Yee Trinh

What should one know about doing business with Chinese companies?

What should one know about doing business with Chinese companies?

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3 Answers

Heather Chai

Heather Chai , Head of Communications at Asialink Business

Hi Yee, great question! And certainly one that we get asked a lot at Asialink Business. In fact, we’ve written an entire comprehensive guide to help Australian businesses looking to do business with China (which you can find at https://asialinkbusiness.com.au/research-resources/china-country-starter-pack).China is a very complex market and building strong relationships and trust is crucial for successfully engaging with Chinese businesses. The Chinese are influenced by Confucianism, so respect for education, authority and age are big priorities for them. Within the Chinese culture value system, Confucianism’s core value of etiquette and politeness is a key foundation of business dealings in the country.Social etiquette and behavioural norms are important because they help to preserve a harmonious environment in which a person’s miànzi (面子)– face – along with their social standing and reputation can be upheld. One of the best ways to manage miànzi is not to demand ‘yes’ or ‘no’ answers in business meetings, but to accept the need for slow, consensual decision-making and relationship-building. Contradicting someone openly or criticising them in front of others will result in loss of face, and are sure ways to lose business and employees.Always be mindful of maintaining face and harmony with Chinese people through sincere compliments, showing respect, or other actions that tend to raise the self-esteem of others. You should particularly show respect to older people and to those in more senior positions than you.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 option for developing relationships!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.Business etiquette tips - Greetings and titles: When meeting Chinese business people, it is useful to know some Mandarin. Simple phrases can go a long way.Business cards: When presenting your card, do so with both hands holding the card in between your thumb and index finger at the top of the card with the Chinese face of the card up.Dress code: Conservative, unpretentious and modest clothing should be worn in China, particularly in the business environment. Guanxi: Often translated as “connections”, “relationships” or “networks”, none of these terms do justice to the fundamental and complex concept of guanxi and its central role in Chinese culture. Hope this answers your question. Get in touch with us at http://www.asialinkbusiness.com.au if you were looking for further resources.

Jef Lippiatt

Jef Lippiatt, Owner at Startup Chucktown

Definitely a lot of things to consider. Thanks for sharing... read more
Definitely a lot of things to consider. Thanks for sharing
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Greg Vekar

Greg Vekar , BDM/Design consultant at Vekar Design

The main issue with doing business in Asia is the lack of "Rule of Law". It's a bit wild west. There are of course exceptions to this, but short term gain is the main focus. It is seasonal thinking. This was a shock to me at first, as business academics like Hofstede propose long term thinking as dominant in Asian cultures. My observations and discussions with other operators is that this is the opposite, that many will sacrifice long term gain for a quick buck.

To do business one needs a trusted agent based on location. China is big. To check that the shipment is the right quality. They have a range of quality levels. One really needs due diligence at all times.

Contracts are only effective against the foreigner, they mean little to Chinese and Vietnamese. Relationships, or more importantly consequences of bad behaviour are more important. Without a fair judiciary system, the law is not really an option.

Of course there are so many opportunities in Asia and China. As Western Countries have been crippled by austerity measures, reducing consumer spending it's really the best place for business. It's exciting too. Just the other day I met the Viet Kieu mention by Obama in his speech. He has sold his business in Silicon Valley to start one in Vietnam. Most markets are immature and crave a more sophisticated approach. Currently the trend is to move manufacturing out of China to Vietnam, due to costs. Samsung just build their largest factory, Microsoft is doing the same. With all the trade agreements (FTA-EU, TPP, AEC) and growth of the middle class, the ASEAN area shows more promise.

For Australians, no one knows business in China more than Justin Richardson (https://cn.linkedin.com/in/justinrichardsonchina). He has been there for 18 years and speaks fluent Mandarin. Someone I have know since the 90s. I also follow Winston as he have some honest videos on living in Shenzhen. Like this one https://youtu.be/FXXQnyWRSSg

I am based in Northern Vietnam and regularly visit China.

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Jef Lippiatt

Jef Lippiatt , Owner at Startup Chucktown

I don't have any idea, but I am interested in hearing the answers!

Heather Chai

Heather Chai, Head of Communications at Asialink Business

Hope you find the response below useful, Jef... read more
Hope you find the response below useful, Jef
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