10 Subtle Cultural Mistakes You May Make Doing Business in China
October 7, 2014
Any preconceived notion of China by Western businesspeople is a falsification, for China is infinitely more complex a place than can be imagined. Eden Collinsworth should know. She moved to Beijing in 2011, launched an intercultural communication consultancy, and wrote a best-selling Western etiquette guide for Chinese businesspeople -- learning a whole lot about her herself in the process. She compiles her experiences in a new book out today, “I Stand Corrected: How Teaching Western Manners in China Became Its Own Unforgettable Lesson.”
Here, she reveals those top 10 trip-ups and cultural hiccups that may mar your next business trip -- and how to avoid them. (Step one: don’t forget those bi-lingual business cards.) You're probably making a mistake in China if you are:
1. Expecting a standard concept of time
The definition of time in China does not necessarily designate when one hour gives way to the next. For example, noon -- to a Westerner, as definite a time as any other -- is employed by the Chinese as a two-hour period from 11 a.m. to 1 p.m.
2. Mistaking loud voices as a sign of hostility
It could be the sheer number of people in China trying to have their say, or a quirk of the language, but for whatever reason, the Chinese speak several decibels higher than is comfortable for Westerns.
3. Misconstruing Chinese displays of deference
Though shaking hands comes naturally to Westerners, it is not always a comfortable practice for the Chinese who consider bonhomie impolite and disrespectful. Most Chinese offer a weak handshake and little more than reserve during their greetings. Don’t take offense.
4. Underestimating the importance of exchanging business cards before meetings
A double-sided Western business card with simplified Chinese on one side is the first indication of respect toward your Chinese counterpart; its conspicuous absence is not unlike refusing to shake hands at the start of a Western business meeting. Even if you are familiar with the title and position of the person to whom you have been introduced, study his card, and then deliberately place it within clear sight if you are sitting at a table.
5. Not coming to terms with “guanxi”
Like most idioms, guanxi is not easily translated into a single word that mirrors its meaning. “Relationships or connections outside the family” is the closest one might come to the meaning of what is at the very core of Chinese society and culture. It is, therefore, important for the Chinese to get to know the person or people with whom they wish to conduct business before business is conducted -- the how, why, and when things are done all rests on these relationships.
6. Thinking a meal in China is just a meal
No doubt you will be invited to lunch or dinner during which time it will be considered rude to discuss any business. But that doesn’t mean the meal isn’t without a business goal. (Because: guanxi.) Don’t be surprised if people who have not been in any of the business meetings you’ve attended appear at the dining table.
7. Forgetting table etiquette
They believe luck is brought with good table manners and shame is the result of bad. From a Western perspective, there is always too much food at the table (a sign of the host’s prosperity), but try each dish. Be sure to accept the last serving of what the host has pointed out as the best dish, which he has offered you as a sign of his hospitality.
8. Passing on a toast
What fails to happen can matter as much as what happens, and declining anything from one’s host in China -- even with a seemingly legitimate excuse -- throws a gloom over a meal. If you don’t wish to drink, make your excuses early, before the toasts begin.
9. Taking probing questions as an insult
The Chinese’s total lack of inhibition can be the refreshing opposite of our politically correct (and often spontaneity-killing) approach to conversation. It turns out the Chinese are capable of asking what most people want to know but, with the exception of small children, are afraid to ask. Be prepared for social conversation that is often stunningly taboo-free. If a man, you might be asked about your financial assets; if a woman, you will undoubtedly be asked about your marital status.
10. Forgetting that dignity trumps money (always)
Keeping face to the Chinese is paramount; losing it, disastrous; taking it away from someone else, unforgivable. Any form of refusal costs face, which is the reason one should not be direct in saying no in China. Conversely, one should never assume a yes in China is reliable, for the Chinese “yes” is a transitory, flexible concept. Even in neo-capitalist China, dignity is an infinitely more important a commodity than money.
Source: http://www.bloomberg.com/news/articles/2014-10-07/10-subtle-cultural-mistakes-you-re-likely-to-make-doing-business-in-mainland-china
A pocket guide to doing business in China
McKinsey director Gordon Orr goes behind the trends shaping the world’s second-largest economy to explain what companies must do to operate effectively.
October 2014 | by Gordon Orr
China, a $10 trillion economy growing at 7 percent annually, is a never-before-seen force reshaping our global economy. Over the past 30 years, the Chinese government has at times opened the door wide for foreign companies to participate in its domestic economic growth. At other times, it has kept the door firmly closed. While some global leaders, such as automotive original-equipment manufacturers, have turned China into their single largest source of profits, others, especially in the service sectors, have been challenged to capture a meaningful share of revenue or profits.
This article summarizes some of the trends shaping the next phase of China’s economic growth, which industries might benefit the most, and what could potentially go wrong. It also lays out what I believe it takes to build a successful, large-scale, and profitable business in China today as a foreign company.
Trends shaping growth and creating new opportunities in China
As the contribution of net exports and real estate to economic growth diminishes, the focus on infrastructure and domestic consumption—as traditional and new sources of growth for the economy, respectively—rises. Whether or not the current growth of the Chinese economy is sustainable depends on the evolution of several trends.
Government policy continues to be the critical shaping force. As the ministimulus delivered in the second quarter of 2014 demonstrates, the government still possesses levers to push GDP growth rates up and down quite rapidly. In other ongoing government initiatives, the “marketization” of prices for electricity, water, land, and capital is having a major impact on the behavior of business, leading to a new focus on productivity, even within state-owned enterprises. Progress in bringing more private capital into state-owned enterprises is slow at the national level, with few scale examples, such as the $30 billion partial privatization of Sinopec’s gas stations under way. At the city level, much more momentum is building, with local governments selling out of noncore activities such as hotels and many manufacturing businesses. The anticorruption campaign continues aggressively throughout state-owned enterprises, and government has itself become a material brake on growth. Officials and executives are simply unwilling to make decisions that could possibly be held against them later. President Xi has pursued anticorruption as a theme for more than a decade; he is not going to back off.
The Chinese middle class—the people who are buying new homes, who today are buying 18 million cars a year (delivering a third of the global auto industry’s profits), and who are starting to spend more on services—are critical. Only if they remain confident in their personal economic future will they continue to increase their spending and become a larger driver of economic growth. By 2022, more than 50 percent of urban households should be in the middle class (in current US dollars, that means an annual household income of $20,000 to $40,000), an increase of more than 100 million households over the coming decade.
China is now more than 50 percent urban, but 10 million to 15 million people a year will still be moving to cities from the countryside. Rural migrants already in the cities need to be better integrated. City governments need to make their cities more livable, more efficient, and better able to integrate their migrants. “Smart cities” is a clichéd term, but China’s cities need everything from more efficient mass transit to better water usage. Investment to deliver this will be massive, indicating how the construction of China’s infrastructure is not yet complete.
Many businesses are coming under a new level of cost and margin pressure. Margins of industrial state-owned enterprises have fallen by a third over the past four years. Often the industries they compete in, from steel production to telecom-network equipment, are simply growing much more slowly. By the standards of China over the past 30 years, state-owned enterprises have become mature industries. This leads to three outcomes: initiatives on productivity, diversification, and globalization. The latter two are more often conducted on the basis that prior success in one industry in China will automatically lead to success in the next industry and country.
Multinationals selling to Chinese consumers often continue to perform extremely well, using their skills in consumer insights, branding, and pricing to differentiate from local companies that, while large, are still developing world-class functional capabilities. Multinationals selling to government, at the other end of the spectrum, find market access much more challenging.
China is home to some of the world’s largest, most successful, and innovative Internet-based companies. The pace at which Chinese consumers are embracing the Internet is at the cusp of causing major disruptions to many sectors in China. Perhaps because consumers are still new to our traditional ways of shopping or banking (only having had modern shopping malls for a decade in many cities), consumers are very willing to switch to buying online. When the experience of going into a Chinese bank branch is so poor, it’s not surprising that consumers would rather transact online.
Almost no consumer-facing business in China can succeed without an online and offline strategy today. Mall owners are struggling to find a new economic model. Retailers are trying to bring order to their nationwide distribution chains to exert control over the price at which their products are sold online. Online wealth-management products have been able to gather $100 billion dollars in less than 100 days, forcing traditional banks to increase rates on much of their deposit base. The impact on employment is just starting to appear, but many millions of sought-after white-collar jobs will be eliminated in the next few years.
The risks
This growth is not risk free. Perhaps most critically, Chinese consumers remain relatively unsophisticated. A loss of confidence as a result of a default in a wealth-management product, or a decline in housing prices in a specific city, could easily become a nationwide contagion creating a vicious cycle of consumers who withdraw from spending, thereby worsening market conditions. One has to be over 40 to remember a recession in China.
Other risks to growth include geopolitics, especially China’s relationship with Japan, where the government’s credibility depends on being seen to do the right thing by the Internet classes. A final and rising risk is the underemployment of graduates. Of the seven million graduates each year, maybe only three million find jobs that require a degree. The remainder discovers that their aspiration of joining the middle class and owning a home and a car is possibly out of reach permanently. They are a large, dissatisfied, and growing segment of society.
Industries with potential for faster growth in the next decade
Many of the industries with the highest growth potential in China over the next decade are in the services sector, but not all. For example, energy and agriculture will have segments with very rapid growth. Below is a very brief snapshot of where we see opportunities.
E-tailing The online share of retail in China, at 8 percent in 2014, is higher than it is in the United States and is not close to reaching saturation. Increasingly, this is conducted through mobile devices. The payments system is in place, logistics are improving, and online providers are trusted. Many retailers will adapt, often with far fewer physical locations. Malls will have to become destinations for services beyond retail.
Logistics. Modernization of supply chains is a key enabler of increasing productivity in many sectors in China today. Until recently, most goods were carried by individual truck owner–operators. As express parcels become a $100 billion industry on the back of e-tailing, e-commerce companies themselves are investing billions in modern warehouses and trucks. Alibaba alone is committed to spending billions of dollars on its own logistics. Third-party carriers such as SF Express are rapidly becoming regional leaders on the back of growth in China. Even in agriculture, massive investment is under way in cold storage and cold carriage to reduce waste and provide higher-quality food products to China’s middle class.
Education. Nearly two-thirds of registered kindergartens in China are privately owned. Private universities are expanding. Traditional and online vocational learning schools are publicly listed multibillion-dollar businesses. Niche businesses, such as preparing children to apply to US, UK, and Australian high schools and universities, are also flourishing. The amount the Chinese are willing to spend on tutoring and support for their children is almost unlimited. As the middle class becomes wealthier, the increased ability to spend will drive market growth.
Healthcare. More than 1,500 new private hospitals opened in China in 2013, a number of which are 100 percent foreign owned. The shortcomings of the mainstream public healthcare system in China are not likely to be overcome quickly. Patients are looking for solutions where both cost and quality are more certain, and private and foreign companies are being encouraged to deliver. There is a related boom in supplying equipment to these new facilities.
Tourism. Available hotel rooms in China have tripled over the last decade. Four million mainland Chinese visited South Korea in 2013; four million visited Thailand. China’s middle class expects to take three to four weeks of vacation each year and no longer accepts visiting the overcrowded, overexploited traditional domestic destinations. Disneyland’s opening in Shanghai in 2015 could trigger a new wave of investment to create higher-caliber resorts.
Wealth management. China represents more than 50 percent of Asia ex-Japan growth, with high-net-worth assets expected to reach $16 trillion by 2016. The more than one million high-net-worth individuals in China remain generally unsophisticated as investors, seeking advice on how to broaden their investment portfolio both onshore and offshore.
Entertainment. China is the second-largest movie box office market in the world, despite the fact that tickets cost upward of $10 and DVDs are still available for $1. In 2013, more than 1,000 new theaters opened, yet admissions per capita are less than one-fifth of South Korea’s.
IT Services. Finding the chief information officer in a Chinese company is often hard, especially in a state-owned enterprise. Historically regarded as simply a support role for the business, CIOs were pushed three to four levels down in the organization and attracted little talent (which instead went to Internet start-ups). A typical Chinese company spends only 2 percent of revenue on IT versus international benchmarks of around 4 percent. As these companies struggle to bring technology into the core of their operations, they need massive amounts of help to do so. The cost of good IT talent is already soaring. Most Chinese companies will be unable to solve their technology challenges for themselves.
Clean energy. China already produces 60 percent of solar panels and wind turbines. Increasingly, it is consuming this output domestically. For example, 11 gigawatts was installed in large-scale solar farms in 2013, and this will grow an additional 30 percent in 2014. China is also investing heavily to exploit its shale-gas assets and develop cleaner coal technologies.
Agriculture. China does not feed itself today—certainly not with the kind of quality and value-added products that the middle class seeks—but it will be challenged to do so in the future. Continual food-safety crises illustrate the challenge. For many successful technology investors, such as Legend Holdings, agriculture is the new Internet. Chinese companies are investing in agriculture outside of China at scale, from Chile to the Ukraine, for China. They also invest in China, especially in value-added products—such as fruit and the production of frozen ready meals.
Doing business effectively in China
Often in China, the fundamental barrier to success is less about identifying the opportunity and more about the inability to execute the plan more effectively than others. One’s own management team, the team’s relationship with corporate headquarters, the role of and relationship with joint-venture partners—all play a key role. Joint ventures have been part of doing business in China for more than 30 years. In many sectors, they remain the only way to participate, often in a mandatory minority position. But there are a number of clear lessons:
Establish the right strategic positioning.
If regulations require you to have a joint-venture partner and a minority position today, assume it will be that way forever in the core business activities. From automotive to financial services, the lesson is that it won’t change. If that model is not attractive today, do not invest in the hope that it will change.
Follow the evolution of government policy and align your stated intent with such policy as far as possible. Using the words from government statements in your own statements communicates your commitment to China.
Be clear if you are in China for the opportunity in China, or if you are in China for the opportunity that China creates for you in the rest of the world. This can lead to a very different presence in China.
Many potential joint-venture partners are highly successful and very large within China, who sees international partners as little more than a temporary accelerator of growth.
Increasingly, China’s mind-set is that there are fewer and fewer things to learn from foreign partners. China doesn’t need the capital, it can hire the skills, and it has the customer relationships, insights, and, most critically, the government relationships. Even state-owned enterprises now hold this mind-set.
Simply stating that “this is how we do it in America/Germany/Japan” will not win friends. What one can do today is make a long-term commitment to help a Chinese joint-venture partner expand internationally. This may well be at a cost to the international partner’s existing business and needs to be seen as part of the total China investment.
Establish from the outset a clear hierarchy of who interacts with whom at the joint-venture partner and with relevant government officials. Chinese partners like the certainty this provides. Ensure that the committed executive shows up for board meetings and the like, and don’t delegate.
Place a trusted senior colleague in China with a commitment to have him or her be there for the long term.
He or she is your go-to person when things get volatile in China, someone whose viewpoint the global management team will trust, and someone the head of your joint-venture partner will also learn to trust. Usually, this person will be very strong in people development, with skills almost overlapping with a head of HR. And he or she will need to be 100 percent trusted to enforce compliance and to role model required behaviors. Typically, make this person chairman of your Asia or China operations, as senior a title as possible.
Talent acquisition and development, at all levels, remains highly time consuming and often frustrating for multinationals. Loyalty to an employer is often low on an individual’s priority list. Turnover will likely be high and should be planned for.
Hiring midcareer executives is increasingly common, and in almost all industries the available talent pool is deepening. Both Chinese and global search firms have rapidly growing businesses that serve local and international companies. It is imperative to complete thorough background checks. Getting people to leave quietly in China often involves being silent on the cause of separation.
At the entry level, many graduates are available. However, many lack workplace-relevant skills, including even those with MBA qualifications, which are more often bought than earned and often come with a lack of self-awareness that can lead to a mentality of entitlement. As a result, many corporations hire and then weed out aggressively during the initial probation period. Once on board, retention of high performers often depends on a highly variable compensation structure and dismissing underperformers.
While you will likely have to work with “sons and daughters” of government officials as business partners, it does not mean that you have to employ them. Outside of some companies in financial services, few international firms do.
If protecting intellectual property (IP) in China is a concern, consider it very hard if that IP needs to actually come to China. Some companies in the technology sector have been very successful, even while not bringing core IP into China. Secondly, consider if the cost of loss of IP could be contained solely in China. Again, in technology, multinationals have aggressively and successfully sued Chinese companies outside China that have taken IP from multinationals in China and used it outside China. China is evolving fast on IP protection, with more and more Chinese companies suing other Chinese companies. It is becoming increasingly likely that a Chinese partner will recognize the value of IP and be willing to protect IP developed jointly with them. A practical means of making it harder for global IP to leak into China is to establish a stand-alone IT architecture for China that has no access to servers at headquarters.
China is likely to be a more volatile economy. Taking a through-cycle viewpoint rather than a “quarterly performance versus plan” mind-set is key to motivating your China team and to convincing them that you are committed to China for the long term. Indeed, downturns in China have proved to be attractive moments to double down. When partners or governments are under stress, new partnerships and licenses can become available to foreign partners that are willing to step up and invest. Even after 30 years, few multinationals adopt this mind-set.
Don’t do anything to compromise your global brand and reputation. If you can’t do business the way you want to, then don’t do it at all. There may be opportunities to make money in the short and medium term, but shortcuts will eventually be made transparent. The Chinese government will be well aware of how you are operating, and the anticorruption campaign is not going to go away. Don’t assume that because your suppliers are international companies that they are automatically operating to the global standards you expect; verify that they are.
About the author
Gordon Orr is a director in McKinsey’s Shanghai office. This is an edited version of an article originally published on LinkedIn, where he posts regularly. For more of Gordon’s articles on China and doing business in Asia, visit his LinkedIn page.
Source: http://www.mckinsey.com/insights/strategy/a_pocket_guide_to_doing_business_in_china
Doing Business in China
Improved international relations, government reforms, an expanding economy and increased foreign investment make doing business in China a potentially lucrative affair.
Doing business in China means that business people will come into increasingly frequent contact with Chinese business people and officials. It is imperative that those doing business in China learn about areas such business culture, business etiquette, meeting protocol and negotiation techniques in order to maximise the potential of their business trip.
In this short guide to doing business in China, a few cultural facts and their influence on business culture and etiquette are explored. These are in no way meant to represent a comprehensive summary of tips on doing business in China but a highlighting of some important key areas one may encounter.
Confucianism
In essence Confucianism revolves around the concept of harmonious relationships. If proper behaviour through duty, respect and loyalty are shown in the relationships between a ruler-subject, husband-wife, father-son, brother-brother and friend-friend, society as a whole will function smoothly.
When doing business in China it is possible to see how Confucianism affects business practices. Of the less subtle manifestations are an aversion to conflict, maintenance of proper demeanour and the preservation of 'face'.
Face
Roughly translated as 'good reputation', 'respect' or 'honour,' one must learn the subtleties of the concept and understand the possible impact it could have on your doing business in China.
There are four categories of face. 1) where one's face is lessened through their involvement in an action or deed and it being exposed. The loss of face is not the result of the action, but rather it's being made public knowledge. 2) when face is given to others through compliments and respect. 3) face is developed through experience and age. When one shows wisdom in action by avoiding mistakes their face is increased. 4) where face is increased through the compliments of others made about you to a third party.
It is critical that you give face, save face and show face when doing business in China.
Doing Business in China - Meeting & Greeting
Doing business always involves meeting and greeting people. In China, meetings start with the shaking of hands and a slight nod of the head. Be sure not to be overly vigorous when shaking hands as the Chinese will interpret this as aggressive.
The Chinese are not keen on physical contact - especially when doing business. The only circumstance in which it may take place is when a host is guiding a guest. Even then contact will only be made by holding a cuff or sleeve. Be sure not to slap, pat or put your arm around someone's shoulders.
Body language and movement are both areas you should be conscious of when doing business in China. You should always be calm, collected and controlled. Body posture should always be formal and attentive as this shows you have self-control and are worthy of respect.
Business cards are exchanged on an initial meeting. Make sure one side of the card has been translated and try and print the Chinese letters using gold ink as this is an auspicious colour. Mention your company, rank and any qualifications you hold. When receiving a card place it in a case rather than in a wallet or pocket.
Doing Business in China - Building Relationships
Relationships in China are very formal. Remember, when doing business you are representing your company so always keep dealings at a professional level. Never become too informal and avoid humour. This is not because the Chinese are humourless but rather jokes may be lost in translation and hence be redundant.
When doing business in China establishing a contact to act as an intermediary is important. This brings with it multiple benefits. They can act as a reference, be your interpreter and navigate you through the bureaucracy, legal system and local business networks.
Doing Business in China - Giving Gift Etiquette
Unlike many countries, the giving of gifts does not carry any negative connotations when doing business in China. Gifts should always be exchanged for celebrations, as thanks for assistance and even as a sweetener for future favours. However, it is important not to give gifts in the absence of a good reason or a witness. This may be construed differently.
When the Chinese want to buy gifts it is not uncommon for them to ask what you would like. Do not be shy to specify something you desire. However, it would be wise to demonstrate an appreciation of Chinese culture by asking for items such as ink paintings or tea.
Business gifts are always reciprocated. They are seen as debts that must be repaid. When giving gifts do not give cash. They need to be items of worth or beauty. Do not be too frugal with your choice of gift otherwise you will be seen as an 'iron rooster', i.e. getting a good gift out of you is like getting a feather out of an iron rooster.
Doing Business in China - Meetings and Negotiations
Meetings must be made in advance. Preferably some literature regarding your company should be forwarded to introduce the company. Try and book meetings between April - June and September - October. Avoid all national holidays especially Chinese New Year.
Punctuality is vital when doing business in China. Ensure you are early as late arrivals are seen as an insult. Meetings should begin with some brief small talk. If this is your first meeting then talk of your experiences in China so far. Keep it positive and avoid anything political.
Prior to any meeting always send an agenda. This will allow you to have some control of the flow of the meeting. The Chinese approach meetings differently, so rather than beginning with minor or side issues and working your way up to the core issue, reverse this.
The Chinese are renowned for being tough negotiators. Their primary aim in negotiations is 'concessions'. Always bear this in mind when formulating your own strategy. You must be willing to show compromise and ensure their negotiators feel they have gained major concessions.
Make sure you have done your homework before doing business in China. The Chinese plan meticulously and will know your business and possibly you inside out.
One known strategy for Chinese negotiators is to begin negotiations showing humility and deference. This is designed to present themselves as vulnerable and weak. You, the stronger, will be expected to help them through concessions.
Doing business in China
Above all, be patient and never show anger or frustration. Practise your best 'poker face' before negotiating with the Chinese. Once they see you are uncomfortable they will exploit the weakness. Decisions will take a long time either because there is a lack of urgency, simultaneous negotiations are taking place with competitors or because the decision makers are not confident enough.
The above few examples of differences in culture, business practices, business etiquette and protocol demonstrate the number of areas where business people can face challenges. Cross cultural understanding is an important tool for any international business person, company or organisation to acquire when doing business abroad. Looking forward, doing business in China will gain more importance as its potential continues to grow.
Source: http://www.kwintessential.co.uk/etiquette/doing-business-china.html
Going Global: 6 Things You Need to Know About Doing Business in China
In this first piece in the 'Going Global' series, I examine best practices for doing business in the world's largest country.
BY JUSTIN BARISO
Founder, Insight@JustinJBariso
IMAGE: Getty Images
Whether it's trying to hire a more cost-effective manufacturer or looking for a new market for your product, you might be considering a business partner in another country. Having worked many years with persons from all over the world, I've experienced firsthand what problems can arise due to differences in language and culture.
In the coming months, I'll be dedicating specific articles here on Inc. to my 'Going Global' series. In them, I hope to spread some knowledge gained by experienced companies and entrepreneurs located across the world.
First up? The world's second biggest economy: China.
What do you need to know before doing business in China?
1. Relationships are the key to everything.
If this is true in the U.S., it's a hundred times more true in China.
"Good relationships are the key to everything, regardless of job level or industry", says Robert Bravo (current managing director of Compass Corporate Training, a consultancy in Shanghai City, China). He explains:
Rapport building can be done in many scenarios and in many ways: a networking event, dinner with a potential partner, making a client visit, etc. It's not uncommon to spend hours with a potential client over an expensive dinner, talking about seemingly unrelated topics. To the foreigner, this might seem like a total waste, but it can mean the difference between success or failure. Its good to note that more traditional Chinese business people likely value these occasions even more.
For example, a joint venture company recently sought our services after receiving a good recommendation from a previous client. Often times a couple of meetings and emails would suffice to seal a contract. But this more traditional management team indirectly asked for some time face-to-face. A colleague and I flew to western China and spent two days touring and dining with the clients management team. We didn't talk business once.
To a budget conscious American like myself, this could be a tough expense to swallow. But the investment paid off a week later, when we signed a long term contract.
2. Small talk's important. But it's just the beginning.
Bravo continues:
Most Chinese are more shy by nature than the average Westerner. Therefore, its important to take initiative. Your ultimate objective is to help the other person feel comfortable, eliminating any suspicion or awkwardness. Look for positive conversation topics. Chinese cuisine is always a winner; Chinese are universally passionate about their food, and love educating Westerners on the subject. After a few minutes of good small talk and a little laughter, you might shoot for a deeper connection.
On Robert's recommendation, I read the book Think Like Chinese, by Zhang Haihua and Geoff Baker. It's a fascinating read that explains Chinese thought and business culture from both the Chinese and Western perspective. (The authors are a husband and wife team made up of a Chinese woman married to an Australian man.)
Just a few gems from the book:
3. The Chinese concept of mianzi ('face') is extremely important.
It's extremely important to never make a person "lose face" by criticizing, ignoring, or making fun of them. What seems harmless to you may be terribly insulting to a Chinese person.
4. The Chinese definition of leadership differs greatly from that of the Western world.
The Chinese concepts of leadership, effective management, and team work are very different from what you might think of. Simply put, the Chinese view of leadership is 'whoever is in charge'.
After explaining the historical reasons behind this, the authors state:
Western leadership, that is, the ability to guide, direct or influence people, is a concept that is quite foreign to the Chinese. In the eyes of Chinese, whoever has the authority or power automatically becomes the leader regardless of their ability to influence people...Such a person's leadership skills are not questioned--their position is respected, not their skills.
This is just the tip of the iceberg. Further reading about the Chinese concepts of leadership, hierarchy, and giving direction can greatly aid you in communicating with Chinese partners.
5. Why the Chinese (almost) never say no.
Generally speaking, Chinese communication is more indirect than English. Telling someone 'no' directly may seem disrespectful. Keeping in line with the concept of mianzi, many Chinese believe that saying 'no' to someone will make the other person lose 'face'. They don't want to show disrespect to you, your hard work, or your expertise, so they communicate in a more indirect style.
This information can be helpful, especially when negotiating. Many times, a Chinese person will say something like: 'I agree with what you said, but...' In this statement, the 'but' could indicate that in reality, the person totally disagrees.
If you find the need to disagree, doing so in an indirect way ('Perhaps we can come back to that' or 'I may need to check with my partner before deciding on that issue') will often be appreciated by your Chinese counterpart.
6. Understand which Chinese people you're dealing with.
Stereotyping is a typically dangerous practice. But the sheer size of China complicates matters even more. As the authors explain:
[China] is like a collection of diverse nations within a common economic boundary. Just like the British don't always see eye-to-eye with the French, similar regional differences exist in China. For example, people in Beijing are different in many ways to those in Shanghai. China is one of the most diverse countries in the world.
So, remember: What you've learned about Chinese culture will differ depending on which part of China you're dealing with. Get to know a local partner by following the relationship building advice above. Work on building trust with them, and this can be the stepping stone to expanding your network.
Learning to do business with Chinese partners brings along a unique set of challenges. But a rapidly growing market and huge number of skilled professionals could make it well worth your while.
(If you're looking for an interesting blog about Chinese culture and business, I recommend Sean Upton-McLaughlin's The China Culture Corner.)
Source: http://www.inc.com/justin-bariso/going-global-doing-business-in-china.html
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