Business culture in China

Chinese business culture is very different from that of the west. Business influence is based on a combination of community, business hierarchy and contacts, family and the Communist Party. Combined with social etiquette the complexities of doing business presents a challenge, which really does require expert help for all but the shortest and simplest of corporate visits.

Apart from other considerations if you want to do business you need someone on the ground to create introductions to the appropriate contacts. Without a ‘fixer’ doing business can be a very frustrating and prolonged process.

The choice of fixer is important. They have to have the right connections, but sometimes those connections may not be related to the specific business sector in which the outsider trades. Utilising community contacts, family and Party often pave the way to the best deal rather than simply trying to utilise the experience of someone who knows a particular business sector. This is because relationships are more important than business.

Company structure is based on hierarchy and respect. Managers give instruction which is carried out without question. To question a directive would cause a loss of ‘face’, which is a very serious insult and breach of etiquette in any situation, and one westerners need to understand from the start.

Loss of face can also be caused by saying no, and therefore outsiders often find it difficult to communicate beyond language alone. It is therefore better to discuss likely potential results and influences of prospective decisions rather than try to elicit a yes / no response.

With respect being fundamental to any hierarchy based system it is crucial to show it and act with dignity at all times. Greetings are based on a light handshake and a lowering of the eyes in respect.

It is important to concentrate and be seen to concentrate on what people say. The protocol for receiving business cards is very important. When presented with a card study it closely, and do not put it in a pocket. If at a meeting study each card presented and line them up on the table with the card of the most important individual at the top. This is important.

Meetings themselves are more about getting know people and ideas than decision making. Deals or frequently done in private discussion, but the process cannot be rushed and it is important not to appear to push too hard when negotiating.

Because society and business is based on hierarchy it is almost impossible for outside companies to introduce flat management. Even though many elements of Chinese society are changing there is no benefit from going against accepted practice. It will be time consuming, difficult and almost certainly fail.

The giving of corporate gifts is common in China, but they should not be expensive enough to be considered a bribe. Unless advised differently the safest option is to give a collective present.

Corporate dining has its own set of complex rules and often involves copious amounts of beer, spirits and smoking. It is not unknown for those that do not smoke to actually practice it in order to fit in and not offend. The key things to know are to let hosts or someone else be the guide on where to sit. Secondly, do not eat everything you are presented with as it is a sign that the individual is hungry and therefore a sign of a poor host.

Above all it is important to show dignity and respect in order to be considered an honourable person – the qualification needed for building relationships that allow business.