Understanding the Chinese Business Culture
Western culture is as diverse as the Asian culture, but since China is believed to have the oldest civilization, most people connotes the Asian culture have influenced by the Chinese.
China is the most densely populated country in the world with over a billion people living on the mainland alone. There are also Chinese living in neighboring countries and other parts of the world. Because of their ballooning population, their country has strict rules regarding childbirth which they called as “one child policy”, wherein couples are limited to only one child.
Almost 100 percent of the population made up of ethnic or Han Chinese. People from China speak different dialects depending on their region. However, there is only one written language. Their official language is standard Chinese derived from Mandarin dialect. Most people who ventured in business can speak English. This is why it’s quite easy to communicate with them.
Problems will only arise if two parties do not understand each simple cultural difference. For example, a business deal can be threatened, or a good working relationship can fall apart because of misunderstandings. Here are some tips on how you can conduct a more successful business in China and give a clear understanding of Chinese business culture.
Understanding how Chinese communicates
Communication is either verbal or non-verbal. Communicating isn’t only limited to speaking. Even body language and gestures are part of communication.
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The Chinese business practice is hugely different from the Western method. We’re used to each of our cultures. Language and cultural barriers can be removed if we get to know ways and etiquette so we can communicate freely.
The Chinese are accustomed to introductions. Westerners are used to handshakes as a form of greetings, but it’s different in the Chinese way. You may be offered a handshake in return, but you have to wait for the Chinese to offer their hand first. Bowing or nodding is their common greeting.
The Chinese always like formal introductions. Always take note of official titles. Often, Chinese people will use a nickname to assist Westerners. It is also common to applause, especially when greeting a crowd. They expect applause in return too.
The Chinese always like to show courtesy and respect. Hence, they like being formal.
When handing a calling card, present and receive cards with both hands. Always remember not to write on a business card. It is better to carry a small card case and never put it in your wallet or pocket. It’s a sign of disrespect if you do the latter.
· Respect to seniority
Seniority is also very important to the Chinese especially if you are dealing with a government officer or State affairs. It is appropriate to address the other party by his designation or rank, instead of addressing the other party as Mr. or Mrs. For example, it is better to say “Director Yu” rather than saying “Mr. Yu” when you want to call their attention. They call it Gei MianZi or giving due respect. It is considered as an important concept in China. You must give the appropriate respect according to seniority or rank.
Americans like going ahead or on time for their meetings. That’s their way of showing respect. The Chinese don’t like tardiness too. Being on time is vital in China, but if a Chinese was late for a meeting, it is not because he was wasting the time of the other party. It might be because of some reasons especially if the address of the meeting place is unclear. Another thing to take note is to allow the Chinese to leave first if the meeting is over.
The Chinese show conservativeness in their appearance. For men, they wear suits for with subtle or neutral colors. Even casual dress should be conservative as well. For women, short sleeved bloused and heels should be avoided. Revealing clothing is considered offensive to Chinese businessmen. They will show a frowning face if they see a woman displays too much of her body. Both men and women can wear jeans, but it is not acceptable for business meetings.
· Manners and body language
We may be used to swaying and waving our hands when talking. But for the Chinese, they do not speak with their hands. It is considered distracting to the host if you have hand movements when talking. They also don’t point fingers when speaking. In case you need to emphasize something, do not point your index finger but rather use an open palm.
They also show formal manners when eating. It is considered improper to put your hand in your mouth, but use chopsticks instead. Take note to avoid acts that involve the mouth.
· During lunch/dinner meetings
Chinese are fond of food, and it is common for them to have at least one trip to a restaurant for business meetings. They even held lunch or dinner meetings even before any business discussion take place. Chinese often rent a private room in a grand restaurant for doing such meetings while enjoying good food.
When a Chinese business meal takes place, the Chinese always likes to have a detailed seating arrangement. For northern Chinese, the formal seating arrangement is very particular to them, while the Southern Chinese has loosened the formalities somewhat. Fixed seating positions for the host and the guest should be organized. They should also be seated according to seniority or designation. Formality is a part of their culture, and it is important to show it even for a dinner meeting. Following the rules accordingly shows respect.
· Drinking alcoholic beverages
There might be instances that during or after the meeting, alcohol will be served. It does not matter if it is lunch or dinner as long as a meal is being hosted. People from the northern and western China are heavy drinkers. It is often seen as rude to refuse a drink with the Chinese in a formal lunch or dinner. If you cannot keep up with them and you want to maintain your sanity, you can ask for a non-alcoholic drink instead. You can also tell them if you have any medical issue as an excuse so they’ll let you off the hook.
Doing business with the Chinese
With the burgeoning of their economy, the Chinese business practice has begun to align with more conventional methods. Even though there may be cultural and language barrier since it’s the Chinese business culture and etiquette, doing business with them is not that complicated.
Back then, a business relationship with a Chinese is struck based on the recommendation of another business associate. Chinese business contacts are mostly referrals but because of the internet accessibility and the competitive nature of Chinese businesses, cold calls, and direct contacts are accepted.
A western entrepreneur should develop a working knowledge of culture. Making an effort to understand and respect the Chinese approach to business matters gives the Chinese businesspeople, a good impression. Business deals will go successfully if you appreciate the way of life in China in both the social and business settings.
Business mentality of Chinese
You’ve got an idea about their gestures and the way they communicate. Let’s now talk about the Chinese mentality when it comes to business.
The Chinese are business-minded people and for them, appointments are a must for business. You have to make sure that contacts were made before your trip, and they have confirmed the meeting.
Small talk is considered particularly important at the beginning of a meeting. For the Chinese, the most valuable member of your company or group should lead important meetings, since the Chinese value rank and status. They will assume the first who will walk inside the room is the chief.
When presenting a business proposal, always bring several copies of all written documents for your meetings. Always maintain your composure during meetings. For them, showing too much emotion or any embarrassment might have an adverse effect for the business negotiation. Insulting someone in public and behaving inappropriately gives them an impression that the person has a lack of self-control and weakness.
Expect that the decision-making process is slow when dealing with Chinese. Chinese prefer to establish a healthy relationship before closing a deal. They will appreciate your patience. Business deals are not closed swiftly so you might have to meet up several times to achieve your objective. Feng Shui and fortune telling are part of traditions in China. Many Chinese will want to consult with the stars or wait for a lucky day before they make a decision. The process may take time, but developing mutual trust is the key to achieving a successful business in China or from its people.
Gift offering: how to give and how to receive
If you’re dealing with a Chinese businessman, you can impress them by addressing people by their designation or hierarchy, acknowledging their customs, and offering gifts. Awareness of cultural nuances shows sincere interest and respect.
Giving gifts are common in Chinese business culture. It is also a part of Gei MianZi. This gesture is done in the to company to give acknowledgment. For some, it is considered illegal to give gifts especially for a government body or state officials. The official policy forbids receiving gifts since this gesture would be considered bribery, which is illegal in the country. But they would still appreciate it if you give them a token of appreciation. If they refuse, say you understand.
Don’t know what gift to give? A high-quality writing pen is considered as one of the favored gifts. However, do not give pens with red ink because it connotes bad luck. Take note that the more senior the person, the more expensive the gift. Buying similar gifts for the higher ups and their subordinates gives them the impression that you do not recognize their position.
If you’re in a lunch or dinner meeting, you can give the gift in private or to a group as a whole to avoid embarrassment. If there’s concern about the gift you’re offering, tell them you’re giving it on behalf of your company.
The gift should be wrapped and delivered using both hands. A part of the Chinese tradition is not to open the gift in front of the person who gave the gift. You can wait until negotiations have concluded so a gift you’ll be presenting will not be considered bribery.
If you’re the one who is presented with a gift from a Chinese, do not take the gift immediately. Refuse it three times, then accept it with both hands. Once it’s taken, tell the person who gave the gift that you’re happy to receive it. That’s the way not to appear greedy. Wait until later to open it.
Why gift giving gives good impression
The value of the gift should match the level of the business dealings which applies both individual’s gift and corporate gift. However, do not give overly extravagant presents. It could bring an embarrassment to the other party create complications especially if the recipient were not able to give it back in return.
The Chinese culture is full of symbolism. It is mentioned earlier that Chinese likes fortune and luck readings. Colors and numbers have importance and special meanings. An example, red is a lucky color. If you’re giving money, you can place it in a red envelope. However, take note that it should be an even amount, using an even number of new bills.
Other numbers and colors symbolize different meanings such as:
· Number 8 is the luckiest number
· Black, white and blue and the number 4, or four of anything, are negatively associated with death or funerals
· Clocks, handkerchiefs, and straw sandals are also given as gifts in funerals
· Pink and yellow represent happiness
· Knives or scissors and other sharp objects represent a ‘severing of a friendship or relationship’ and may give a wrong impression to a business relationship.
Have your gift items wrapped once you arrived in the country to check if it’s an appropriate gift to offer. You may want to check out a local gift selection store and ask for proper information and direction. They can suggest what type of gift you can give.