3 Ways to Kill a Deal in China
Whether you're a business owner curious about what China's prospering economy offers, or an entrepreneur making plans to enter the Chinese market or bring on a Chinese partner, the prospect of hopping across the pond and meeting these people may be the most daunting portion of your expansion plan. You're not alone. But trying to memorize the lists of "don'ts" is no way to prepare for a visit to the Middle Kingdom--it's more likely to kick-start a nervous tic than a flair for navigating China's business culture.
This what-not-to-do guide will help you when negotiating your Chinese market entry. Then feel free to sweat the details--in fact, print our pocket-sized "don'ts" guide for an on-the-spot reference with minimal memorization involved.
The Deal-Breaker: A heavily suspicious attitude. A business owner who appears unwilling or hesitant to share information will be particularly undesirable.
"I think Chinese firms see three big benefits to working with American companies. [American companies] usually have more managerial experience and, in some cases, better technology, although China is catching up. The biggest reason is that everyone is eager to enter the international market," says Juny Chu, 36, an IT administrator for Beijing E-Business High-Tech Technology Co. LTD.
Chu cites the opportunity to learn from American businesses--such as how to move a product in the U.S., or the art of human resources, as key reasons Chinese firms choose to work with their smaller to midsize American counterparts. While American entrepreneurs eye the Chinese market for its abundant natural resources and cheap labor, Chinese entrepreneurs hope that the knowledge gained from their U.S. partners--whom they respect as players in the world's most prosperous economy, despite recent churnings--will put them ahead of their competitors. A Chinese firm will make it a priority to extract as much knowledge as possible from its collaboratorsAmerican partners. Although initial hesitancy is natural, a partner who remains suspicious in his or her dealings despite continued efforts to establish mutual trust will likely be viewed as a bad partner.
The Deal-Breaker: Cultural inflexibility. Would you do business with a person who made no attempt to understand or abide by American social customs? Well, the feeling is mutual.
"Treating your partners with respect is very important. It's easy to forget when dealing with the frustrations of China. In the U.S., there is more of a 'get it done' philosophy, but in China, [conducting business is] all about having patience," says Adam Harr, a senior accounts executive at Edelman Beijing. Edelman, the first international PR firm to enter the Chinese market in 1994, helps foreign firms, Chinese bureaucrats and Chinese companies communicate in tandem.
You may get an odd look or two but, most of the time, Chinese businesspeople, particularly younger professionals, will brush off unintentional lapses in etiquette with politeness. Remember, it's not about getting these social rituals correct as much as it's about showing respect to your partners through your willingness to learn Chinese customs. After all, wouldn't you expect the same from them if they visited your operation in the United States?
But beware--being culturally flexible doesn't equate to bending over backward to fit in with the furious pace of doing business in China. Your goals should clearly always be at the forefront of your discussions. Colin Friedman, founder of Beijing-based consultancy firm China Expert International Ltd. and Beijing Fortune Connection Club, a networking organization, says an entrepreneur's most important tool is a personal list of "do not's."
"People get very swept away because it is so different here," Friedman says. "But they should actually do things the same way. If you wouldn't take a risk like that in the States, don't take it in China. Zero multiplied by 1.3 billion is still zero."
The Deal-Breaker: Thinking that your work is done.
Don't be lulled into a false feeling of security even after you've done the legwork to find reliable Chinese partners. According to both Friedman and Harr, a predominant characteristic of the Chinese is that they shy away from saying no, sometimes giving vague, obtuse or even largely incorrect answers instead because they think you expect to hear yes. Learning when yes means no is yet another cultural difference between China and the West.
"In the West, there is a clear rule of law. In China, your relationship is as static as the market: As the market continues to change, so does your relationship. The only way to stay up to cultivate your relationship is with a continued, concerted effort to keep it strong and clear," says Harr, adding that in China, nothing is set in stone, and there are no guarantees that provisions in your contract won't change.
Pocket Guide to Chinese Business Etiquette
To print a pocket-sized guide to doing business in China, click here.
- Keep hand gestures at a minimum. These can be distracting because Chinese rarely use body gestures while speaking.
- Keep personal contact at a minimum--including hugging, slapping shoulders, etc., especially between a man and a woman. Shaking hands is OK.
- Dress conservatively. Women shouldn't wear ultra-high heels.
- In conversation, steer away from politics. If pressed for an opinion on a political or controversial issue, express your personal opinion, but acknowledge that it's not the viewpoint of the entire company.
Good Numbers, Bad Numbers
Bad: 4, 14
Good: 3, 8
Greetings and Meetings
- Be on time or early.
- A slight bow or nod is a common greeting. Wait for the Chinese to offer a handshake.
- Use formal titles
- If possible, make business cards with an English side and a translated Chinese side.
- Present and receive business cards with two hands, and never write on them.
- The most senior member of your retinue should enter the meeting room first. The Chinese will do the same.
Mr. (?? Xiansheng)
Miss (?? Xiaojie)
Director (? Zong)
Manager (?? Jingli)
- Items with company logosHigh-quality pens
- Regional specialties or country specialty goods
- Business card holders
- Ideally, gifts should be convenient to transport, with the most "valuable" gifts going to the highest office holder, and so on.
- Wrapped, ideally with red or yellow paper
- Items that suggest poverty
- Items with stork or crane imagery
- Items that are solid blue, white or black in color
- Sharp objects
- Politely refuse the gift at first to show modesty.
- Don't open the gift until the giver is out of sight.
- It's normal to offer, even "fight" for the bill during business dinners. Don't suggest splitting the bill-this is not done.
- Taste all the dishes you are offered, leaving what you don't like on your plate.
- For your own sake, don't eat everything on your plate or a Chinese host will assume you are still hungry and continue to pile more on.
- Don't stick your chopsticks straight up within a bowl of rice. This is reminiscent of incense sticks at a grave mound.
- It's uncommon to tip at Chinese restaurants.
- The most senior member of your retinue should enter the banquet room first. The Chinese will do the same.
- Be ready to inhale second-hand smoke.