the Chinese put the ship into a port somewhere, but it didn’t get out of China. 

Question: When you worked as a buyer’s agent, what cultural differences did you need to negotiate to ensure the transactions were satisfactory?  

Answer: There are a lot of differences. Chinese in general think long-term. For example, if you call a Chinese factory and you want to purchase once, they might not be that interested in speaking with you. But if you are interested in long-term, then there is something to talk about. I would always tell my customers that this is something the supplier wants. Similarly, one of the things that works is to say, “We will order more in a few months.” You have to show your suppliers that your business is big, and that it’s growing. It always has to be long-term. If you make a one-off order the supplier may not be invested in making a good quality product.  

Question: How could the Chinese understand us better?  

Answer: Maybe we’re a bit more direct. They can say something leisurely, a bit softer and we’re much direct and to the point: That’s why it takes them so much time to get through conversations. Whenever you visit a factory, they take you to a tea room after you have visited. They sit you down to a tea place and we sometimes talk for hours. But we’re much more to the point: this is the price we should agree upon, and let’s leave. They want to build a relationship with you, and trust you. Part of that is that you become friends, and then when you do business as friends, if let’s say the buyer didn’t make a good enough profit, it’s considered acceptable to renegotiate.  

For example, if I sell you something right now, we can make a deal at $5.00 for a single unit of a gadget. Then the next day the seller says, well, it’s worth more than $5.00, it’s worth $6.00. Once you’re doing business with friends, that kind of transaction and communication is considered more acceptable. For us, however, a deal is a deal. Once you’ve promised at $5.00 then you have to keep it. The way the Chinese have structured the relationship, it makes it much more acceptable to renegotiate. 

Rabbi Gavriel Price
Rabbi Gavriel Price is a member of the Ingredients Approval Registry as well as a rabbinic coordinator for the flavors industry. He lives in Passaic, NJ. He and his family love hiking.