Doing Business in China and Working With Chinese

[4-min read]

Question: How to do business with the Chinese?

Answer:

• Respect the hierarchy and don’t jump “rank” (skipping a layer of hierarchy)
• Loss of face is real. Be careful to single out an individual when working in a group or teams
• Understand the Indian-head-nod
• A “yes” is not always a “yes” so don’t push it. Ask circumventing questions to get the real answer
• Family is important, just like relationships. Take your time to develop them. It’ll be worth your while
• Not every Indian speaks English, nor do they all work in IT
• Read this article…

In this country-specific article, I will cover several topics:

• Doing business in China, or the Culture of China
• Business Culture in China
• Understanding Chinese Culture
• Working with Chinese

What This Article is NOT About

Although I will use some statistics here and there and sum up some numbers, this article is not about the facts and figures. It’s about understanding the culture of China. More statistics about doing business in China can be found here.

And although there is a map of the country on the right, this article is not a tourist guide. It’s about business culture in China and working with the Chinese. Another good source for a better understanding of Chinese culture is Wikipedia. Click here to find out more.

A news site on China can be found here. If you want to know how to do business in China this article will help you in the right direction.

Then Why This Article?

Question: Is doing business in China easy or difficult?

Everyone who has ever been in China, be it in big cities or more rural areas, must have found cultural differences between their own culture and the culture of China.

As I say in my podcasts every time, I’m not in the convincing business. I’m here to offer a plan. A plan for people who are looking for solutions. And when you’re doing business in China, you need a plan. Not only a sales and marketing plan. It would be best if you also had a cultural plan.

And the more you understand Chinese culture, the better, more efficient, and more effective you will be.

So, this article is about you. You who do business in China.

How to do Business in China?

Recognize this?

• You don’t understand their English.
• The subtle non-verbals are hard to understand
• You get what you ask for, but not what you want.
• You wonder why the Chinese don’t ask for help if they don’t understand something.
• Why are the Chinese sometimes very polite and timid, and on the other hand, they can be really rude?
• Why do the Chinese never give you a “straight” answer?
• Etc.

If you recognize any of the above examples, read on…

What is the Business Culture of China?

On the right-hand side, you see a table with an overview of how China scores on the first four primary dimensions of culture.

As you can see, China, compared to the other Western countries, scores quite differently (any score with more than 10-point difference is significant). But not on all dimensions. This means that when you’re working with Chinese it is important to realize that different cultures will have different ways of doing business in China.

How to do business in China is not something that is fixed in concrete. Nor is it something that you can write down on one piece of paper, an article, or a book, not even in many books.

What is important is that you, a non-Chinese, realize that your culture is different (not better!) than the Chinese culture. And if you want to succeed in doing business in China, you better not only take the rules, regulations, and language into account. You better also understand the culture of China. If you miss that, your business will not work (or will take a lot more time, costing you a lot of money).

Working With Chinese. A Practical Guide

As said before, working with the Chinese will be different for different cultures.

In 2015 I was in Bejing some time back for work. After my first day of work was over I had some time to myself to explore the city. Having some local money, a credit card, and a can of coke, I decided to go for a walk. Before I took off I had a vague idea of where I would be going but got lost after walking about four blocks. Fortunately for me, I had plenty of time and eventually made it back to my hotel alright, but I’ve never felt so alone in such a big city. You can’t read any signs (other than in the metro), and hardly anyone speaks English.

• Chinese will generally not say no if you ask them to do something. That is if you are the boss, or being perceived as the boss.
• In the US and UK, it is possible to delegate upward. Meaning that if your boss asks you to do something you can make it conditional to the extent that you can request your boss to do this or that for you to do what your boss asks you to do. This does not happen in China. You can even say that upward delegation in China is simply not done.
• Being more collectivistic or Loyalty to Group-oriented (a lot more than for instance Indians), the Chinese put a lot more emphasis on relationships than on tasks. For a Chinese, it is important to know who you are as a person. Relationships over tasks is important in China. In the West, it is task over relationships. Although contracts are important in China, who you are is much more important. To that extent the contract is secondary.

“I’ve never felt alone in such a big city.”

• Chinese communicate indirectly. Direct questions from Westerners are seen as rude and impolite. Whereas in the West we can really only deal with direct answers in the form of Yes and No, the Chinese, in the eyes of Westerners, seem to avoid giving a “straight” answer. In their eyes, they give you a straight, but polite answer. It’s just that the West can’t “read” that kind of indirectness.
• Being a Manager gives status.
• Although at first, you might not see this, rules and regulations are not as important in China as they are in the West. Even though you may experience China as very bureaucratic, the rules, regulations, paperwork etcetera, are mainly a fiction of the power of the powerholder. Not so much a display of the necessity of rules.

Summing it Up

Doing business in China, understanding the culture of China, and working with the Chinese are not as straightforward as you might think. And that says absolutely nothing about the Chinese themselves. It says everything about the cultural differences between China and Western cultures.

Not many Chinese speak English. It is changing but in a country as big and diverse as China this will take a while.

How to do business in China is not easy. In a recent survey, I held myself, international managers ranked China as the second most difficult country to do business with. The culture of China is so different from Western culture that you must understand it better to succeed there.

Remember, Culture eats strategy for breakfast

Related keywords: Guide to doing business in China, doing business in China cultural differences, cultural challenges of doing business in China

Should you want to read an article on cultural similarities that can lead to cultural difficulties, read this case study.

Read more on how China (and the rest of the world) dealt with the Corona crisis here.

Another article about China and the Chinese can be found here.

President George Bush in China. Read the article here.

A podcast with Lawrence Draken on China can be found here.

An article about China and Tibet can be found here.

Another podcast on China can be found here.