Understanding Chinese Business Culture

Guest article by Lucas Paluch from the Lean Traveller Guide.

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Conducting business overseas
​Just about every country has their own way of doing business. Part of that routine is regulated by the laws of the country a person has traveled to for business purposes. Yet, some countries, like the Chinese business culture, are very difficult to navigate.
That is because they do not necessarily operate by laws. Their business relationships are conducted on a deeper level than most Western businessmen are used to. For example, the drinking practice conducted by Chinese men at luncheons or dinners.
For the Westerner to be successful, it is vital that they learn about and participate in this Chinese business culture practice. That is if they want to have a successful trip. What follows are more insights into the Chinese business culture to help western businessmen be more successful in their interactions with the Chinese officials.

The first encounter
There is a proper way for western businessmen to meet their Chinese counterparts and Chinese government officials. Making the right first impression goes a long way in opening the business deal door.

• Bowing, nodding & handshakes are permissible- but these must be first offered by the Chinese. Knowing a few Chinese words in greetings help but make sure you know the exact meaning and the right time to use those words.
• Addressing your hosts- it is important to use their title first, then their last name. For example, if the man you are meeting is a manager, you call them Manager Kim.
•  Business card exchange- use both hands when accepting or giving a business card. The card is seen in Chinese business culture as an extension of the person, so treat the cards right.

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The conversation aspect
Even chatting has rules to follow in the Chinese business culture. Here are a few of them:

• Small talk- is done to break the ice but the Chinese do not use How are you? They have their own cultural expressions and questions to ask
• Topics- talk about travel, weather, food, what you like about China and so on. Stick to safe topics. Do not talk about politics.
• The concept of face- this is a very important issue in all of China, not just the Chinese business culture. You never want to speak in a way or topic that your Chinese hosts will lose face. If they lose face, you can count your business deal a failure.

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The dining aspect
Cultural rules pay a large part in conducting business in China. It is important to understand how they work.

• Seating- the senior Chinese officials are seated first, then you must wait for the Chinese to show you your seat.
• Eating your food- don’t begin eating ahead of the others. Then do not clear your plate as your hosts will think you are still hungry.
• Going Dutch- is not a concept that is practiced in China. If you invite someone to join you for dinner, then it is expected that you are going to pay for it. There are a lot of rules governing the invitation.
• Do not do- sticking your chopsticks straight up and down in the center of your bowl is a big no-no. That action is reserved for funerals and very offensive to live hosts or guests. Also, do not tap your bowl. Tapping is done by beggars.

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The gift giving aspect
There are rules governing this part of the Chinese business culture

• Receiving a gift- use both hands to accept the gift and do not open right away. Only open immediately if the giver gives you permission to do so.
• Do not give- expensive gifts, clocks, watches, green hats or chrysanthemums. You do not want to look like you are bribing the Chinese officials or make a cultural faux pax.

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Navigating the Chinese business culture
This can be tricky especially for the first time western business man. There are a lot of rules to learn and follow. The Chinese have an advantage over the western businessman because they grew up learning and practicing these rules.
The key to a successful business meeting is that what works in the west may not work in the east. The thinking is different and here are some comparisons to let you in on how to effectively work within the Chinese business culture:

• Logic- the western mind is direct, but the Chinese way of thinking is round about
• Communicating agreement or disagreement- the western way is very overt and willing to disagree. The Chinese way is not. They are subtle and usually less verbal
• Communicating information- for the west it is explicit, specific, direct but the Chinese imply, infer and use indirect language
• Communicating honesty- again the western mind is more open, direct while the Chinese prefer the subtle non-verbal way of communication
• Self-expression- the west is individual minded while the Chinese are group minded. The westerner will use words like ‘I’, etc., while the Chinese prefer words like ‘we’
• Business thinking- the westerner prefers strictly applying rules and regulations, whereas the Chinese see rules as guidelines and fluid
• Business relationship- for the west a written contract is more important, and the personal relationship is not. The Chinese are the reverse. They prefer personal relationships being sound over written contracts.
• Resolving conflicts- the west go to their lawyers and the courts first. The Chinese prefer to use mediation with trusted associates.

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Some Final Thoughts
The Chinese business culture is basically almost the reverse of the western business culture. Their business culture is also an extension of their country’s culture and it is hard to separate the two. That is the result of the group think mentality that is used in the Orient.
As mentioned earlier, the concept of face is very important in Chinese business culture. Losing face to the Chinese means that they lose all authority and credibility. If they lose face in front of their juniors, then they cannot manage their juniors anymore. They become impotent and incapable of leading.
In dealing with the Chinese business culture, you are walking on eggshells.

​About the author
Lucas is the the author of Lean Traveller Guide – blog about efficient business traveling. Lucas writes about his experience in traveling seeking the most effective ways to pass through each business trip. Blog contains a lot of valuable travel hacks and advices. Most of his writing comes from  his experience and daily work. You can connect with Lucas also via Facebook or Twitter.