Working with Chinese businesses
Let's talk about interaction...
China has the largest population in the world and through rapid industrialisation, The People’s Republic of China has become one of the world’s most successful economies, and is rapidly progressing to take on the mantle of superpower. That means more than ever before there is the potential for interaction between British businesses and Chinese organisations and individuals.
There is a huge amount of civic pride over the culture and historical significance of China, however for those businesses that want to engage organisations and industry leaders from China, it’s really important to have some understanding of the importance some of underlying cultural norms and customs before you start your interactions. Not having a good understanding of these cultural, business and ethical norms could cause unnecessary problems when first interacting with Chinese businesses.
The makeup of the Chinese State
There are almost 1.3 billion people in China. A population which is growing rapidly — that’s a lot of people by anyone’s standards! All of those people are governed by one party, the Chinese Communist Party. China is made up of 22 provinces, five self-governing regions, four self-ruled municipalities as well as Hong Kong and Macau — both of which are areas known as SARs (special administrative regions).
Who are the Chinese People
Around 90% of the Chinese people are Han Chinese although there are 56 ethnicities recognised by the Chinese government and arguably a number more in-between. The main language spoken in China is Standard Chinese (sometimes known as Mandarin) and around 2/3rds of the population speak it. In addition, there are a number of other languages spoken around China however seven regional languages are officially recognised by the government. Although 350 million people in China have some understanding of English only 10 million are fluent in English, so you had better get brushing up on your Standard Chinese!
What are the cultural values of the Chinese?
With a population made up of 1.3 billion people it’s perhaps unsurprising that there are many varying cultural norms in China, however a few standout. If you’re from the West and you think about the cultural values of China, you’re almost certainly going to be thinking about Confucianism and that’s one of them, however, these are the values you probably should consider:
Guanxi is all about creating a network of relationships which can be used to work in a person’s favour. Chinese people appreciate the importance of these interdependent networks and concentrate on strengthening the networks they perceive around them. This tends to mean that knowing the right person in the right place is more important than expertise and skill sets.
Mianzi means to give someone the chance to regain their honour and it’s important that you understand that this is one of the cornerstones of the Chinese value system. It also forms part of the deference and obedience culture in China that a non-Chinese person should be conscious of at all times and can lead to Chinese taking what could be conceived of as drastic or irrational measures based on embarrassment.
One of the oldest philosophical works in history, Confucius teachings have been one of the key forces to shape the development of China through the ages. Confucianism teaches the importance of humility, responsibility, and loyalty. All important points to understand when dealing with Chinese people.
Doing business in China
The first thing to think about is how to get people to understand that you will respect their Mianzi. If you are in a situation where you are trying to resolve a problem the last thing you want to be doing is trying to identify who the problem is but rather how the problem can be resolved.
It’s your network that you really need to be working on and you shouldn’t underestimate the power of that network in order to make things happen and get things done. This is crucial, whether you’ve got a huge scale project to drive through or are simply looking internally.
It may be that during the initial stages of developing business opportunities in China, the most important thing you can do is relationship-building rather than attempting to try to get any tangible returns. More so than you’d expect to have to do in Western business situations.
As trust is a key element, one of the most important things to understand when trying to do business in China or when trying to work with the Chinese is that you should look to be referred and introduced rather than to directly make the connection. In addition, it’s important to remain consistent in the way you do business as any deviation in the way you conduct your business may create suspicion.
Planning for the long haul
The government in China, as well as a wide number of businesses, generally work to ten-year plans, so it’s important that you can demonstrate your long-term plans to prospective business partners and employees as this will be important in gaining their confidence if your business.
This demonstrates why the three concepts listed above are so important in Chinese business because people work together for a long period of time and have to be able to get along, trust and understand each other.
This should also give you some understanding about the decision-making process in Chinese business, where it can often take a long time to come to a firm conclusion as every permutation is run through.
Although Chinese business can take longer than you’d be used to in making decisions, once they’re made, expect them to be carried out swiftly. This can sometimes feel alien to Western workers who are used to quick decisions and more lengthy planning schedules.
Is it really this hard to do business with the Chinese?
OK – so like any business operators, the Chinese are out to make a profit and they will deal with people from all around the world. As such they will be prepared to overlook small faux pas in order to build the relationships with suppliers, employers and business partners, however, there are some things you should be conscious of:
- You should always show respect for people, being conscious to use their job titles and dealing with them based on their age and level of seniority.
- A good rule in business in general is to remain politically neutral, in China this applies to the Chinese state and the Communist Party. The best course of action here is not to discuss either.
- You will likely be asked questions about your family and your personal finances, be prepared to be as open and honest about this as you can be.
- If you’re offered the opportunity to attend a meal, banquet or other social meeting don’t turn it down. These situations form a core role for the Chinese in understanding if they can do business with you.
- Memorise the important Chinese holidays if you can. Chinese New Year is perhaps the most important one to know however there are plenty you need to be aware of and this knowledge will help you know when and when not to approach someone about business.
- Remember also that no matter how Westernised a Chinese person you’re interacting with may appear to be it's likely there are some differences in experiences and perceptions of the world. Do your best to work within the framework of the three concepts listed above and over time as your relationship grows you will form a solid understanding of where the boundaries are?
Whether you are doing business with a Chinese operation or looking to employ a Chinese employee, you should at all times be conscious that there may well be cultural differences that you need to take into account.
China is a huge country, steeped in history and as the second biggest economy, it’s incredibly important for the global economy. It’s becoming more important every year and it’s likely that global business will take on some Chinese characteristics in the coming years, so it’s perhaps a good idea at Chinese New Year, to think about how we can better interact and engage with our Chinese counterparts.
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