Guanxi, or personal relationships are of vital importance when doing business in China. Do not underestimate the importance of the relationship building process.
People are comfortable building relationships with honourable people who show respect to those to whom respect is due.
As all relationships are unequal it is important, if you wish to appear honourable, to show respect to age, seniority and educational background.
Managers tend to be directive, which reflects basic Confucian concepts of the hierarchical nature of society.
In return for loyalty, the boss is expected to show consideration and interest in all aspects of a subordinates life.
There are often close relationships between senior management of a company and local party officials.
It is important that you do not make people lose face in front of their group. Always respect seniority and do not openly disagree with people.
Do as many favours for people as possible – debts must always be repaid.
Business cards should be formally exchanged at the beginning of meetings. Treat the business card with great respect, as the card is the man.
Meetings are often long and seemingly without clear objectives. Very often the meeting is an exercise in relationship-building and the aim of the meeting is to move the relationship, rather than any specific business task, forward.
It can take several, very long meetings before any tangible progress is made. Patience is essential if you wish to capitalise on the situation.
The Chinese are very interested in long-term commitment. Build long-term goals and objectives into your proposals.
Do not be too direct. Strive for diplomacy, consensus and harmony. Remember that this takes time to achieve.
Do not assume comprehension. It is often useful to go over the same point several times from different angles in order to aid comprehension.
It is difficult for the Chinese to say no directly. Anything other than a direct yes could mean no. Be circumspect and reflect on seeming agreements reached. Has an agreement actually been reached?
It is difficult to read body language as, by western standards, it is somewhat muted in China. Be very alive to any changes of posture, animation etc.
Gift giving is an everyday part of Chinese business culture. Giving and receiving gifts helps to cement relationships. Take gifts with you when visiting and put some thought and effort into the gift selection process.
Always wrap gifts before giving them. Gifts are rarely opened in front of the giver.
The Chinese are an intensely patriotic race. Do not make disparaging remarks about China, the political situation, human rights etc.
Entertaining is very important in the relationship building process. If entertaining, do it well. If being entertained at a banquet, take you lead from your hosts – they will enjoy taking you through the process.
Written and Produced by Keith Warburton
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in China. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in China and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: