How to Conduct Business in China

So you’re trying to expand your business and have decided that China seems to be a good starting point. Surely, it would be easier to try to contact prospective clients via e-mail, and not worry about the hassle, time consumption or the expenses of traveling several miles; after all, isn’t that the reason why technology exists?

Now, here is what technology cannot do for you: replace decades of business etiquette and rituals.  Your ability to communicate effectively in a more personal manner is a benefit that e-mails, or even web conferences, cannot provide. In China, professional business behavior can be different from what you might be accustomed to, so in order to have a successful meeting, you should be aware of the etiquette and do your best to follow the tips we explain below. Try to practice them as a role-play with your co-workers to decrease your chances of forgetting them when in the meeting.

Warm-up:
Prior to the face-to-face meeting, send a letter or e-mail setting forth the topics or points that are to be discussed with your prospective client.

Hire an interpreter:
Make sure to find the right interpreter with enough time prior to your business trip. Our recommendation would be to use an interpreter with Chinese as their mother tongue, and English as their second language. You will be better off with an interpreter that is from the same culture as that of your prospective client.

Likewise, ensure that your interpreter knows what you will discuss at the meeting, and provide him/her with plenty of material related to the topics you will cover, so that the interpretation process is as smooth as possible.

While you are at it, you should also ask your interpreter to help you choose a Chinese name for you. The reason is explained below.

Your appearance:
Try to be conservative and modest in the choice of colors and outfits, and never use jeans for a business meeting. If you are a woman, stay away from high heels, revealing clothes and short sleeved shirts or blouses.

Always be on time:
This one shouldn’t be difficult to remember, as most cultures consider it a virtue. If your client is the host, they will be already expecting you, and you will be escorted by a representative to the location where the meeting will be held.

Greeting and arrangement:
Greet with a bow or nodding, and avoid the handshake, unless the Chinese offer it. Sit to the right of the host (prospective client) and opposite to the door.

How to address attendees:
Names are very important to the Chinese and you must establish how to address someone during your first meeting. Call the attendees (if Chinese) using their last name (not first name), followed by the corresponding title (Mr., Miss, or even their job title). If you use the title in Chinese as well, you will show that you are going the extra mile to know and respect their culture.

Business cards:
It would be best to have your business cards ready before hand, prior to the business trip. Paying attention to detail and accommodating a prospective client is always an asset that will reflect positively on you and your company. Take the time to have your business card translated, and pick a Chinese name as mentioned earlier. One side of your business card can be in your native language, the other one should be translated into Chinese, with your Chinese name. Have plenty of your business cards printed. Remember that business cards should be exchanged at the beginning of a business meeting.

If you are translating your business card, this might be a good time to “localize” the design. The designs and colors that are appealing in your country might have an entirely different meaning in China. As an example, try not to use white, blue or black, as they are associated with mourning or death. Red, on the other hand, is connected to much more positive meanings. If you are unsure of what colors or design to go with, a good translation company should be able to advise you on this.

Give and receive business cards with both hands, and read the one received with interest. Doing otherwise would be extremely insulting to your potential customer. Have a small card case where to keep them; do not put them away in the wallet or your pocket

Rituals first
In China, a gift is usually expected as part of doing business so be prepared to gift your prospective client with a dinner. Also, remember that dining or having a couple of drinks is common prior to a business meeting. The host should always be the first one to start eating and/or drinking, and make sure to always taste every portion of the meal offered, as a way to be courteous, and try not to eat everything on your plate (also, note that females don’t drink during meals). During the banquet, keep your conversations light and hold your urge to talk “business”. As stereotypical a topic as small talk might be in our culture, this is one instance when it is absolutely more than acceptable and necessary. Successful meetings are based on knowing and trusting the attendees, and this is one way to start building that familiarity and trust.

When done with the meal, do not stick your chopsticks straight up in your bowl, and do not take the initiative of tipping, as it might be considered insulting.

In the U.S., smoking can be considered rude, particularly when not asking for permission to do so. Do not assume this is the rule of thumb in China, as it is quite the opposite. Smoking is a very common habit, the restrictions and laws do not apply the same as in the U.S., and when doing business it is absolutely acceptable, so avoid showing disapproval of others smoking if you want to ensure a successful relationship.

Keeping a good conversation:
When talking to the host of a meeting, be sure to speak slowly and do not use very elaborate sentences, or colloquialisms and slang. This will help to avoid misunderstandings. Also, avoid completely negative sentences, rather than saying ‘no”, paraphrase and cushion the negative with phrases such as “I am not sure…” “Let me verify….” “Let me see what I can do”, etc… Lastly, always talk directly to your prospective client, instead of talking to the interpreter.

Be patient with pauses and what might seem to you as a bit of a “delayed” reaction from the listener’s or host’s part. These reflect a concern for measured words and giving the right message during Chinese conversations. Also, as you would do in your culture, avoid interrupting while the host is speaking. As a last consideration, try to differentiate between “Yes” meaning “I agree”, or  “Yes” as in “I am paying attention to what you are saying”, to avoid misunderstandings and false expectations. Chinese use “Yes” in both situations, and if not aware of this, your conversation might seem misleading.

Avoid exaggerated hand movements, physical contact, pointing when speaking, as well as using your index finger to point. Do not put your hand in your mouth.

If you are going to discuss prices or certain technical information, use the metric system if possible. This will make the understanding much easier from their perspective.

When the meeting is concluded, allow the Chinese attendees to leave first, as a courtesy.

Personal relationships are key:
Chinese people are very reserved in public, but can be very straightforward if you manage to have a private conversation. If you can create the opportunity for a private chat, this will give you a better picture of the level of success of your meeting.

If you have someone on location that can represent you or your company after you leave China, try to introduce them before you leave the country. Remember that personal relationships are key, so do your best to make the introductions in person. This will help you greatly in keeping in touch and nourishing the relationship with your prospective client/business partner.

Always remember the personal factor when doing business with Chinese people. It might take longer to build their trust, but it will create better chances for a fruitful business relationship. Do not get discouraged, and enjoy the ride!

Happy (Chinese) New Year!!

The folk story behind the Year of the Rabbit (China) and Year of the Cat (Vietnam)

According to the Chinese Zodiac, the Year of 2011 is the Year of the Golden Rabbit, and begins on February 3, 2011 and ends on January 22, 2012.
At the same time, with just one hour time difference due to location, the Vietnamese will be welcoming their lunar New Year, or Tet, the Year of the Cat.

To make it easier for the people to follow the calendar, a folk story from China describes how animals were selected to the cycle of years.

A long time ago, the Lord Buddha summoned all the animals together to assign each of them a year. At that time, the cat and the rat were best friends. When the cat heard the news, he told the rat about it, and both animals decided to go to the summoning together. However, since the rat did not wake the cat, the cat continued to nap and did not make it to the assembly on time and therefore was never assigned a year. This is why there is no year of the cat and this is why cats hate rats now.

But the rat was determined to get to the assembly and he used a trick. He knew that a small animal like him would not be able to compete with the bigger animals, so he persuaded the ox to let him ride on its head. The ox consented and just before they arrived, the rat jumped off the ox’s head and raced through the finish line first. Being first, the rat received the first year in the lunar cycle.

This is why the year of the rat is the first year in the cycle and the year of the ox is the second.

Vietnam also adapted the 12 animal zodiac from China, but they have Cat in it, while Rabbit is dropped off. Nobody knows for sure why this is. One explanation is that the pronunciation of “Rabbit” in Chinese sounds like “Cat” in Vietnamese, so it is believed that a mistake was made.