The Chinese Business Culture is very different from that in the West, and it is essential to learn about China and understand its culture before attempting to do business in China. Theresa Gao explains
When my friend John first arrived to Beijing from London five years ago, he was frustrated with his Chinese business partners who are always slow to respond, lag behind with their work, and seem like they are waiting for a yes or no response from him. John was also confused about their working methods: they seldom provide suggestions; They do as they are told. John obviously was unfamiliar with the Chinese Business Culture.
In fact, I was confused myself about the differences between the Chinese Business Culture and the Western one, until I joined a Chinese state-owned enterprise four years ago. It was interesting to see many mid-level managers arrive at the office earlier than the staff, because they needed to think about task allocation for their subordinates. Numerous were the times that employees were asking for feedback, for instructions or for an “OK” from their managers to continue with regular, everyday assignments.
You might be wondering, to do as one is told shouldn’t be too hard, right? Theoretically, it shouldn’t. The truth is, though, that managers in China have a lot more to deal with other than to give instructions and to “OK” the work of their subordinates. They have to attend meetings and meals that last hours; Events with their direct supervisors are important in particular, because mid-level managers need to please their bosses in order to gain more trust and support in the company and in order to receive a bigger chance for promotion.
Golden Rule to Understand the Chinese Business Culture
Foreigners must understand that in order to survive in a Chinese business environment, Chinese employees need to establish a good relationship with their direct supervisors. They must be obedient, and they are not allowed to make a single decision on their own; Many are the times that employees are promoted not based on their abilities and skills but based on their obedience and loyalty to their supervisor: That is why doing business with the RIGHT individual is crucial for achieving success.
Han, a 44-year-old manager in my company, agrees with my views: “I have been an expatriate in the United States for about nine years, and every country is different. We Chinese say 入乡随俗 (Rù xiāng suí sú: When in Rome, act like a Roman). It’s just the way things are here.” Keep the golden rule in mind: Obedience and loyalty. No one likes a challenging subordinate.
Obedience and loyalty are important in the Chinese Business Culture, and they are represented in the concept of “face”. (面子- Miàn zi). “Face” means that one must respect the Chinese partner by expressing more gratitude, by avoiding straightforward disagreement in public, and by asking for his/her ideas. It is also very important to join the partner for leisure activities such as Karaoke!
Since China is a familial society (based on relationships), many people are influenced by what other people think of them, and this effects their self confidence. People are accustomed to being judged by their parents, by their teachers and later by their bosses and spouses. They rely on the opinion of others to make themselves feel good. That is the reason why “saving face” – acting properly in front of other people, is my number one tip for understanding the Chinese business culture.
The importance of Alcohol in the Chinese Business Culture
It seems that in China, investment, M&A and JV proposals are often discussed over luxurious dinner settings; Agreement signing ceremonies are always followed by consuming alcoholic beverages. Some might mistake and think that Chinese people are strange, because some only choose to work with business partners who can drink a lot. According to Han, they have their own reasons: “A famous joke says 酒品决定人品 (Jiǔ pǐn jué dìng rén pǐn): The way one is, is the way one drinks. It is true to a large extent.”
As many Chinese businesses are in fact managed by individual decision-makers rather than by procedures, choosing the right person with whom to do business is more important than choosing a company that has a good-looking balance sheet. This brings me to my number two tip for foreigners: Eat well before you meet your Chinese partners. Try to raise a toast with each individual over dinner, and drink as much as you can. Do not hesitate, because what you are drinking is not alcohol but rather the trust of your future partner.
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Theresa Gao is working in the Beijing headquarters of a major Chinese SOE; Prior to her current position, Theresa worked as a university teacher and as a free lance simultaneous interpreter 
Interesting. I have been in U.S. for two years, and I still feel rather awkward when being asked for my opinions. I am a student. I am ambitious to give my ideas, at least when I do have a great idea. But I am more comfortable to obey orders: just tell me what I need to do, I will then do my best. Because of awkwardness, it gives the feeling that I am not confident. Lack of confidence is kind of shame in U.S. culture, so I am shamed somehow. However, I am not sure which way is better. Because, there’re also a lot of blabbers around, who just like to give their “ideas” anytime and anywhere. Some of them gets popular by just talking, but gets nowhere in their work after years. I guess this is a cultural thing, as well as a personal choice.
Amazing differences. In the west, there is much less emphasis on the relationship part of the deal but rather on the result: Both parties want to succeed and that is the main agenda. It seems that in China, though, the foundation of a good relationship is necessary in order to yield successful results.
Well, to my knowlege, the tardiness in response is not the typical business culture in china, at least not in the small private enterprises. It’s more likely to happen in monopolized state-owned enterprises where silent conflicts are everywhere. I used to work as a project coordinator in a foreign enterprise which has been outsourcing projects from Europe into China. Most of the contractors we worked with are small private companies and the matter of fact is in most cases it is the china team that has been waiting for reponses/feedbacks from our customers in Europe.
It’s indeed true that chinese flinch from making their own opinions in a public setting. Low-Key is alwasy a part of the life philosophy in China and sometimes, in a working place, the fact is being a follower is much safer than being a decision-maker as no one knows how the decision is going to play out , Better stay low and save your hide.
I guess you’ve missed sth that’s core of the business culture in China: Beauty and Commision Generally you need 3 things to make a deal in china,which are A(Achohol) B(Beauty) C(Commision)
Hey Blacksugardaddy,
well said. I do agree with the author, though, that it just seems that in China everything else except for the business itself is VERY important in order for the business to succeed. If in the west two parties who want to do business are simply focused on the success of the deal, in China it is the ceremonies and customs that accompany the business transaction that carry huge importance (ABC like you said…)
I like Theresa’s writing style and that she uses Chinese idioms in her posts
Well written
Theresa, I think you should have talked more about the concept of Face, which is unfamiliar in the west. I have “eaten bitterness” (so they say in Chinese) when I was doing business in China and I told my Chinese business partner my feelings directly. That was a huge mistake (even though these feelings were not told in a time of anger) and I lost the deal. So keeping face, or allowing your Chinese business partner to feel good about himself and about the deal, is probably the most important thing. Everything else (including drinking alcohol for example) is just a by product of that…
Theo
It is not surprising that the Chinese and foreign business practices are completely different. Sometimes I am amazed that foreigners and Chinese people can even do business together – the differences are just huge. But, still, the more we learn about each side the more we know what to do and what not to do, so these types of articles are very useful.
I also want to add that in general, if someone is interested in what you are selling, he/she will do business with you, even if you make them lose face or not drink alcohol. It might be more difficult, but if they want what you are selling, business will be done
Just to make it short, here the CEO’s 1.000.000 $ “8 Golden Rules” for securing a sale:
1 – Reserving a VIP room at a beautiful restaurant.
2 – Arriving 20mn before your buyer and assuring yourself that everything is A-ok.
3 – Having with you 2 bottles of an expensive Rice Alcohol.
Providing that you are a true salesman, you will have learned from which province, city, your buyer is from. That said, you should do your best at matching quality.
Red wine is fine as well, making sure that your buyer will not go home empty handed… which means that you should have with you 2 of each
4 – Having with you 2 expensive cigarettes cartons.
It doesn’t matter if your buyer doesn’t smoke for he will give then to someone else
5 – Having your buyer seating in the center of the room, and facing the door making sure that his dinnerware set marks his rank.
6 – Drinking with him by honoring his youth, health and good fortune. Never ever approaching or directly responding to criticisms.
7 – Travelling for abroad? Bringing with you 2 bottles of COCO Chanel, one for his wife, the other one for… well you know who.
8 – With sugar on the top?
Having someone like a friend or your diver to pay the bill.
Never let the bill enter the room…
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However, Liza Zhu is also correct:
* If your client wants your product, he will have it no matter what.
* Problem… competition is fierce…
I apologize for not précising in No.8:
“Assuring yourself that your buyer goes safely where ever he wants to go after dinner.”
Other, different rules come to mind if you are familiar with your buyer…