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68 Country starter pack Conducting business in China CASE STUDY Orient Group Christopher Neil, Managing Director Speaking the local language – whether a few words of Mandarin or simply understanding the Chinese way of doing business – is a huge advantage for foreigners trying to move into the Chinese market, according to Orient Group’s Australian managing director Christopher Neil. “I’ve listened to so many speeches here in China and someone gets up on stage and even if they say ‘nihao’ or a few words in Chinese the audience loves it,” Neil says. “They love that someone’s making an effort, it doesn’t matter if they make a mistake as long as they’re giving it a go. They really respect that.” Orient Group helps foreign organisations entering the Chinese market, conducting due diligence, facilitating partnerships, and also working with Chinese companies operating overseas. Its International Properties Luxury Lifestyle division offers property investment and immigration services to Chinese buyers. Neil is a 20-year veteran of the Chinese business world and says Australians entering the market need to seek good advice, team up with the right people, and take it slow. “We have a problem in the West of trying to get down to business too quickly. It’s important to get to know the people you’re doing business with, get to know their family and understand what motivates them. If you don’t understand them you’re just trying to sell them something, and you have to have something pretty damn good for them to buy because there are so many competing products in the market.” “You have to respect China and the Chinese, it’s one of most important things, you have to be very humble in your approach, and you have to be patient. It can take some time to get an understanding of the market and trust from the market, to build your brand up. “Australia has a very good image in the Chinese market, a very clean, green, organic image so you have to market that and trade on that Brand Australia that we have.” www.Orient-Group.org
Country starter pack Conducting business in China 69 4.2 BUILDING RELATIONSHIPS WITH THE CHINESE Investing in relationships is critical to succeeding in China. The strength of business relationships can determine many aspects of commercial life, including gaining credit, procurement and contracting, and the timeliness of bureaucratic processes. Investing in business relationships often involves large amounts of face-to-face time with a person of similar age and status, with a strong emphasis on loyalty and trustworthiness within the relationship. Australian businesses should also explicitly consider the impact of age, gender, educational and marital status on the formation of personal and commercial relationships in China. For example, younger people are often excluded from decision-making processes in China, and are expected to defer in language and attitude to older people. General knowledge of China: Relationships can be aided and built by some general knowledge of China and its culture; it can assist to establish an immediate connection to a new Chinese contact. For example, an ability to demonstrate knowledge of Chinese geography when someone tells you where they were born could immediately give them more trust in you and lead to them being more open in communicating than they otherwise might be. Travelling around China to develop a connection with the country could therefore serve you well in a business context. Formal introduction: With the emphasis on guanxi, Chinese prefer to do business with people they have a personal connection with. It can help if you are introduced to a prospective business associate through an intermediary. The higher the social status that your connection has, the more successful you are likely to be at being introduced to the right people and key decisionmakers. Conscious effort: Relationships in China are more trustoriented and personal than relationships elsewhere, therefore a conscious and continued effort is required to develop and maintain them. It will require frequent visits, almost daily communication (preferably CEO/ company director to CEO) and plenty of socialising. Always stay at least one night in each Chinese city where you have a meeting to allow for social events. After you have established your business, you should still send the most senior executive you can to conduct business in China to avoid insult and to nurture and sustain positive relationships. Gifts: Giving gifts is an important aspect of doing business and building relationships in China. Australians should provide at least some overtly ‘Australian’ gifts, such as koala toys. Gifts that have your company emblem will also be well received. Gifts should be given and received with both hands and should not be opened in the presence of the provider. It is wise to carry several gifts with you on your trip to China for unexpected meetings. When you receive a gift, you should generally reciprocate with a gift of a similar value. Therefore, try to avoid giving expensive gifts that will make the receiver feel obliged to reciprocate. Gifts are best wrapped in bright colours such as yellow or red, not dark colours in sets of four, or red writing as these are seen as symbols of death. The same applies to knives and scissors. You should also note: • Be prepared to exchange gifts with your Chinese business colleagues at the initial meeting to prevent the business relationship starting off on the wrong foot. • You may want to give a gift from your company to the host company. This should be presented to the most senior delegate. • To give individual gifts to the Chinese delegation – do so in the order they were introduced to you by. It is always best to either give gifts to all the delegation or, if you do not have enough, only to the most senior person. • Older Chinese usually refuse a gift at first to be polite so ensure you offer a second time. • Always bring a small gift (such as chocolates or cakes) for the hostess if you’re invited to a person’s house. Dining and entertainment: Once you have established relationships in China, you are likely to be invited to dinners and other forms of entertainment including golf, nightclubbing or karaoke. If you are invited for dinner at a business contact’s house (which is generally a reserved honour) – arrive on time, remove shoes before entering and take a gift. Karaoke venues normally have a good selection of English songs, and almost everyone is expected to sing and give a performance. Businesswomen attend such events but spouses are not usually included in business entertaining; however, business people may bring their secretaries. Dining is commonly used to gently probe positions without any formal commitment. Business is generally not discussed during meals; the focus is rather on building trust and relationships. However, business may be discussed if your Chinese counterpart initiates it. Business breakfasts and lunches are becoming more popular in parts of China, but they are generally seen as less important than dinners. So if you want to impress your Chinese counterparts, ask them to dinner. If you attend a working lunch, be aware that they are more formal than in Australia and are more similar to an Australian dinner meeting.
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© August 2015, Asialink Business.
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China

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