Respect is a fundamental building block of business. When conducting business in China, this truth stretches even further.Underpinning the business world is a concept termed “Face”. Summarised, Face is effectively a level of reputation. It can increase and decrease, and is a measure of how others view you. Through actions such as a manager dressing down an employee one would lose Face. On the other hand, if a manager praises a worker’s efforts they would then gain Face.
This concept is deeply rooted into Chinese culture. As a foreigner, you may be given a little be more leeway when it comes to following local customs. However, you will still be expected to follow them, and if you do not follow the concept of Face your business trip may be ruined. The power of face has the ability to fracture business relationships, make negotiations go sour, as well as close previously open doors.
Remember, when in another country, you should be polite by following the differing culture.
Negotiations for Business in China
The act of negotiating and reaching the conclusion of a business agreement is no quick task. In China especially so. Forming relationships is key to getting your foot in. The end goal is usually the main concern for Western companies, whereas in China the overall journey is more important. Guanxi is another concept similar to Face which is important. Effectively, the term refers to personal connections and relationships. It is about who you know, not necessarily what you know. Chinese companies prefer to deal with familiar parties. To be able to set up a meeting and negotiations to proceed, Guanxi comes into play. You may need a referral or an introduction to a client before they will consider you as a business partner.
Due diligence is important. More so in China than you may expect. Ensure you take the time to receive appropriate legal advice from a representative familiar with Chinese business laws. Extended this to protecting your intellectual property as well. Protect your IPR when dealing with unknown parties. IPR infringement is uncommon, but does exist. Regardless take suitable precautions. Registering your IPR within China is a great start. Before entering into any business contracts seek professional legal advice.
Venturing into the unknown can be exciting and scary. Experience can make anyone feel at ease. Having a professional firm to guide you along is generally worth the price. Not only do you learn quicker, you also receive the advice of industry experts familiar with the market.
Across the course of this article we have touched on a few important tips to keep in mind. Business in China is different than the West. Business trips to China would require carefully preparation. The aspects touched upon within this article are detailed more in depth on our Trade Wiki. If you are planning on travelling to China or simply interested you will find plenty of help and advice there.