Building Trust With Your Chinese Business Partners
Intercultural business partnerships, no matter where they begin, can be an incredible learning opportunity, as well as a symbiotic relationship for both parties. However, you have to navigate cultural differences with sensitivity. Eastern and Western business worlds are different in many ways, but it doesn’t mean they can’t be beneficial to each other. Learning the basics of Chinese business culture will help you streamline business deals and grow your market into China.
Chinese business culture vs. American business culture
For a relationship to form, you must have both a strong professional reputation (trust from the head) and a personal connection (trust from the heart). Chinese relationships take time to build and there is a reason your Chinese business partners may withhold information or use non-verbal communications to relay information. Showing respect and patience are the two essential characteristics Chinese business people look for before they can develop a strong bond.
The Chinese do not have the “trust default” that Americans do. This is because unlike in America, strict legal rules and business practices are not in place. Much of their business culture is based on tradition and most Chinese business owners are hesitant to start new relationships until they know the key players involved have proven themselves to be honest and courteous.
The Chinese avoid direct social conflict, unlike Americans who tend to be more blunt and domineering. In China, you should never take social risks. Allow your partner to lead the interaction until you have developed mutual trust and acceptance.
How Chinese Government Affects Commerce
The Chinese government is much more involved in the economy than in America. If you plan on selling into the Chinese market, you need to understand how State-Owned Enterprises (SOEs) work into the market, and how Chinese business structures differ from Western business.
The Chinese government is actively changing the market by putting greater emphasis on a consumer-based economy, unlike the investment-based economy they have relied on for decades. They have made significant efforts to encourage entrepreneurship and small business ownership. But keep in mind these efforts by the government are focused on local business, not foreign entities. You may face some challenges winning the favor of local government officials unless you take the time to build trust with them.
The Timeline of Developing Guanxi
“Guanxi” is the term used to describe the relationship-development process in China. In America, professional relationships are built typically after the first introduction between two individuals. Most Americans are ready to “talk business” from the get-go, but this is not the case in China. Many American business owners become frustrated when their relationships with Chinese companies seem to be at a stand-still. They don’t realize that from the Chinese perspective, there is still time needed to develop a positive personal relationship and time for both parties to evaluate each other.
It may take weeks, and many meetings or casual interactions, before a Chinese business owner, is ready to solidify a business contract. You must be patient and respect the Chinese practice of guanxi. You too will feel more confident doing business with people you know and trust to deliver both quality work and honest communications.
Common Misconceptions and Mistakes to Avoid
Most people believe that in China the way to do business is to learn the very specific traditions, such as Chinese business card or gift-giving etiquette, in order to gain trust. However, Chinese guanxi is much more complex than using the right handshake or inviting your potential partner to a lavish social engagement.
Remember that Chinese business culture is changing and relationships are built on a much deeper connection than what can be gained from correct social etiquette. Here is what is most important to social interactions with the Chinese, and what won’t help you advance your relationships.
- Pay attention to hierarchy and titles. This is very important to business culture, and you should always follow the lead of the most senior executive in the room over anyone else.
- Never “call out” or cause conflict with someone else, especially in front of others. “Saving face” is crucial in Chinese business etiquette; embarrassing or causing discomfort to anyone is the quickest way to ruin a deal.
- Gift-giving is important in China, but too much emphasis on lavish parties and gifts may give the impression that your interests are superficial. Chinese business owners are becoming more Westernized, and you should be both practical and polite in your business dealings.
Building Chinese relationships is a long and complicated process, but it will give you a great competitive edge. Baysource Global specializes in helping clients connect with Chinese manufacturers and partners.