The specialties of the Chinese business culture are one of the most sought after information from Western business owners and readers of our blog. So, to do your curiosity justice, we’ve put together the five key factors for doing business successfully in the Middle Kingdom.
In this blog article by Tenba Group, your China online marketing company, we reveal what’s important for Western companies when successfully expanding and doing business in China, the second-largest economy (GDP 14.14 trillion USD) in the world after the United States. Read about Chinese Business Etiquette and how to unlock the potential of this powerful market for your company.
Specialties of the Chinese Business Culture
The Chinese economy is skyrocketing, and e-commerce, in particular. The Chinese economy is the world’s second-largest economy by nominal GDP (Gross Domestic Product), which is an estimated 14.2 trillion USD in 2019. It is the world’s largest economy by PPP (Purchasing Power Parity), which is an estimated 27.3 trillion USD in 2019. China is one of the world’s fastest-growing economies, with growth rates averaging 6%.
From mining, manufacturing, and construction – the industry in China is booming. And the 900 trillion USD “New Silk Road”, China’s New Belt and Road Initiative (BRI), aims at reopening the trade corridor between China and the West. The current trade war with the United States does not seem to impact the Chinese economy much.
Foreign companies, which are successfully doing business in China, follow five tips for success to get started.
These include building a strong and reliable business relationship (Guanxi) with your Chinese counterpart first. Knowing the culture and traditions, as well as speaking and understanding Chinese, even if just a few words, are crucial to making a great impression.
Besides, focus on a localized online and social media presence. Lift the potential of the largest online economy by staying focused on your long-term goals.
In this article, we will go into more depth on:
- Building Business Relationships
- Key Aspects of Chinese Culture, Language & Traditions
- Be Online & Mobile First
- Stay Focused Within the Gigantic Chinese Market
- Things to Avoid in China
Then we will discuss how to put these concepts into real practice exploring the use of:
- Entrance Protocol
- Respectful Greeting
- Business Cards
- Never Lose Face
- Engage in Business Talk
- Bring a Gift
- After the Meeting
So, let’s start right away on the things to know when doing business in China!
1. Building Chinese Business Relationships
At the beginning of every business deal in the Chinese market, there’s a personal relationship between the business partners. In Chinese business culture, this is referred to as Guanxi.
This means the social networks, connections, and influential relationships that are the foundation of any business or formal interaction. This includes trust, moral obligations and often exchanging favors.
Without good Guanxi, doing business with Chinese partners is nearly impossible. So, how do you create a good relationship with Chinese businesspeople?
As always, building a great relationship takes time and patience. But this will ensure long-term beneficial and fruitful cooperation.
How About Some Examples?
So when doing business in China, start your conversation informally, for example, asking how the trip to the meeting venue went, how the family is, or how business in general is. You should also consider exchanging a small gift as a sign of respect, which is one of the most important values in the Middle Kingdom. Chinese people often value electronics, tea, red wine, or fruits from abroad as gifts.
Expect several formal business meetings to get to know each other before actually talking about the business at hand or closing a deal. Remain patient, friendly, and professional. A few words in Chinese are always an icebreaker breaker. For example, try “nǐ hǎo” for “hello” and “hěn gāoxìng rènshí nǐ” for “nice to meet you”.
For a successful business in China, never pressure your Chinese partners for a decision. If you want to speed things up, slow down! Finally, never lose your face!
Take a deep dive into the rules and protocols of the Chinese business culture and social etiquette in this article. This includes how to enter and leave a meeting room, respectful greetings, the exchange of business cards, not losing face, business conversation starters, the exchange of gifts, and how to follow up after a meeting in China.
2. Key Aspects of Culture, Language, and Traditions in China
As China is one of the earliest ancient civilizations, the Chinese (business) culture has a significant influence on the philosophy, virtue, etiquette, and traditions of Asia in general.
It may not surprise you that the most traditional Chinese value is harmony. This value is accompanied by kindness, politeness, wisdom, honesty, and loyalty.
Besides, Chinese culture is also strongly reflected in the language, which is also referred to as Mandarin or Putonghua. In fact, more than 70% of the Chinese population speaks Mandarin, but there are also other dialects in China like Yue (Cantonese), Xiang (Hunanese), or the Min dialect.
Therefore, at Tenba Group, your agency for marketing in China, we regularly post Chinese characters, their origin, meaning, and relevance for business today. This is to give you a better understanding of the Chinese culture, language, and how it relates to doing business in the Chinese market.
At the same time, English is not very common in the Middle Kingdom. In fact, less than 1 in 100 Chinese speak English. Therefore, having your website, social media presence, Baidu SEO efforts, as well as your other business materials, professionally localized is crucial to your success in China.
A simple “Google Translate” won’t do the trick and you run the danger of accidentally falling into one of the many pitfalls in the Chinese language. This means that the names of people and businesses, as well as places, require a transliteration/transcription instead of a “simple” translation.
Here’s An Example:
For example, the term 林先生 would be translated as Mister Forest. But it requires the transcription for 林 as Lin (instead of the translation to forest). Therefore, the correct English term is Mister Lin.
Finally, keep in mind to respect the Chinese view of the world. It typically focuses more on tradition, collectivism, as well as obligations around the society, family, and organizations.
If you really want to impress a Chinese person when doing business in China and beyond, adapt your sales pitch to the Chinese values and worldview accordingly. Make sure to solve problems that they encounter in their daily lives. Besides, speak to their desire for luxury and exclusiveness.
3. Be Online & Mobile-First for Doing Successfully Business in China
The key to understanding China’s online and mobile-first e commerce is the quickness of the market, the importance of social media, online shopping platforms, and mobile payment (AliPay, WeChat Pay).
For your business, this means adjusting your online business presence accordingly. Implement a strong localized website and social media presence (focus on WeChat), as well as Baidu/Sogou SEO and PPC.
4. Don’t Get Lost in the Gigantic Chinese Market
For companies planning on entering the Chinese market, the number of opportunities online and offline, across niches and marketing channels may seem endless.
While China is the largest country by population and the strongest e-commerce economy in the world, remember to focus on your niche and target audience. For example, Baidu Trends (Baidu Zhishu) can help you with this. There, you can discover general user interests and needs, related searches, interests by region, and more.
At the same time, you can reach a large target group in lower-tier cities through Xiachen more cost-effectively through Baidu PPC campaigns (lower CPL – cost per lead).
Finally, remember to follow your long-term strategy and hire experts for the China market to help you! Now, let’s look at the last specialty of Chinese business culture.
5. Things to Avoid for Doing Business in China
As you are probably aware of the censorship in China. In fact, the online world is shielded by the Great Firewall of China from what the government considers bad influences. In practice, this means that more than 8,000 sites including Google and Wikipedia are blocked in the Middle Kingdom.
Censored content includes violence, sexuality, and gambling. Besides, for example, hip-hop performances, tattoos, and the LGBTQ community are viewed as “problematic” and “low moral” by the government and therefore censored.
This is important for your online presence, including SEO and pay-per-click ads on Chinese search engines, for example, Baidu PPC. Paid advertising in the health sector (in particular health supplements), finance, and gambling are not allowed.
To sum it up, avoid politics in any form, censorship topics, impatience, and losing your face. You would lose your face by becoming angry or loud, not showing respect, and disturbing social harmony in general.
A specialist for digital marketing in China like Tenba Group can help you to launch your business in China. Click here to book your personal cultural awareness training course and to discuss the opportunities of doing business in China with our team of experts.
Putting “Doing Business in China” into Practice
The Chinese market offers sheer unlimited potential and business opportunities. Foreign companies planning a market-entry in China should follow the particular Chinese business etiquette to ensure long-term success for their global business.
You have increased your knowledge of the Chinese business culture in general. Now, it’s time to put your understanding of the Chinese culture and business into practice with China’s business culture strategies for success.
The Chinese business culture has some special business etiquette, customs, behaviors, and manners. The Chinese business etiquette vs American (Western) may seem more strict, hierarchical, and formal.
Therefore, understanding the differences will help you to unlock the power of globalization and the limitless potential of the Chinese market as well as help you navigate doing business in China effortlessly.
1. Entrance Protocol for Doing Business in China
Make sure to enter the meeting room in order of seniority. You should actively demonstrate great respect to the head of the Chinese delegation. The person with the highest rank of your team should introduce the other members of your group.
Practice: Try to get the names, positions, and ranks of the Chinese partners you will meet in advance to prepare for your meeting and add them to your notes.
2. Respectful Greeting
Nodding and smiling are common greetings. In official business meetings, a handshake must be initiated by your Chinese counterpart. Handshakes in China are not as strong as in the West – expect it to be soft and short. Keep eye contact brief. Too much eye contact may be interpreted as a challenge.
Practice: Like the rest of the world, Chinese people appreciate it if you can use some Chinese words. You can say “您好” (nǐ hǎo – hi, hello) or “很高兴认识你” (hěn gāoxìng rènshí nǐ – Nice to meet you). Learn more practical Chinese phrases and practice the Chinese business etiquette in tailormade coaching by Tenba Group.
3. Business Cards
Exchanging business cards is a key part of introductions when doing business in China. It is regarded as an extension of the person. Make sure to accept the business card with both hands and give yours to the Chinese counterpart with both hands as well (Chinese side of the business card up). Treating the business card carefully and studying it briefly before placing it in your business card holder, never in your wallet or pocket.
Practice: Make sure you have your company details in Mandarin and English on your business card. If you need help with translating your name and business details to Chinese (simplified), Tenba Group is here to help.
4. Never Lose Face
Losing, giving, or saving “face” is an essential Chinese concept. It can be translated to your honor, and the honor of those you are with. Avoid self-deprecation, sarcasm, open criticism, and negativity.
Practice: Stay respectful, factual, and friendly. If there is a conflict or disagreement on the horizon, stay solution-oriented. For example: Say that you value their opinion or view. And another option could be *add your suggestion*. You can say “Maybe” or “We’ll think about it” instead of a harsh “No”.
Practice: It’s rude in China to point with your finger. Instead, point with your open hand or, if possible, make eye contact and get someone’s attention without using your hands at all.
5. Engage in Business Talk
Chinese people, as does the rest of the world, often open conversations with an informal conversation. Questions like “你吃了吗?” (Nǐ chīle ma? Did you eat yet?) or “你去哪儿了？” (Nǐ qù nǎr le? Where have you been?) are popular ice breakers in Chinese culture. There is no need to answer in detail.
Keep in mind that business meetings are often 95% conversational talk to get to know each other and see if you can become friends and thus do business together. Only 5% is actual business talk. It’s quite the opposite of Western business meetings.
Practice: The Chinese way is always to establish a good network, 关系(guanxi). Business is better among friends. That’s why a Chinese businessperson first wants to gain a potential partner as friends. If they think you won’t be a good friend, maybe too arrogant, they won’t do business with you.
Practice: Safe universal conversation topics include weather, travel, and food. Talking about your positive impressions of China in such aspects is always welcomed. Avoid political discussions, especially those related to Hong Kong, Taiwan, Tibet, and human rights in general.
6. Bring a Gift
Giving gifts to your Chinese business partners is almost an art. Gifts should not be too costly. And if your business counterparts are government officials, make sure you don’t give them a reason to mistake your gift as a bribe. In Chinese culture, clocks, watches, green hats, or chrysanthemums are often seen as symbols of bad luck and are therefore not suitable as gifts. When you receive a gift, accept it with two hands. Do not open the gift immediately unless the person who gives it to you asks you to.
Practice: Electronics, tea leaves, red wine, fruits, silk, and presents from abroad are valued gifts for Chinese business associates.
7. After the Meeting
Wait until the host ends the meeting and allow the Chinese to leave first. They will leave the meeting in the order they came in (hierarchical). Make sure that your team also leaves in the correct order.
Practice: It is typical for the Chinese to extend negotiations beyond deadlines. So, don’t remind your overseas colleagues about deadlines and feedback. Patience is a virtue. And most likely, a business deal will not close after just one meeting. Only when a personal relationship is established with your Chinese business partners, then the business deal moves forward.
The Takeaway: Doing Business in China
Entering the Chinese market and how to start doing business in China properly is a timely process with lots of research and specific knowledge on how to target Chinese customers.
Tenba Group, the digital marketing agency of your choice, offers digital marketing services for China and around the world. Our state-of-the-art digital agency services are affordable and at the pulse of time. Unlock the advantages of digitalization in business for your company today!
From KOL marketing to WeChat advertising – your business can benefit from an expert on Chinese marketing for Western companies like Tenba Group. We can also help you to build a website for the Chinese market, or coach you for your next business meeting with Chinese partners.
Does this sound interesting, but you are not sure how to start doing business in China? Why not test our digital agency services with our FREE audit of your online appearance. Our one-of-a-kind manual review checks your social media channels, user experience on your website, Chinese SEO, and PPC. Contact us today! Tenba Group – Your Digital Link to China and the Chinese Speaking World.