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The 3 Business Culture of Doing Business in China

The role of the State

It is easy to underestimate the role that the State continues to play in Chinese business. Despite the rapid expansion of the private sector, many large Chinese businesses in strategic sectors remain state-owned and, in addition, apparently private firms also often turn out to have an element of state control. The state factor can have a significant influence on the way a company does business, so you should make yourself aware of the wider political (in both the small and large "p" senses of the word) milieu that your Chinese partner or customer operates in. This knowledge will give you a greater understanding of where the Chinese side is "coming from".


On a related point, government officials such as city mayors and party secretaries in China often wield far more power than their counterparts in the UK do. Good personal relationships are key to successful business in China, and taking the time to get to know key officials is likely to make doing business much smoother. However, a change of local government officials might affect the incentives or agreements offered by the previous administration. Officials are also occasionally arrested for corruption. Having said that, most government officials – particularly in the lesser-known parts of China – are really pleased to see interest from the UK.


Making conversation

Most people should be addressed by a title and their last name. You can address people by professional titles such as "General Manager Wang" or "Director Zhao" or, alternatively, if a person does not have a professional title, use Mr, Madame or Miss, plus the last name.


Stick to safe subjects such as hobbies, family, your hometown, the Chinese landscape and Chinese culture. The Chinese often ask apparently intrusive questions about your age, income or marital status. These questions are not meant to offend, but if you don't want to answer, remain polite and give an unspecific response.


Avoid talking politics unless you know the person very well. Chinese people are more nervous having political debates openly. In any case, do not criticise China or Chinese leaders. Do not refer to Hong Kong as if it was still run by another administration or Taiwan or Tibet as a separate entity.


It is fine to tell jokes in informal situations, but they are best avoided when speaking to a group. Also, be aware that cross-cultural jokes are hard to find, and often the point of a joke will be lost in translation.


The Chinese do not like to say no. Doing so causes embarrassment and loss of face. If a request cannot be met, you might be told that it is inconvenient or under consideration. Alternatively, you might be told "Yes, but it will be difficult". This might seem like a positive response, but in reality means "No" or "probably not".


Gestures in conversation can have different meanings in China. Nodding means "I hear what you are saying", not necessarily "I agree with you". Laughing can be from embarrassment rather than because something is funny.


Entertainment

Work and social life tend to remain separate in the West, whereas much of a Chinese person's social life will be used to further personal and business relationships. In China some three-quarters of business deals are sealed outside of working hours. Tea houses, Karaoke bars and restaurants can all be locations where discussions and deals are made.


Banquets have traditionally been an essential part of doing business in China, although the practice varies depending on where you are and who you are dealing with. Very senior people who have not previously made an appearance may be present at a banquet. They may be key to the approval of the business in hand but be too senior to be involved in the actual negotiations. The banquet is an opportunity to impress them and get a feel for how things are going.


Most Chinese are unenthusiastic about Western food, and prefer Chinese food. Typical official entertainment for a foreign visitor will take the form of a banquet with several courses, often consisting of exotic delicacies not usually eaten in the West – or in China, for that matter!


If you are the host at a Chinese restaurant, at the customary round table, your seat should face the door, with the Chinese guest of honour on your right. Guests are seated further away from the host in descending order of seniority, with the most junior having their back to the door. Thought should be given to placing interpreters between guests who cannot speak each other's languages. If in doubt about the placement of your guests, a friendly invitation for assistance when they arrive often solves the problem.


It is traditional (but now less common) for the host to serve food to the guest. If you are the host and offer a guest a second helping, do not automatically take no for an answer. They may just be being polite.


It is polite to try a little of each dish if it is offered to you. Otherwise, you can discreetly leave any dishes that do not appeal to you – if you finish them you are likely to be given further helpings! 


Frequent toasts, to good health, Sino-British friendship and so on are standard. Locally-produced wines or baijiu (a strong spirit) are the usual drinks for toasts. However, many people in China have a low capacity for alcohol. If you host a meal, plenty of soft drinks should be available.


Never arrive late for a Chinese meal. It is common for people to arrive up to 15 minutes early. They also tend to leave en-masse as soon as the last dish has been eaten. Chinese hosts make it quite clear when the meeting is over and you will not be expected to linger.


The Chinese eat earlier than we do. Lunch is served from 11.30am onwards, and dinner from about 6.00pm. Most official banquets run from 6.00pm to 8.00pm.


Table manners are a matter of fitting in. If in doubt, follow your host's example. One gaffe to avoid – do not leave your chopsticks pointing into the bowl, as this resembles an offering of incense to the ancestors or the funerary flags on a recently dug grave. Place them horizontally on the rest provided.


If you are invited to a banquet, it is polite to reciprocate. A good time to have a return banquet is on the eve of your departure or at the conclusion of the business in hand. Many senior officials in southern China are moving away from the typical banquet scenario and are now more likely to be found playing tennis (with a top coach) or golf. Find out what form of entertainment your key contacts prefer, as this can help you decide how best to build your relationship with them.


Conclusion

Globalization does affect China in a way. However China is taking action to maintain the economic growth such as laying out some policies related to the foreign investment to boost the national economy. This CEO survey report comes from PWC which comprehensively reveals that China could be the main stage for market entry. Moreover CEOs emphasize the recent problem about talent gap which can be solved by man and machine work together and it could be a long way to go. Yet finding an agency can be one of the best ways to narrow the talent gap. Talent Spot can help you with your HR solutions in China as well as Asia Pacific Region includes Singapore, Hong Kong, Taiwan, Japan, Korea, Thailand and Vietnam.