More than game theory: etiquette counts in China
IN CHINA, business etiquette can make or break a deal, and choosing a trustworthy local partner is vital.
Melbourne business teams identified these key elements in an exercise designed to find out how to do business in China.
The inaugural “Masters of their Game” competition, organised by the Institute of Chartered Accountants, featured nine teams.
Participants had to devise a business solution for a fictional client wanting to do business in China. The Australia Post team won.
The institute’s general manager for Victoria and Tasmania, Michael Nazzari, said the exercise revealed some risks involved in doing business in China.
“Significant cultural differences must be addressed,” he said. “Punctuality is considered of utmost importance, as is ensuring the highest-ranked person in a meeting sits at the head of the table.
“It is considered an offence to write on someone else’s business card, and the giving of gifts is essential at business meetings.”
Mr Nazzari said in-market contacts were invaluable. “Choosing a trustworthy partner is vital in establishing contacts and networks, and achieving guanxi, or mutual trust in business,” he said.
Mr Nazzari said rather than being one, monolithic market, China consisted of many geographically and economically separate submarkets.
“Your business needs to be tailored to a particular region, rather than trying to target the nation as a whole,” he said. China’s complicated labour laws also varied between provinces.
Mr Nazzari said language was important because the language of law was Mandarin.
It was important that definitions were not lost in translation because Mandarin overruled any English definition, he said.
Mr Nazzari said long delays to set up in China were not unusual, nor were unsophisticated distribution systems.
Both these factors needed to be included in any business expansion plan.
“Consideration must be given to your ability to supply the market,” he said.
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