China has quickly established itself as a world leader. Which means there is a multitude of businesses across the globe, looking to take advantage of China’s booming economy. Doing business in China though is very different from doing business in most places in the world. The Chinese business culture has a number of traits you probably won’t encounter anywhere else.
It’s important to be prepared and to know what to expect in order to avoid any detrimental loss of business due to mere misunderstandings. Being a regular business traveler to China, you most probably know many tricks of the trade, but refreshing your memory and being well-informed can go a long way. In this blog post, we help you to understand the Chinese business culture.
Greetings in Chinese Business Culture
Understanding Chinese Business Culture: Westerners are generally used to shaking their business associate’s hands as a form of greeting but it works differently in China. Slight nodding is their common way of greeting, however, you may be offered a handshake but it’s important to wait for your Chinese counterpart to offer their hand first. Formal introductions are very important to the Chinese as it’s the first step to establishing an interpersonal relationship. Therefore, it’s important to take note of these when they are mentioned. Most people will be addressed by a title followed by their name and it’s important for you to do the same. For example, when addressing people, refer to their professional title such as ‘Director Wang’ or ‘General Manager Lee’. It is considered rude to introduce yourself so when being introduced, stand up, smile and make eye contact for the duration of the introductions.
Insider tip: Applause is common when greeting a crowd and reciprocation is expected.
Importance of Mianzi (Face) 面子
One key aspect of Chinese culture is the concept of Mianzi (pronounced Mi-en-zuh) which means ‘face’. Face can be described as a mix of public perception, social role, and self-esteem that has the potential to either destroy or help build relationships. Therefore, it’s important to never make Chinese business people ‘lose face’ by insulting, criticizing or making fun of them in public. An entrepreneur can gain face by attending meetings, accepting invitations, giving gifts or compliments and showing sensitivity to Chinese culture.
Insider tip: When making a toast in honour of your Chinese counterpart, make sure that your glass is below theirs. This way, you maintain respect by giving them face.
The Art of Business Conversations
Small talk is particularly important at the beginning of the meeting. Popular topics about China to start with which are generally safe are landmarks, art, scenery, climate, and geography. Try to stay away from politics unless you know the person very well. Chinese business people will appreciate it if you’re able to say a few Chinese words, but this is not a necessity. Rather avoid this if you’re not comfortable or aren’t 100% sure of what the words mean. The Chinese often ask questions such as ‘Where have you been?’ and ‘Have you eaten’ which are equivalent to Westerner’s ‘How are you?. Don’t take the question literally, simply smile and say ‘yes’ or ‘thank you’. The Chinese don’t like to say no as it causes embarrassment and loss of face. If a request can’t be met, you might be told that it’s inconvenient or ‘Yes, but it may be difficult’. Although that may seem like a positive response, it most probably means no. The Chinese also nod as an acknowledgement that you are being heard, rather than symbolizing ‘yes’ so it’s important to take note of that.
Insider tip: During a conversation, don’t criticize China or Chinese leaders and certainly don’t refer to Hong Kong as if it was still run by another administration or Taiwan, Tibet, or Xinjiang as a separate entity.
Understanding The Chinese Business Mentality
Guanxi 关系 (pronounced gwan-shee) which literally means relationship, is extremely important to the Chinese. Chinese business people also see mutual trust and respect as a vital part of the relationship and will often meet up several times in order to establish that relationship before closing the deal. Therefore, the deal closing process may take time and they will appreciate your patience. People in China will enter the boardroom in an order of hierarchy so the delegate of the meeting will usually enter first. Rather wait for the appropriate time to enter the room. You’re expected to always arrive on time or earlier and to be well prepared for meetings so make sure that you bring several copies of all documents to your meeting. When handing out brochures or documents, make sure that you start with the most senior person in the room, handing it over with two hands. It’s important to remain composed at all times. Rather than showing too much enthusiasm or emotion when closing a deal, show acknowledgement with a faint smile or nod.
Insider tip: You may find that once both sides have met, Chinese businessmen may use the newly found friendship to reach concessions. For example, the Chinese side may mention to foreigners that true friends would reach an agreement that is of maximum mutual benefit. Make sure that the benefit is genuinely mutual and not just one-sided.
Body Language and Mannerisms To Look Out For
Understanding Chinese Business CultureIt’s important to be aware of your hands at all times as the Chinese don’t use their hands when talking as it is considered rude and distracting. Pointing at something with your index finger is also considered rude, rather use an open hand. Chinese business culture sees people continuously acting in a very formal manner, so it is vital to remain calm and collected at all times. Touching your mouth with your hands, biting your nails or removing food from your teeth is also considered incredibly impolite.
Insider tip: The Chinese don’t like to be touched, particularly by strangers. However, Westerners often feel that the Chinese comfort zone regarding distance is a bit close to comfort. Don’t be surprised if you feel an invasion of your space.
Business Meeting Etiquette
Always dress in formal attire for meetings as a sign of respect and stay away from any bright colours as they are considered inferior. Being punctual is as important to the Chinese as to Westerners. Exchanging business cards is an honourable act in Chinese business culture as it contains your name and your title. Always use two hands to hand over your business cards so that your counterpart will need to tug at it and stand before doing so if you were sitting. Once the meeting has come to an end, you’re expected to wait for your Chinese counterparts to leave first. If you are the host of a meeting, it is proper etiquette to send a representative to meet your guests outside the boardroom or building and to escort them to the meeting room. The host should escort the most senior member as well as VIPs to their seats.
Insider tip: It is important to never write on a business card or to put it straight into your pocket or wallet. Carry a small business card case with you instead.
Doing Business Over A Meal
If you were invited for a business meal, wait to be seated as there is a seating process based on hierarchy and don’t discuss business. Know how much to eat as you may be served 20 to 30 meals throughout the course of the evening but be careful not to leave your plate empty as it’s a sign of not being given enough food. Try not to reject anything, rather taste a bit of everything. Being invited for drinks is a good sign as you’re given the opportunity build your business relationship with your counterparts. You might be tested on your ability to consume alcohol. When using chopsticks, never drop them or put them parallel on top of or in the bowl, but rather place them on their chopsticks holder or rest them diagonally on the plate. Remember not to tip afterthe meal as it is considered rude.
Insider tip: Never eat or drink before your host and always offer someone else food or drinks before you serve yourself. Never take the last piece of anything as it is considered bad luck and shows that you are greedy.