Understanding Chinese Business Culture and Etiquette

asian and caucasian business executives looking at laptop screen while having a discussion in a multinational company.

China is known as the world’s second-largest economy for low-cost manufacturing. But things are moving fast China’s rapid market transformation and economic expansion supported by a series of government reforms is now an attractive destination to do business. This has led to the establishment of global giants Boeing, Procter & Gamble, Volkswagen and Starbucks.

However, there are certain challenges that several western companies encounter when looking to do business in the country. Common barriers include language, corruption, business etiquette and intense competition.

What Do You Need to Know When Doing Business in China

A mixture of markets- According to Martin Roll, a business and brand strategist, China should be viewed as a mixture of cultures regardless of its population, 1.3 billion people, and diverse market. Therefore, companies should be more flexible and innovative since there is no single consumer profile.

According to the president of the 48 Group Club, Stephen Perry, business in china depends on the specific markets. He adds that one should consult trade promotion bodies, trade associations and the Chinese people to understand the dynamic of the country, also not forgetting to take up business Chinese courses to decrease the gap of communication.

Business culture and etiquette- China has a huge history and it is important to obtain insight into the country’s business culture and social etiquette to avoid misinterpretations and destructive working relationships or partnership.

According to Professor Jonathan Story, giving face or giving due respect is a very important etiquette in this place. It describes a mix of social role, self-importance and public perception. You can give face by showing sensitivity to their culture, accepting invitations, attending meetings (but sitting according to ranks), providing gifts according to rank as well as seniority. Behaving in a way that lacks self-control and weakness or contrary to giving face can cost your connection with the Chinese.

One can illustrate respect by showing awareness of cultural nuances by developing a sincere interest in their local customs, offering gifts, acknowledging hierarchy, appreciating their food and addressing people according to their designation. Seniority is important if you are dealing with a government or a State owned body. According to analysts, Chinese business people generally respect cultural differences; a simple cultural difference can sink a perfectly good working relationship.

Market-based approach- Western companies that are looking to invest in the Chinese market should make an effort to appeal to local tastes. They make it their duty to be aware and adapt to local preferences accordingly. You will need to look at your product with China’s context in mind to gauge on the price and other decisions.

Dealings in China takes a lot of time and money

According to analysts, westerners should approach the china market with a mentality that they are there to stay. Foreign businesses are prone to failure when they do not consider cost of resources, time and patience. It takes an open-minded entrepreneur to determine the market state of china in the coming decades. The current characteristic of china indicates a fast growth of consumer goods so there is a need for the future impact of the country.

Strong local team

According to Perkowski—a well-known Wall Street expert—those interested in tapping into this market should also consider relocating or finding a representative for their organizations. This creates a limit to the amount of travelling. Every deal requires your presence so it is important to get some local talents or put together a good team to help you escape barriers like the mandarin language, complexities of the market, and the Chinese culture. Hence, knowing the benefits of learning business Chinese will help you in a long way in your venture of doing business in China.

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