5 Aspects of Must-Known Chinese Business Culture
Updated: Oct 9
Authored by: Sanni Rajaniemi
Chinese culture has an abundant influence on the success of a cross-border deal, and when doing business in China, your knowledge on the necessary etiquettes may help you solve a “life-or-death” situation. Here are five key areas.
1. Guanxi (Relationship-Building)
With guanxi playing a focal role in business relations, the Chinese have a long-term approach to business. This means that you might have to meet up several times with your counterpart before reaching your objectives. In China, the negotiation style is interpersonal rather than contract-based.
Chinese tend to be uncomfortable doing business with strangers*, which highlights the importance of the initial contact with your business partner via an introduction or a trade show. If you are determined to reach out to a potential account that could bring promising business opportunities, consider being introduced by a trusted third party that this account is connected with, such as a bank, trade association or government agent.
It’s true that in the western business culture, efficiency may come before building relations. However, consider investing time in getting to know your Chinese business partner as a person, and vice versa, before discussing business. Chinese people want to build trust and loyalty to support future business.
In China, after establishing a relationship, maintaining it is also very essential. This can be done, for instance, by sending each other gifts and seasonal cards. Chinese favor drinks and dinners to build relationships. Therefore, if you cannot think of a professional gift to give, having dinner or a drink together is a good way to show gratitude and appreciation.
2. Composure, Patience and Politeness
Taoism, playing a fundamental part of Chinese culture, emphasizes individuals shall stay in harmony with their surroundings. What this means to you when doing business in China is the importance of maintaining composure and a calm exterior during meetings, as your Chinese hosts can lose respect for those who openly show impatience or anger. Also, try to avoid interrupting others or showing too strong emotions, whether you feel over upset or excited.
There is an invisible hierarchy in Chinese culture, and respect from the lower-positioned to the higher-positioned cannot be looked past. Knowing your position is key. For instance, you’d be in a lower-positioned situation when you are meeting a Chinese customer that contributes a significance in your revenue, or when you are meeting a government official who could grant you a business license, or simply when you are in talk with someone older than you.
Loss of face is a big issue in Chinese culture, and it can even end a personal relationship. Violating Chinese customs can embarrass you in public and thus cause you to lose face. This is why it’s vital to understand the local expectations for proper behavior. For example, a person may feel face loss if he is refused upon a very simple request, or he is unable to answer a simple question publicly.
3. Conversation with Chinese
When greeting, handshakes are well accepted, but hugging or kissing on the cheeks are not. Also, business cards should be given using both hands, and the card should be examined upon receiving.
When having conversations with your Chinese partners or clients, it is common to nod or smile slightly. Nodding is common as a non-verbal cue in discussions, but it does not mean agreement; rather, it lets the other person know that what they are saying is understood. As a rule of thumb, staying conscious of your body language is important, for example, by maintaining a good posture.
Small talks are important at the beginning of meetings, and common topics include anything related to everyday life and even the hot topics on the Internet.. For instance, it is typical for Chinese people to start a conversation by asking you whether you have eaten or where you have been recently.
Consider avoiding direct criticism when having a conversation. Indirect language is common in China, or Asian culture in general,as it helps to avoid losing face or offending people*. This is why it is wise to pay close attention to what Chinese don’t say and their hints of hesitation. Saying "no" directly may be offensive, so a more polite alternative would be preferable, such as "That will be difficult."
4. Business Meetings and Meals
Understanding proper behavior and table manners can make a significant difference in business interactions. First of all, make sure that you are punctual upon arrivals. Remember, the participants enter the meeting room or dinner tables in an hierarchical order.
The correct seating order is also important to consider both in business meetings and during meals. The most honored guest or the host sits on the side furthest away from the door, in the middle of the table. Those next to them are the second-most important, and so on, in descending order.
Applauding is a form of showing respect after a person has been introduced in a meeting. Also, it is important to greet everyone in the meeting room and allow a few moments of social conversation before jumping into business topics.
When you are given an opportunity to introduce your business for the first time, it is helpful to focus only on the favorable aspects to build a positive first impression, whether it is about your business size, revenue, reputation, intelligent staff, etc.
5. Networking in China
A strong personal and business network is critical when doing business in China, and it highly correlates with guanxi.
You can develop your network through networking events, trade fairs, being introduced by a trusted common connection, and attending social or business dinners. Having a meal together is a sign of trusting each other in China. When invited to a dinner party, honor the invitation and follow the local customs.
Knowing some Chinese phrases can be beneficial in relationship building. However, a hired professional translator can also contribute greatly in conversations and clarification, especially when talks are associated with your business deals. If you wish to make an impression, it is a good idea to have your business card, especially your first name, also translated into Chinese.
Lastly, Wechat (similar to Whatsapp but for Chinese users) is even more commonly used in China than business cards. Do create an account there so your relationship will be better maintained in a more modern way.
Hohot Consulting Oy supports you when entering China, providing strong and extensive knowledge of both the international and Chinese markets. We have in-class training developed to help you and your team master the Chinese business culture and etiquettes. Learn more about us here.
(*The book used as a source: Cross-Cultural Business Behavior – A Guide for Global Management. Richard R. Gesteland, 2012, 5th edition.)