The most important aspect while doing business in China is to learn, understand and adapt to the Chinese way of doing business. Since business behavior is closely related to cultural behavior, differences in terms of culture between two countries create a gap between their business ethics. The only way to close this gap is the learning process about the cultural and business behavior of other countries.

Closing the cultural gap

Since some traits of Chinese culture are completely different from African or Western cultures, the learning process is extremely important while doing business in China. Otherwise we could see cultural shocks appearing in many business situations. The most important outcome while acquiring knowledge about the Chinese cultural environment, is the improvement of exchanges with Chinese entrepreneurs.

While developing projects in China, foreign entrepreneurs or companies have to exchange and establish business relationships with their Chinese counterparts. To do so, before getting engaged in such relationships, foreign entrepreneurs have to learn the Chinese business etiquette in order to communicate and develop their projects faster and safer. The projects that foreign entrepreneurs undertake in China are usually purchasing, manufacturing and investments such as joint venture or wholly foreign owned enterprise (WFOE).  For all types of projects, establishing a good partnership with Chinese entrepreneurs is vital.

Negotiation

The key cultural traits that could affect business relationships with Chinese entrepreneurs are often expressed by metaphors and images, I will use three old Chinese proverbs to explain these points.

"A chopstick can easily be snapped, but a dozen is hard to break." This Chinese saying shows an important trait of the Chinese culture which is collectivism.

This cultural trait can be found in social as well as business relationships among Chinese people. Foreign entrepreneurs should keep this characteristic in their mind while engaging in negotiation with their Chinese partners.

The number of participants in business meetings are usually higher than Western style meetings, and is variable in relation to the size of the company you are dealing with. However in small-and medium-sized companies, the participants are usually the owner of the company, a technician or engineer, a sales person and at least one or two translators or assistants. Foreign entrepreneurs who become involved in negotiation should be aware of this matter in order to avoid unbalanced negotiation situations in terms of number of stakeholders attending the business meeting. In addition, knowing this will help foreign entrepreneurs to avoid being impressed which could affect the power struggle in negotiation. Finally, in case the number of participants in negotiations between the Chinese and foreign companies are much different, the Chinese counterpart might consider that the foreign company does not attach much importance to their negotiation and possible partnership.

"Dripping water can eat through a stone." This Chinese proverb emphasizes important Chinese cultural traits, which are patience and perseverance.

It also reflects the lesser value placed on time compared to the West. This characteristic is expressed in business meetings by the fact that the Chinese business people take the time to discuss subjects that are not directly related to the agenda in order to better know their future partners and to establish a friendly environment. During this first phase, foreign entrepreneurs can feel somewhat uncomfortable if they are not prepared, because the Chinese counterpart could even ask some personal questions. If this kind of situation happens, do not panic, you can usually avoid undesired questions by putting on a nice smile.

Another bit of advice is to plan your negotiation in advance and try to be precise with the agenda during the meeting, in case you see your Chinese partner straying away from the topic. Otherwise you could spend hours in a meeting without any fruitful outcome. Having said that, it is also important to know that the first meeting may not have any meaningful outcome for you. In this case do not get frustrated, remain patient and begin to plan your next meeting. Do not forget that perseverance is the key when dealing with Chinese entrepreneurs.

"Old horse knows the road." This Chinese proverb shows the importance that Chinese people give to the decisions and judgments of senior people.

This cultural trait is often important in negotiations, specially in case your team is composed of young people. In fact having a few seniors in your team could strengthen your position and see that your ideas are taken more seriously by your Chinese counterpart. This point is all the more important in case the Chinese team is composed of older people. To avoid this type of unbalanced negotiation try to include a senior member in your team.

Important Chinese cultural traits in business situations

●Collectivism

●Patience and perseverance

●The importance of age and experience

●Friendly sincerity

Column prepared by Milad Nouri

Managing Director of China Consultants International Limited

www.China-Consultants.biz