The Chinese market has opened up substantially since Deng Xiaoping’s famous Open Door Policy in December 1978. In that year, Deng set up four economic zones in Southern China in order to attract western investment, resulting in a shift toward a market-based economy. In it’s latest report, the World Bank now ranks this industrial giant 78 out of 190 countries for ease of doing business. Many western companies have already taken advantage of China’s low labor costs to achieve economies of scale in manufacturing. In A Quick Guide To Business Etiquette for China, we’re going to give you the tools you need to succeed as you do business in China.
How To Network
Networking is crucial to success in China. To succeed, you must first understand the principle of guanxiwang in business. Guanxiwang encompasses the network of connections or relationships that operate within the Chinese market. It is important to remember that the Confucian values of trust, mutual reciprocity, and harmony form the basis of each guanxiwang network. Without guanxiwang, you will have very little chance of building your business in China. It is something you will have to nurture and grow, demonstrating that you are worthy of being a part of their network.
The Chinese harbor a long-term view towards any business network relationship. As such, they rarely trust outsiders and will only explore business connections that come with recommendations from within their respective networks. Hence, relationship-building and a strong introduction is crucial to business success in China.
Consider that a good guanxiwang or guanxi (business network) will allow your company access to decision-makers, local bureaucrats, and policy-makers. Having access to officials and decision-makers should not be interpreted as an opportunity to offer bribes. Corrupt practices are rarely tolerated within a reliable guanxiwang. Trust is crucial to harmony, and the Chinese value long-term viability in business. They prize mutual dependence and eschew predatory practices.
So, it is critical that your company retains the services of reliable local contacts who can put you in touch with established networks. If you have colleagues, employees, or other close associates in China, rely on them to help make introductions into their networks. The Chinese would much rather work with people in their network or people who have been introduced through their network, even if they are not as good as other people or companies they do not personally know.
Another way to start a relationship is to connect through economic development groups in your country, professional business organizations and professional services that have a strong and reliable network. It’s very difficult to navigate China alone without local assistance.
Cold Emailing in China
Typically the Chinese prefer face-to-face interactions in business. With the emphasis on guanxiwang, cold emailing may not be the best method to introduce or advertise your advantages. China’s recent crackdown on independent NGOs (non-governmental organizations), charities, and business foundations highlights the latent Chinese suspicion against foreigners. Such organizations must now register with state-approved government agencies and register with the police in order to operate legally in China.
An alternative to the cold-email is the ‘warm’ email, where you are introduced to the company by another party they already trust.: contacting Chinese firms for meetings and introductions when they have already been brokered by reliable contact intermediaries will be more effective.
Email Etiquette
It is well known that the Chinese value courteous, refined discourse in business. While it is admirable to remember the expected social pleasantries during a meeting, it is even more crucial to understand the role that email etiquette plays after the event. Within 48 hours of a meeting, write a positive and polite email to thank your hosts for meeting with you. Briefly state the mutually advantageous terms discussed and outline the agreed-upon steps that will move the guanxiwang relationship forward. You can’t go wrong with a sincere email.
Don’t expect your cold emails to get a response, you’ll want to get a warm introduction if possible. If you are not able to get a warm introduction, quickly impress with your credentials such as a PhD, book authorship, speakership, or other reputable expertise in your cold introduction. Younger people from within the startup world are more open to cold introductions as compared to traditional business people.
Business Cards
In China, it is important to exchange business cards upon the first meeting. Remember to use simplified Chinese characters on one side of the card and the English translation of the characters on the other side. When you meet your Chinese counterpart, present your card with the Chinese characters facing him/her. Refrain from using traditional Chinese characters if at all possible; these are usually used in Hong Kong or Taiwan. Make sure that you use a translation service that is familiar with where you’re going so your business cards are correct.
When presenting your card, remember to use both hands; it is a sign of refinement and courtesy. After accepting a card, peruse the card for a few moments before putting it away, either in a business card case or on the table next to you. Never deposit the card in your front or back pockets. If you’re feeling adventurous, try using a Chinese name, either a transliteration of your English name or a specially chosen one based on your personal philosophy in life.
How To Dress
It’s important to dress conservatively while doing business in China. Men are usually expected to turn out smartly in a suit and tie. As for ties, avoid those that exhibit garish designs and colors. Above all, refrain from showing up in casual clothes such as jeans or khaki pants. Classic and tasteful jewelry is appropriate, such as a good watch or a simple wedding band. The key is to present a sophisticated and professional image at all times.
Women are also expected to dress conservatively during business occasions. Wear pastel or darker colors, rather than brighter ones. Above all, refrain from wearing low-cut tops and bare-backed dresses. Skirts should be well below the knees, if possible. If you wear high-heeled shoes, make sure that they’re not open-toed and more than an inch or two in height. It is considered ill-mannered to tower over your business counterparts in China. If in doubt, see how Chinese female executives dress on Fortune’s 50 Most Powerful Women list: Rachel Duan (CEO of GE China), Lucy Peng (co-founder of Ali-Baba), and Wang Fengying (CEO of Great Wall Motor).
LinkedIn Or Other Social Media Connections
The top five social media platforms in China are WeChat, Weibo, QZone, Youku, and LinkedIn. WeChat alone has more than 700 million active subscribers per month. Chinese consumers use the platform to access news, purchase flight/hotel tickets, perform money transfers, and shop online.
According to LinkedIn, at least 600 million active monthly users at QZone access the site to write their own personal blogs, send pictures, watch videos, and listen to music. Your company can literally reach millions of Chinese consumers with effective social media campaigns.
You can also reach Youku’s almost 200 million monthly users with engaging, professional videos that highlight the versatility of your products. As for LinkedIn China, its continued success stems from its partnership with two local venture firms that are part of its Uguanxiwang network. These local firms communicate any politically-sensitive lapses to LinkedIn China, thereby preserving mutual trust between the Chinese government and the company.
It’s not easy to get connected to a Chinese business person directly by using only social media since relationships are important as a first barrier, although the younger people are more likely to ‘meet’ online for business purposes. A warm introduction from a business contact, professional titles such as PhD, authors, speakers, and experts are more likely to succeed in connecting when reaching out through social media.
How To Negotiate
The art of negotiating is a delicate process in China. Be prepared to exercise patience and to keep your good humor during any negotiation. It is said that the Chinese prize personal camaraderie above contract formalities. In other words, you may be apt to get a better deal if there is goodwill between you and your business counterparts. So, never rush the yanjiu yanjiu (research) process.
The Chinese often cite yanjiu as the reason for the apparent delay. At this point, continue to rely on your guanxiwang contacts to smooth difficulties and to bridge any differences that arise. Inquire politely at intervals about any progress, but avoid direct confrontation and debate about logistics and internal plans.
How To Tell If A Meeting Went Well Or Poorly
If a meeting went poorly, you’ll know it by the apparent lack of an agreement. Sometimes, the yanjiu process can take months, indicating that your business contact may be hesitant about disappointing you with a rejection. Conversely, it may also mean that much internal negotiation has to occur before your proposal can be green-lighted. It’s helpful if you have a champion within the company that has influence but the Chinese are risk adverse and may not champion your proposals unless there is internal consensus. If you suspect that there is a lack of agreement, maintain your patience and tenacity and continue to provide positive reasons for working together. Avoid accusations about the nature of the delay, and be gracious in your approach. The key is to preserve your dignity, maintain harmony, and ensure the possibility of a future, long-term partnership with your Chinese counterparts.
On the other hand, if the negotiations have gone well, you will usually get an unequivocal YES after the Chinese have finished their yanjiu process. Don’t negotiate without expert assistance and make sure you have very good local legal counsel to document the agreed upon deal points and write up contracts appropriately in Chinese, not English. Deals often fall apart because of cultural and legal misunderstandings.
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