Doing Business in China: Cultural Behaviors

People who decide to do business in China and work with Chinese people should take into account that the cultural interactions they encounter differ greatly from what people are used to. It is important for successful business to take this into account and to familiarize yourself with Chinese culture in advance. This can prevent misunderstandings and embarrassing situations that could have a negative impact on business relationships.

Confucianism

Conficianism still plays an important role in Chinese society. It is a system of ethics and behavior that bases people’s obligations to each other on their mutual relationship. There are five important relationships:

  • ruler and subject
  • husband and wife
  • parent and child
  • brother and sister
  • friend and friend

Confucianism emphasizes duty, honesty, loyalty, respect for age. By maintaining harmonious relations between individuals, society as a whole becomes harmonious. This teaching permeates the thinking of Chinese at every level.

Collectivism and Individualism

The collective, the group, is highly regarded by Chinese people. This starts with the family, but also applies to school, work and country. People try to avoid conflicts because they prefer to seek harmony and that is why decorum plays an important role. The group takes precedence over the feelings of the individual and most people will almost automatically subordinate their own feelings and interests to those of the group. Because harmony is so important, non-verbal forms of communication play a major role. One does not want to contradict the other in public, but a facial expression or silence makes it clear that the other disagrees.

Hierarchy

In China, hierarchy plays an important role in daily life and certainly also in business life. It is important to find out who makes the decisions within the company you are working with and that is not always immediately clear. The hierarchy largely determines who makes the decisions, but also matters such as who sits where during a dinner, who enters the meeting room first, etc.

Neiren and Wairen

Neiren means as much as the limited circle of familiar ones. Wairen is everything that doesn’t belong there. When you are part of ‘ neiren ‘, doing business is immediately a lot easier. For the Chinese, neiren involves people from their own family, direct colleagues, people from the same city or province. These are usually quickly familiar. In principle, foreigners are always warren , but with the help of many Chinese contacts, some knowledge of Chinese and Chinese culture and history, it is possible to overcome the biggest differences and become part of the circle of trusted people.

Happiness and Unhappiness

For many Chinese, good luck and bad luck are linked to certain numbers or colors. Colors to avoid are black and white, which are associated with mourning and funerals. Red and gold are colors that are positive. Numbers with a negative sound are 4 and 250, because the pronunciation of the first word resembles death and that of the second word resembles stupid or stupid. Many buildings do not have a fourth, thirteenth or fourteenth floor. Lucky numbers are 3, 6 and 8 because their sounds are similar to those of positive words.

Status and loss of face

‘Mianzi’ means a person’s status, social position and image. This is a very important concept in China. Losing face is a very sensitive issue for Chinese people and two main ways to seriously insult someone are to criticize him or her in public and to show no respect for someone’s status or position. Chinese realize that ‘mianzi’ is not always clear to foreigners in China and will often take this into account, also because they themselves obviously benefit from a good business relationship. However, it is good to take status differences into account, for example by putting people with a higher position together during a meeting or dinner. It is also better when gifts are given to give people with a higher position different things than people with a lower position. Show respect for someone in a high position in front of his or her subordinates.

What are some things to take into account in China?

An important start in doing business is building a circle of relationships. In China, as in many countries, relationships are more important than knowledge. In China this principle is known as ‘Guanxi’. Once you have built up such a network, things will go much easier and faster. People are introduced to new business relations, bureaucratic red tape suddenly becomes easier, etc. Of course guanxi also has its negative sides, your relations will also ask you for something in return and these may be things you would rather not have to deal with.

How do you build a network?

The start of a network can be made through a translator, a colleague who has previously gained experience in China, but also a chance meeting. It helps enormously to show interest in the country and to be somewhat aware of Chinese history and backgrounds. It is then important to maintain contacts and be hospitable, hospitality is of paramount importance to the Chinese. Dinner parties are an inevitable part of building and maintaining a network in China.