Chinese Business Culture
China, (People's Republic of China), is situated in eastern Asia, bounded by the Pacific in the east. The third largest country in the world, after Russia and Canada, it has an area of 9.6 million square kilometers, or one-fifteenth of the world's land mass. The border stretches over 22,000 kilometers on land and the coastline extends well over 18,000 kilometers.
China is a highly diverse country and its terrain varies from plains, deltas and hills in the east to mountains, high plateaux and deserts in the west. Less than one-sixth of China is suitable for agriculture and the most fertile areas lie in the eastern third of the country, which is economically the most developed region.
China has a marked continental monsoonal climate characterized by great variety. Northerly winds prevail in winter, while southerly winds reign in summer. The four seasons are quite distinct. The rainy season coincides with the hot season. From September to April the following year, the dry and cold winter monsoons from Siberia and Mongolia in the north gradually become weak as they reach the southern part of the country, resulting in cold and dry winters and great differences in temperature. The summer monsoons last from April to September.
There are three major hierarchies in China: the Chinese Communist Party (CCP), the government and the military. The supreme decision-making body in China is the CCP Politburo and its 9-member Standing Committee, which acts as a kind of 'inner cabinet', and is headed by the General Secretary of the Chinese Communist Party. The National People's Congress (NPC) is China's legislative body. It has a five-year membership and meets once a year in plenary session. However, in practice it is the CCP who takes all key decisions.
China has been one of the world's economic success stories since reforms began in 1978 and has recently overtaken Italy to become the sixth largest economy in the world (in purchasing power parity terms, China is the world's second biggest economy). Official figures show that GDP grew on average by well over 10% per annum until the mid-90s and currently stands at around 7-8% a year.
A growing share of China's economic growth has been generated in the private sector as the government has opened up industries to domestic and foreign competition, though the role of the state in ownership and planning remains extensive. China is the world's 6th largest trading nation. Its exports and imports of goods were valued at $ 326bn and $295bn respectively in 2002.
China's economic and social development challenges remain huge. These include reforming state-owned industries, overhauling the financial sector and raising the incomes of China's rural population. China's leaders have launched a campaign to develop China's western regions in an effort to slow down the widening income gap between China's more developed eastern and coastal areas and the interior. China's entry into the World Trade Organisation in December 2001 is further integrating China into the global economy.
Source: Foreign & Common Wealth Office UK
Chinese Business Culture
Avoid comparing Chinese events with parallel foreign ones
At times, during business meetings, comparisons with the West may occur automatically, but don't verbalize everything. It can be annoying to Chinese managers and can appear unappreciative. Don't make the West the standard for everything. When you're in China, be there.
Don't overly praise Western values and lifestyles
This is just arrogance run wild. Hold back your inflated sense of cultural superiority, which is often unfounded. Such a faux pas would destroy the possibility of doing business in China.
Know Chinese business styles
Chinese business is guided by Chinese, not Western, values. The aggressive, backslapping, ‘let's get it on' Western approach just won't do. Western machismo will surely produce a Western fiasco in China.
In fact, instead of heightened male-driven models, you'd do much better adopting a more androgynous style - one marked by a quiet strength and a passive determination. Success in Chinese business requires a new style that combines both masculine and feminine qualities, strength and gentleness, both determination and flexibility. Linking competition with co-operation will serve you well during Chinese business meetings.
Coming to agreement rather than reaching a majority is a priority. Reaching an overall consensus is crucial in China. The key is to address each business person's wishes in the decision. Getting the entire business group to agree is the goal, even when it simply involves choosing a restaurant for dinner.
All business transactions seem to be exercises in bargaining. Almost everything requires bargaining: negotiating a lease for office space, establishing rates for executive's monthly consultant fees, negotiating prices on goods manufactured or establishing percentages on government contracts with major vendors.
So, be prepared. If you're looking to manufacture or establish joint ventures, know that the first price or percentage you're given is never the final number. It's only a starting point, and from there you and your Chinese partners will work your way to a second and third price or percentage.
Aversion to conflict or to any social disorder is high in China. Feeling ashamed in public is the ultimate taboo. Avoiding loss of face is primary. Thus, open disagreement between two business parties is avoided, since it would require one to lose face in public. Be sensitive to this: be aware that this is much more serious than simple embarrassment, and avoid any business situations that could cause or precipitate any public shame or embarrassment.