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23 November 2017

The Ultimate Guide to Doing Business in China

Ultimate-Guide-to-Doing-Business-In-China

In the past, we have looked at how Europe and the rest of the world conduct business, outlining some of the most important principles and customs. This time, we will be giving you an in-depth analysis of the Chinese business and consumer culture in order for you to understand how to create a long-lasting business relationship.

Friendship and Business

More often than not, you will notice that in the Chinese culture it is almost impossible to have a thriving business relationship if it is not accompanied by a personal relationship.

The Chinese do not shy away from investing their time in getting to know a person before they do business with them.

You should therefore expect to have several meetings where you will mostly be discussing trivial topics, family and personal likes and dislikes. In China, this is an important part of setting up a mutually beneficial business relationship.

When it comes down to business, however, the Chinese expect you to be well prepared. Make sure you have all the necessary paperwork with you, including additional copies as a backup. Be confident when presenting your value proposition but avoid cockiness or arrogance.

Deception is a Part of Doing Business

In the western world, the word deception has negative connotations and we hardly ever talk about it in business. This is mainly due to the duality created by several of our belief systems. Chin-Ning Chu, author of Thick Face Black Heart offers a fresh perspective on this taboo topic.

The Chinese do not see the world in black and white, but rather in degrees of grey. According to that, you will never find an individual so pure that does not have negative traits. Conversely, you will not find anyone who is so rotten to the core that they will not have any redeeming qualities. Yin and Yang.

This philosophy applies in business as well. Some businessmen are more ruthless than others of course, but everyone has a hidden agenda, and everyone wants to protect their own principle first and foremost.

In China, deception is just a tool, and it is neither good nor bad. Deception can be used for good purposes as much as it can be used for bad ones. A tool cannot be intrinsically good or bad. It is the user and the use that define it.

We rarely think of deception in this way on the Western side of the globe. The Chinese on the other hand, are perfectly comfortable accepting that deception is just another part of doing business.

You should therefore always try and read between the lines when negotiating with your Chinese peers.

Culture and Customs

Business Meetings

The Chinese have a tendency of extending negotiations beyond the agreed deadline in order to gain some advantage. Make sure you are armed with patience, as it will be much appreciated. If this happens to you, we recommend you accept the delays and do not mention the deadlines.

Be careful when entering a negotiation room with your team. In China people usually enter the room in hierarchical order. Therefore, the head of the delegation should always walk first.

Business Hours and Breaks

In China business hours are from 8:00 am to 5:00 pm, Monday to Friday.

Many Chinese workers take a break between 12:00 and 2:00 pm, during which almost everything stops from working – from lifts to phone services. The best time to set up a business appointment is throughout the months of April to June and September to October.

Language and Meaning

Like any other culture, the Chinese appreciate it when you express interest in their culture. An easy way to show your interest is to use a couple of Chinese words, but make sure you are aware of the meaning and that the context is appropriate. Some Mandarin language courses could help you be prepared when the time comes.

In China, questions like “Have you eaten?” or “Where have you been?” are pleasantries equivalent to the traditional “How are you?” in the English-speaking culture. Therefore, do not take it literally and start getting into details! Simply answer “yes” regardless if you have eaten or not, or simply smile and say, “thank you!”.

Chinese people are very careful about strong negative statements. For example, categorically negative answers are considered impolite, so it is best to find alternatives (“I will think about it”/”maybe”/”we will see”) instead of a blunt “no”. This is why cross-cultural training perfectly complements a language course.

Business Ethics and Dress Code

When it comes to the business dress code, it is always best to play it safe during your stay in China. Try to wear conservative suits that do not overtly attract attention. Bright colours of any kind can be considered inadequate.

An important business ethic that applies not only to the Chinese, but to every other culture as well is punctuality. Being late represents a serious lack of respect, and will have negative consequences. After the meeting has finished, you are expected to leave before your Chinese peers. Please note that this may not be the case among younger businessmen, as they are more liberal in their approach to business.

Everyone likes a business card, so do not be shy when giving yours away. There are however, a few key pointers that we recommend you follow.

It is generally considered a good practice to have one side written in English and the other one in Simplified or Traditional Chinese depending on the region.

On your business card it is advised to include your personal title, especially if it is relevant to the person in front of you. Another detail to bear in mind here is, if your business is the oldest, largest or has some other prestigious distinction, try not to include that on the card as it can be interpreted as bragging.

When giving your card, use both hands to give your hands and ensure the Chinese side is facing the recipient; receive your card attentively and examine it for a few moments.

Food, Gifts and Drinks

Be careful when bringing gifts to a business meeting. Do not bring expensive items such as jewellery or watches as they can be considered bribery. A good idea for a gift would be to bring a souvenir from your home country.

If you are invited to a business meal, wait to be seated, as there is a seating protocol based on hierarchy. It is ill advised to discuss business during the meal. This is your opportunity to get to know and to bond with the people you want to do business with. During a meal, 20 to 30 courses can be served, so try not to eat too much at once! The trick is to try a sample of each dish. Not touching the food will be considered rude.

Scorpions, locusts, snake skin, dog meat and blood may come your way – in China they are considered delicacies.

Do not be fazed if everyone starts slurping and belching, in China they are considered signs of enjoying the food.

Lastly, if you are invited for drinks – you must go, as building a personal relationship (“guan-xi”) during your business is very important. Of course, this implies participating in the drinking culture.

The conclusion for this article is best summed up by Sun Tzu, a Chinese army general and philosopher from over 2500 years ago:

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” – Sun Tzu, The Art of War.

We would be happy to help you know the “enemy” with one of our Cross Cultural Training or Mandarin Business Courses .

 

Summary
What you dont know about doing business in China
Article Name
What you dont know about doing business in China
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Some things you probably didn't know about doing business in China
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Simon and Simon International
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