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Business Culture & Etiquette in China

In a few short years after Deng Xiao Ping liberalized the Chinese economy in 1989, China has raced from a third world country to jostle for position as one of the world's most influential economic power.

China has awakened. Improved international relations, government reforms, an expanding economy and increased foreign investment make doing business in China a potentially lucrative affair.

China is now one of the fastest growing markets in the world and is becoming the global factory floor.

Interested in a culture of the Chinese nation that constitutes one-fifth of all the people in the world?

In China, it is important to be aware of significant cultural features. Apart from having a general understanding of the historical and cultural background of the country you are dealing with, the more commonplace business culture in Chinese countries includes toasting at banquets, handclasp, swapping cards and after-dinner activities such as singing at Karaoke clubs.

Gift Giving & Gifts to Give

Gifts are very important and are normal Chinese business practice.
Only small gifts are necessary (e.g. bottle of alcohol, carton of cigarettes etc.). Lavish gifts may indicate that a special favor is expected in return, so beware.
Foreign cigarettes, cognac, fine whisky, quality wine.

If is appropriate to bring a gift, particularly something representative of your town or region, to a business meeting or social event. Gifts indicate that you are interested in building a relationship. A gift should always be wrapped, but avoid plain black or white paper because these are the colors of mourning.

Present the gift with both hands as a sign of courtesy and always mention that this is only a small token of appreciation. Do not expect your gift to be opened in your presence. This indicates that it is the thought that counts more than the material value.

Chinese people decline gift three times before accepting, be sensitive to genuine refusals. They do not open gifts when received. Do not open gift unless they insist.

Never give a clock, handkerchief, umbrella white objects or white flowers, cut flowers, specifically chrysanthemums, as a gift, these object carry association or signify tears and/or death. To give a clock" is the homonyms of "see you on your final trip to the cemetery or funeral home."

Don’t give food items suggest poverty.

Wrap gifts; red and gold are best wrapping paper.

Don’t use red ink to write.

Never give sharp objects such as knives or scissors as they would signify the cutting of a relationship.

An unlucky number is 4. "Four" sounds very much like death; eight sounds very much like "get rich fast". Lucky numbers are 6 and 8 (especially in a series, such as 66 or 888). Car licenses with good combinations of these characters may cost more than the car.

Social Events:

At a formal banquet, be prepared to give a brief and friendly speech in response to the host's speech.

When inviting Chinese to a party, serve a "real" meal rather than snacks and drinks.

Eating and drinking play a key role in business in China, and it is often during dinner that the most important business relationships develop. When invited for dinner, it is considered to be proper etiquette to sample every dish served. Your host may serve some food for you, and it is nice to reciprocate, if you feel comfortable doing so. Always leave something on your plate at the end of the meal or your host might think that you are still hungry.

Do not try too hard to "go Chinese." Chinese do not expect you to know all of their etiquette, and they make allowances for foreigners. Keep the above guidelines in mind, but above all, be yourself.

Meet them half way culturally. Although there is truth in the saying "In Rome, do as the Roman does", you cannot give up your own culture. People would wonder why a person would do that. It may even invite contempt. You cannot insist on behaving as if you are still within your regular circle. That strike people as arrogant.

Chinese businesspeople will react unfavorably to a person they consider to be ill mannered, inconsiderate or conceited and welcome someone who is honest, courteous and determined in approach.

Also, avoid telling American-style jokes, because jokes sometimes do not translate across cultures and can cause confusion or hurt feelings. Avoid talking politics or religion. Good topics: Chinese food, sports or places one should visit.

Business Meeting:

In China, it is assumed that the first person that enters the room is the head of the group. Americans should observe this convention so as not to confuse the Chinese. Important guests are usually escorted to their seats. If the meeting room has a large central table, the principal guest is likely to be seated directly opposite the principal host.

Meetings begin with small talk. Resist the temptation to get down to business right away.

Negotiation Meeting:

In most negotiating sessions, businesspeople will speak both their native language and English. Western negotiators should therefore have available a native speaker on their team. Negotiations really only begin as the venture progresses, and the real substance of the relationship develops as the two parties negotiate issues and events, which arise on a daily basis.

Chinese negotiators have a reputation for being forceful, determined, and willing to take advantage of any weakness or opening. In order to negotiate successfully in China, Western companies should be sensitive to morals, behavior patterns and psychology, as well as business matters.

For substantial investments, on-the-ground representation is particularly crucial to success.

The following is a list of points that companies doing business in China should consider, and tactics they should expect to come across during negotiations:

Avoid embarrassing people and causing them to lose face in the presence of others. If possible, criticize in private, or even better, use an intermediary to convey.
Conduct a feasibility study on the Chinese company prior to your first meeting. Research current economic conditions and government policies as thoroughly as you can.
Good preparation is essential in order to achieve an acceptable result. Expect your opposition to know your company, your products and the industry and to ask penetrating questions.

Business Cards:

Bring a large supply of business cards. You may meet many more people than anticipated.

When exchanging business cards, hold out your card using both hands with the writing facing the recipient. Present business card with both hands don’t put it away and scan it immediately for vital information. Then lay the card in front of you on the table. hold it and when sitting down put business card on the table.
It is demeaning to put someone's card directly into your pocket without looking at it first.
Cards should always be exchanged individually (one-on-one). Never toss or "deal" your business card across the table, as this is considered extremely rude.
Don’t use the term comrade in China
Call them by their first name
Personal questions are asked (this done to seek common ground)
No touching like hugs or arm around the shoulder
Personal space in China is closer than the Western norm.
People of same sex walk hand in hand (sign of friendship)
Clean plate means you are still hungry
Don’t pour our own drink
Drinking alcohol is very important. (to get out of it medical reason is great).

Getting to know each other

Resist the temptation to get down to business right away.
Don’t like to do business with strangers they do go betweens
Chinese cultures place an emphasis on establishing a relationship, and so will focus on learning about your company before concentrating on the agreement.
Like formal introduction (standing up and keep standing through introduction)
Don’t show excessive emotion when introduced (don’t mistake that for unfriendliness)
Handshake and maybe bow from the shoulders.
Chinese avoid direct contact.

Greetings

The Chinese way of greeting is a nod or slight bow. However, when interacting with Westerners, Chinese usually shake hands. Bear in mind that a soft handshake and a lack of eye contact do not necessarily indicate timidity. It only implies that the person is not accustomed to the firm handshakes commonly used in the West.

Address a person using his or her family name only, such as Mr. Chen or Ms. Hsu. The Chinese family name comes first and is usually one syllable. A one or a two-syllable given name follows a family name. For business purposes, it is traditionally acceptable to call a Chinese person by the Last Name, together with a title, such as "Director Wang" or "Chairman Li."

Avoid using someone's given name unless you have known him or her for a long period of time. Formality is a sign of respect, and it is advisable to clarify how you will address someone very early in a relationship, generally during your first meeting.

Do not try to become too friendly too soon, and do not insist that your Chinese counterparts address you by your given name. The American pattern of quick informality should be resisted.

The Chinese point at objects with an open hand instead of the index finger. Beckoning to someone is done with a palm facing down. Avoid beckoning with your index finger facing up.

Keep in mind that in China, and virtually all other countries, that 23/1/08 means January 23, 2008. When sending correspondence, avoid confusion by writing your date in full.

Source: Based on various Field research and official documents.

Do learn a few words of Chinese. This shows an interest in your host's language and culture. It also is a very good icebreaker.

Useful Chinese Expressions
Hello . . . . . . . . . . . . Nee Hao
Hello (honorific) . . . . .Nin hao
Thank you . . . . . . . . .Shay shay
Cheers (toast) . . . . . ..Gan pei
Goodbye (honorific) . . Jai jian

Click on the map to Enlarge the China Dialects Map (Including Dialect Groups)

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