China: The Art of Business

by Kim Dannies
August 2008

All eyes are on Beijing this month as the Chinese host the 2008 Summer Olympics. Watching the games each evening I marvel at the magnitude of detail that must be perfect during every moment of the contests and ceremonies, and the hospitality that a city filled with athletes, fans, volunteers, officials and staff demands. Hein Verbruggen, Chairman of the IOC's Coordination Commission said two weeks before the games began, "Here, in the Chinese capital, you can sense the excitement and anticipation. The city feels ready; it looks ready, with the stunning venues all completed. The quality of preparation, the readiness of the venues, and the attention to operational detail for these Games have set a gold standard for the future. What our hosts have achieved is exceptional."

How did the Chinese do it? Well, it took time, a long time; that's the Chinese way. And, it's all about the power of relationships here. I've been working on a project with a manufacturer in China since last spring and I can tell you that there is a fine art to doing business in China: delicate relationships to develop, a lot of protocol to follow, good communication, the stars aligning, and if you blow it- you'll know it in no uncertain terms.

Here is a peek at business etiquette that you'll want to follow should you ever decide to go for your own Chinese gold.

Give It Up for China
Even if you didn't medal in men's diving it can happen when you enter a room that your hosts greet you by clapping. And hey, you respond to these greetings by clapping too! It's all about hierarchy and ego in China, so you can be sure that the person who enters the room first and sits at the center of the table, has the highest rank. The meeting room will have a large central table, or tables, in a square. Let your host or his assistants initiate seating suggestions, but remember that the head of your group will always be placed in front of the host. Out of respect, the most important member of your company or group should be the spokesperson for your group, even if they are not the smartest. Because the Chinese take their host responsibilities so seriously, always allow them to leave the meeting first, leading you out.

Just Say 'No' To Sponge Bob
Do not use large hand movements, the Chinese do not speak with their hands. Your movements may be distracting, even threatening, to your host. Personal contact must be avoided at all cost. It is highly inappropriate for a man to touch a woman in public. Do not point when speaking; do not use your index finger, or any other finger for that matter. Think 'puppy': always display an open palm. It is considered improper to put your hand in your mouth, or any non-food item for that matter. In fact, avoid any acts that involve the mouth altogether and you'll be fine. Bowing or nodding is the common greeting; however, you may be offered a handshake. Wait for the Chinese to offer their hand first. Dealings between men and women are reserved. After an initial handshake, avoid physical contact and be politely restrained. Avoid hugging, "I love you, Man", or any other exuberant touchdown behavior even if you've built up a close relationship.

Introductions are always formal. Use formal titles. Remember that Chinese surnames come first, and the given name second. Address Chinese acquaintances with their surname proceeded by their title: Mr., Ms., Director, whatever. Sometimes the Chinese will adopt a nickname to assist Westerners.

Dress For Less Stress
If you are visiting China on business, conservative, smart clothing is a must. A Western suit and tie are the universal business dress code, but do not wear anything too dandy, as that might offend. Conservative casual wear is acceptable when you are not in a business meeting. Women must avoid high heels and short-sleeved blouses. As a rule, opt for the conservative look and always wear subtle colors. Females who display too much (boob, leg, or brain) are a guaranteed insult. Jeans are never acceptable for business meetings.

(Being On) Time is Money
Honored appointments are a must for business. Being on time is vital in China. This means, don't call them on your cell at meeting time 10 minutes away to say that you'll be right there. You're already late and you've already blown it. Never underestimate the importance of the Chinese concept of "losing face". If you are late, cause embarrassment, are confrontational, insult someone in public or call attention to a mistake, the upset has serious consequences and could ruin a business relationship.

"You be good to me, I'll be good to you"

China's business culture is all about relationships- they are way ahead of us Westerners on this one. All potential contacts must be arranged prior to your trip, complete with introductions. These relationships are built up over a long period of time, many trips, meals, and lots of hangovers. The Chinese have an ancient respect for personal connections, or guanxi, even more than they do for their own laws and regulations. Remember that guanxi involves an invisible balance sheet between two sides.

Avoid accepting gifts or favors unless you are in a position to reciprocate in some way. Gift giving is a very delicate issue in China. It is illegal to give gifts to government officials, even though it has become more commonplace in the business world. It is more acceptable to give gifts either in private or to a group as a whole to avoid embarrassment. The most acceptable gift is a banquet. High-end writing pens are considered favored gifts. Certain gifts and colors are associated with death and should not be given: Clocks, straw sandals, a stork or crane, handkerchiefs; anything white, blue, or black. Pink flamingos are out, too.

Cards Are King
Exchanging business cards is a mandatory ritual throughout China. Use both hands to receive a card and look at it immediately. Offer yours in return, again using both hands. It's considered impolite to hand a name card to someone using just one hand. A smart idea is to print business cards with your name and job title printed in Chinese characters. With a Chinese translated business card and English on the other side you will always create a good impression. Ask a Chinese speaker to select a good name for you. And don't opt for one that phonetically spells out your whole name in Chinese- your Chinese contacts will laugh at it. Mainland characters are different from those used in Hong Kong and Taiwan, so make sure that the printer uses the simplified characters that are used in China.

When you hand over your card, with the Chinese side upwards, hold it in both hands and bow slightly. When you receive the other person's card give a polite comment before you put it, with extreme care, into your business card case. Never write on a business card or put it in your wallet or pocket. Note to self: bring lots and lots of business cards!

Also bring several copies of all written documents for your meetings.
The decision making process is slow. You should not expect to conclude your business swiftly. The website cyborlink.com/besite/china captures it best:

"Many Chinese will want to consult with the stars or wait for a lucky day before they make a decision. When it comes to conducting business in China, infinite patience is the key. To many foreign businesspeople, the protracted pleasantries at the beginning of each meeting, the drawn-out negotiations where each minor point is discussed at length and the seeming reluctance to close the deal can be very frustrating. The only way to deal with this is to allow plenty of time for discussion and negotiations and ensure that every important condition is included in the contract." Think: "20 ounce rare t-bone steak with chopsticks" kind of patience.

Things Mom Might (or might not) Say
It is essential to arrive on time or early if you are a guest. Do not discuss business at meals. Do not start to eat or drink prior to the host, but be prepared to drink, a lot. It is considered bad form NOT to get drunk at social dinners, although women do not usually drink at meals. As a cultural courtesy, you should taste all the dishes you are offered. Sample meals only, there may be several courses. Never place your chopsticks straight up in your bowl. By placing your sticks upright in your bowl your will remind your host of joss sticks which connotes death. Please, do not drop the chopsticks! It is considered bad luck- and it will be- for you.

Do not eat all of your meal. If you eat all of your meal, the Chinese will assume you did not receive enough food and are still hungry. Tipping is considered insulting, however the practice is becoming more common. The person who extended the invitation should pay the bill for business meals. When visiting a business associate's house, a modest gift such as chocolates or any kind of flowers, is a nice gesture.

A respectful place to start building a business connection in China is by developing a working knowledge of Chinese culture. Although speaking English is all the rage in China, communication can still be the biggest difficulty for visitors to Beijing. Pick up a good phrasebook and point to the relevant words and Chinese characters. Be sure to ask the concierge at your hotel to write down addresses for taxi drivers, and don't forget to bring a hotel card-with the address in Chinese characters-for the return trip.

"Bu fangbian" or "It is not convenient", and similar phrases, are a polite way of saying that something is impossible or very difficult. Back off. Don't force the issue, but ask again later at an appropriate time after the person has had a chance to consider the matter.

The Chinese are very proud of their culture and history. Political discretion is a mandatory hypocrisy here. Resist bringing up Taiwan, Tibet, religion, human rights or other politically sensitive issues if you wish to do business. May your stars align!