With 5,000 years of history, Chinese culture exerts an enormous influence and explains a lot about how the Chinese do business today. An understanding of China’s Business mentality and etiquette can help you avoid unnecessary misunderstandings, build relationships quicker, and maximise business opportunities. What are the key differences in business environment, Chinese mentality and how do you navigate around them to deepen your Chinese business relationships? Here are some of the key points (and we will cover more in full detail in our upcoming Survival BUSINESS phrases – Mandarin taster on 25th September 2018 at 19.00):
- Guanxi – In the west, we say ‘It’s not what you know, it’s who you know’. This captures the essence of Guanxi in Chinese. In English, the term means having a fantastic set of contacts. Without Guanxi, ie. with the right introductions, it will be especially hard to get to the top decision makers in China as the Chinese much prefer to do business with the people they know. In the past, Guanxi is essential for getting a job, seeing a good doctor etc. It is no longer as critical now but in general, it’s still an extremely important way to get things done in China, in personal life and in business. To do business successfully in China, you need to build a strong Guanxi chain. Nurturing a good relationship/Guanxi via sharing a meal and thoughtful gift giving are basic practice in China. We will cover this in detail plus other useful Chinese characteristics in our Survival BUSINESS phrases – Mandarin taster on 25th September 2018 at 19.00.
- Banqueting – Nurturing Guanxi is vital, so people need to socialise. The meal plays an important role in doing business in China. Banquets are often hosted at lavish restaurants to welcome Western guests. The head of each party is usually expected to give a speech and toasting with Chinese wine is a part of the occasion. In Chinese, we call a business dinner ‘fanju’ (饭局),which literally means a dinner plan or strategy – it’s something that’s planned to achieve the desired business results. There are Chinese books on how one can best plan a ‘fanju’– a testament to the importance of the dinner in doing business in China even for the Chinese themselves. A quick note on the dinner, if you are hosting, your Chinese guests are likely to interpret the price of the meal as how sincere you are about the business relationship – it’s also associated with the concept of ‘giving face’ (explained below), Where do you have to sit at a banquet? Do you have to finish everything on the plate as demonstrated in a HSBC advert?
- Gift Giving – Do you know that it’s a big taboo to give a clock, or a watch as a gift to the Chinese people? This is because in Chinese, the word ‘clock’ sounds like the word ‘funeral’ and when you give a clock to someone, it sounds like you are ‘attending to their funeral’ in Chinese! It’s considered very unlucky and we can get quite offended. Sadly, these small (but quite unpleasant) misunderstandings are still happening, for example, earlier this year the British Transport Minister presented the mayor of Taiwan a watch on her visit and unsurprisingly it was not very warmly received (you can read more about it here). Things like this highlighted the importance of some fundamental knowledge of the Chinese culture when doing business with the Chinese people. What other gifts can be sensitive to your Chinese counterparts? We will explain in detail with real life case studies on the 9th.
- Face – The Chinese concept of ‘Face’ concerns the image or credibility of the person you are dealing with. For the Chinese, it’s important to maintain a good, external image. In business, ‘giving face’ to someone could mean to compliment a member of staff in front of his boss, arriving a meeting with an immaculate suit to show your respect, or hosting a very nice banquet dinner as mentioned before. Face is also linked with hierarchy, respecting someone’s rank or status. This is has implications on how you address your Chinese associates and where people sit during a banquet for example.
We will help you to compare and understand more differences in the Chinese way of doing things, pitfalls and ways to navigate around them in the Survival BUSINESS phrases – Mandarin taster on 25th September 2018 at 19.00.