How to succeed doing business in China | Fili’s World

4 Oct, 2006 in China, Chinese culture by Fili
Tags: China, Chinese culture

How to succeed doing business in China

Today's TheMarker financial news in Haaretz has an article about westerners doing business in China titled "The Confucius Business Model". The article summarizes with 12 tips on "How to succeed (or not fail) doing business in China". Here's my translation of the article (from Hebrew):

Take an interpreter to the first meeting. "Never expect to convey a technical message to a Chinese in English. He will never admit he doesn't understand" experts say. A Chinese interpreter will cost between 50$ to 1000$. An Israeli interpreter will want much more and will probably want to be involved in the business development.

Present your business card with both hands. You must study your Chinese college's business card and under no circumstances should you ever stash it in your back pocket.

When negotiating there's only one person you should be talking to - the Senior manager. There is no open conversation with the rest, as approaching them will embarrass the negotiating team.

You should try and spot who's the real decision maker. Some Chinese pass the burden of making the decision from one manager to another so that they don't assume responsibility.

The most important part of negotiations is spending time together in a good restaurant, or at a Kareoke (KTV). Some deals will not be signed before drinking together a Chinese liquor. Some Israelis have commented that it tastes awful.

Chinese are not impressed with the use of body language. They consider that a weakness.

Arriving late to a meeting is considered an act of insult which might undermine a whole deal.

Gifts should be presented on a personal basis, and not in front of other members of the organization, so that it wouldn't be considered a bribe.

The Chinese refuses gifts 3 times, but will accept it on the 4^th.

It's better to wrap gifts in red paper, as it is considered a symbol of luck and fortune.

Recommended topics for conversation : The weather, domestic tourism in China, Chinese art, good experiences in China.

Recommended topics to avoid : Political subjects, especially China's politics regarding Tibet and Taiwan.

Personally, while I think that while there is some value in those lists this is the wrong approach for doing business in China. Those tips limit the understanding of the Chinese culture complexities to mere stereotypes which might result in doing more harm than good.

Consider, for example, the stereotypes about gifts (sometimes perceived as "bribes"). What I've heard several businessmen working with China say is that you can't make your way through business in China without bribing the hell out of the Chinese managers in order to achieve what they heard their consultants term as "Guanxi".

Guanxi, with my limited understanding of the concept, goes far beyond putting money and gifts on the table as the importance of the money value is insignificant and what really counts the most is the symbolism and sentimental value to show deep respect and honor. It would mean nothing, maybe even something negative, if one was to take this kind of gifts-initiative without achieving somesort of initial Guanxi by joining the Guanxi network of already existing connections. Meaning, by finding someone that you have Guanxi with who has Guanxi connections to the person you're trying to Guanxi with.

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What's your opinion about this kind of lists and articles?

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7 Responses so far | Have Your Say!

Epath | October 6th, 2006 at 6:25 am #

Hello, Fili.

Your observation is absolutely correct that the “Given List”might result in doing more harm than good.

If you are dealing with “Government Officers”, you may need GuanXi to speed up the process of approval, or approved in your favor.

However, now-a-day, the business in private sector, especially those management are well educated with whom you need no GuanXi at all. Business is business, the business term and condition, price, quality and delivery becomes major interests of both parties.

Of course, some social works in dinning table or conference table plays an important task in building up the mutual trust in business relationship. In fact that over such occasions, people observes each other the moral quality of the counter party. Which will define their own judgement about the person with whom they are going to do business. They will carefully observe your beheaviors to match with the words you have spoken to them. For instance, when you toss to a guest, if you said “Gan-Bei” and he agreed, then its a deal, you have to drink it with a “Bottoms up” without any hesitation. You should not play a trick by drinking a half of the cup or leave some remaining wine in the cup. People will think being insulted and be cheated in drinking. And the worse case is that they will not see you next morning for further business discussion. Chinese philosoph that if you cheat on drinking, you will cheat on business or anything else.

An honest and sincere person like you, I believe you have never ever cheat when you tossed to “A-Gon” in New Year Party. Hahaha……,
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tercume ceviri | June 4th, 2007 at 4:58 am #

red, symbol of luck and fortune!? china is definitely another world:)

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