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The Chinese Business Culture

Chinese and Western business cultures are quite different. Cultural awareness and a basic understanding of the behaviour of Chinese colleagues and business partners can be extremely useful when doing business in China.

2.1 Hierarchies

In the hierarchical structures of Chinese society and companies, age, position and title determine how general and business encounters are carried out. In China, the individual is subordinate to the organisation. For business meetings, people will enter the room in a hierarchical order and senior managers usually lead any negotiations or discussions. Also, Chinese introduce themselves with full titles and company name (e.g. Doctor Michael Williams, CEO of XYZ company).

It is important to respect the hierarchical order. Older employees are to be respected. Instructions by a supervisor are strictly followed. Questioning orders are seen as a sign of disrespect, especially because as a consequence the supervisor might “lose face.” Open criticism should be avoided.

2.2 Punctuality
Generally Chinese business counterparts are on time. Punctuality is important and being late is deemed disrespectful.

2.3 Business Relationships
Relationship (guanxi) and relationship building is essential to succeed in China and long term relationships are considered more valuable then fast transactions. Often, business deals can only be secured after trust, based on a mutually beneficial relationship has been established. Possessing good guanxi with authorities is useful to avoid difficulties and frustrations.

Hence, having a well-connected Chinese business partner can be beneficial when it comes to relationship-building, especially with the government.

2.4 Party Membership
The Communist Party of China (CPC) continues to play an important role, not only in politics but also in the private-sector. Most larger companies have employees that are party members and senior executives tend to have good relationships to the CPC, especially in state-owned enterprises.

2.5 Lian and Mianzi
The concept of face is of great importance in Chinese culture and should be considered in business interactions. It can be categorised into two types “lian” and “mianzi.” Lian represents the society’s confidence in a person’s moral character. Mianzi represents society’s perception of a person’s prestige. If a person loses “lian” this might result in a loss of trust within a social network. If “mianzi” is lost, it results in a loss of authority.

Being responsible for the “loss of face” of a person through public humiliation or disrespect can seriously damage the business relationship with this individual. Similarly, complimenting someone in front of others is highly respected and can help with negotiations and working relationships.

2.6 Other Helpful Hints

Business cards should be two-sided. One side printed in English and one in Chinese.The business card should be presented with both hands and with the Chinese side facing up. Examining it carefully is a sign of respect. Business cards should not be placed in the back pocket, as this is disrespectful.

Prior to business meetings in China, it is common to engage in small talk. This might include very personal questions. Often initial meetings are merely a social gathering to get to know the other part.

Being patient is crucial for success. The Chinese sense and importance of time is different compared to western countries.

It is common to exchange gift with business colleagues at the initial meeting. Not giving a gift might be regarded disrespectful. Especially older Chinese often refuse a gift at first to be polite. Therefore it should be offered a second time. Too expensive gifts should be avoided. Otherwise it might be seen as bribery.

Chinese find it difficult to say “no.” To save face often Chinese rather say “maybe.” Forcing a Chinese person to say no might be damaging for the working relationship.

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ECOVIS Ruide Certified Public Accountants Co., Ltd.
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Shanghai 200122, P.R. China
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