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Business Culture in China

Foreign people definitely can do business with Chinese people, regardless of whether the negotiations are on a large scale or smaller scale. The important element to be considered before trying to do business in China is to have as complete an understanding of the Chinese way of looking at business. Otherwise, you can expect less cooperation than you had hoped for.

The Chinese people, even the higher echelon in the business realms, put great emphasis on relationships. That helps to explain why many Chinese businesses are family affairs; they understand the relationships between parents and their offspring. Relationships over a long period of time help the Chinese to build confidence. They are more willing to do business with people whom they trust than with strangers.

Once a good relationship has been built, it is hard to break it. On the other hand, once a relationship has become less than harmonious, it is very difficult to re-establish it with the Chinese. The relationship which the Chinese want is called guangxi. It is a trusted feeling that the Chinese have with a person, one that is built over a long period of time.

Thus, to try to escalate any business relationship with the Chinese is to go against their idea of guangxi. Instead, the Chinese may appear to be stalling before entering into a serious business deal, but they are working toward as good a mutual respect as they can achieve.

Many business activities in China actually involve attendance at both business meetings and at banquets. These banquets should not be viewed as optional; they are intended to help the Chinese understand their prospective business partner. One should attend with as much preparation as possible in order to make a good impression on the Chinese hosts. Gifts should be taken, business cards should be exchanged (with both hands), toasts should be responded to briefly and respect should be both given and received. At a banquet, the outsider will most likely be presented to the most senior member of the Chinese team first.

There are many Chinese customs which one should try to be aware of. When giving gifts, they should be wrapped in red paper. Avoid green hats and white flowers as they have a negative connotation to the Chinese. There will be many questions they expect you to answer, some of which may seem out-of-place, but do your best to provide responses. The hosts are trying to understand you more and learn to trust you. Face-saving is very important to the Chinese. Always attempt to avoid embarrassment to your hosts. Because of this face-saving element, the Chinese may tell you what they believe you want to hear rather than tell you the truth on some issues.

If you do not understand the language, it is better to hire an independent interpreter, one whom you trust. The hosts may offer translation service, but it is best to have your own as well.

In various regions of China, there are differing levels of knowledge on particular topics. In Beijing, China's capital city, the people tend to be very knowledgeable, especially on political issues. They may tend to talk on many subjects as if they are experts. It is quite important in Beijing to help the Chinese hosts to save face, even if you must simply not comment on ideas about which you disagree with them.

In Shanghai, on the other hand, mixing between the Chinese and westerners is not such a new element. Thus, you will probably feel more equal with the people there. They will give you more respect that you deserve rather than a lot of talk to build up your sense of importance. It tends to be easier to do business in Shanghai than in Beijing. The businessmen of Shanghai may tend to bicker over smaller issues, but they tend to be fair. They simply do not like to suffer even a small loss if it is not fair to them.

The Cantonese in the southern areas of China tend to be rather easy to do business with. They understand western ideas somewhat better than people in Beijing. They seem more open to new ideas and tend to be risk-taking people. However, they are also ready to take advantage of foreigners if opportunity presents itself. Be wary of counterfeiting in the Cantonese areas.

Businessmen in the northeastern areas of China tend to be short-tempered and do not spend so much time bickering over trivial things as the Shanghai people do. As other Chinese, however, face-saving is of monumental importance, and relationship-building is worth the time before trying to enter a business relationship with them. These Chinese, as those in the South, tend to take advantage of westerners at any opportunity. Swindling and being misleading are among their talents.

In Sichuan the business culture is more sincere and honest. They tend to keep their word concerning contracts. This area is the least counterfeiting part of China. Their religious influences have made them more reliable than many other Chinese people. They tend to be practical people with little tendency toward vanity.

Zhejiang people are the eastern seacoast people. Their attitudes are matter-of-fact. They tend to be risk-takers. In the past, they were the most seafaring of the Chinese people. Doing business with these people is difficult since they tend to present little personal information about themselves but want a lot of information from the prospective business partner. They tend to deal in low-end items and often profit from this element of their culture.

To summarize, do not be in a hurry when doing business in China. Take time to cooperate with their desire to build a trusting relationship with you before you push for a serious commitment. Embarrassment does a lot of damage to relationships in China. Thus, face-saving is a skill to cultivate. Take a stand when necessary as the Chinese may try to outmanoeuvre your deal-making skills. It will be well worthwhile to learn to enjoy the Chinese culture as you do business in China.