12 March 2013

10 Common Mistakes When Doing Business in China and How to Avoid Them!

In my last piece I wrote about the sometimes confusing mix of highly contemporary eye-catching architecture in China contrasting with a strong adherence to traditional beliefs and customs.  I would like to follow this up with a few specific examples of common mistakes people make when they are first doing business in China. After many meetings, frustrated de-briefs and 17 years of travel, here are my top ten:

1.The top mistake I see is people rushing to get the deal done! Don’t. In the west we like to draw up contracts quickly, get them signed and get down to business. In China, this isn’t always the case.  Huge importance is put on building relationships first and often it’s not the security of a signed contract that gets things moving, but rather the security of knowing the person you are working with is a trustworthy business partner.  It’s very important to understand that the Chinese have a long-term view toward doing business and that successful business often arises from successful relationship building.

2.A common way in which people sometimes get this wrong is dismissing the post meeting banquet as an optional leisure activity.  It’s not.  Your Chinese host will almost certainly invite you to dinner to consolidate your relationship and get to know you better and you must go.  Don’t turn them down because you are tired or have emails to write. This will most likely not only offend them but may give the impression that you are not serious about working together.

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3.Business casual is not the fashion in China.  Business transactions are not done over coffee in a pair of jeans. The Chinese can take quite a formal approach to business meetings; they will be dressed smartly and will be punctual. Although several people may turn up, often it’s the most senior person there who will do the talking and lead the negotiations.  Show that you understand their culture and take them seriously by taking a similarly formal approach.

4.Slow down in your communication and choose your vocabulary carefully. Remember that standards of English vary widely and many people don’t speak it at all.  For those that do, they may well have learnt it from a Chinese person inside China and so are unlikely to know slang or colloquialisms.

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5.Don’t take the word “yes” literally in business discussions. Chinese executives will often say yes and nod during conversations, but this often just signifies they are showing you courtesy and listening rather than being in full agreement with what you are saying.  Real feedback will usually come sometime after the meeting.

6.‘Why didn’t they say something?!”  This is another common mistake people make when first in China.  If you are there for an extended period of time and are managing a Chinese team, don’t expect individual members to come to you with concerns or problems regarding a plan you have formulated.  Often Chinese staff will try to avoid conflict with their boss and this means not confronting you with what they for see as potential issues – until it’s too late.  Instead, make sure you create an environment where your team feel they can approach you away from a meeting scenario and in private to relate their concerns.  Spend time checking in with them as well to ask their opinions.

7.Writing complaint emails and issuing orders and ultimatums is not always an effective way to solve problems.  This makes your counterpart or supplier lose face which they will not appreciate.  A much better way to solve problems is to give them face by inviting them out for dinner and showing you value them as a partner and not just an employee.  After good food and polite conversation it might also be a better time to broach concerns or problems you may have.

8.Once the deal is done, don’t just expect to do business entirely by email or over the phone.  Nurturing relationships is just as important as building them and you will need to put in some face time and make trips to China.

9.‘But I have worked all over the world and it wasn’t like this anywhere else!” Correct!  China is a vast and varied country and has a very distinctive sense of its own culture and identity.  Because techniques have worked in other Asian or developing countries it doesn’t mean they will necessarily work in China.  Take the time to learn a bit about the culture and etiquette and even a few words of Mandarin; it will go a long way in the all important relationship building!

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10.But the biggest mistake of all is to be scared and throw everything you ever knew about business and negotiation out the window.  It’s not about learning an entirely knew way of being, but more about being sensitive to the evident cultural differences that exist and being able to adapt to them.  Relax, stay calm and enjoy it!

Daisy is a China specialist and resident of Shanghai with over 15 years experience  in producing and directing television programmes for international broadcasters including the BBC, PBS, Channel 4, ITV, FIVE and National Geographic.

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