10 Business Etiquettes in China

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THE GLOBAL ENTREPRENEUR | CULTURE

With about 1.4 billion potential customers, constantly growing markets, exciting business environment, numerous regulatory reforms, China has become a very attractive business destination.

But China is a very tricky market.

There is a steep learning curve as you enter China because the Chinese lifestyle is different from the Western lifestyle. If foreign businesses don’t understand the business environment and the culture of China, they will struggle.

how to do business in China

In this article, we will explore the culture of China. By keeping an eye on these essential aspects of their culture, you can easily win the hearts of your business partners, clients, and even customers. Chinese people are like us: we all love it when a foreigner expresses an interest and appreciation for the culture of our home country.

If you follow these business etiquettes, you’ll have a much easier time in China. It all boils down to building guanxi, or connections.

1. Confucianism is valued in the Chinese culture

Confucianism have been the biggest influence on Chinese culture for thousands of years. 

Confucianism places the family in the center of social interaction. The people in the higher ranks have more rights than people in the lower ranks. 

Parents have more rights than children.

 Husbands have more rights than wives.

The older have more rights than the younger. 

Of course, this shouldn’t be taken too literally or in an extreme sense. It is better understood in this way: there is a system of social rankings that everyone is placed into.

There is a clear-cut set of rules for how people in each rank are supposed to act. And the very same set of values is still in place today despite the growing Westernization of the younger generations.

2. Guanxi is the foundation of all business relationships in China

One of the most interesting concepts of Confucianism commonly used in business is Guanxi.

Guanxi can be translated as “relationships, connections, networks”.

It includes everyone that we know: family, friends, acquaintances, business partners, even political connections.

If you can develop a lasting relationship with the right people, you will have a much easier time advancing on whatever path you took in life.

In the US and the Western world, this concept is not emphasized. Although we still have to rely on our relationships in one way or another, Western cultures still don’t value relationships as strongly as Eastern cultures.

Western cultures value individualism. Eastern cultures value the community.

In a country where interdependence and community values are so important like China, it makes sense why Guanxi is that crucial to business success.

In a way, guanxi prevents outsiders from getting in. Only those who have relations with the insiders can do business with them.

Guanxi is a representation of Confucianism’s values of solidarity, loyalty, and courtesy. If you have a lot of good guanxi, it means that you are a good and trustworthy person. On the contrary, if you have only bad, or no, guanxi, you are also a bad person, and shouldn’t be trusted in business.

This idea of Guanxi leads people in China to prefer long-lasting relations. They try to weigh the importance of the people involved instead of evaluating the importance of the deal.

If you are only focusing on achieving profitability, but neglecting to improve and consolidate the guanxi, then you won’t be able to do business with them for long.

Building guanxi is not difficult, Chinese believe. It involves having casual dinners, drinks, home visits, or golfing, depending on your social class and your budget. They will judge your personality and trustworthiness during these “guanxi-building” periods.

Acknowledging the importance of guanxi and working hard to cultivate it can be a major turning point for a Western business in China.

For example, it is wise to establish connections with business partners who appear to have good guanxi with their employees, customers, and other business partners. When you have guanxi with a reputable person, it is safe to deduce that you are also a trustworthy one.

Having guanxi someone that has political influence is even better because such powerful connections can come in handy in the future.

Westerners also have to show that they have rich guanxi networks and can provide something in return to their Chinese counterparts. The ultimate of making connections is to make even more connections. Guanxi builds guanxi.

It is not always the case in some regions, though. In places that have been highly Westernized like Shanghai, Beijing, or Shenzhen, Guanxi is much less appreciated. Be flexible. If your business partners express an interest to develop guanxi with you before signing the deal, so be it. 

3. Chinese society is heavily hierarchical

Asian cultures in general value hierarchy in both family and society.

There have to be divisions in all aspects of social interaction. These divisions determine a lot of things, from the way we act, speak, look, to even the hand gestures.

People are expected to behave in accordance with their social position. After all, China is among the countries with the strictest hierarchical system. Those who violate the system are heavily looked down upon.

The rankings in China are not based on achievement and accomplishment, but experience and, again, guanxi.

In a family, the children of older siblings have a higher rank than the children of younger siblings, no matter the age. In the corporate world, the more experienced, and sometimes the elder, are more respected than the young.

Seniority has a huge importance on the weight of your opinion. If you pay respect to people of the higher ranks in the company, you will be respected and valued, in return. However, if you don’t, there will be a lot of consequences.

They even have sayings that can be loosely translated as “Respect the elder, and you will be rewarded with a long life”.

Decisions and commands are passed down from the higher ranks to the lowers. The information does not flow freely. It has to be passed from department to department instead of flowing directly to the ones in need.

When the information flows back, it has to go in the same order. Senior managers and leaders don’t appreciate being contacted by lower-ranked members because it seems like a disrespect to them. A lot of valuable time can be lost this way.

Moreover, this hierarchy can lead to a lack of initiative at lower levels.

People have to bite their tongue and shut their mouth when they want to say something that is hard to hear to hear-hear to higher-ranked people.

If they have something that they need to say, they have to delegate it to people nearer to their ranks. These people will then transfer the information to the higher, and higher ranks until it reaches the recipient. This lack of initiative makes the working environment less innovative and creative.  

A lot of other social interactions are also hierarchy-based.

When entering the room, you have to enter in a hierarchical order. The same thing applies to getting out. Using the elevator, entering the car, or sitting at the dining table all have their own rules and orders. This complex hierarchy is opposite to Western values of independence and individualism. The attitude towards individualism in the West is not appreciated, as it shows a lack of respect for people around you.

People consider everything they do from a social perspective to avoid affecting others, especially when you are in the lower ranks.

The higher you are in the social ranks, the more advantages you have. You won’t have to follow as many rules as the lower-ranked people. Social interaction in China as well as other Asian countries demand you to notice even the tiniest details. Failure to follow those details can make others think low of you as a disrespectful person.

Chinese culture can dissolve your sense of self and your ego. You are no longer a separate individual, but a part of the community. You have to immerse yourself into the group and observe everyone else’s actions while adjusting yourself to fit in.

This culture can be suffocating, but it is, in some ways, an opportunity to develop a more careful and observant personality. Its main goal is to keep people in control of their behaviors and actions. Those rules help people think twice before they act, and society will be more controlled.

4. It's important to keep "face", or "mianzi"

“Mianzi”, roughly translated as “face”, is the “guiding principle of the Chinese mind”, as described by the influential 20th-century Chinese writer Lu Xun.

business etiquettes in China

“Face” is an interesting concept. It is associated with almost all aspects of Chinese social interactions. We can understand “face” as an individual’s social status, reputation, dignity, credibility, or respect. It is a compass that all Chinese use in their interpersonal relationships.

Mianzi is the building block of guanxi. 

If you want to establish guanxi with another person, you must protect their mianzi and give them mianzi. In simpler words, you must show them your respect and try your best to not humiliate or embarrass them in front of other people. By promoting trust and respect in the relationship, you’ll gradually build your guanxi.

So what is “protect mianzi” and “give mianzi”?

When entering an interpersonal relationship, we should acknowledge the social role that the other person assumes in relation to yours, and adjust ourselves accordingly. 

For example, a person with inferior status in the relationship shouldn’t display acts that downplay the importance of the person with superior status. If you show yourselves off too much, you’re essentially diminishing the other person’s mianzi. You are not protecting their mianzi.

A person with inferior status should display acts that show their respect for the superior person by giving mianzi. Gifts, compliments, and acts of gratitude give mianzi to the recipient. Once enough trust is built through various acts of mianzi giving, the guanxi is earned.

Mianzi is complex. One person can have high mianzi to one person but low mianzi to another. 

5. Informal Social Interaction in China

Guanxi building is crucial in China. And you can’t build guanxi in the office.

It’s not all about contracts and signatures in China and many other Asian countries. In the East, relationship building is more prioritized than the terms and conditions in the contracts. If you approach a deal without showing your enthusiasm to establish a relationship with your business partner, you’re not likely to get that deal.

And you should build that relationship through informal social interactions.

Giving gifts, inviting your business partners out for dinner or a drink, golfing, and inviting to events are common activities that Chinese people use to build guanxi. However, there are a lot of cultural nuances and traditions that you should keep in mind as a way to show your respect for the Chinese culture.

6. Gift-giving in China

Gift-giving is an important business etiquette in China. However, the important thing is how you give, not what you give. The same gift can show respect, commitment, and enthusiasm in the relationship if given correctly, but can totally embarrass and humiliate the recipient if done improperly.

Most of the time, the recipient won’t accept the gift immediately. They will try to refuse your gifts. Deep down, they want to receive the gift, but they’re trying to show that they’re not a greedy person. By doing that, the gift-giver will also have the opportunity to show that they genuinely want to give the gift. Usually, the gift is refused up to 3 times before being accepted.

A gift should not be opened in the presence of the gift-giver. Public gift-opening can damage the mianzi of the gift-giver. Even kids are taught to not open whatever they are received in public. If you want to open a gift, you should go somewhere private and open it all by yourself.

 Try to associate your gift with the right number:

  • Number 1 is written as a dash, which represents unity, whole, uniqueness, specialness
  • Number 2 represents double, harmony
  • Number 3 represents stability
  • Number 4 represents death because its pronunciation is fairly similar to the word “death” in Chinese. Try your best to avoid anything associated with the number 4, such as not giving anything packaged in 4. 
  • Number 5 represents “me”, “I”, “myself” because its pronunciation is fairly similar to the word “I” in Chinese
  • Number 6 represents “smooth”, “good luck”
  • Number 7 represents “holiness”
  • Number 8 represents “wealth, happiness, success”, and is the best number in China. Try to display your gifts in a way that evokes the number 8. You can also combine several lucky numbers to create a sequence of “good fortune”, such as “888” or “6868”
  • Number 9 represents “longevity, eternal”, and is also associated with fortune

When giving the gift, try to be humble. Don’t act as if you’re giving the gift in exchange for a favor. Give the gift as a form of “appreciation” for the recipient. 

Avoid gifting watches, umbrellas, handkerchiefs, or white flowers. These objects are given to people attending a funeral, so they are associated with death. You’re going to cause a lot of trouble with those kinds of gifts.

7. Show your patience and calmness

business etiquette in China

The Chinese culture and Asian culture in general values patience. Those who watch their words and acts are seen as more educated and well-mannered. 

Chinese business people don’t tend to rush into decisions, which is totally opposite to the cut-throat approach that many Americans take. Guanxi building is a requirement before any deal is signed. There have been cases when the Chinese side refused to sign the deal simply because the Americans didn’t express an interest in establishing guanxi with them. 

Take your time. Discuss the necessary, but do not expect them to reach a decision immediately. Show them that you want a long-term cooperation, not just in business, but in any other area of life. They don’t take time as seriously as people in the West, so try to familiarize yourself with that.

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8. Follow the ceremonial rules

There are a few basic ceremonial rules that you must keep in mind before going to China:

  • Nods and bows are very common. These gestures are used in formal situations, especially official business meetings. When shaking hands, remember to let your Chinese counterpart initiate.
  • A few greeting expressions you need to know: “你好” (nǐ hǎo) means “Hi” or “Hello”. “很高兴认识你” (hěn gāoxìng rènshí nǐ) means “Nice to meet you”. “幸会” (xìng huì) means “I’m charmed to meet you”. “久仰” (jiǔyǎng) means “I`ve long been looking forward to meeting you”. Remember to pronounce them accurately. As long as you get it right, you’re going to make quite a good impression on your Chinese business partners.
  • Accept business cards with both hands and a slight bow
  • When chatting, avoid sensitive topics such as politics
  • When dining, wait for the senior to get seated first
  • Don’t start eating until all of the seniors have started
  • Don’t finish all of your food, but leave a little bit on your plate.
  • If you’re the one that invites the other one out for a meal, pay the bill
  • Learn how to use chopsticks
  • Never stick your chopsticks straight up in your bowl of rice. Straight-up chopsticks in a bowl of rice indicate that that bowl of rice is reserved for the spirits in a funeral.
  • Accept gifts with both hands

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9. Chinese people have a relaxed attitude towards time

In Western culture, we want to get things done quickly. We approach everything with the mindset that “time is gold”. We want to make use of every single second. Opportunities should not be missed.

People in the East don’t think so. Considering the complex system of hierarchy in place, the importance of guanxi and mianzi, and the deep-rooted values of Confucianism, Chinese society doesn’t want to be hasty.

Sometimes all you have to do is go with the flow. Chinese people look at Americans and think that they’ve got to calm down a little bit and let time take its course.

If you show anxiety and haste, Chinese counterparts are going to think of you as untrustworthy and impatient.

Chinese people also don’t take schedules that seriously. They believe in a relaxed approach towards deadlines. When setting a deadline, choose a date that is reasonably far away. Accept that it’s just the Chinese way, and flow along. No hurry. In the process, you might learn something about your Chinese counterpart that you might have not known if you rushed in too quickly.

10. Get to know China's culture, especially important holidays

If you want to be relevant with Chinese customers, you need to understand China’s culture.

A good way is to understand the Lunar Calendar.

A lot of traditions and customs were based on the days of that calendar, including their New Year, their Mid-Autumn Festival, and their Full-Moon celebration.

If you want to reach your Chinese customers and connect with your Chinese business partners, take some time to read up on the traditions and days that Chinese celebrate, and plan your business activities accordingly.

If done properly, you can win over your Chinese clients They love foreigners who show an appreciation and respect for their culture.

Conclusion

China is indeed an interesting market to explore, but there are challenges that aren’t easy to overcome. The Chinese culture is complex, but it’s very fascinating and worth exploring. Just keep in mind these key points:

  • Understand Confucianism
  • Respect the social hierarchy
  • Build guanxi with everyone
  • Protect and give mianzi to your business partners
  • Don’t criticize anyone publicly
  • Be considerate and genuine when giving gifts
  • Express an interest in building a relationship with your business partners 

Do you have experience of business etiquettes in China? If you do, feel free to share with us your thoughts! We’re eager to hear a few thoughts from you.

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