Chinese business culture in the land of opportunity

Deep-rooted ideals and traditions influence the way countries do business, and China has many of them. One of the most important keys to being successful importing from China is understanding how the Chinese think and how they build relationships. It is important to remember that Chinese culture is rooted in thousands of years of history and tradition.

China is not easy – “Everything is possible in China – but nothing is easy.” It can take months or years to establish good business relationships. Do you know and understand the meaning of “face” in China? Keeping “face” is one of the most important parts of “Guanxi”.

Chinese business banquets

Chinese business culture includes business entertainment and is a crucial element of Chinese business culture. Entertainment is part of relationship building. The quality of the entertainment offered reflects the seriousness of your intention to have a lasting relationship (guanxi), and also the lack of quality entertainment can be viewed as a lack of serious intention. A lack of mutual entertainment can often be confusing for Chinese counterparties visiting Europe or the US.

Business banquets play a huge role in relationship building in Chinese business culture. Prepare for a memorable meal. A banquet can consist of up to thirty dishes. Be prepared to be served over a long period of time. Eat a little of each dish. It is also traditional to leave some food on your plate. They enjoy dining with potential partners outside of work. The conversations are personal and not business oriented. The goal is to really get to know the person you want to do business with. The Chinese interlock their professional and personal lives because they want their business partners to be friends as well as co-workers.

Chinese business culture and gifts

It is important to note that giving in China is a very different issue from bribery. Small gifts are given and received very often as this is seen as an integral part of the relationship building cycle.

What is guanxi?

Guanxi is a difficult word to translate, but it refers to the type of relationship, social or business, that Chinese people create with one another. Building guanxi with one person in China takes time, trust, and openness to work successfully. Guanxi can take months or sometimes years to build. In some European countries we may understand this, but many Western cultures today like it that transactions and business relationships take place quickly, precisely and in most cases detached from our personal lives. Building these relationships in China takes time and personal visits.

Guanxi in practice

The Dutch, German and some other cultures tend to be open and blunt during negotiations. If there’s something they don’t like about a business negotiation, they’ll likely voice it out. It is easy to offend Chinese business people by being too direct. The Chinese value-preserving face is indeed one of the most important parts of guanxi. Chinese business people prefer to be very polite. They know how to cross the waters of careful negotiation. You may tend to use exaggerated language. If something is good, they will call it great. If it’s okay, they’ll call it good. Sometimes their polite yes actually means no, depending on whether or not they perceive that someone has acted aggressively against them.

If you offend the person in China you want to work with (intentionally or not), they may choose not to cooperate with you. Pressing too hard or too fast can ruin business too. In other cultures, you can “swallow pride” and choose to work with people we don’t necessarily like or care about, but if the deal is good we will accept the awkward situation and move on. To do business in China, a person must know, like, and trust you.

Sometimes factories prioritize customers with whom they have longstanding relationships over newer ones and work to provide accommodation for them, such as: B. Smaller orders that they would normally not accept for other customers.

The importance of trust

Trust plays an important role for both sides of a business.

Here’s an example:

One time a Chinese factory contacted us to send an invitation to cooperate with us. Their website looked legitimate, as did their request. We decided to visit their address hoping to see their skills only to find out that the location wasn’t a factory but a run down part of town. The “factory” was probably someone trying to scam people out of their money.

Unfortunately, there aren’t just a few of these types of stories so the importance of working with a verified supplier like GTS is important. We are building long-term relationships and personally reviewing the Chinese factories.

We are here to bridge these differences and capitalize on our longstanding relationships with suppliers in China. If you want to use a supplier like GTS who already has close relationships with their factories in China, please contact us.