It is true that at the large corporation levels (multinational), Chinese companies behave like most western companies, but this quickly changes as you move to dealing in government operated businesses or the smaller than $50 million USD companies. In this post I will focus on pointing out the differences that I have identiﬁed as the mostnotable in dealing outside of the global corporation environment.
1. Relationship ﬁrst!
Chinese people as a whole value relationship much more than American people do. In business the initial effort is usually 80% - 90% focused on developing the relationship. In fact, the objective of a business meeting is to develop a relationship (in Chinese terminology; a “cooperation”). Opposite to theAmerican approach of “closing” the deal. American business culture has common phrases like “business is business” and “we dont have to be friends to do business”, implying the order of importance. Chinese practice the opposite, we have to be friends to do business.
2. “How is biz?”
Another big difference! It is not only quite inappropriate, but can also be considered “rude” to ask, how is yourbusiness? or even more offensive ask for sales ﬁgures. Chinese business people will only volunteer this information to a close friend or people they have a very close relationship with. Opposite to the American presentation (sometimes required) of a detail company proﬁle prior to initiating any negotiation.
3. The Business Plan.
In Chinese business generally speaking the request of a business planwill incite a response like, oh... you dont trust us? In China the majority of business is done over days of dinners, lunches, drinking tea and wine and talking about life in general. Business will develop out of these encounters aimed at developing trust and relationship sprinkled with business details now and then. Opposite to the methodical American approach, concept, features, requirements,sales, marketing, costs of goods, ﬁnancial statements, etc. Many Chinese people will literally invest millions of dollars without nothing more than a handshake, it is all about trust.
4. The “Face” Game.
Chinese culture and particularly business revolves around the value of your “face” to others. “Face” ; deﬁned as how others may see you; as in your level of status in society or your abilityto command respect and trust from others. For American business people this is extremely difﬁcult to deal with as it ﬂies directly in the path of disclosure and transparency. For Chinese, the very fact that you would be asked for details takes away from you “face” value. A simple example of this concept is the fact that Chinese people will likely never allow you to pay for a meal or entertainmentas this is done by the person with the most “face” in the situation.
5. Family Business.
In America the word “Nepotism” is not a complementary statement, in fact you can land in the middle of legal issues for favoring a family member for your business rather than a more qualiﬁed stranger.
Not in China! It is possibly one of the strongest unwritten rules of business, a business owner willcarefully select family members and close friends for the most critical positions in a business. This is party due to trust and partly due to the “face” issue, qualiﬁcations are largely overlooked.
6. Sales= Alcohol+Karaoke.
In Chinese business sales is hardly regarded as a profession and most often is only looked as a sort of functional entertainer. While it is true that America has a great dealof this type of sales, it is also regarded as “undesirable” by most companies, particularly if you look at it in the Chinese business context. Chinaʼs smaller businesses (under $50 million in sales) have primarily two types of sales people; very young people (mostly women 20-24 years old) and older men (40-50 years old). The expectation of these sales people is almost 100% to work on cultivating...