Doing business in China cannot be compared to doing business in any other country and so one must prepare by taking on the advice of those who have experience of operating in the Chinese market. Below are some areas which need to be taken into consideration when doing business in China.
Respect the Chinese view of the world
Despite the opening of the Chinese economy to foreign investment and cultural influence that commenced at the start of the 90’s China has still kept its unique collective culture. Decades of communist rule still affect day to day interaction. It is important as a Westerner regardless of if you are in China for leisure or business to respect their culture and not expect their values to be the same as your own. For sure the influence of events such as the one baby policy have created a more individualistic cultural element but for many people individual accomplishments will come secondary to family and organisations.
Don’t make assumptions
If you are in a meeting with a Chinese business person don’t necessarily take things at face value. What they say may not actually be what is going on, and they maybe acting in this way so as to avoid confrontation. This is also not considered to be inauthentic but just a different way of interaction than westerners are used to. You need to be aware of Chinese culture to understand the subtle communication that is going on behind the spoken word
Relationships, relationships, relationships
You could say that for westerners transactions define everything. Westerners like to go into a meeting, work out a deal, sign and deliver what you said you would. These building blocks are the transaction and delivering on the transaction. The way of conducting business in China is more relationship oriented. The Chinese will generally only do business with people they know, like and respect. A transaction is not really business, which is why there are sometimes quality issues between exporters in China and the importers in the west. the exporter and importer have not got a real relationship going. It’s common for a ‘business meeting’ in China to involve eating hotpot and drinking Baijiu (rice wine) whilst not even mentioning the task in hand.
Reasonably successful companies are likely to have some government connection
President Xi has made it his manifesto to tackle corruption in China and he has been pretty successful, however there are still likely to be links between companies and the government. If you wish to be successful in China in the long term it is imperative to understand the political landscape you are operating in and to build up connections (guangxi) accordingly.
Hire local agencies to advice and guide you
If you’re planning to expand to any foreign market it is very important to work with local partners. This is especially the case in China, a country whose values and systems are still largely misunderstood by their western counterparts.
Guanxi means relationships. Relationships are extremely important in China. Guangxi was more important in the past as businessmen/women could not rely as much on institutions. As China has developed guangxi has become slightly less important but it is still hard to imagine a business being successful in China without good strong relationships. It is very common for a Chinese businessmen to conduct initial meetings in an informal environment such as a bar or a restaurant and build up the relationships this way. Get practicing on your rice wine (baijiu) drinking skills!
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Do not talk about any sensitive issues such as politics, anything controversial is a unnecessary risk to take.
Lastly, bring an abundant supply of business cards as it is common to exchange these with everyone at the meeting.
Wearing red is normally more appropriate at festivals or special events, as red symbolizes luck and fortune. Generally for business meetings people would not expect you to wear read but you are welcome to.
White is the color of mourning and for that reason is often associated with death. Ancient Chinese people often wore white clothes and hats when they mourned for their dead. Black has a variety of symbolic meanings that include evil, corrupt, illegal, and greedy.