Chinese Business Culture

Business Culture

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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About the Author

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