Making Chinese Connections

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An introduction to 'Doing Business in China'

The most important factor to consider when approaching the Chinese market is the need to develop a relationship with your prospective partners or buyers. Often this means devoting time on identifying an agent or dealer who already has the desired relationships. In the western world one is aiming to get the business done and then perhaps develop friendships afterwards. In the East, and in particular in China, connections (guanxi) need to be made first, and those connections worked on to such an extent that the business follows almost automatically. This all takes time, and inevitably means visiting, entertaining, and often working through agents; all of which involves costs. Essentially this is all about developing trust so that there are no surprises when it comes to a 'crunch'. Traditionally Chinese are unconvinced about the protection of legal contracts, and therefore prefer to work through established friendships based on mutual trust. This means you should go light on lawyers, at least at first. If you have to resort to the courts this will probably mark the end of the relationship and the business.

One of the most important facets of Chinese culture is the achievement of harmony. This means you should try to act and behave in such a way that confrontation is avoided. It does not mean that you should be weak in negotiation, or fail to make clear the limits beyond which you are not prepared to go. However, if hard messages have to be delivered use a go-between, or at least couch them in polite language. Be sensitive to the Chinese concept of 'face', and avoid any possibility of what they may interpret as a humiliating situation. Sometimes it is difficult to understand what might cause offence, and the best rule is to exercise courtesy at all times and always ask yourself "if I say or do this will the other side feel comfortable?" If a senior Chinese negotiator loses 'face' you will in all probability lose the business.

If you are selling there will be an initial period when they will try to learn all about you, your company, and your product. The hard commercial bargaining will come later. Pace your negotiations accordingly, and never give your last price first!

Do I need to speak the language? Chinese characters (writing) are ideograms and can therefore be read across China. However for the spoken word there are many dialects, most of which are unintelligible to each other, but mandarin (putonghua), the official language, is understood by a majority of people. Like all tonal languages it is not easy to learn, however if you can pick up a few everyday phrases and greetings this will be much appreciated. More important is always to make use of the very best available interpreter. They are relatively inexpensive, and it is essential to realise that your message is no better than what your interpreter makes of it. Equally whenever possible get any translation work, on for example your sales literature, done in China itself to avoid stilted or out of date idioms.

Being prepared is, as always, a key ingredient to successful business relations. Farnham castle offers a complete range of training programmes designed for every aspect of conducting business in China. Contact us now to discuss your specific requirements.

Bruce Tremayne was Deputy Chairman and Marketing Director for Shell companies in China and Hong Kong from 1991-93. On his return to the UK in 1993 he became the Department of Trade and Industry Trade Promoter for NE Asia (China, Hong Kong, Macau, Taiwan and Korea). A key speaker at Farnham Castle, he is now a consultant specialising in business strategies and implementations in China and the Asia Pacific Region, and continues to travel to the region on a regular basis.