Is business in china for you

In Chinese business culture, drinking plays a prominent role with many Chinese companies hiring what amount to professional drinkers, giving them professional job titles. Many Chinese people in professional jobs that I met, i.e. in accountancy and management positions, often have to accept the drinking culture in order to be accepted and to progress in their company, hence it is often necessary to put the drinking culture ahead of the direct needs of family sometimes.

Chinese people are very family orientated people and they care very much about their families. It is more a case that most companies expect their employees to conform to the company culture and to do well in a company, it is important to fit in with these ideologies. Many of my students spoke of the way in which it was necessary to entertain business clients with a good evening of drinking and a visit to a singing room in order to get a deal done. This use of alcohol in business seems to be changing gradually with several Chinese business people telling me that they are now tiring of the heavy drinking culture, and choosing instead to entertain clients out on the golf course. As someone who enjoys social drinking, I kind of like the idea of having a few drinks with clients at the companies expense and it is perhaps true that it is a great opportunity to learn about the real character of the client/s when they are drunk. The problem for many people though, seems to be the high amount of alcohol drank during these meetings and the difficulty of saying NO if you do not feel like drinking.

In Finland I found that people drank vodka so fast that it was as though their lives depended on it and that the girls drink as much as the guys. Winters in Finland are long and cold and drinking is almost considered a pastime to get through the harsh winter. As a result of this you will not be surprised to hear that alcoholism is a big problem in Finland. Finland incidentally, was the first country in the world to allow all females to vote (New Zealand would have been first but excluded the Maori women), and these days the Finnish women account for over 40% of women in the parliament. Finnish women can handle drink almost on a par with the men. In Ireland, even the girls have beer bellies, not just the guys. Take a walk around the capital city Dublin, on a Friday or Saturday night, and you will see plenty of girls drinking Guinness by the pint. Drinking eight or ten pints of beer on a good night was normal and I have to say, there were some good nights out in Dublin. Drinking is an integral part of the Irish culture and Guinness, one of the Irish beers, is now popular worldwide.

The passion for alcohol is also noticeable in Chinese business culture and a source of pride to many. When visiting drinking places in Beijing on Friday nights, it was common to see groups of co-workers including the women, drinking rounds of shots. The co-workers often play drinking games and seemed to drink copious amounts of alcohol. Many businessmen and businesswomen have turned up at my morning classes still suffering from a hangover from four or five before. In many cases they make it clear that they did not want to go drinking, but they had to for the sake of their job and future promotions. Conformity in many ways I am told, dictates that one should not leave the drinking session before their senior (higher manager) leaves. Drinking in China though, is limited to an extent in some situations. Drinking alcohol for example does not tend to occur very much in the home; Universities tend not to have bars directly on campus; and places such as singing rooms are mostly alcohol free. There is no denying though, that both food and alcohol are a definite part of the vibrant Chinese culture.

Well its pretty obvious inst it????

China is quickly transforming into a mass consumer market. Some say it is even going to overtake the USA. When is another question, but what we sure know is that it will. It has never been a better time to expand than now…

Whether you have been in business for a long time or not, just ask this question to any “elder” business person you know, When is the best time to enter a market??? He will always tell you, when it is growing.

And China is growing now.!!!

The European as well as American markets are mature markets. They have already passed their “growing cycle” and will for the next years, unless something dramatic happens in innovation, remain in a steady pace.

Whether you are in a service or product related industry, now is the time to enter china.

If it is in a product industry, you got to realise and realise NOW, that the chinese market is changing from a developed to a consumer market. And it is turning fast. It is normal human nature that if suddenly you have more money to spend, then you want to spend it in the best. And what is the best??? Something made in Europe or the USA. That is the mentality in the chinese new middle and upper class.

Many say that the chinese economy is overheating. So what??? Take your place now, and when it slows down, it will slow down from a 8-9% growth to a 4%. Even then, a 4% growth in a billion people country, is a lot!!!

If you are in a service industry, it is even better. Since the economy has been growing at such a fast pace, it is only logical to note that the qualty of the service type industries cannot possibly have grown at such a level of standard that we have in the west.

Remember, when the ball is rolling, you don’t want it to stop. Yes there are many couriers, logistic companies, restaurants, schools, hospitals,etc, but how many of them are up to western standards????

And imagine if you were to take your stand now???? Not only can you differentiate yourself and target that new rich consumer that is emerging, but when the market starts to slow down in the coming years, who do you think will stand out???? Since a service is an experience that you have had, as long as the experience you have given to the local Chinese consumer (who has never imagined the western standard of service), is as good as in the west, you are assured a good market share for the future.

So, what are you waiting for???? Do it, and do it NOW, don’t wait till you cant afford it, or till its too late.

I hope this short outline was helpful as a start.

Best to you,

Manoj Shivnani

The 3 main disadvantages are:

-The understanding of the language English: As you know, the business language is English. What happens, is that they have learnt the language as a text book. That is, they will be very good in writing and reading but their “listening” will be quite poor.

Note that there are many and each day more and more exceptions to the above, specially with the enormous amounts of Chinese students who study abroad and then come back to their country to do business.

Due to the above you got to understand NOT TO USE COMPLICATED WORDS. Try and speak simple English and you will avoid many of the disadvantages of doing business in china, which mostly arise due to communication issues.

-The meaning of a life time customer: The Chinese have a very short-term mentality due to mostly cultural, and historical factors. Due to this they don’t see the business relationship as long term. No matter how much you tell them, and no matter how much they speak about it, they believe that the customer will sooner or later go to someone else. It is like if they don’t really care since they know that if you don’t buy or invest, somebody else will.

Of course there are exceptions to the rule, and I suggest that when you do find a long-term mentality supplier or partner, stick to him, he will save you a lot of time, effort and money.

You should hence, realise the fact that you need to always have a range of potential suppliers and “friends” to turn to in case the service you receive does go down. Many foreigners just believe that they hit the jackpot once they do one deal and they just sit back and expect a level of service like they receive in their country without realising that the supplier will in most cases look first at the money he is going to make in that deal rather than during the duration of the relationship.

-The meaning of quality: I love this word. It is the most used word in china apart from “yes, no and sorry”. Everything seems to be of such a high quality in china, that the word itself has lost its meaning. As Timothy Ferris says in his book “the four hour workweek”, the more you use a word, the more it looses its meaning.

For china quality means “that it looks the same”. I stress the words IT LOOKS. Their way of seeing reality is different and you cant blame them. They don’t know how to create things ( contrary to the japanese), they only know how to best copy it so it LOOKS the same.

Due to the above, it is a normal disadvantage in doing business in china the fact that you got to stress and stress over and over again the fact that you don’t want it to look the same, but rather that you WANT IT THE SAME. This means inside,outside, the raw materials used, the finishing, the strength, etc,etc,etc.

I hope this short outline was helpful as a start to you success in doing business in China.

Best to you, Manoj Shivnani, FreeChinaAdvice.com

China is the only fastest major growing nation with an average annual GDP growth rate of at least 10%. In 2007, China was ranked 1st by current account balance of USD 262.2 billion dollars (9% of GDP).

China’s rapid development of its economy is no threat to any other country but an important opportunity for other countries to come into China and expand and expose their market internationally. China’s globalisation is becoming “the place to be” for exposure to multinational companies and organizations.

The Chinese business culture is very unique. Chinese like to talk about “guanxi” (relationships), and “mian-zi” (to give face).

• “Guanxi” means relationship, any form of relationship. Once “guanxi” is established, it means constant cooperation and support is exchanged with one another. Basically, it goes as far as exchanging favours on a regular basis. The Chinese believe that by knowing how to make the right “guanxi”, it minimizes the risks, frustrations and disappointments of doing business in China.

• “Mianzi” means to give face. If you “give face” to someone, you respect that one person, and you will not do anything to embarrass them. If you don’t “give face” it means you don’t respect them, hence, they should no longer be in any association with you. It can be as absurd as not accepting a cigarette, meaning you don’t “give face” and thus you don’t respect them.

Developing Relationships (Guanxi)

Once you have developed a mutual relationship and cooperation with a Chinese businessman, it literally means you will support each other. “Guanxi” and “mianzi” are very important in China, not only with networking and doing business, but also in everyday life. PRC Study can help you establish and open up your “guanxi” in China, as well as teach you the morality of “mianzi”, and various aspects about doing business in China.

Basic Understanding of Mandarin Chinese

When doing business in China, foreigners often come across the same problems over and over again. The language barriers between English and Mandarin Chinese are completely diverse. Even if you hire a translator, would it not be better if you have some understanding of the Chinese language to ensure that the translator is at least translating what you are really trying to say? Therefore, it is really recommended that those doing business in China have at least a basic understanding of the Mandarin Chinese language.

Chinese Business Protocol

As for business ethics, men or women should never wear bright suits (to the Chinese it seems very inappropriate), and must develop good “guanxi” and give a lot of “mianzi” to show trust, appreciation, honor, and cooperation.

Starting Up a Business in China

To start up a business in China takes anywhere from one month up to 1 year, depending on the type of business one wants to start. There are 13 procedures to go through till you finish setting up a business. To start up a business, you must be obtaining the following items below before you can open your business to the public:

• A notice of Pre-Approval of the Company Name

• Opening a preliminary bank account

• A registration certificate “Business License of Enterprise Legal Person” with SAIC or local equivalent,

• Approval of making the company seal from the police department

• Organisation Code Certificate issued by the Quality and Technology Supervision Bureau

• Register with the local statistics bureau

• Register for both the state and local tax with the tax bureau

• Open a formal bank account

• Apply for authorisation to print or purchase financial invoices/receipts

• Purchase uniform invoices

• File for recruitment registration with local Career Service Center

• Register with Social Welfare

In the last two decades, no country like China has received so much coverage worldwide. Their economy expansion has attracted many foreign investors who want to get a piece of the growing economy. Furthermore, with regard to the WTO, China has been relaxing their restrictions on foreign investments regulations. This actually indicates that the government is supporting foreign investors to enter into the China market. China is placing more importance to the quality rather than the quantity of foreign investment. This shows the development of the China market where they are focusing on refining their economy as they expand further.

The growth of the China market is increasing as such a high speed that the number of foreign companies is flocking in each year. From 2001 till 2005, China has attracted 345.6 billion U.S. dollars in foreign investment more than the 323.3 billion dollars that poured in over the nine years from 1992 to 2000. China market’s appeal to foreign investors are growing at such a rapid rate that China’s economy is no longer just a production factory. Foreign companies are entering into China not only to produce their goods but also to selling their products to the local consumers. However, entering the China market needs a lot of tactics, networking, and familiarities.

1. Tactics

Many of the foreign investors who enter into the China market have a huge amount of experience in business administration and marketing strategies. However, the Chinese have a different way of doing business and most foreign companies do not have the correct tactics to deal with things in China.

2. Networking

Most people would agree that networking is very important for business dealings. With a strong network, we will be able to seek for help or consult someone if any problems were to occur. In China, networking or “guan xi” is one of the main methods which the Chinese use. “Guan xi” is the Chinese term that the locals use. The Chinese believe that everyone needs to establish good relationships with others. The only way to really survive in China is through “guan xi”.

Foreign investors may think that as long they have good business relationships with other organizations would lead them to be successful in China. However, this is only partially true. In China, any kind of relationships are important. Be it a personal or business or even governmental relationship, all of them are crucial in establishing a successful enterprise.

With good personal “guan xi”, the Chinese can rope in people whom they can trust into their business. The Chinese believe in having trust among their counterparts.

With good business “guan xi”, the Chinese would be able to negotiate easily and collaborate with others to ensure a lasting partnership with other parties. Having business “guan xi” would allow the local companies to meet more clients and suppliers to expand their business.

With good governmental “guan xi”, the Chinese would be able to settle their bureaucratic and administrative work faster as their contacts would be able to advise them on a personal level. Furthermore, any problems encountered with the paperwork, the Chinese would be able to seek help through their governmental relationships.

Thus, the Chinese value relationships very highly and even though their business with their contacts failed, the Chinese would continue to maintain a close relationship with them.

3. Familiarities

To enter into the Chinese market, one must have a good grasp of the Chinese culture. As different countries have their own unique way of values and working styles, lots of conflicts tend to arise due to differences. Thus, the foreign companies need to familiarize themselves with the Chinese culture and understand how the Chinese work.

For example, without a full understanding of how the Chinese handle with the authorities can bring a lot of problems to the enterprise. The way the Chinese communicate to the authorities differs from how the way it works in other countries such as the US and Europe.

Hence, one of the best ways to familiarize themselves with the Chinese culture is to engage a local individual or firm as the link between the foreign company and the China market. Local parties have the expertise to handle any problems and have a better idea on how to negotiate with the local firms.

China is the world’s forth largest economy. It is one of the top and fast growing markets in the world, with its annual GDP growth exceeding 9%. China has become a great business destination of the potent and prosperous multinational business corporations in last two decades. China is today remarkable country offering excellent business opportunities. It’s become a wonderful business destination for the world business community.

China is the most vibrant, dynamic trading economy in the developing world. Chinese business is growing tremendously and a number of foreign companies are rushing to china each year. According to some surveys, the Chinese business has attracted 345.6 billion U.S. dollars in foreign investment from year 2001 to 2005.

The swiftly growing Chinese market offers tremendous Chinese business opportunities to companies through out the world. Chinese business offers some fantastic advantages. It has easy access to raw materials and cheap labor and it is a monolithic and growing market for all types of products and services.

However, getting success in Chinese business needs a strategy, networking, and acquaintances. The Chinese have a different way of doing business and companies have to be acquainted with accurate tactics to handle things in China. Chinese business tactics involves honoring their superiors, staff and family. Drinking is also a very common part of the business deal culture. Be prepared!

Thus, any investor interested in Chinese business has to be respectful when dealing with the Chinese. Developing and implementing a winning Chinese business strategy needs a perfect, realistic understanding of both the risks and rewards. To have a good place in Chinese business market, it is crucial to establish a strong relationship and network.

The China market, similar to in countries such as South Korea, is just like a web which work efficiently on the basis of links and connections. Strong and healthy business relationship allow sharing Chinese business tactics and analysis with others and on other hand good governmental relationships help to deal with administrative and legal procedures. Investors or companies also need to familiarize themselves with the Chinese culture and understand their basic business strategies.

However entering the China business market is not an easy task. The government procedures in China are complex and a lot of paperwork confuses investors to deal with the authorities. The role of labor unions and works councils and rules regarding protection of intellectual property are also challenging in China.

A curious mix of communism and capitalism, China is certainly eager for your business. Take note though - success in this emerging economic powerhouse of nearly 1.3 billion people depends on how well you understand its protocols and customs.

American companies are rightfully nervous about doing business with China. Chinese culture is a complex mix of nuance and meaning. Most Americans don’t grasp these subtleties and some have paid a dear price for not having adequately prepared before they set foot on Chinese soil. In contrast, some Chinese view Americans as rich and powerful from whom they have the right to exploit. It is not the easiest business climate in which to stage negotiations.

Establishing trust between the two cultures starts first with forging a good working relationship based on common interests. Americans tend to get right to business. It’s our nature to push boldly into action, and while that usually works here at home, such an approach in China will almost always fail. For example, informal conversation usually opens business meetings. Discoursing on such subjects as how you’re adjusting to the weather, where in China you have visited, and your impressions of the city you are visiting, allows both sides to grow more at ease as the talk turns to business.

Recommendations on doing business with China

A 4,000-year-old society is bound to have thousands of cultural nuances but here are 12 tips for successfully conducting business in China:

1. The Chinese enter a meeting in protocol order and they expect that the first foreigner to enter the room also is the delegation head.
2. The leader of the visiting delegation sits to the right of the Chinese host.
3. The Chinese approach to business is subtle and indirect; be prepared to discuss intelligently non-business topics (like the Great Inventions of China).
4. In making introductions, note that the family name (surname) precedes the individual given (personal) name, and that married women do not use their husband’s name.
5. When speaking on business matters speak slowly and introduce pauses in your presentation to allow the interpreter to keep up.
6. Direct, negative responses are considered impolite. When in doubt, say “maybe” and clarify later.
7. Devise, share and stay on an agenda. Surprises are considered quite rude.
8. Banqueting is an art and very much a part of the business process. Drinking plays no small part, but you should not feel compelled to imbibe. Do participate in and return toasts with soda or some other beverage.
9. Theirs is a gift-giving culture. Seek expert opinions regarding taboos, government restrictions, etc.
10. Conducting business will almost certainly happen over lunch or dinner. You will be served by your Chinese counterparts. These are gestures of courtesy and respect from your Chinese hosts.
11. Tipping is not a common practice and can even be considered an insult.
12. Chinese etiquette calls for leaving some food on your plate when you have finished eating lest your host continue serving you. You will not offend your hosts if you decline to sample some of the more exotic local fare.

Remember, your goal is not friendship in the western definition — in fact such personal relationships are very difficult to establish. Rather, your measure of personal regard is defined by the working relationships you establish.

Just as you would hardly undertake an expedition without a guide, you would be wise to engage the services of an expert in Chinese customs before conducting business. Select consultants who offer cross-cultural programs led by experts with hands-on experience in specific business areas. For example, PALS INTERNATIONAL has a team of China experts that offers a full spectrum of needs, ranging from corporate briefings and cross-cultural training to negotiation simulations. Our consultants also can address intellectual property concerns and commercial supply chain risks in commercial, environmental, terrorism and criminal areas.

Engaging such experts who know the issues of doing business in China and how to best traverse them increases your odds for success in this vast, complicated but promising market.