Navigating the world of business in China can be both exciting and challenging. The country’s rich cultural heritage shapes its business practices, and understanding these cultural nuances is essential for building strong, effective relationships. Here are ten crucial Chinese cultural rules to keep in mind when doing business in China:
1. Build Relationships Before Discussing Business
In China, relationships (or “guanxi”) are a cornerstone of successful business transactions. Before diving into business discussions, take the time to build a personal rapport with your Chinese counterparts. This might involve engaging in social activities, sharing meals, or participating in informal conversations. Developing a strong relationship will pave the way for smoother negotiations and foster mutual trust.
2. Emphasize the Importance of Face
The concept of “face” (or “mianzi”) plays a significant role in Chinese culture. It refers to a person’s reputation and social standing. In business interactions, avoid actions or comments that might cause someone to lose face, such as public criticism or outright rejection of their ideas. Instead, offer constructive feedback in a respectful and private manner to maintain harmony and respect.
3. Develop a Network
Cultivate contacts with as many people as possible in China in order to find the right decision makers. Understand that majority of Chinese businessmen will want to get to know you on a personal level. Therefore to have as many contacts as possible is key to good business practices.
4. Language and Culture
Knowledge of the culture and language is key. Even basic understandings will go a long way and your hosts will appreciate your initiative. Chinese businessmen do not expect you to be fluent within Chinese; however a shown effort to understand the culture will go down very well. Pay in particular notice to meal time etiquette as it is likely you will engage in social activities with your partner before working together.
5. Don’t say No
Avoid the word “no” in your business dealings. “Perhaps,” “we’ll see” and other vague words are better. Saying no is not common in the Chinese language so can be seen as very rude to the Chinese.
6. New Opportunities
Keep an open mind for new and creative opportunities as the Chinese market is opening up there is always new opportunities arising. With the implementation of the ‘Made in China 2025’ concentrating on innovation China is soon becoming the land of opportunity.
7. Intensive Negotiations
Expect long and arduous negotiations until the very end.
8. Be Patient
Be prepared and be patient. Accept the delays that may occur. Due to the weak legal system to enforce laws, Chinese tend to establish strong relationships before closing deals.
9. Know Business Law
Before establishing a formal business relationship, understand the difference between a Joint Venture (JV), a Wholly Foreign Owned Enterprise (WFOE) and a Representative Office (RO).
10. Business Cards
Exchanging business cards is an important practice when doing business in China. Bring sufficient to business meetings, preferably ones written in English on one side and in Chinese on the other. You must take time to learn how to properly give and receive business cards. This lack of research can make sure a avoidable bad first impression does not occur.