Chapter 9China: Price => Value-Add

Who wishes to fight must first count the cost.

—Sun Tzu, The Art of War

Questions Answered in This Chapter

I understand that China has the advantage of lower production and manufacturing costs, but how can it afford to be giving product away for free to our customers?
Their discounting is ridiculous. Even after I give the biggest discount possible, digging into my margins, I still get undercut by my Chinese competitor—by up to 50 sometimes. How can the Chinese afford to do that?
I heard that the Chinese offer very unique payment options that sometimes don't require currency as a method of payment. Can you tell me more about that?
How do some of these customers or countries that cannot afford large infrastructure purchases still end up making significant procurements from Chinese vendors?
Some of my customers tell me about interesting business models or arrangements that Chinese vendors offer them. They sound quite attractive and almost too good to be true. How can these Chinese companies offer such compelling propositions and still stay in business over time?

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