Sinorbis co-founder Allen Qu’s recent enlightening post about the ‘3 must-dos for B2B companies entering the China market’ is a great lead-in to a discussion about the specific nature of Chinese business culture and the importance of understanding how to navigate Chinese business etiquette.
The broad concept of business etiquette is generally not formally taught in business schools, even though it’s a critical element of success.
Part of the reason why business etiquette may not be part of the official curriculum is that it’s a difficult topic to get your head around in a purely theoretical setting. The complex interplay of local cultures and customs, as well as the nuances of how professional relationships are built in different countries, make business etiquette a subject that’s easier to learn on the job.
Understanding business etiquette can be crucial for improving your bottom line of business because, as we know in our heavily networked world, relationships are everything - which means the ‘furniture’ around those relationships is also important.
However, the issue with business etiquette in a global village is that ‘one country’s etiquette can be another’s poor behavior!
So, the challenge for a company wanting to do business with an organisation in another country is understanding the country-specific business etiquette it should adopt.
Chinese business etiquette
Dealing with China as a business is no exception.
Any non-Chinese business commencing a relationship with a Chinese-based business will be far better placed if it understands some of the more important aspects of Chinese business etiquette.
To this, here are what we see as five of the most important aspects of Chinese business etiquette.
Chinese business etiquette principal #1: Guanxi - 关系
Guanxi is an overarching principle of Chinese business etiquette. While some cultures place actual business activity at the centre of business relationships,creating long-lasting business relationships is considered a cornerstone of Chinese business dealings.
While Guanxi is most often referred to as the relationships between individuals, it can also be applied to business in that there can be a spiderweb of Guanxi relationships binding two businesses together.
Key to Guanxi:
- It is considered a personal relationship, albeit within a business context.
- It is difficult to refuse to agree to do something you have been asked, the reverse of which is to always try and refrain from asking a business associate to do the impossible!
- Favours must always be repaid.
- Relationships are not ‘transferable’, meaning that when a person leaves a company, she or he takes the relationship with them.
In general, Guanxi is only applied to dealings between Chinese businesses. However, having an understanding of Guanxi will be useful for foreign companies dealing with China to help understand the inner workings of Chinese businesses and will ultimately assist with building long-term relationships
Chinese business etiquette principal #2: Mianzi 面子
There is a saying in China - 人要脸树要皮 - which translates to, ‘face is as important to man as the bark is to the tree’.
Mianzi lies at the heart of this, with ‘face’ another key concept at the heart of Chinese business etiquette. Admittedly, it’s not as easy to grasp or explain as Guanxi but the best way to come at it is through the historical lens of China being a hierarchical society. So, in a Chinese business context, paying heed to positions that professionals hold relative to one another is crucial. This should not be construed as holding deference to those in higher-ranked positions but rather offering respect. In doing so, face will be maintained or saved.
The reverse of this, of course, is creating a situation where someone loses face, which can lead to souring of business relations or even termination. Simple ways a foreigner may cause a Chinese business associate to lose face, particularly in a group setting, include:
- Directly pointing out people’s mistakes.
- Directly disagreeing with a senior person.
- Addressing juniors rather than the seniors.
- Over-use of humour in serious situations.
- Pushing hard for a decision during a lengthy, complex decision-making process (see Principal 4, below).
- Asking for things to be done that are outside of the ability or remit of the person you are asking - a breach of Guanxi.
Chinese business etiquette principal #3: Business never stops
Work-life balance is often touted in the Western world as a growing principle around which companies manage their employees to ensure they operate at their most productive.
Not so in China, where one might hear the saying, ‘Life is business’!
This makes much sense when one considers that it has been the goal of successive Chinese governments to lift people out of poverty and build China into an economic powerhouse. Practically it means that talking business almost anytime is appropriate and, quite often, people’s business and social lives intertwine.
As a consequence, banquets in the forms of lunches and dinners form a critical part of Chinese business interactions, something non-Chinese companies should embrace - and not just for the great food on offer!
Chinese business etiquette principal #4: Decision making styles differ
With competition such a huge part of Western business culture, quickly sealing the deal can sometimes be imperative.
With Guanxi fundamental to Chinese business culture, decision-making processes tend to be more lengthy. This ensures every aspect of the deal before them has been considered, and can even involve revisiting issues a Western business may have assumed have been signed off on.
Also, given the collectivist nature of Chinese culture, a consensus decision-making approach is often used, which further extends the process.
Chinese business etiquette principal #5: Communications
Communications in China can be challenging for a variety of reasons.
Here are some key considerations around communications:
- Much business is conducted in Mandarin, but there are also a range of dialects, so ensure you are utilising appropriate translation services where necessary.
- Be aware that due to Mianzi, ‘saying no’ can be difficult because it can lead to losing face, so taking care with the kinds of requests you make, how you make them and who you make them to is important.
- Delivering bad news is problematic, so sometimes using an intermediary is an important way of preserving broader goodwill.
- Unlike Westerners, Chinese people are less inclined to use body language, which should not be construed as rigidity or passivity in business dealings.
- Monitoring general language use such as speed of delivery, using a more basic vocabulary with less colloquial language, asking more open questions and keeping written materials on the shorter side will improve communications.
- Consider Chinese-appropriate digital forms of communication such as WeChat instead of email.
A note on gift giving
While gift giving once played a role in business relationships, crackdowns on corruption within China have slowly led to the displacement of this as a part of Chinese business etiquette.
Gift giving is still allowed, but keep gifts small and modest. This will act as a sign of goodwill without any notion of it being a form of bribery. Assess this on a case-by-case basis as you deal with different Chinese businesses.
There are also a range of matters to be aware of when it comes specifically to meetings and Chinese business etiquette, which is something we will cover in a future blog.
Cultural awareness plays a huge part in our daily lives, affecting the way we interact with others within our own societies.
So, having an understanding of Chinese business culture and the Chinese business etiquette that comes with it will both improve your dealings with Chinese businesses and show them yours is the kind of business with which they might like to form a long-lasting relationship.