10 tips for doing business in China

Published on December 16th, 2020

Introduction to Chinese business culture

Doing business in today’s world means operating in a globalized and intercultural market. In such a setting, it should come as no surprise that many people are rushing to the second-largest economy: China. Being the most populated country, with the biggest consumer market in the world, it provides business opportunities for almost anyone.  

Although much has changed in the last few decades of modern China, it is still a unique and complicated culture for outsiders. Since culture influences and shapes business practices, in order to create a long-lasting partnership or expand your business in China, you need to adjust your approach in accordance with their culture. And for that, you need some sort of cultural training.  

Before you delve deeper into the fine details of cultural awareness trainings, here are the top 10 tips for doing business in China.  

Top 10 tips on Chinese business culture:

1. Guanxi

One thing that people often overlook, or don’t even know about, is the way Chinese people foster relationships and connections called guanxi. David Smith wrote that guanxi includes cultivating and maintaining relationships with individuals, with both parties recognizing that, as part of a developing relationship, a personal obligation also develops. It consists of several elements: ganqing (emotional attachment), renqing (reciprocal favor exchange), and xinren (interpersonal trust). 

2. Mianzi

Mianzi is another important concept in social and business situations in China. Mianzi, or face is closely related to guanxi. Mianzi manifests itself as a desire to retain social stability, have a clear place in hierarchy, be respected, and not to be embarrassed in social situations. Individuals can lose their ’’face“  by being directly criticized by someone, or by showing emotions publicly. 

3. Business card

In China, a business card is called a ‘name card’ or ‘ming pian’. Having enough business cards is essential as you will need to hand them out to everyone you meet. The layout of the card is also important. If your company is prestigious in any way, this should be clearly stated. You should also emphasize your title or seniority. 

When the time comes, present your card with two hands facing the other person. Be aware that among the new generation of entrepreneurs, this culture is changing, but you may still be expected to hand your card over carefully. 

4. Dress code 

As in many other cultures of the world, appearances and first impressions are important in Chinese business culture. Dressing conservatively and wearing high quality clothing will help show both status and modesty. 

5. Business is usually done outside of the boardroom  

The Chinese feel honored to either receive an invitation or to invite you to a meeting or a function. The ceremony of signing deals, formalizing contracts and similar gestures are often carried out in offsite settings such as restaurants or bars.  

There will be a lot of exchange of courtesies and small talk, and you shouldn’t try to move things faster. These formalities and pleasantries are important, and they tend to be seen as part of creating a long-lasting relationship, which is directly tied to guanxi.  

6. Be well prepared

The Chinese tend to be very detail oriented. This means that they will do their research on your company and will expect you to do the same. This includes making sure you don’t schedule a meeting during a Chinese holiday that is not recognized in Western culture and knowing exactly who will be making the final decisions about the business transaction.  

7. Formality and hierarchy

When attending a business meeting in China, it’s important to show respect by arriving on time. Keep in mind that the first meeting is going to be hierarchical and set up to follow strict rules.  

The Chinese also regard seniority as very important. Determine who the most senior person at the meeting is and shake hands with that person first.   

8. Chinese tend to be reserved 

The Chinese tend to be implicit communicators and do not often express emotions or passion in business openly. This has everything to do with their culture, social, political and philosophical systems. Chinese culture encourages people to be reserved and humble in character. Their social and political systems are more community-focused and once a person says something it is considered in the public domain and out of their control. 

9. Don’t point 

In China it is considered rude to point with your finger. Instead, point with an open arm or make eye contact to get someone’s attention.  

In addition, the Chinese dislike body contact such as back slaps or arm touching, and often consider noises like clicking your fingers, whistling, and even blowing your nose to be impolite. 

10. Communication

Words like “no” shouldn’t be used in a discussion; instead, use a phrase like “I’ll need some more time to think about that.” When the Chinese say something like “it’s okay” or “not a problem,” they likely mean the opposite. Also, controversial topics like politics should be avoided. 

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