Intercultural competence is frequently regarded as a key skill for successfully doing business internationally, and nowhere is that more important than in China. I would go so far as to say that it’s way more important than being able to speak the language (although that would be cool too). However there are unfortunately people who don’t yet realise that learning to use chopsticks, whilst an admirable skill to possess, isn’t the only qualification you need for understanding Chinese business culture.
I can obviously only touch on the main topics here & may expand on individual aspects at a later point in time. This is however one of the main challenges of entering the Chinese market.
Table of Contents
What are the Chinese business culture basics?
As I mentioned above, there’s more to working with Chinese partners than knowing how to use chopsticks and that you should hand over business cards with both hands. Yes, those are both very important to know but they probably won’t make or break a deal, at least not in higher tier cities.
[If you are wondering about the whole business card thing, you should give and accept business cards only with both hands. Then you should look at it, to show your interest (check both sides, if the front is in Chinese – there may be an English version on the back) & then place it on the table in front of you to refer to. Whatever you do, don’t just shove it in your back pocket or write notes on it – treat it with respect. ]
Realistically speaking though, in many situations these days you are likely to be asked for your WeChat code, so make sure you download the APP, register before your trip & know how to find your QR code. (It’s on the ME tab, just below your name.) Once you have scanned the code of whoever you are meeting with, make sure you change the “alias” to something that you can recognise. Eg their English name (yes, many Chinese people use an English name) + the company or their position. Otherwise you’ll get back to the hotel later & will have no idea whether the cute cat avatar belonged to the head of sales or the marketing assistant…
I like to exchange both to be honest, as that way your Chinese contact also has your other more formal contacts such as email, company website etc.
Gift Giving in Chinese Business Culture
I’m writing this towards the beginning of this post, but exchanging gifts at the end of a visit is also a major part of building relationships with your potential Chinese business partners. Whilst it’s officially seen as potential bribery (in the same way that compliance regulations govern gifting in Europe or the US) traditionally giving a gift to your host has been a way of showing respect. I appreciate that this can be a hard line to walk, especially if you are visiting the first time and don’t know the people that you will be meeting, however it’s worth giving this some thought.
Specialties of the region you originate from in the form of handicrafts or sweets are usually acceptable, although if possible it’s worth doing some research as to how your chosen product is perceived by other cultures. You should take care to pack your gift as beautifully as possible.
I like to gift “coffee table books” to people I’m meeting for the first time in China. Most Chinese enjoy looking at high quality photos of tourist attractions in your country & getting a perspective on where you live or are from.
As with business cards, gifts should be given & received with both hands. You shouldn’t open your gift right away unless encouraged to do so by the giver.
Don’t give gifts which are difficult to reciprocate or match as this may cause the recipient to lose face (see below).
China as a high-context culture
China is what is defined as a high-context culture, and this aspect of their communication is a cornerstone of understanding Chinese business culture. A high-context culture is typically defined as:
- Implicit information communication (“listening to the air“)
- Importance of rank, status, hierarchy
- Common history and background
- Nuanced communication
- Emotions are being transmitted
- Difficult to enter
If you also understand that the US is one of the lowest context cultures out there, you can begin to see how misunderstandings between major superpowers can start out, even before 2 political systems oppose one another.
High-context cultures often exhibit less-direct verbal and nonverbal communication, utilising small communication gestures and reading more meaning into these less-direct messages. China as a high context culture, also often uses a large number of emojis even in business discussions via WeChat as these add additional non-verbal context. Beware though…the WeChat emojis don’t always correspond exactly to the meanings you may be familiar with!
It makes it rather exhausting to do business with Chinese companies because as a European you are concentrating so hard to REALLY get what is being said. It’s like a far more extreme form of the British understatement.
Hierarchy in Chinese Business Culture
Workplaces in China are definitively hierarchical based on age and position, and everyone has a distinct place and role within their company. This is because Chinese business culture is largely influenced by Confucianism.
When participants in a meeting are introduced to you, you can expect that they are presented in order of importance in the company hierarchy usually. Also if you are the guest of honour in their company, then the most important participant from their company will be seated either in the middle of the table or at the head.
You can expect to be greeted and welcomed with a small speech that emphasises how happy they are to host you.
The hierarchical nature of Chinese companies as well as the need to preserve face, means that you are highly unlikely to see a junior member of staff contradicting their more senior colleague. Consequently, when you are discussing perhaps controversial topics in your business relationship, you need to consider whether the boss will be happy to discuss this in front of his staff. If the discussion takes place in front of a broader group of the team, don’t ask a junior team member for their opinion…If it’s appropriate due to the technical nature of the topic, it’s likely that the senior staff member present will ask them to speak.
Negotiation depends on creating long term relationships in Chinese business culture, so it really pays to invest time up front in this stage of any meeting, before moving onto the contract discussions or whatever else you have on your agenda. This can feel frustrating if it’s the first time you’ve worked in this way, but the relationships you build are long lasting and solid if you take the time to do it right.
So, if your business partner is asking what feels like a never ending stream of questions which apparently have absolutely nothing to do with the question at hand, bear with it & try to answer patiently. In the past I’ve had colleagues come to me completely frustrated as one of the Chinese team members was asking more questions than an average 4 year old about the business. These were not directly related to the open task but served to build a relationship, except the other party didn’t realise that & felt the questions were inappropriate & a waste of time.
Your Chinese partner probably sees any contract you may have signed, more as a basis for discussion & a symbol of concrete goodwill for having an ongoing relationship, than as a document cast in stone.
This is one of the most frequent causes of conflict that I’ve observed over the years. You think you have agreed that a sales campaign will be structured like this or that the budgets for project X will be so many RMB and then the next time you talk to or meet with the partner, he wants to talk about it again. ?
Just take a deep breath and remember that they just see the contract as a sign of commitment to the relationship. Smile & explain gently (without saying “not likely!”) why you can’t do whatever it is that they have just requested – or obviously agree if perhaps the situation has changed in the meantime & it now seems a more sensible course of action.
Building Relationships & Saving Face
As a high-context culture, it’s important for the Chinese business community to build relationships before they get down to the nitty gritty of your planned meeting. Depending on the individual concerned, this may range from 5 minutes small talk through to a couple of hours spent drinking tea and getting to know one another. Obviously, it’s advisable to avoid critical topics such as the political status of Taiwan, Tibet or human rights issues in Xinjiang.
Business in China is often based on the idea of reciprocity of favours. Once you have a strong basis to a relationship, your Chinese counterpart may do you favours in the assumption that you will return the favour at a later point. This is interconnected with guanxi, the Chinese form of building relationships, which are often supported by doing one another favours at various times and based on mutual trust.
面子 (face) is one of the key aspects of Chinese culture. A Chinese person always wants to save face, never lose it. In order to “give face,” pay attention to older people & those further up in the hierarchy, especially when it comes to government officials. Don’t force them to admit that they don’t know something, or push them so far into a corner during negotiations that they only can say no.
Be careful when commenting with strong negative statements. For Chinese people, it’s impolite to give negative answers directly. The blunt “No” should be replaced by the euphemistic “maybe” or “we’ll think about it”.
If people are nodding their heads in a meeting, it doesn’t necessarily mean that they agree with what you are proposing, it just means that they have understood you. Don’t confuse this as it can lead to problems further down the line.
Managing Relationships when you can’t travel to China
This for sure is a huge challenge. If you have existing partners, then you can take care to regularly stay in touch with WeChat messages, video calls etc. It’s certainly not the same as in person visits, but better than nothing.
It becomes more challenging when you are managing new projects and perhaps have never yet met your counterpart in person. Of course, the whole world has been forced to do business via video calls in the last 2 years, but that doesn’t mean that it’s great for your relationships with China. It’s really hard to build new relationships anywhere via video as you lose so much of the non verbal communication & in high context cultures this is even more the case.
One option that can work well for building new relationships is to leverage the networks of a trusted person, either a consultant or a local friend if they are suitable qualified. That way you know that you will be working with a company who someone you trust has experience with. If you are interested in this option, reach out for a call & I’ll be glad to support you.
Learn to Understand what your Customers are looking for
Whilst many intercultural competence courses focus on how to conduct meetings and negotiations with a Chinese team, an integral part of understanding Chinese business culture is recognising that you also need to tailor your marketing messaging house for the consumers.
China isn’t a “plug & play” market where you can get away with just doing a few minor tweaks to a translated version of your global messaging. If you don’t tailor your messaging to the market, then you can be sure that either your distributor or your superfans will do that for you – & then you have little control over whether it really corresponds to your brand core.
It’s essential that you take the time to deliberately craft the story that you want consumers to understand about your brand in China. Chinese consumers are extremely sophisticated and do huge amounts of product research compared to say Europe, so you don’t need to simplify things to help them remember. Instead you can really geek out on the specifics of your products and ingredient details, whilst ensuring you have very localised messaging.
Understanding Chinese Business Culture
Obviously I’ve only scratched the surface of this huge topic today, but hopefully it is sufficient to give you an impression of what you need to watch out for when working with Chinese teams.
I can’t summarise the whole of the business culture of a complex country like China in a couple of thousand words in a blog post, but would like to sensitise you here to the kind of topics which you need to learn more about or consider, if you want to be successful in the market.
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If you are interested in selling in China, you might also find these posts interesting:
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- Successful Selling in China Part 3: Building Guanxi for Success
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