The Pellucid Perspective - September 2011 - (Page 4)

tactics. Americans have to be prepared for that, and ready to use those sudden shifts to their advantage. “Culturally, we get offended when people nickel and dime us or change the rules, but that’s just good business to them,” said Toro’s James. “The ones who succeed [in China] have been burnt and got over it. You can’t win every battle, and you have to learn when to give in, because the Chinese always want to negotiate. If you’re going to get slighted over every little thing, you ought to just leave. It’s like a bad marriage.” APLG’s Jayson had a considerably more pithy analogy to those negotiating surprises, even when the deal eventually gets done, saying “It’s like when you get pregnant and everyone congratulates you, but they don’t ask you how many times you got screwed.” During his early years of building golf courses in Asia for the Nicklaus group, Sasser said he learned one negotiating strategy that he still shares with first timers doing business in China today. “You always have something in the negotiation that you can give up, and you negotiate the heck out of that for the first few days,” Sasser said. “Then, if and when they finally beat you down on that, you shift to the thing that you really wanted and tell them that since you gave in on the first thing, you need to take something home to your bosses. They’ve saved face on the first thing, and they understand you need to do the same thing on the last thing, so they give you what you really wanted all along.” Government intervention a constant threat If golf course development weren’t exciting enough in China today, there is the ever-present threat that at any moment in time, the central government could stop a planned course development in its tracks, or eradicate it entirely. It is after all, despite its decidedly capitalist leanings toward economic development, a Communist country, and there is no balance of powers to prevent the government from halting course construction if the developers have failed to meet all regulatory, environmental or compensatory requirements, or if attention has been called to such shortcomings by the media. Robbins noted that local media outlets in China are becoming more vigilant in pointing out perceived injustices by golf developers, and cited one of his recent projects where the partially constructed site was abandoned and replaced by 8,000 new tree plantings! “The interesting thing was that my client was a state-owned company,” Robbins said. “They closed their own course!” The Chinese central government is in many ways between the proverbial rock and a hard place in terms of golf development. On the one hand, the country needs the economic contributions of golf and related real estate and tourism development; on the other, the country’s huge rural population which needs cultivatable farmland to survive has to be considered, for both economic and political reasons. Despite its vastness, China also has environmental issues to consider, particularly water quality and availability. There have been considerable recent rumblings from Beijing about a set of firm guidelines for golf course development in China. While it would depend upon what those entailed, most American stakeholders we talked with said they would welcome rules they could base their decisions on, rather than the extremely fluid nature of arbitrary decision-making that prevails in China today. Recent posts on various China-related social media sites indicate that Chinese government representatives have been dispatched to new and existing golf course sites to check for regulatory compliance and ensure that local farmers have not or will not be displaced by golf courses. Whether those inspections result in fines, enforced practice changes or shutting the course project down entirely will probably be determined on a case by case basis. While most of the involved parties anxiously await any official guidelines from China’s central government, Jayson, for one, doesn’t think any firm rules of the road will be forthcoming. “I don’t think the government will ever come out with those guidelines,” Jayson said. “That would make it too defined, not loose enough for Chinese tastes. They always want room to negotiate and interpret things in different ways.” Regardless of whether or not firm guidelines for golf development emerge, it seems obvious that based on sheer numbers, the golf development scene in China will continue to be a dynamic one for some years to come. The trick for American entrepreneurs and contractors will be to bob and weave with the n inevitable – and frequent – changing conditions. sePTember 2011 4 The Pellucid PersPecTive http://www.clubcar.com http://www.clubcar.com

Table of Contents for the Digital Edition of The Pellucid Perspective - September 2011

The Pellucid Perspective - September 2011
Contents
The China syndrome
Shift happens: The impact of Hispanic growth on local golf markets
Promoting rounds at rate card — a novel concept?
Promoting rounds at rate card — a novel concept?
There’s golf in them thar’ (sand) hills
August weather impact, July utilization
Seattle, WA Core Business Statistical Area (CBSA)
Seattle, WA Core Business Statistical Area (CBSA)
The long and the short of it

The Pellucid Perspective - September 2011