Operating in a country with a history of thousands of years and ways of doing business that go back as far can be a great learning experience yet challenging. It is wise to develop insight into China’s business culture and social etiquette to avoid misunderstandings that could stymie deals and harm working relationships. Business outsiders can impress with their knowledge of local customs, acknowledging hierarchy, offering gifts, addressing people by their designation and appreciating the food. Such awareness of cultural nuances illustrates respect and sincere interest. However, the opposite can occur when westerners assume they don’t need to learn about Chinese culture before going there. Not making an effort to understand the basics of the culture can have repercussions and make a bad first impression.
China’s culture and business practices differ greatly from those of the USA. As you start or expand your business in China, having an understanding of Chinese business etiquette is important to your success. Knowing and practicing common customs will also help you relax, avoid embarrassment, and focus on the matters at hand on critical occasions.
In your business dealings in China, you will make many friends, both Chinese and foreign, who can help you learn the ropes. Follow their advice and example. The toughest business people you encounter will often also prove to be genuinely warm and accommodating hosts, and will overlook simple errors of table manners or business etiquette – as we would in the USA – if your purposes are serious and your conduct respectful.
Unfortunately, creating a positive first impression is not enough. One should also have an understanding of the following aspects of Chinese business etiquette:
- Gift giving
- Greeting rituals
- Business relationship development
- When to display emotions
- Time perceptions
- Differences in decision making and problem solving
- Guest-Host relations
- Negotiation styles
- How to use intermediaries
- Meeting customs and conduct
- Use of the names, titles and business card presentation
- How to establish relationships with government officials
The list below shows the basic protocol when conducting business in China.
Attending and Conducting Meetings
Top tip: Don’t be late, and know who’s boss!
In general, meetings in China follow the same format as those in the USA, although with a bit more ritual. The Chinese value punctuality, so arrive on time or even slightly early for meetings or other occasions. The following points should be kept in mind:
- Dates: Check the Chinese calendar. If you are scheduling a meeting, avoid all national holidays, especially Chinese New Year, when the entire country effectively shuts down and it can be very difficult to organize meetings with key individuals. The May 1 and October 1 holidays also affect businesses: be forewarned.
- Preparation: Be well prepared in advance of your meetings. Your Chinese hosts will most likely know you and your business quite well. Have a detailed proposition of the value of your company and product; your counterparts will have one for you (see section below on “Materials”). Chinese businesses often meet with numerous foreign businesses seeking to establish relationships; if you are unable to capture their attention at the first meeting, you may not be able to secure follow-up.
- Language of the meeting: Make sure you know the language capabilities of your hosts before the meeting. It is more convenient and reliable for you to have your own interpretation if your hosts don’t speak English or have little English capability.
- Meeting room set-up: If you have specific requirements for a meeting room set-up (e.g. projector and screen), be sure to communicate this to your hosts in advance of the meeting. They are usually happy to accommodate, but often do not have the in-house capacity to set up the technology on the spot.
- Materials: Have Chinese-language materials (e.g. brochures, presentations) about your company to share with your hosts. While your contact in the organization may speak perfect English, the decision makers in the company may not. It will be challenging for your interlocutor to convince others of your company or product’s value if they are not equipped with Chinese materials.
- Dress Code: Government officials and top management dress formally for meetings, while business people at working levels may adopt a more casual style. If you’re not sure, go formal – it will convey respect and seriousness. In the summertime, there can be a suggestion for men to “go casual”. This means polo shirts or button-down short sleeve shirts, as opposed to suits and ties (or shorts – which are definitely not appropriate).
- Addressing others: Seniority is valued in China. It is important to address your counterparts by their title (Chairman, Director, etc.). Find out who the most senior person in the room is, and address them first.
- Introducing yourself: Say your name clearly, and remember to state both the company you work for and your position. As a point of reference, know that Chinese will refer to their company first, then their title, and then their name when introducing themselves to others.
- Handshakes: As in the USA, meetings often start with handshakes. Ensure that you are not too aggressive with your handshake. Don’t be surprised if you are at the receiving end of a decidedly non-aggressive handshake. If things go well, you may also be on the receiving end of a prolonged handshake: anything goes. In western business contexts, you have probably found yourself in “squeezing” contests (among men): who has the stronger grip? In China, the question will be “who lets go first?” Don’t be shy about holding on if your counterpart is enjoying the contact – it is meant well.
- Giving/Receiving business cards: Similar to introductions, hand out business cards to the most senior official first. Chinese use both hands when giving and receiving anything of value, including gifts and particularly business cards; you should do the same as this is one of the first points at which you will make an impression. Take a moment to look at and acknowledge the individual’s card. Have your own cards translated into Chinese on one side. Your title is important; this is how your hosts will determine who should be invited to meetings, what weight your words carry, and where you will be seated.
- Your name: Having a Chinese name, ideally one with meaning rather than a transliteration of your English or French name will be taken as a sign of respect as well. The best approach is to have a local contact or native speaker help create one for you. A link to an online Chinese name creator is provided at the end of the document under “Useful Links”.
- Seating Arrangements: The host will take the lead, and you will likely have a name card or designated seat based on your role in the organization.
- Meeting structure: Particularly in government circles, meetings may follow a fairly formal structure, with the senior member of the hosting party introducing himself/herself and colleagues, and then proceeding to state his or her views and position on the matter in question. Following this, the leading member of your party should do the same. Subordinate members of the Chinese party will not usually speak unless asked to do so by the most senior person; your observance of the same protocol (even if your management style permits a more fluid approach) will have the advantage of conveying who is in authority and who, within your own team, may have special expertise or authority in a given area.
According to Mark Buchman, who teaches a class called “Doing Business in the Pacific Basin” at UCLA, there are five principles (The 5 Ps) that one must keep in mind to successfully deal with different business etiquette in general. They are:
- Plan. It doesn’t have to be the 60-page bulletproof version one would present to the venture capitalists, but there has to be something written that all agree on. It’s critical to define the fundamental opportunity, your competitive and marketing strategy, and its tactical components.
- Persevere. It’s not easy to do business there, so don’t give up. Many sound business concepts fail when the company loses heart too early in the process.
- Patience. If you are a financially driven company that sets high hurdle rates with short-term payback periods, you will give up too early and lose the investment or not have the guts to try.
- Personal Relationships. Something generally considered *not too important for most task oriented managers is extremely important in Asia.
- Perfection. We are bound to make many mistakes. Learn from them and don’t make them a second time.
Chinese business contacts are mostly referrals; essentially a business relationship is struck based on another business associate recommendation. The best prices and deals often come from a strong recommendation.
However, it is common today for cold calls and direct contacts, given the availability of the Internet and the competitive nature of Chinese businesses. You may source from the Internet, trade fairs, catalogues and brochures, advertisements and approach the Chinese companies directly through a call or email.
Alternatively, if you are seeking to invest in a factory in China, you can approach an investment committee or a business advisory directly. They will be able to advise you on your best location based on your industry, raw material and manpower needs.
Remember, our greatest enemy is our own ignorance. If we don’t take steps to understand the subtle aspects of Chinese culture and business practices, we will most likely never experience the sweetness of success.
Top tip: Business in China relies heavily on personal relationships: make sure you have some!