China Guide – Business and Culture

East West Handshake

China Guide – Business and Culture

China is, for many people, alien and difficult. The language, the culture, the distance all make it seem very strange. Many people have also heard tell that the country is an extremely difficult place in which to do business. They (mistakenly) think that it is Communist.

The first response to this is that you should never make generalisations about China or leap to conclusions. Sometimes it is difficult; more often than not it is as easy to get along in China as it is anywhere else. At CBBC we tend to the view that China is actually far more interesting than anywhere else. Invest time and effort and you will be rewarded many times over. And, yes, it is perfectly possible to make money, too.

The most important thing is to prepare. Read up on the country. Seek advice from those who know – especially the China-Britain Business Council. Ask others who have been there before. Spend time in conducting market research. In short, do everything you would normally do when approaching any ‘foreign’ country.

The other myth to dispel is that only large companies can tackle the China market. Not true. Small companies can succeed – and many have. Again, contact the China-Britain Business Council to set you on the right path.

As anywhere else, it is good business practice to know whom you are meeting and to take an interest in some of the cultural and social factors that influence thinking and business decisions. Here are some special considerations that apply to China:

Establish relationships and contacts
Almost the first Chinese word anyone to do with business in China will come across is “guanxi”. Whole books have been written about what it means and about its cultural significance, but, broadly speaking, it means “connections”. To do business in China you have to make the right connections i.e. meet the right people, develop long-term relationships with them and make sure that favours and generosity are reciprocated. Guangxi is probably the most important single asset of any foreign business in China.

The problem is the comparatively young framework of laws and the inexperience of those who wield them, coupled with tradional bureaucracy. The only way through is reliable local people – be they consultants, agents, employees, lawyers or just people who have been there a while – who can help one find a path through the maze.

Similarly, understanding the concept of “face” is absolutely essential. It’s a very similar concept to “respect”. If someone is embarrassed, makes a mistake or is humiliated, he loses face. If he does something right, gets complimented, has something to show off or similar, he gains face. It’s important to avoid other people losing face if possible, and it’s a good idea to give them face, but equally, it’s a good idea to increase your face as much as possible.

Ways to increase face include letting your Chinese colleague or partner speak English (though if their English is bad, using a translator will help them save face), complimenting them, asking after their families, commenting on their office/house – and definitely by not contradicting a Chinese person publicly.

Ways to increase your own face include taking a Chinese person out to a smart restaurant and paying, giving expensive presents (though if it’s a lot better than the one they give you, they”ve lost face), knowing some Chinese, having good background knowledge. Losing your temper can lead to a large loss of face for both sides, but equally, it can be the only way to save it, for example if someone slanders your name of cheats you, and you shout at them in public, then you cause them embarrassment and they lose face.

Also, remember that if the truth is uncomfortable, someone may not want to lose face by telling it. This also means that Chinese people may be unwilling to say ‘no”, and is something to watch out for.

This all sounds 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 to whom you are being introduced so it is polite to study the card for a while and then put it away 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 read and write English.

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’s a good idea at this point to remember this person’s surname so that you can refer to them easily later. Most men would 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 consist usually of green tea, although in many international offices coffee may also be on offer. 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 keep 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. Both sides may well be using an interpreter so it is as well 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 and part of the reason for this is the 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.

Jackets and ties should be worn for meetings, and when invited out for meals.

The emphasis on guanxi in China means that there is still much more need to mix business with pleasure than there is in the UK and in most other western nations. 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 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 include some positive and encouraging statements about your hopeful prospects for business cooperation.

Small souvenirs are often exchanged. Any difference in value should reflect the status of delegation members. It is usual to wrap the gift in red paper. 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 & Customs
The Chinese are very easy to get to know, warm, generous, interesting, curious, wise and thoroughly rewarding people to have as friends and business contacts. Society is also changing very fast. The younger generation, raised in a society where China is increasingly integrated with the rest of the world, are outward-looking and well-informed.

You will find you will be asked quite a lot of personal information (are you married? how much do you earn? and so on). Do not be offended, under any circumstances.

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