A robust economic growth, a rapid transformation of the market and some useful reforms promoted by the government, led China into becoming the second strongest economic power worldwide. Until some time ago characterised by low-cost labour and poor-quality products, China has shifted to being a more and more advanced country.
How to do business in China in 2017?
Not everyone is ready to do business in China in 2017, first and foremost it calls for an approach other than superficial.
It is mandatory to understand the logics underlying the Chinese market and carry out in-depth, extensive sectoral studies. Information is paramount to navigate the Chinese market comfortably. The more exhaustive the information, the more likely a would-be operator will meet success. Very often a dedicated local work team will not do. An external team of experts will help you put in place the strategic actions strictly necessary to do business in China. On the other hand, doing business in China differs entirely from the approach applying to Western standards. Many principles apply that may appear extremely hazy. Instead, they are crucial in the Chinese business world.
For this reason, we deemed it wise to share a practical handbook about business in China with you. By relying on this guide, you will avoid making some of the most common mistakes which might thwart the success of your business, in addition to providing you with a clearer vision of the cultural differences between the Western world and China.
Three key concepts: time, guānxi and face
The article reading below is an overview of the “Three cornerstone concepts” to do business in China: time, mianzi (face) and guānxi (relation).
To understand how to do business in China, every foreigner (“laowai”) must comprehend and internalise these three key concepts.
Time – In the Western countries, we usually prefer to get things sorted out and done rapidly. If you want to do business in China, remember that the best strategy advises to let things happen spontaneously. A Chinese partner can turn a Westerner’s haste against him/her and will sense the pressure to obtain results as a weakness. Instead, it is advisable slowing down one’s schedule, developing a more holistic vision and slackening the tension about deadlines. You will soon realise this approach is going to prove beneficial to your business which will also be more profitable. Things happen for themselves; it is the natural consequence of a process revolving around knowledge, approach, gaining confidence, sharing apparently recreational occasions such as lengthy meals. Doing business is a process the success of which will display as a natural flow.
Guānxi 关系 – Guānxi, or “relation”, is a hardly translatable concept. It is about networking, establishing trusted relationships to be counted on, exchanging favours and doing business. You cannot be successful in China unless you commit yourself to identifying and building a network of relations. The value of your business is subordinate to the value of the relationship you weave and how you nurture it. The strength of your Guānxi will be directly proportionate to the power of your business.
Mianzi 面子 – Another paramount concept is “face”. It is about the reputation a person has won; the respect he/she has gained, it genuinely revolves around role, background, Guānxi. For this reason, when you are in China, it is fundamental understanding the importance of ceremonies, namely the moment when hierarchical issues display, in addition to keeping the partner’s and one’s reputation high. Behaviours apt to cheapen the partner’s “face” in front of his team may put an end to a business relationship.
Make sure you follow the following advice:
- Carefully respect hierarchy
- Follow ceremonial rules
- Never criticise anyone in public
- Genuinely praise your partners in front of other people
- Taking pictures is a crucial moment, do not show annoyance and proactively take pictures yourself
China: the business etiquette
In addition to the above cornerstones, it is advisable for Westerners to be in the know of some thumb rules before venturing the world of business in China.
How to address people?
In China, people are addressed by their surname only. For instance, you will speak to a male acquaintance by calling him “Mr Chen” vs. “Steve”. Furthermore, remember that the first name is always behind the surname. Therefore, this person will introduce himself as “Chen Steve”.
Chinese people are keen on titles; they strictly belong with the concept of Mianzi. If Mr Chen is the project manager, you’d better call him “Director Chen”. Do not insist on them calling you by your first name, as this might cause the people you are connecting with to feel embarrassed. Formalities are rated critical. Being on friendly terms marks an achievement because it means successfully approaching the partner.
Shaking hands and bowing
While a handshake may do when greeting, Chinese usually do a little bow, which is a good practice reciprocating. Do not take the bow to the extreme. Make sure not to mistake the gentle bow given in China with the prolonged, hierarchy-related bow given in Japan. In fact, people would look at it as ridiculous and partly annoying (never mix up China with Japan, it is common knowledge they are not always on the best of terms).
Behavioural tips when attending a meeting
In China, the first person entering a meeting room is the highest-ranking one. In case you already sat down, watch out for who enters first, most certainly it is the boss and, as such, he commands respect.
The seat is equally important: in fact, it mirrors hierarchy and roles. Westerners are more informal but make sure you acknowledge respect for authority also when it comes to your chief and colleagues.
In principle, the meeting usually kicks off to some diplomatic talks. Talking business is never the ice-breaker, and you’d better not insist, it would be equal to starting on the wrong foot, let alone be perceived as a weakness. Read through the paragraph about time once more: let the talking progress at its own pace.
Do not feel annoyed if the talk focuses again on a previously discussed topic. Chinese communication patterns follow a flow instead of a linear, yes or no thread. It is a full process, and it is legitimate asking a question repeatedly to make sure one has understood the answer and its details. It takes time, but it is the right track to build a trusted relationship.
Giving a present is a wise thing to do in certain circumstances. Usually, the gift comes from your country of origin, is based on your culture of belonging and your History. A present is a telltale sign of respect and desire to continue a business relation closely connected to the concepts outlined above, namely Guānxi and Mianzi.
It is mandatory to wrap the present in gift paper: make sure it is never black or white gift paper as these colours symbolise mourning. If possible, refrain from referring to number 4 as the assonance with the word death is a bad omen. It is better to choose a number like 8 (=abundance, wealth, prosperity) as Chinese consider it a lucky sign. Chinese are substantially superstitious, therefore respect this belief of theirs.
When handing out a present, use both hands and state it is a “little sign of appreciation”. Most likely the recipient will not open the present in front of you. Be advised that the gifts you’d better not offer include wristwatches, umbrellas, handkerchiefs or white flowers. Chinese people associate these objects with death.
If you are ever to attend any event or dine out to talk business, it is advisable keeping some customs in mind. You are supposed to taste every course so as not to hurt your host, even one bite only. Make sure that you leave some food on the plate; otherwise, your host might think you are still hungry. Also, when attending formal business dinners, your dinner companions expect you to deliver some speech. It is part of the ceremony. Get ready and do not spare thanks and wishes for a long-term partnership and mutual prosperity.
Ganbei. Drinking a toast together is part of the ceremony, of the friendship. It is a crucial moment when some formalities become loose, and a closer relationship is established contributing to foster mutual trust. It could be hard to you if you are numerically at a disadvantage, especially when you are in the company of 10 Chinese people urging you to go on a Ganbei. But saying no…will be taken as no.
The information above highlights just some of the cultural differences to keep in mind. Needless to say, when you are a foreigner on your own, everything may become more involved. But do not worry, rely on the experts’ support, and you will be able to accelerate the kick-off phase, besides not making faux pas. In this way, you will successfully and consistently make the most of the largest market-to-be worldwide.
Source of the article: east-media.net