Chinese Business Culture

Chinese Business Culture

Doing Business in the Chinese-Speaking World

I. Cultural humility

Perhaps the most useful negotiation skills you can bring to a first meeting with potential Chinese business partners are humility and patience. Humility is essential for the simple reason that the cultural landscape of the Chinese world is nothing like the direct, sign-on-the-dotted line culture of western business. Westerners often seek business in China out of a desire to get in on what could be the world's largest market or take advantage of cheap labor. While these are fine reasons for going to China, as starters they often interfere with the successful development of a business relationship.

Humility acknowledges that one does not know all the answers about a potential partner. Patience ensures the answers and the right answers will come. Western business operates according to standard practices, published rates. Chinese business, especially in its still evolving form comes with none of these reassurances. By carefully laying the groundwork, the businessperson will come to understand each situation and know each potential partner well, establishing a sound basis for a business relationship. In practice, this means your first meeting or meetings may be more social occasion than negotiation session. But don't be fooled: This is as important as any formal meeting around a conference table.

Find a sponsor

At your first meeting, you will want to be sure to have for lack of a better word a "sponsor." This sponsor should be familiar with the people and places you hope to do business. In business dealings among themselves, Chinese rarely practice "cold calling," or arriving without a proper introduction. Neither should you expect to arrive and introduce yourself. Your sponsor can do this, or make the necessary arrangements. He or she will be invaluable in helping you to navigate the often murky waters of business in China.

Why a sponsor? If you are negotiating a business deal in the U.S., you do not plunge in without knowing something about your prospective partners. References are commonplace. In the Chinese case, both parties to an agreement want to know and build relationships with one another and an intermediary is essential. Indeed, it would be extremely rare to arrange a meeting without at least a letter of introduction from someone your potential partners will trust. They want to know: Who are you? What is your business? And more importantly: Do you have an existing good relationship with someone they know, too? Will others speak well on your behalf? You will almost never be able to meet a potential Chinese partner and immediately begin discussing the details of a proposed contract. Instead, those discussions may follow a meal, or even re-adjourn another day probably over another meal!

Expect Ambiguity

Especially at the beginning, you will find yourself operating under a cloud of uncertainty and ambiguity. You may not be in complete control of your meeting schedule, for example. And you may be unsure if the relationship is taking root. This is where patience is essential. You can help yourself before you begin seeking business with the Chinese by learning as much as you can about China and the Chinese way of thinking. You can read, study the language, and get to know Chinese and their culture through personal experience even among Chinese Americans. Plan to allow yourself some time for travel before you start negotiations. At the very least, it will provide you with common topics of conversation during initial meetings with your potential partners. Only after you do these things should you try your hand at business.

Of course the most effective approach by far is to spend time in China (or wherever you hope to do business, such as Hong Kong or Taiwan or Vancouver). A Chinese saying, paraphrased, warns that if you truly want to know the mountains, you must live in the mountains. At the very least, you should do a bit of climbing to acclimate yourself to the road ahead.