What to Consider when Doing Business in China? Major Chinese Cultural Values and Business Practices

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What to Consider when Doing Business in China? Major Chinese Cultural Values and Business Practices

China’s enormous consumer base, expanding economy and FDI-friendly policies are luring foreign businesses into plethora of promising opportunities. The success of an investment or alliance, however, often depends on the observation of some unwritten rules. Find out which are the soft aspects companies are to bear in mind before setting foot on China according to our guest blogger Joab Khamala.

Chinese Cultural Values

China is the most densely inhabited nation in the world and the People’s Republic is currently appearing as one of the key economies in Asia and globally. China is legendary known as a nation of ceremonies and etiquette. The unique nature of the Chinese is established on a strong reason of pride in their ancient culture and history. Understanding the basic Chinese ethical, business, and cultural values is vital to any organization willing to conduct business in the current rapidly progressing China. There are four major values and concepts that should be considered when determining the Chinese culture.

The first one is Guanxi, which in literal terms means relationship. It is a net of elaborate relationships promoting co-operation and trust and for many past years was the key way of accomplishing daily tasks. Creating a sincere, supportive relationship based on common respect is a significant aspect of Chinese ethnicity. In the global business, acquiring the right Guanxi is important for ensuring the reduction of frustrations and difficulties that are frequently encountered.

The second one is Mianzi, which is the crucial issue that opts to be considered during business interactions with the Chinese. Mianzi or face is an indicator of personal pride and develops the basis of a social status and reputation of an individual. In Chinese business ethnicity, giving face, losing face, and saving face are very important for successful business. Making someone to lose face through inappropriate allocation of esteem to individuals within the association or public humiliation can seriously spoil business discussions. Conversely, praising a person in moderation before their partners is a type of giving face and can earn loyalty, respect, and aid negotiations.

The third one is Keqi which is a notion based on the incorporation of two Chinese words, ‘ke’ that means ‘guest’ and ‘qi’ indicating ‘behaviour’. Together, this cultural perception advocates courteous, refined, and thoughtful behaviour. In business, it is significant to demonstrate modesty and humility, as exaggerated claims of capacity are viewed with mistrust and are likely to be observed.

The last one is Confucianism where its recognizable ethical belief system is based on the writings and teachings of the 6th century philosopher Confucius. The concept of relationships is mostly emphasized together with the elements of obligation and responsibility. This philosophy remains an essential cultural factor in the creation of Chinese society and still remains effective in Chinese business ethnicity in the protection of collective good and surface harmony.

Image courtesy: Portland Center Stage, 2009, Flickr CC.

Read or download the original article "Chinese Culture and the NYSE"

Business Practices in China

Those organizations venturing into big business with China need to consider the features of Chinese business etiquette and ethnicity in order to succeed. There are a number of things to be considered while working in China.

The first one is working practices. In this case, punctuality is needed when conducting any business in China. Your Chinese corresponding persons will not waste your time; being on time is necessary. You will find it rare for Chinese to deal with people that they do not trust or know, unless proper introduction is established before entering into business.

The second one is hierarchy and structure in Chinese companies. These hierarchical structures of business organizations and Chinese society are based on a stern observation of levels where the person is subordinate to the business. When observing Chinese as they enter the meeting room, you will find that they do it in hierarchical order.

The third one is working relationships in China, which are more important than hurried transactions. The collectivist mode of thinking is crucial in current Chinese business where it influence many negotiations. In Chinese business ethnicity, the hospitable nature of your corresponding person does not essentially equal a positive outcome. Trust is based on a helpful relationship which is more important.

Finally, we have business practices in China. During negotiations, patience and humbleness are the major things for success. The sense of time for Chinese means that they utilise it knowingly and that it is always enough for the completion of their tasks. You find that most of the initial meetings may appear to be more of a communal occasion as oppose to a cooperation discussion.

If you have any experience with the specificities of the Chinese business culture and practice, please feel free to share them with us!


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