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How understanding Chinese business culture unlocks opportunities

December 12, 2016 |   Nicolas Chu

Let the states of equilibrium and harmony exist in perfection, and a happy order will prevail throughout heaven and earth, and all things will be nourished and flourish.
                -       Confucius

The path into Chinese commerce can be more of a slippery slope. The various digital platforms and different sales channels are loaded with their own particular idiosyncrasies. But your foray into the world of Chinese commerce is going to be a lot smoother if you work to gain an understanding of their culture.

As China opens itself up to the world, adherence to cultural norms is becoming less rigid, particularly among young Chinese people working for international companies in China. But when looking to do business in China, it’s safer to stick to the more traditional rules of etiquette.

The political and philosophical history of China has led to a society unlike any other in the world. If you don’t understand the nuances of relationships, social structures or body language, then you risk looking crass or offending people, which could potentially derail an advantageous partnership.


Even larger organisations aren’t immune to a business cultural faux pas. It’s no secret that Facebook have been looking to expand their operations into China and have been seen attempting to woo the Chinese government. Over the course of their courtship, CEO Mark Zuckerberg has learnt Mandarin and the Facebook team have developed tools that can suppress information in China, so that Facebook adheres to China’s notoriously rigorous censorship laws.

In his zeal to enter the Chinese market Zuckerberg has also caused some controversy. In March 2016, he posted a picture of himself and other Facebook delegates jogging in Beijing:

Chinese business cultural faux-pas : Mark Zuckerberg and other Facebook delegates jogging in BeijingThe BBC called this Zuckerberg’s ‘smog jog’

At the time the picture was taken, authorities claim that air pollution was 15 times higher than the standard recommended by the World Health Organisation. Far from seeing it as a nice gesture, Chinese citizens viewed the move as not understanding the climate. One commentator remarked: ‘For someone who keeps proclaiming his love and interest in China and wants to make it big, you sure don’t know anything about our country. For one, everyone in Beijing has to wear a mask. We don’t take air pollution lightly, like you do.’

However, this example doesn’t seem so bad compared to an earlier transgression.

In 2015, Zuckerberg made headlines when attending a state dinner, he asked President Xi Jinping to name his unborn daughter. His overture was declined, the president responding ‘it was too weighty a task.’

It’s unclear why Zuckerberg thought this was an appropriate request. In Chinese families, it is common for the parents-to-be to ask a senior member of their family to name a child. However, this honor is usually only bestowed to a very close blood relative.

By asking this favour of President Xi Zuckerberg was seen as being naive of Chinese culture. Even though he didn’t mean to, Zuckerberg’s request implied that he considered himself equal of the president. The Chinese see Zuckerberg as a younger man who runs a company of around 12,000 staff, whereas President Xi is responsible for the health, wealth and future prosperity of 1.5 billion people.

Both of these failed gestures can teach us a valuable lesson: no matter how well-meaning your intentions are, if you fail to grasp the way in which relationships, hierarchy and values in China are inseparably intertwined, you risk coming across as naive at best or arrogant at worst.

So how can you avoid those mistakes when looking to do business in China?

Guanxi 关系

Guanxi is often wrongly translated as ‘relationships’, but the English word doesn’t capture the many intricate layers of the Chinese expression, and its meaning for Chinese companies. If the two characters are translated separately, they roughly come out as ‘joint chain.’  Business Insider’s definition expands on this saying, ‘fundamentally guanxi is about building a network of mutually beneficial relationships which can be used for personal and business purposes.’

In the west, we see our relationships as very distinct. Business relationships tend to be formal and finish when we leave the office. In China however, these lines blurred. Your circles interconnect:

In China the lines between relationships are blurred

In this video Chinese business culture is explained and it gives you a sense of how intrinsic guanxi is to the smooth running of society.

This intertwined system of relationships is seen as a way of upholding societal cohesion. Given the grey area that exists between the rule of law and its enforcement, guanxi is a way of making sure societal behaviour is kept in check. To do this, Guanxi draws on 3 Confucian principles values essential to Chinese culture: balance, harmony and saving face.

These principles are particularly expressed in the way favours are given and received, summed up in the Chinese proverb 礼尚往来, 礼尚往来 meaning 'courtesy demands reciprocity.' If you’ve asked a favour of a person, then it is absolutely essential that when they ask for a favour in return, that it’s repaid. It is considered a grave offence not to reciprocate and leads to ostracism for the person who neglected to repay the favour and their family.

Building these kinds of relationships are essential when looking to enter the Chinese market and work with Chinese businesses. Many Westerners make the mistake of rushing into China with their ‘objectives checklist’ and want to hit those goals ASAP. This is absolutely counter-intuitive to the Chinese. The focus can’t be on just the business result, but rather there also needs to be an investment in interpersonal relationships. These connections are often forged over the course of lengthy dinners and tea ceremonies. You’ll find that, as opposed to the ‘business lunch’, there won’t be a lot of shop talk conducted over the course of these events, rather it’s seen as a chance to build rapport.

How to develop guanxi

There are a number of ways that you can start to develop guanxi. The biggest is to have a space or a full-time commitment in China. In addition to that you need to partner with a Chinese-born person and task them with establishing those connections, the language and the in-country knowledge. If your business needs to get the government on side, then hire someone who had experience dealing with the government, or even better, someone who has once worked in government.

It’s also really important to have patience. The Chinese have a long-term view of relationships, so when initially approaching them with your idea, have long-term objectives and goals built into your proposal. And even though you might be bristling to burst into the Chinese market, you need to remind yourself that the Great Wall of China wasn’t built in a day.

Gei Mianzi 给面子

Gei Mianzi or ‘saving face’ is loosely the prevention of causing shame or embarrassment, but it runs a bit deeper than that. The China Culture Corner likens the concept of ‘face’ to ‘reputation and feelings of prestige within their business and family circles.’ The concept of face is intrinsically linked with hierarchy and authority (much more than in Western culture).

If you are hoping to do business in China, you must be attuned to the nuances, otherwise you may inadvertently create embarrassment for a would-be partner. Understanding Gei Mianzi also means understanding how hierarchy, guanxi and the sense of self interplay. It’s highly complex and it can take some time to get your head around.

However, if the idea of causing great offence is making your palms sweaty, be aware that Westerners are not held to the same standard as Chinese. And as values become more open, the rules are starting to shift, particularly where there is exposure to larger international communities. If you stick to the following rules you should be ok:

  • Show more deference to older people and more senior stakeholders. You can do this by making sure you’re spending more time speaking to them, giving them the most valuable gifts (if you are giving gifts to others) and be seen to be more compliant to their requests. There are also particular phrases you can learn that convey the appropriate level of respect.
  • Strive to give face whenever possible, especially when seeking to do business.
  • Don’t openly criticise or upbraid someone, particularly in front of their colleagues, friends or partners.

If all else fails, follow the advice that your mother gave you: be polite and respectful to everyone and you can’t go wrong.

Body language

You can also charm (or cause offence) by knowing the conventions surrounding body language and conversation.

It doesn’t matter if you are doing business in Brisbane or Beijing, there are just some gestures that are considered incredibly rude across cultures. Whistling, clicking your fingers to get somebody’s attention are all rude. Smiling, like in the west, might not just be a signal of pleasure, rather a way to smooth over tension or unease.

However, there are a few gestures which will be particularly displeasing to a prospective Chinese partner. Whereas it’s not uncommon to greet a business associate here with a hug, kiss or an effusive pat on the back, your Chinese contact may be very uncomfortable with that level of touching. Handshakes are becoming more common, but don’t go in with a very firm handshake, it may be interpreted as a sign of aggression.


When you’re getting down to business (or relationship building) there are also a few things to remember about conversation. There are quite a few topics that are off the table. For example, it’s best not to say anything negative about China. It’s also safer to steer clear of about topics regarding the independence of Tibet and Taiwan.

To avoid loss of face, make sure you rephrase your point a few times, in several different ways so that the meaning is very clear. If you see your Chinese associate nodding and smiling, it might not mean that they’re agreeing with what you’re saying, it might be merely politeness or encouragement. There also might not be a tendency to come outright and say ‘no’ (because to do so would may cause you to lose face). Instead they may be indirect or vague, offer excuses (such as they need to refer to their boss). So be aware that if you think a meeting is going very well, it might just be politeness.

Business cards

When you are interacting with partners, make sure you remember to bring your business cards. A business card is a shorthand way of showing who you are and allows your prospective partner to understand your rank and place at a glance.

At the start of a meeting, business cards are exchanged (with two hands), one side printed in English, the other printed in Chinese (often Mandarin, but simplified Chinese if doing business in Mainland China).

When you receive the other person’s business card, it’s important to study it to show deference, and don’t put it in your pocket and when you hand yours over, make sure the Chinese side is up. Never just leave a pile of cards and tell meeting-goers to have at it. Also make sure that your business card is impeccable. No smudges, dog-ears and creases.


Bringing gifts is another way to build guanxi, because it demonstrates respect. Local specialities from your home region are always appreciated, as is alcohol, souvenirs, notebooks, food and tea. It’s also typical to send your business partners a gift around certain Chinese holidays, like mooncakes for the Mid-autumn festival.  There are a few things to remember when giving gifts. They include:

  • Make sure the more expensive presents are given to the more senior members of your party
  • Don’t give an outrageously expensive gift if the receiver can’t afford to reciprocate
  • But don’t be stingy either, otherwise you may cause a loss of face (For example, if you’re offering a bottle of wine, make sure it is a good bottle)
  • The presentation of the gift is as significant as the gift itself. It must be beautifully wrapped
  • Avoid wrapping your gifts in white (the colour of death) or write a card in red (also death)
  • Give the gift with both hands.

It’s also very important that the gift isn’t construed as a bribe. Some Chinese businesses set a cap for their employees, so discretely enquire about the parameters. When dealing with government, make sure that the gift isn’t too over-the-top, for example luxury goods can ring alarm bells. If you aren’t sure, it’s always best to ask the advice of a local.

Culture shock

Doing business in China can open up a whole new world of opportunity for you, if you keep in mind that ‘It’s a whole new world.’ China has it’s own values and own particular ways of doing things, but rather than being overwhelmed, you should use it as a chance to be open, curious and to learn about an incredible and vibrant culture.

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