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Many people view China as a ‘difficult’ market. Certainly, differences in language, culture, time and distance can make China bewildering for business visitors and give the impression that it is an extremely difficult place in which to do business.
Establishing relationships and contacts
Business Meetings
Banquets
Gifts
Manners and Customs
However, it is better not to make generalisations or leap to conclusions about doing business in China. It may be ‘different’, but need not be ‘difficult’. Investing time and effort in understanding where the differences lie can help you overcome the challenges of doing business in China.
The most important thing is to prepare well. Read up on the country. Seek advice from those who know. Ask others who have been there before. Spend time conducting basic research. In short, do everything you would normally do when approaching a new market.
For sure, taking an interest in some of the cultural and social factors that influence thinking and business decisions in China will stand you in good stead. Below are some special considerations that apply to China.
How does Chinese culture affect the business environment?
Establishing relationships and contacts
Almost the first Chinese word you will come across when doing business with China is "guanxi". Broadly speaking, it means "connections" and for Chinese people it is very much a part of everyday life, where people will use social networks to access scarce resources in everything from schools to healthcare.
Business is no different. Navigating your way through China’s bureaucracy and complexity can seem daunting and often requires help from reliable local people, whether these be government officials, business leaders, consultants, agents or employees. The right relationships must be developed before business can be done. So long as favours and generosity are reciprocated, these relationships can bring long-term and successful business in China.
Understanding the concept of "face" is also essential. It’s a similar concept to "respect". If someone is embarrassed, makes a mistake or is humiliated, he/she will lose face. If he/she does something right, gets complimented, or has something to show off, he/she will gain face. It is important to avoid making others lose face, while seeking opportunities where you can make people can gain face. Equally, it is a good idea to increase your own face as much as possible!
Ways to increase your own face include taking a Chinese person out to a smart restaurant and paying, giving nice gifts, knowing some Chinese and showing some good background knowledge about China. Remember that losing your temper can lead to a large loss of face - for both sides.
Also, remember that if the truth is uncomfortable, someone may not want to lose face by telling it. Chinese people may be unwilling to say “no", so this can be something to watch out for.
This all may sound very complicated, but much of it is common sense and good manners.
Business Meetings
The Chinese always shake hands when being introduced to someone new. Business cards are always exchanged and this should be done with two hands (as a sign of respect). The business card is considered to represent the person whom you are meeting, so it is polite to study the card for a while and then put it a somewhere safe.
Take ample stocks of business cards as almost everyone you meet will want to exchange one with you. Your business cards should be bilingual even if the people you are meeting already read and write English.
There are many places where you can get cards and other documents translated and printed, both in the UK and in China. It is useful to write a few comments on the back of each card you receive soon after the meeting, so that you can remember the person's significance once you have returned to the UK.
In China, business meetings start on time and it is good practice to arrive at the meeting location early. It is usual to be introduced to the most senior person present first. It is a good idea at this point to remember this person's surname so that you can refer to them easily later. Most men should be referred to as Mr... or by their title, Director... Women are also referred to by their titles or alternatively as Madame...
Refreshments at Chinese business meetings usually consist of green tea, although in many international offices coffee may also be offered. If green tea is served, it will usually be boiling hot and will come in a porcelain mug with a lid. To avoid the tea leaves, which will sink eventually, blow gently on the surface of the tea or use the lid to brush them to one side. The cup will be refilled periodically but there is no need to drink more than a couple of sips.
If it has not been made clear to you who the most senior person is, try to establish this by asking about their relative roles in the organisation and then address your remarks to that person. It can be useful to place the business cards of those at the meeting on the table in front of you and arrange them in the order in which individuals are seated as an aide-memoire.
Once the substance of the meeting commences it is important to make sure that you are clear about everything that is said. On a first meeting, formal introductions will be made by both sides. The host will go first. It is important not to interrupt. There will be time for discussion after the formalities. Both sides may well be using an interpreter so it is best to double-check anything which does not seem to have been translated properly (see Using an Interpreter).
If and when the meeting starts 'hotting up', try to remain patient. The Chinese are tough and highly skilled negotiators. Part of the reason for this is their ability to think longer term than the majority of their western counterparts. It is advisable to enter any meeting adequately prepared and with your key points firmly in mind. If you sense problems on the Chinese side, try to come up with solutions.
Jackets and ties should be worn for meetings, and when invited out for meals.
Banquets
The emphasis on guanxi in China means that there is a greater need to mix business with pleasure than in the UK. You are most likely to be invited to a 'banquet' (some are grander than others!). These can be very enjoyable and a valuable opportunity to establish a good rapport with your potential partners.
You may meet very senior people at a banquet whom you have not met before. They may be key to the approval of your business but be too senior to be involved in the day to day negotiations. The banquet is your opportunity to impress them and to get a feel for how things are going.
If you don't like something that is served, just leave it and it will disappear with the next change of crockery! It is a Chinese custom for the host to serve the guest. In the interests of hygiene, communal chopsticks are often provided for this purpose. It is not necessary for you to serve others back.
There will usually be several toasts during the banquet, starting with the main host early on in the proceedings. It is customary for you to respond to the first speech (and possibly others, depending on how many are in your team). These should not be long or detailed responses but should try to pick up on the sentiments made by the Chinese host and include some positive and encouraging statements about your hopes for business cooperation.
The Chinese often toast with strong alcohol. If you wish to avoid this, make a polite excuse at the beginning of the meal and indicate that you will just be taking sips (as oppose to bottoms up or ganbei) or drinking something softer. Do not change your toasting behaviour half way through the banquet, or your hosts will think they have said something to offend you.
Gifts
Small souvenirs are often exchanged. Any difference in value should reflect the status of the recipients. You should regard gift-giving as part of the relationship-building process. Choose a gift with some sentiment – either an attractive souvenir to remind the Chinese side of your visit, or one linked to a known interest of the host. It is usual to wrap the gift in colourful paper. Hotels often have a wrapping service. Never give clocks because the pronunciation of the words "to give a clock" sounds similar to a phrase, which means "sending somebody to the grave". Green hats and white flowers should also never be given because of similarly unwelcome connotations!
Manners and Customs
The Chinese are very easy to get to know and are warm and generous hosts. If you are warm and genuine in return you will find Chinese people thoroughly rewarding to have as friends and business contacts. Chinese society is also changing very fast. You will find that the younger generation, raised during a period where China has become increasingly integrated with the rest of the world, is outward-looking and well-informed, so it pays not to stereotype. The person sitting opposite you may well have an MBA from Birmingham or a PhD from Reading!
You may find you will be asked some personal information (are you married? how much do you earn? and so on), but do not be offended. These questions are not offensive in Chinese culture. Conversely, if you too are open minded, curious and well-mannered in China, there is not much that can go wrong. If you are not sure of anything, just ask a Chinese person, who will enjoy the opportunity to explain how things are done in China.
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