5 Things You Need to Know about Doing Business in China

There are 5 things that you need to know about doing business in China. If you’re already from an Eastern culture, most of these will already be familiar to you. If you’re from a Western culture, you may need to brush up on your knowledge of how to do business in China. There are obviously a lot more than 5 things you need to know about doing business in China. I’d like to share my top 5 things with you based on over 20 years of experience doing business in China.

So, here are my 5 Things You Need to Know about Doing Business in China:

1. The Importance of Becoming “Old Friends” in China

Chinese culture dates back 1,000s of years and is steeped in a rich history of tradition and symbolism. One of the most important aspects of doing business in China is understanding the importance of relationships, or guanxi (ɡwanˈCHē). Guanxi is the system of social relationships and influence that makes for successful business in China.

Plan on spending a significant amount of time on relationship building long before you get to the nitty gritties of contract negotiation. This means doing your research on the organization and the people you would like to do business with in China. Be willing to spend the time to get to know them and build a solid relationship. There is a saying in China that once you’ve built the relationship you can be considered “old friends”. That is the intersection where business starts.

2. Get a China Culture Coach

When I first started going to China many years ago, I sought out a culture coach. This individual who helped a lot was an American citizen who was born, raised and educated in the People’s Republic of China. They were very conversant in Mandarin (Chinese language) and also the customs and culture of China. They also understood Western culture and knew some of the pitfalls to avoid in bridging the gap.

My coach traveled with me to China on the first few trips and not only acted as an interpreter, but also my closest advisor. This really helped me become educated and confident about doing business in China.

3. Learn Social Etiquette the Chinese Way

There are many aspects to etiquette in China and there aren’t many as critical as how to conduct yourself in a social setting. This is especially important if you are attending a dinner with your Chinese colleagues. I’ve learned to always follow the host’s lead as to where to sit and when to speak. The host of the dinner will usually guide the conversation and if you are the highest ranking member of your delegation you will be seated next to your host. The best rule for conversation is to let your host introduce topics for discussion.

One aspect of etiquette is to always respect the “face” of your Chinese colleagues. Do not try to upstage them in conversation or reply to their conversation in a negative way as this would cause them to lose “face”, a terrible faux paux in Chinese culture.

The social dinner is an important part of doing business in China. Plan to participate as this is where a lot of trust is built. Besides the conversation, there are two other important aspects to the dinner. Those are food and beverage. You will usually be offered a soft drink and an alcoholic beverage. You can drink the soft drink anytime during the meal, but the alcoholic beverage should only be taken when the host or another colleague proposes a toast. It is a good idea to take just a sip and meter out your toasting beverage, never letting your glass get empty. When the host stands up and everyone follows suit at the end of the meal with a glass raised it is usually a signal that the meal is over and it is bottoms up. If you are going to be driving after dinner, it is perfectly acceptable to let your host know and ask for a non-alcoholic beverage for the toast.

4. Learn to Use Chopsticks

This may seem like a small detail, but being adept at using two little wooden sticks will get the admiration of your Chinese colleagues.  This will really help you become successful at doing business in China. If you are good with chopsticks, you’ll usually garner a lot of compliments. Accept the compliments with a sincere and gracious thanks. Resist the temptation to brag about how you practiced by eating Chinese food at home or at Chinese restaurants in your home country.

If you can’t really use chopsticks that well, give it a go anyway and you’ll get admiraiton for your effort. If you are seen to be having difficulty, your host will often ask the server to bring you a knife and fork. The only time I’ve really had trouble is when trying to eat sea cucumber, a Chinese delicacy that is usually served in a delicious sauce. These little creatures of the sea are really quite slippery, especially when covered in sauce. I’ve been grateful for my hosts noticing my lack of skill and coming to the rescue with a fork!

5. The Other Great Wall in China

There are many “sayings” in Chinese culture and one of them is that if you climb the Great Wall you’ll be a hero. I’ve been to the great wall, not sure about the hero part. There is another Great Wall in China and it is the cyber wall. China protects its citizens from outside influnce by restricting or walling off the population from some of the popular western social media sites and by blocking all Google properties. This means that in order to be successful at doing business in China you need to know how to circumvent the obstacles that this may create for you.

One of my biggest obstacles is accessing my gmail. Because it is part of the Google suite, you are not able to log in to gmail or download your email even when using mail programs on your smartphone or web. I’ve found that the best way to navigate my way around or over the cyber wall is to have a VPN (virtual private network) app installed on all my devices. This allows me to keep in touch with my colleagues, friends and family by email and access popular social media sites.  The VPN is used to authenticate a device through an IP address outside of China.

One popular social media app that is not restricted is WeChat, because it is a Chinese owned platform. I use it to communicate with my Chinese colleagues. One thing to keep in mind is that all communications and posts on the app are subject to the government’s rules and monitoring.

If “Googling” as a friend at home, you will find that Baidu is a popular search engine in China. If you type in the direct URL of a website into your browser and it doesn’t load, putting the search term for it in Baidu will often give you the result you are looking for.

Pro Tip: Don’t mention your difficulty or bring up the subject of the cyber wall with your Chinese colleagues. This is a territory that won’t garner any points and if the subject is brought up by someone, simply acknowledge without being critical or negative and you’ll stay in the safe zone.

I hope you’ve enjoyed these 5 things you need to know about doing business in China. If you’d like to learn more and ask me questions, please join me for the SMEI webinar “Open Doors: Doing Business in China”.

Willis Turner, CAE CME CSE, author and speaker, is the President & CEO of Sales & Marketing Executives International and has been traveling to Hong Kong and mainland China to build SMEI’s presence for over 20 years.

Feature Photo by Eric Muhr on Unsplash