Chinese Business Culture

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China's business culture and etiquette is very much different from Western business practice. If you intend to travel to China for business purposes, it is good advice if you can learn some basic Chinese business culture before making the trip.


Understanding Chinese Business Culture and Etiquette

The Chinese business practice is vastly different from the Western method that most of us may be used to. Of course, with the Chinese economy opening up, China's joining of WTO and the Olympics in 2008, many Chinese business practice are now beginning to align with more conventional methods.

However, China will always have their own unique business culture and etiquette, given their unique history and background.


The Initial Approach

Chinese business contacts are mostly referrals; essentially a business relationship is struck based on another business associate recommendation. The best prices and deals often comes from a strong recommendation.

However, it is common today for cold calls and direct contacts, given the availability of the internet and the competitive nature of Chinese businesses. You may source from the internet, trade fairs, catalogues and brochures, advertisements and approach the Chinese companies directly through a call or email.

Alternatively, if you are seeking to invest in a factory in China, you can approach a investment committee or a business advisory directly. They will be able to advise you on your best location based on your industry, raw material and manpower needs. Please contact us directly if you have such a need and we'll be glad to advise accordingly.


Business Relationship in China

Chinese business relationship inevitably becomes a social relationship after a while. Unlike Western business relationship which remains professional and perhaps, aloof, even after a long time, Chinese business relationship becomes a social one.

The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are in your business relationship. Sometimes, a lot of time is spent discussing matters outside of business, but then a lot of time, the other party is also making up his mind about your deal based on how much he sees your personal relationship with him.

Seniority is very important to the Chinese especially if you are dealing with a State owned or government body. Instead of addressing the other party as Mr or Mrs so and so, it is always appropriate to address the other party by his designation ie Chairman So and So, Director So and So or Manager So and So.

When giving out name cards or brochures, make sure you start with the most senior person before moving down the line. When giving out a name card or receiving one, ensure that you are stretching out with both hands with the card. Remember to face the card you are giving out in a manner such that the receiving party gets it facing him correctly.


Giving Face or Gei MianZi

Giving face (aka giving due respect) is a very important concept in China. You must give the appropriate respect according to rank and seniority. For example, if you are buying gifts for an initial contact, make sure you buy better gifts for the senior managers instead of buying similar gifts across the board

Similarly, sitting positions in a meeting room or a dining table is accorded accordingly to rank, importance and seniority. It is good to seek advice before embarking on your first meeting with Chinese business contacts to avoid making the wrong move.


Gifts and Presents

Unlike earlier days when China was very poor, gifts, especially of Western origin was especially appreciated. Today, China produces and imports almost anything imaginable and gifts are no longer a novelty.

However, gifts are always appreciated and especially in the smaller cities or towns, will continue to play an important part in your business relationship. Do note that if you are indeed giving gifts, make sure the senior people get a better gift or at least gifts perceived to have a higher value than their junior staff.

Similarly, expect to recieve gifts from the Chinese, especially Chinese art products. It is polite not to refuse, especially if it is not of too high a monetary value.


Lunch/Dinner in China

There is no business talk in China without at least one trip to a restaurant. Sometimes, a trip is made to the restaurant even before any business discussion take place! Inevitably, the restaurant will always be a grand one and you are likely to be hosted in a private room.

There is an elaborate seating arrangement for a Chinese business meal. There are fixed seating positions for the host and the guest and then they are seated again according to seniority. This is a very important aspect of a formal dinner and it is important that you follow the rules accordingly. However, it seems that the Northern Chinese are very particular to this formal seating arrangement while the Southern Chinese has loosen the formalities somewhat