China

Country starter pack
Conducting business in China
65
Having chosen your strategy for establishing your business,
you must consider how to conduct business in China.
This includes understanding Chinese business etiquette
and culture, developing business relationships, choosing
business partners, negotiating, holding meetings and
carrying out due diligence.
4.1 CHINESE CULTURE AND
BUSINESS ETIQUETTE
The Chinese are strongly influenced by Confucianism,
which emphasises respect for education, authority and
age. Although modern urban Chinese may not adhere to
Confucian principles as rigidly as previous generations,
these principles continue to underpin many customs and
business practices. The deeply rooted importance of family
and respect for parents is still very apparent today. The
Chinese have a saying: fù zhī guò ( 父 之 過 ) meaning it is not
your fault, but rather placing the blame and therefore the
shame on your parents. However, the significance of the
opinions of peers is growing, particularly with the one-child
policy generation. This also ties in with China’s ‘collectivist’
philosophy, which emphasises relationships, looking after
each other, sharing responsibility and that everyone is a
part of a hierarchy. The need to belong to and conform to
a unit – a family, a political party or an organisation – is
a fundamental element of modern Chinese culture. This
often translates into the Chinese business culture, in which
people highly value positions of authority, the maintenance
of harmony via saving face, and the feeling of belonging in a
workplace that is comparable to a family environment.
Building good business relationships and trust are very
important in China, so expect to spend plenty of time
at meetings and banquets with your potential business
partners. Often these will be done out of business
hours with karaoke (KTV) being a favourite medium for
developing relationships or at business dinners. Chinese
business people prefer to establish a strong relationship
before closing a deal and never start a discussion or
meeting by getting straight to the point about business.
Like other East Asian cultures, the Chinese like to develop a
personal connection first. So expect to be asked, and to ask
questions, about family. Try to find a connection with your
Chinese counterpart and make a note to remember it. For
example, if they have a son, remember his name and ask
each time you see them how he is.