Chinese Business Culture

By: Alina Hoon

China is emerging as a global factory as more foreign investors are taping into its growing economy. Over the decade, China has grown tremendously financially with a GDP of $2.225 Trillion. (2005 Est)

However, despite the growing economy of the China market, many foreign investors are frustrated with the complications that come along. The locals in the China market have their own business style and many foreign investors find their years of experience in business administration failing in the China market. The China market may look like just a new emerging economy but one would need a lot of effort to enter into the China market successfully.

The Chinese business culture may seem complicated to the foreigners but all they need is to familiarize themselves with the culture and they would be able to understand how the Chinese carry out their business. Here are some guidelines on how foreign investors should do when entering the China market.

1. Understand China

The Chinese are very proud of their rich culture and their values have been passed down from generations to generations. Thus, the Chinese tend to carry out their business according to those beliefs and values.

Respect is an important virtue in China and thus, the Chinese business system involves respect to their superiors, staff and family. Thus, foreign investors have to understand that they need to be respectful when talking to the Chinese.

The Chinese are also very concerned about "face". The Chinese are very particular on how others perceived them and if they are criticized in front of others or their incapability and mistakes are exposed in public, the Chinese will be very embarrassed and they would feel that they are unable to face others with their incapability.

2. Guan Xi

Relationship establishment and networking are very important to Chinese companies. The China market is like a big web where everything works when there are links and connections. The Chinese believes that in times of trouble and needs, contacts would help them get help and resolve issues.

The Chinese uses the term "Guan Xi" when referring to network and relationships with others. "Guan Xi" refers to any kind of relationships whether it is personal, business or with any government officials.

Good business relationship with others will allow the Chinese to share business tactics and analysis with others. Good governmental relationships will help the Chinese with administrative and legal procedures.

Many foreign investors do not have the correct approach when they try to enter the China market. The China market may be full of complications but if foreign investors know how to work their way in the China market, they can have a successful entry into China.

One way to find out the correct approach would be to carry out research on China market and its consumers or to approach a local party or organization to aid foreign companies into entering the China market as the locals have a better understanding of it.