In Sun Tzu's The Art of War, there is a wise saying... "Know the enemy, know thyself; a hundred battles, a hundred victories". Understanding the Chinese way of thinking can help you avoid unnecessary complications and misunderstandings and maintain good relations with your Chinese partners. Much of the business etiquette in China draws upon key values that are just as important in social settings. They can be summed up as respect for hierarchical positions, the concept of face and building relationships. A quotation from Mao Tse Tung epitomizes the importance of hierarchies. "The individual is subordinate to the organization. The minority is subordinate to the majority. The lower level is subordinate to the higher level."
At the onset of business negotiations, expect the representatives of a traditional Chinese firm to enter the room in order of seniority. The same will be assumed of the visiting party. In many Chinese companies, especially larger and older ones, a company official who has an honorary position in the company, will usually preside at the first sessions then leave the real business to the managers in charge of operations.
The normal greeting involves shaking hands with everyone in the group and handing out business cards. Name cards are an essential part of doing business in China. When out on business, you should carry a good supply of name cards with you at all times. On the first meeting, offer your business cards using both hands. On receiving one, also use both hands and read it immediately. This is the polite form of exchange.
If you plan to make a good impression, it's a great idea to have your cards printed with your name and job title in Chinese characters on the back of your business cards. It's a courtesy that many Chinese businessmen would appreciate. If you don't get a chance to do this prior to your trip, most business centers in major hotel chains offer quick-delivery name card printing services, and they can also assist in the selection of a Chinese name for you.
Do not underestimate the concept of face. Having face means being regarded at a high status by one's peers and is a mark of personal dignity. Arriving late, causing embarrassment, confrontational behavior, insulting an individual or calling attention to a mistake can all cause loss of face. In the most extreme cases, losing face once could mean losing business with that client/partner. This is particularly true for senior officials who might be embarrassed in front of more junior colleagues. Giving face is also possible when you publicly praise your counterparts for a job well done. This earns them respect and loyalty from colleagues. Try not to praise someone too much otherwise it will seem insincere.
During negotiations not everything that is said and done is as straightforward as it seems so patience is key. Bringing your own interpreter may be a wise decision in case there are some misunderstandings. Don't be intimidated if there are periods of silence and the person you're conversing with doesn't answer your questions right away. He may be using that silence to think about how to answer or just using it to unnerve you. When your Chinese counterparts smile and politely say "The problem is not serious", they usually mean "There are still problems". "It is not convenient" is a polite way of saying that something is impossible or very difficult. Chinese people are instinctively comfortable in telling you the positive part, while avoiding the negative.
Also, issues that may be clearly related in your mind may be completely unconnected as far as your counterpart is concerned. If it turns out that something important has been left out, this does not necessarily mean that they are being deliberately deceptive: they genuinely may not think it is relevant. This makes checking for complete understanding from both sides a necessary part of every business interaction. Be prepared to spend time going over the details to ensure nothing has been left out.
Establishing personal relationships ("guanxi" in Chinese) is a huge factor in getting things done in China, more so than in other countries. These relationships are important to the Chinese businessman because trust is held in higher regard than legally enforceable documents. A favorite motto used is "Make friends, then business".
Becoming friendly with your Chinese counterparts implies some investment of time. It is worthwhile to make a lasting impression on your Chinese counterparts with your good character, rather than trying to impress them on the merits of your company or its products and services. Tolerance, integrity, honesty, sincerity and a little bit of humor can help you set up a stable, constant and long-term working relationship with your Chinese partners. Learning some greetings in Mandarin can also help you quickly get close to your Chinese partners. Visitors who can speak a few words of Chinese, even if pronounced improperly, will impress Chinese counterparts because they equate the willingness to learn Chinese with a serious commitment in China. Don't be surprised if your host speaks some English or is even fluent and knows quite a bit about the world outside of China.
Business lunches and dinners are also a very important feature of Chinese business culture and will be common during your stay in China. Participation is strongly recommended, since this is where your Chinese counterparts get to know you, and exchange information that was not presented in the formal meeting. This is where you establish "guanxi" with your counterpart and begin to build trust. Count on attending banquets arranged by your host. As a guest to their country, it's best to let them treat the first time and then reciprocate by treating everyone on the next meal or your next business trip. If not possible on the first trip, return the favor when your Chinese counterparts visit your country.
In a very short time, China has transformed from a third world country into one of the world's most influential economic powers. It is no wonder why this country attracts business people seeking new opportunities. Understanding the roots of this complex culture is essential when doing business there. Hierarchies, giving face and establishing guanxi are just as important in social settings as they are in business. Demonstrating some flexibility and observing these rules of engagement can help you reap the benefits of doing business in China.
