Business culture in China

Chinese business etiquette and culture
Chinese business practice is very different from the Western method that most of us are used to. Of course, with the opening of the Chinese economy, China’s accession to the WTO, and the Olympics in 2008, many Chinese business practices are beginning to align with more conventional methods.

However, China will always have its own unique company culture and etiquette, given its unique history and background.

“I was recently involved in a business meeting that went wrong and threatened to spoil a good deal. What happened was that the Chinese party that received the American buyer was slow to get to his hotel. The American was furious because he had a tight schedule and that was late and threatened to withdraw your purchase.

The Chinese group was late because they were given a vague address for a lakeside hotel. You see, what happened was that the American gave his hotel a Lakeside hotel. Unfortunately, there were numerous hotels along the lake, but the Chinese were too shy to ask which lakeside hotel before because they feared that the American would “lose face” for giving an imprecise address. Instead, they spent the morning hopping from one lakeside hotel to another in search of this American gentleman. “

A simple cultural difference threatened to ruin a perfectly good working relationship. To avoid similar cultural disasters, here are some tips on how you can run a more successful business in China.

The initial approach

Chinese businesses are mostly referrals; essentially, a business relationship is established based on the recommendation of another business partner. The best prices and deals often come from a strong recommendation.

However, cold calling and direct contacts are common today, given the availability of the Internet and the competitive nature of Chinese companies. You can get from the Internet, trade shows, catalogs and brochures, advertisements and approach Chinese companies directly through a call or email.

Alternatively, if you are looking to invest in a factory in China, you can approach an investment committee or business advisor directly. They will be able to advise you on your best location based on your industry, raw materials, and labor needs. Please contact us directly if you have such a need and we will be happy to advise you accordingly.

Relationship

The Chinese business relationship inevitably turns into a social relationship after a while. Unlike Western business relationships, which remain professional and perhaps distant even after a long time, Chinese business relationships turn social.

The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are to your business relationship. Sometimes a lot of time is spent discussing matters outside of the business, but then a lot of time the other party also makes a decision about his deal based on how much he sees his personal relationship with him.

Antiquity

Seniority is very important to Chinese, especially if it is a state or government body. Instead of addressing the other party as Mr. or Mrs. So-and-so, it is always appropriate to address the other party by their designation, that is, Doe President, Doe Director, or Doe Manager.

When handing out ID cards or brochures, be sure to start with the highest ranking person before moving on. When handing over a business card or receiving one, be sure to reach out with both hands with the card. Remember to place the card you are giving face-on in such a way that the receiving party places it in front of him correctly.

Giving face

Giving face (also known as giving due respect) is a very important concept in China. You must give proper respect according to rank and seniority. For example, if you are buying gifts for an initial contact, be sure to buy better gifts for senior managers rather than buying similar gifts in general.

Similarly, seating positions in a meeting room or dining room table are assigned according to rank, importance, and seniority. It is good to seek advice before embarking on your first meeting with Chinese business contacts to avoid making a wrong move.

Gifts and gifts

Unlike the days before, when China was very poor, gifts, especially those of Western origin, were especially appreciated. Today, China produces and imports almost everything imaginable and gifts are no longer a novelty.

However, gifts are always appreciated and, especially in smaller cities or towns, they will continue to play an important role in your business relationship. Keep in mind that if you are actually giving gifts, make sure seniors get a better gift or at least gifts that are perceived to be of higher value than your junior staff.

Similarly, expect to receive gifts from the Chinese, especially Chinese art products. It is polite not to refuse, especially if it does not have too high a monetary value.

Lunch dinner

You don’t talk about business in China without at least one visit to a restaurant. Sometimes a trip to the restaurant is made before a business conversation even takes place. Inevitably, the restaurant will always be great and will likely be housed in a private room.

There is an elaborate seating arrangement for a Chinese business meal. There are fixed seating positions for the host and the guest and then they sit again according to seniority. This is a very important aspect of a formal dinner and it is important that you follow the rules accordingly. However, it seems that the North Chinese are very particular about this formal seating arrangement, while the South Chinese have relaxed the formalities a bit.

You may want to learn more about this interesting China Book.

Drinking with the Chinese

The Chinese are big drinkers, especially in North and West China. It doesn’t matter if it’s lunch or dinner; as long as a meal is being held, there will be alcohol.

Chinese wine is the favorite, followed by red wine and beer. Chinese wine is more like fuel than liquor and has an alcohol concentration of up to 60%. No matter how good a drinker you may think of yourself, never, ever challenge a Chinese to a drinking contest. They will win, without a doubt!

It is often considered rude not to drink with the Chinese at a formal dinner. To keep your sanity, say you are not an alcoholic or use medical reasons as an excuse. This will allow you to free yourself from the hook with a minimal or minimal amount of drinks. Better yet, bring a partner who can drink on your behalf!

After dinner entertainment

The formal business dinner usually goes on for quite a while, as there will be plenty of social talk, some karoake, and drink contests. Most of the time, everyone is too drunk to enjoy more entertainment after dinner. Also, if you’re new to this association, you’re unlikely to be invited to more after-dinner entertainment.

However, once you become familiar with them, you may be invited to Karaoke, a Nightclub, or Suana. Please note that if you are the host for the night, all bills will be collected by them, including all entertainment. It is rude to fight for the bill or worse, to split the bills.

Similarly, if you are the host for the night, you are expected to pay all the bills for the night.

Controverciales problems

There are some taboo areas in social conversations with the Chinese. Try to avoid these talking points as much as possible. I’ve seen a lot of nasty arguments as a result of these topics:

1. You should not mention that Taiwan is an independent state or country.

2. You should NEVER praise the Japanese or be seen as a good friend to them.

3. You can condemn Mao Tse Tung but avoid criticizing Deng Hsiao Ping

4. You should not praise Shanghai in front of the natives of Beijing and vice versa.

Other than that, it is quite safe to converse with Chinese anything under the sun!