China is one of the world’s main emerging markets and offers good prospects for growth. Right now, the Chinese economy is third largest in the world. But no one ever pretended China was an easy place to do business. While some do very well there. Many others, including some of the biggest names in international trade, find it a bottomless pit they throw money into without getting a return. Below are tips for how to succeed in Chinese business.
Don’t cross the line (or sign it too soon)
China is still run by person-to-person relationships. So, determining whom is the key decision-maker in an organization you are engaging is crucial. Afterward, building upon those relationships is important. A lot of business in China is conducted over dinner. When doing so, keep a clear head and don’t be overwhelmed by hospitality, especially if you are just off the plane after a long flight. (You may be asked something ridiculous over dinner and then find yourself held to it later). It’s also not rare for some people to have contracts dangled in front of them after an evening’s drinking.
As one American businessman based long-term in Beijing put it, “Chinese businessmen in negotiation will often ask for the impossible. It’s surprising how many of their counterparts agree.” Make it clear you want to conduct formal business later, and maintain control over what you say and how you behave.
Lost in translation
A good translator is priceless, even for those who already speak a little Chinese. Don’t rely just on the translator provided by the Chinese side. Get someone reliable, through a recommendation or a professional advisor (there are plenty in Beijing and Shanghai), who understands western business methods, and the area or expertise you are working in, who can provide accurate, impartial, and clear translation. It’s an extra cost but worth every penny.
Characters and odd names
Business cards should be printed with one side in English, the other side translated in Chinese. This helps communicate you are familiar with how things work in China, and that many of the key decision-makers speak little or no English. Displaying [correct] translation of your name, company, and job position means you don’t waste the first ten minutes after you meet trying to make it clear who you are, where you’re from, and what you do.
Also, make sure the translation of your name doesn’t look odd – a straight transliteration into Chinese characters of your own name work best, rather than trying to adopt a Chinese name, which often looks contrived, and weird.
Even better, get your Website translated into Chinese. (China has more than 200 million Internet users). People, especially in business, are very Internet-aware.) A well-translated part of your Website into Chinese is a great advert; helps to explain much of what you do, and shows you are committed, and respectful, of the Chinese market. Failing this, Chinese language company literature can massively help, too.
Kangaroo scrotums
If you want to create good business ambiance, simple gifts from your home state or town go down well – especially items with a unique, local flavor. The standard is whiskey or chocolate (Chinese chocolate, in general, is poor quality). Your local delicacies or wines might work well, too, though nothing too outlandish that tends to need a lot of explaining (one businessman bought wallets made of kangaroo scrotum).
Wedgewood ornaments from the U.K., or candy from the U.S. are always appreciated. And, leave plenty of space in your luggage for return-gifts. The Chinese can be as generous with gift giving as in their hospitality. Be careful though – a huge opulent gift might be a problem to take back with you, and could create a future obligation you’d rather avoid.
Square peg in a round hole
Not even the most experienced foreigner in China can claim to understand all of the nuances of Chinese folkways and behavior. It can be difficult to fit in. The best policy is to act naturally because it will be pretty obvious you’re the outsider. There will be a lot of things you will not be expected to be aware of. But, don’t get too relaxed.
Many older Chinese and those in senior positions in government and business, still regard westerners as too brash and loud. Being polite, natural (and also open) is the best policy, so even when there are misunderstandings, these can be negotiated rather than being perceived as something that might possibly derail everything you’ve worked for
Cash is king
China is still very much a cash society. When traveling around China, even in Beijing and other big cities, credit cards are of limited use. You’ll need cash to pay for taxis, and often for hotel flights, and for food. You can get cash from automated teller machines in the big cities, but avoid being placed in a position to borrow money from hosts because you can’t get access to your accounts.
It’s also best to stay in four- and five-star hotels when you travel because they are more comfortable, plus doing so can also show the Chinese you are successful and respectable. Face and image are both important in China. People looking to make a good impression should at least avoid traveling on a low budget. Doing so shouldn’t be a problem. On the whole, hotel and travel costs in China are far lower than in Europe or North America.
Political influence
The Chinese are hard negotiators. They are patient, and willing to bide their time. Proposals that offer benefits for both sides are the ones that are likeliest to go through. Many Chinese business people work on the toughest of margins, in one of the world’s most ruthless environments. They are also working with a lot more political interference than in the West.
Trying to screw them down to the last cent will only work in the short term. More and more Chinese want to see long term relationships developing, where both sides come away with a feeling that they have got something of value. In this sense, China is not unlike the business environment in the West.
Don’t do anything in China you feel would be inappropriate in your home country. If it doesn’t work at home, it certainly won’t work in China.
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