Doing Business In China : Cultural Differences You Need To Know

Chinese Business Etiquette

In order to do business in China, you have to understand local business etiquette. Indeed, when it comes to China the saying “When in Rome, behave like a Roman” is perfectly relevant.

You need to adhere to the social norms, otherwise, your deal might fall apart. To prevent this from happening, it is imperative to understand the significance of effective communication and its core components according to Chinese traditions and beliefs.

Source:

For Chinese businesspeople, socializing is an essential part of the negotiations. Surprisingly, socializing is even more important than the business deal itself.

You have to show your Chinese partners that you are genuinely interested in getting to know them more personally. Chinese people would never do business with a stranger. They have to take their time so that both sides get better acquainted with each other.

When socializing with your Chinese business partners, keep the following aspects in mind:

• Politeness – Always be polite and never rush things. Indeed, being blunt is the worst communication pattern you can opt for when doing business in China.
• Respect – Always show your respect towards others, regardless of whether they are your business partners, office clerks or even strangers. If you don’t behave respectfully towards the surrounding people, you risk being shunned by Chinese society.

This point is especially relevant when it comes to elderly people. Chinese people consider age as a sign of wisdom. Thus, the older a man is, the wiser they are believed to be. Chinese families are very attached to the elderly members and are showing their respect by taking care of them.

• Conflicts – Always make sure to avoid conflicts. Having a confrontation with somebody is deemed as showing a lack of respect and being impolite in Chinese culture. Nevertheless, Chinese people love bargaining, so don’t settle down with the first proposal.
• Teamwork – Chinese people believe teamwork can achieve anything. The focus on the individual is much less prominent, so never try to present yourself as the lone wolf. Alternatively, you will earn their respect by being a tolerant team player.
• Pride and honour – There is a general misunderstanding that Chinese people complete a business deal with a handshake rather than with a signature on a legal contract. The reason for this is considered to be their strong sense of honour and pride. In other words, they do not need contracts to keep their promise. Their pride and honour oblige them to do so.

However, this is not entirely true. Since the establishment of the Contract Law in 1999 having a contract is a must. Nevertheless, the notion of pride and honour has remained influential in Chinese business culture. In fact, Chinese people are often referred to as among the most reliable and loyal business partners.

• Tranquillity – When it comes to delivering a project on time, Chinese people take a more relaxed approach. For them having a deadline is simply a suggestion. They do not worry about details such as when a specific document is sent in. Still, being late for a meeting is considered disrespectful, so make sure to be punctual.

Also read: Business In The Middle East: Cultural Differences You Need to Know?

Tea and Business Meetings

Another important aspect of business etiquette in China is tea. As the herbal drink is a central part of Chinese culture, it has found its way into business meetings. It is usually the host that is preparing it. Then they offer the guests a cup of tea. Considering as an act of respect and politeness to accept and drink it or else, you will offend your potential business partner.

Overall, Chinese people, considered to be friendly and welcoming people. By following their traditions, you will simply prove to them that you are deserving of their time and respect.

Also read: 10 Marketing Translation Mistakes by Big Brands

Education and Innovation

Chinese parents are notorious for being willing to do anything in the name of their children’s education. Some buy apartments closer to the desired school. In this way, they increase their chances of their kid receiving a spot there. Others splurge on courses and lessons outside of school to help their children get higher scores in the class.

Source:

Generally, Chinese people are very pragmatic about how they spend their money. Consumerism is not as pervasive in their culture as in the Western world.

Indeed, Chinese families invest their money primarily in education and new gadgets.

China has long ago established itself as an innovative economy and as it seems, its nation truly values cutting edge technology! Electronic products are among the most frequently purchased goods by Chinese customers besides food and beverages. What’s more, a 2020 report by the National Bureau of Statistics claims that China has spent nearly $380 billion on innovation and development.

Overall, Chinese people value education and innovation and despite their pragmatic attitude towards money, are always willing to splurge on knowledge and novelty!

Also Read: Languages of East Asia [Complete Guide]

Eating Out Etiquette

Eating out etiquette is yet another divergent aspect from Chinese culture. There are a few very important rules you need to keep in mind in order to avoid embarrassing situations.

•  The one who invites pays the bill – If you invite your Chinese business partners to a restaurant or a café, you are the one paying the bill. If you are the one who is invited, then you are expected to simply enjoy your meal.
• Don’t tip the staff – In China tipping the staff at a restaurant consider rude, so don’t even think about it.
• Drink warm water – This tradition considers to be influenced by the yin and yang philosophy. Chinese people believe that the warmth of the water (yang) can dispel the negative energy of the cold (yin). Thus, it is widely accepted to sip a glass of warm water while enjoying your meal.
• Do not hurry – In Chinese culture every meal, regardless if it is lunch or dinner, is very sophisticated and thus, can last up to 2 hours. Don’t try to hurry because you might offend your partners.

Generally, Chinese cuisine is one of the most diverse and old cuisines in the world. Besides landing a great deal while eating out, you can also enjoy yourself by trying out something new. Nevertheless, following the local traditions will inevitably leave your partners pleasantly surprised!

High Context Communication

In China giving direct and detailed instructions consider as impolite. As a result, often people in China start working on a project even before knowing all the details.

Undoubtedly, this can lead to confusion and mistakes. Nevertheless, making a mistake is more acceptable than following a guideline. In Chinese culture reading through a list of instructions or a checklist is considered a sign of lack of intelligence.

Still, if you are working on a dynamic project you can expect sudden changes of plan, make sure to inform your Chinese partners. They will appreciate it! And you can save both sides a lot of stress and frustration.

Last, but not least, the location and start date of your project is the first details you have to tackle. Once you have agreed upon these aspects, you can start recruiting people.

Why? In China, it is a common practice to publish fraudulent job postings. Thus, changing your location or starting date is a sign of fraud.

So, to ensure that you will start on time and have enough workers, settle all the needed details as early as possible. In this way, you can convince the candidates that this is a legitimate job and not a scam.

Also read: What Are The Main Languages Spoken In The Middle East

Culture Differences Between U.S. and China

China and the US are poles apart in most cultural aspects. While both of these countries are leading economies and have found their own ways towards modernization, their cultures are incredibly divergent.

The chart below creates a vivid image of the cultural systems of both nations:

Chart source:

On one hand, Chinese people are used to rigid social hierarchies, meaning that every individual has a spot in society. Moving up and down is rather impossible.  In the US, on the contrary, everyone is free to become anything they want.

The USA is well-known for its loose, rather informal hierarchy. This belief is a central aspect of the American dream – anyone can become whatever they want, regardless of their origin, only if they work hard.

Also read: The Top Languages Spoken in California 

This is in stark contrast with the rigid social structure in China where social classes are inherited, rather than earned through labour.

Social Structure in China

It is not surprising that China has kept its social structure for centuries, though. The Chinese nation has always had a strong sense of unity, of a whole. Thus, the focus on the individual is considerably less prominent in comparison to the US.

Chinese business culture, hugely influenced by the virtues of authority, solidarity, loyalty, good reputation, modesty and, last but not least, courtesy. All these values are intrinsic to oriental thinking and very far away from the US business mindset.

While in the US it is the individual that is most valued, in Chinese culture humbleness and teamwork are always well-appreciated.

Also Read: The Prevalence of the Spanish Language Within the US

Source:

Let’s have a look at the graph one more time. In terms of masculinity, which denotes the drive towards success and competition, both countries have similar scores.

However, the means of accomplishing success are quite different in both countries. In the US success is acquired by the individual, while in China the whole nation is involved.

Uncertainty avoidance refers to the attitude of a nation towards the unknown or the unpredictable nature of the future.

This aspect is also indicative of the acceptance of new ideas and innovative projects. In this aspect both countries score below average, meaning that they are rather risk-averse.

The next point, long-term orientation, is an interesting one! As we have discussed above, Chinese businesspeople never do business with strangers. They take their time to get to know the other person. Only then do they proceed with negotiating a deal.

As can be seen from the graph above, Chinese people seem to be oriented toward long-term commitment. In the US it is just the opposite. American people are known for trying to make the most out of a situation without considering any future potential.

The last point refers to the ability to control one’s desires. As we all know, Chinese people, considered very disciplined.

This, undoubtedly, is a direct consequence of their strict social structure.

Also read: Languages Spoken In Singapore [Updated 2022]