SERIES: Connecting Australia and China

Like with most places, succeeding in China hinges very strongly on understanding the local culture. Here are five things you should know when doing business in China.

Tip 1: Chinese society is typically hierarchical

In China, the mid-level managers are usually not given too much power or authority. Most of the decisions are taken by the senior management, and then implemented at the lower levels of the company. It’s likely that the higher up you are on the company foodchain, the more respect you will get from businesses in China. This also makes it essential that your business associate in China is someone with influence in the company.

Tip 2: No question is considered too personal

What Western companies would consider inappropriate topics of conversation while doing business, are fairly common discussions in a lot of Asian countries, including China. Don’t be surprised if you are asked about your age or marital status, especially when your business associate is older than you. In fact, were you to comment on the youthful appearance of your business partner it would likely be well received. People like to know who exactly they are dealing with and more often than not that involves the exchange of personal information.

Tip 3: Keep your business cards handy

You will be expected to present business cards to every person you meet while in China. It’s probably good practice to ensure you have a good number of them when you go there to do business. When handing them over, you should ensure that you use both hands, and when receiving business cards, read them before putting them away.

Tip 4: Guanxi is key

‘Guanxi’ can be defined as the system of social networks and relationships which facilitate business and other dealings in China. In a business context, guanxi usually begins at the level of personal interactions before being applied at a corporate level. Exchanging gifts, for example, is considered perfectly standard practice in China, and is looked upon as a way of furthering business relationships. Something else to note, is that the line between business and personal is blurred in China. It isn’t uncommon for business meetings to be held in a social setting. It’s good practice to reach out to your Chinese business associates on big festival days, like the mid-autumn festival, to wish them well and ask how they’re going.

Tip 4.5: Business dinners

Relationships are often built through business dinners, which involve a lot of drinking and a lot of talking. You are usually expected to make a toast regarding how grateful you are about the business opportunity that’s been presented to you and your relationship with your associate. The amount you drink is considered an indication of how close you are to your business partner; the closer you are, the more you drink. Once you make a toast, the general practice is to clink your glasses together with a ‘Cheers’; just make sure your cup edge is lower than the other party’s should they be older than you. Also, it is good practice to wait for the oldest or most experienced people to start eating first.

Tip 5: Trust is earned

When doing business with a company in China, always assume that they will not trust you until you show that you are trustworthy. As mentioned in relation to ‘guanxi’ business can often take place in a social setting and developing a closer relationship with your business associate is essential. Building a friendship is a good way to establish trust - open up and talk about yourself; the gesture will be well-received by your Chinese counterpart. Another key point to remember is that the Chinese government plays a large role when it comes to doing business in China. Establishing a good relationship with government officials would be helpful in furthering your business.

Other interesting articles on this topic:

http://www.forbes.com/sites/insead/2012/03/06/the-ten-principles-for-doing-business-in-china/#15689e061176

http://www.australianbusiness.com.au/international-trade/export-markets/china/cultural-tips-for-doing-business-in-china

https://asialinkbusiness.com.au/country/china