18 Practical Tips for Doing Business in China

An Expert's View about Recruitment in China

Posted on: 9 Mar 2010

“18 Practical Tips for Success in the China Market”




James Chan, Ph.D.


Asia Marketing and Management (AMM)

E-mail: JamesChan@AsiaMarketingManagement.com


Copyright 2010 James Chan



American businesspeople interested in doing business in China will benefit from knowing the Chinese mindset and practicing the following practical cross-border skills.


To first-time travelers in China, these skills will make your trips more enjoyable and less stressful. They also apply when you receive Chinese visitors at your company or at home.


Chinese Business Practices


1. Respect their business cards. The Chinese consider exchanging business cards the same way we consider a handshake. They exchange business cards the moment they greet you. People often present their business cards to you with both hands. Take them with both hands. Don’t put the card away immediately. Rather, place it on the table or hold it in your hand for some time. Make an effort to look at the person's title. Take plenty of business cards with you when you go to China. It's advisable to adopt a Chinese name. That will signal to people you’re culturally savvy. Ask a Chinese-speaking friend to help you. Print only your name and title in Chinese. The rest should be in English.


2. Make friends first, do business later. The Chinese enjoy small talk and pleasantries. They want to learn more about you. Therefore, initial meetings are rarely expected to produce results. Chinese salespeople routinely wine and dine prospects before they sit down to talk business. Let people feel that they are "connected" with you before you close a deal with them. In America, where we feel that the legal system is largely enforceable, we can meet strangers and sign contracts with people quite speedily and start doing business. China is a people-based rather than a law-based culture. People in China build trust by “profiling” one another. They observe one another’s behavior over time before they’ll do big business. This is why it takes longer to get things done there. This is also the reason why, if you bring your lawyers to China before you get to know your partner well, you may send the unintended and erroneous signal that you’re trying to outsmart him. That does not bode well in the beginning of a relationship. The Chinese are perfectly willing to sign contracts; but only after people have achieved a reasonable level of comfort and understanding.


3. Let people save face, especially in public. An American behavior that perhaps irks the Chinese most is someone probing into their affairs. Naturally you want all the answers, since you've traveled so far to find out the truth. But the Chinese aren't accustomed to revealing much about themselves, especially in public seminars. If someone is vague about a particular issue, or unwilling or unable to give a straight answer, don't force the issue. Avoid forcing people to tell the truth in public against their will. Rather, practice the “one-on-one” skill mentioned in this paper.


4. Avoid certain colors. White is the color of mourning in the Chinese tradition. People in packaging should avoid too much white background. Red, suggesting power, prosperity and authority, is the preferred color.

5. Avoid giving a green-colored hat to a Chinese man. "Wearing a green hat" in Chinese means that someone's wife is being unfaithful, a shameful thing to admit in public.


6. Never give a Chinese person a clock. The phrase "to give a clock" rhymes with another phrase that means “to attend someone's funeral.” It is all right to give a wrist watch, but not a clock.


7. Respect Chinese superstitions. Many Chinese people are superstitious about numbers. For example, the number 4 in Chinese rhymes with "death" or "failure." Many people try very hard not to have their house numbers or telephone numbers contain the numeral 4. The number 14 is even worse. The Chinese for 14 rhymes with "sure to fail, sure to die." Numerals 3 and 8 are "good." The numeral 3 in Chinese rhymes with "growth," while the numeral 8 rhymes with "prosperity." It's no accident that the telephone numbers of Western hotels in various Chinese cities contain the numerals 8888. They want their Chinese customers to feel good.


8. Cultivate "guan xi". To make things happen in China, you have to know people. "Knowing" is what the Chinese mean by "guan xi" or "connections." When you cultivate "guan xi" with people, you might get them to bend over backwards for you, let alone buy into your demands and style. But if instead you show up with a legal document before people get to know you and feel comfortable with you, you won't go far or make long-lasting deals.


Cross-Cultural Communication Skills


9. Smile. Smiling is the most common way to show friendliness among strangers. Wearing a serious-looking, poker face will cause your relationship to get off on the wrong foot. The Chinese use smiles as a defense mechanism. They smile when they're nervous or uncomfortable. They smile when they feel embarrassed. In some Western countries, giggling isn't proper behavior. In China, it's practiced by people at all social levels. You’ll make more friends and influence more people with a smile.


10. Speak slowly. Some Americans like to speak fast. The result is that they lose their audience. It doesn't matter how superb your ideas are if you can't convey them in ways the Chinese can understand. The Chinese consider it impolite to ask someone to repeat themselves. If they don't understand you, they'll just sit there looking like they do and letting your thoughts and ideas pass them by. It's critical that you speak slowly. The same holds true with interpreters. If you speak too fast, the interpreter will simply not translate those segments they don't understand. Chinese translators may be too shy, or too afraid, to ask you to repeat something, for fear they'll lose face. Asking for clarification may suggest a lack of expertise or experience.


11. Avoid being too casual. In America, we often call people we don't know very well by their first names. CEOs and employees may address each other as if they were on equal footing. This is not considered good manners in China. Always be formal in addressing people. That's the safe and the only right thing to do. In China, only childhood friends and spouses call each other by their first names.


12. Don't expect much eye contact. We in America must make steady eye contact when we talk with people. This is not the case among the Chinese. For the Chinese, a lack of steady eye contact doesn't indicate a lack of attention or respect. On the contrary, because of Chinese society's more authoritarian nature, steady eye contact is viewed as inappropriate, especially when subordinates talk with their superiors. Eye contact is sometimes viewed as a gesture of challenge or defiance. When people get angry, they tend to maintain steady eye contact. Otherwise, they look elsewhere or appear nonchalant while talking.


13. Let them smoke. There are 350 million people who smoke in China. They consume 1.8 trillion cigarettes each year, or one-third of cigarettes smoked worldwide. Many Chinese consider smoking, usually among men, the right thing to do in a business environment. They will offer you a cigarette. Simply decline and thank them. Don't lecture them on how smoking is bad for their health. If you allow them to smoke, they'll listen to you longer. The growing Chinese economy has produced so many successful businesspeople that they now have a craving for cigars. "Cigar bars" are all the rage in large Chinese cities and in Western-style hotels.


14. Don't take their saying "yes" literally to mean affirmative. Chinese people have a habit of saying "yes" to show that they're paying attention or that they're following what you say. In such a context, the word "yes" doesn't mean that they agree with what you say or with your terms.


15. Watch your language. Many Chinese who speak and read English learned the language in an academic setting. As a result, they're often unaware of colloquialisms or figures of speech that we take for granted. I've seen "Love Canal" translated as "sex virology." An article on negotiation skills contains the phrase "football field" when in fact the English original talks about "a level playing field." Other American phrases such as “in terms of,” “the skinny,” “ballpark,” “sidebar” and other sports jargon will confuse the Chinese mind. Keep in mind that most Chinese people (translators or even executives) will not ask you to explain your terms because they don’t want to lose “face” themselves or put you on the spot. To avoid these pitfalls, it's important that you have someone with experience living and working in Western countries to review your translations.


16. Talk metric. Supply technical and pricing information in both English and metric units. Your customers and suppliers will appreciate and understand you better this way.


Recruiting, Training and Managing People


17. Introduce your people to the Chinese personally. The Chinese people are conditioned by centuries of dynastic histories to obey their political leaders the way they obey their parents. If you’re the only person who travels to China but you need your colleagues to help out with operations, introduce them formally to your Chinese contact, especially in person. One American CEO shared his personal experience regarding this critical management skill. He wrote: "Introduce as many of your people to the Chinese as possible. The Chinese do place very high value on face-to-face contact and I found that I was the only person with whom our Chinese distributor would communicate, because I was the only one who had ever traveled to China and met him. As a CEO this can be very time consuming and create organizational constipation. While the Chinese place great stock in meeting the top person in a company (the status thing again), they tend to only want to communicate with the people in a company whom they have met face-to-face.” To resolve this common problem, introduce your colleagues and departmental managers to your Chinese partner in person. By delegating responsibilities, you authorize your colleagues to be your deputies and signal to your Chinese contact that they represent you and therefore they can be trusted. Asian cultures that are influenced by the Confucian ethos—Chinese, Japanese, Korean—place great emphasis on personal introductions as the basis of trust.


18. Arrange one-on-one meetings. The Chinese political system is a one-party system. People have learned not to challenge their political leaders. They find ways to work out their problems by involving other people who can help them. This is why Chinese people tend not to express what they have in mind in public. But when they're with you on a “one-on-one” situation without other people around, they're direct and straightforward. Over the past 26 years, I've learned to do my sales pitch and make my presentations in front of large Chinese audiences without expecting to field many questions. However, I try to stay awhile afterwards instead of rushing away to another appointment. Invariably, a few people will come up to me, wanting to schedule a private meeting. I've found these meetings to be the most informative and fruitful of all. My friends and customers tell me things in private that allow me to get things done. If you want to know the truth—and how you can compete in the China market—learn to pull people aside and talk with them privately.


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About James Chan


James Chan, Ph.D., is president of Asia Marketing and Management (AMM), a Philadelphia-based consultancy specialized in advising western companies in doing business in China. Since he founded his consulting practice in 1983, he has advised more than 100 U.S. companies and trade associations in doing business in China.


Posted: 09 March 2010

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