Doing Business in China

Doing business in China can be an exciting opportunity, but it comes with challenges. As one of the world’s largest economies, China has a rich history and plenty of business potential. If you're a Western expat, adjusting to Chinese culture may be difficult. Many people find that cross-cultural training helps make this transition easier.

Doing business in China isn't always straightforward. The government can feel overwhelming, and the language barrier can be hard to overcome. These challenges cause some expats to leave before their contracts are up. The visa process can be complicated, and starting a business can be expensive.

Despite these difficulties, more and more foreign workers are coming to China every year, eager to find success in this growing economy.

Fast facts

Business language

Mandarin is the official language of business in China. If foreigners don't understand Mandarin, it's considered polite to supply their own interpreter at meetings.

Business hours

Business hours are usually from 8am to 5pm or 6pm, Monday to Friday, with an occasional break from 12pm to 2pm. Some companies require work on Saturdays. 

Business dress

Business attire in China needs to be formal and subtle. Bright colours are inappropriate, and modesty is key. Flat shoes are the standard for women and are generally a good idea for expat women who are taller than their associates.

Greeting

Use titles and family names when greeting Chinese businesspeople (this can be confusing, as names are traditionally reversed from the Western order). Contrary to popular belief, bowing isn't normally done outside certain ceremonies and a nod will often suffice. It's also good to wait for the other person to initiate a handshake.

Gifts

Gift giving is common practice, but traditions are changing. Official policy forbids bribery, so gifts may be declined. A good policy is presenting a symbolic gift to the company, in which case it's presented to the most senior person available. You should avoid expensive gifts, as they create the obligation for reciprocity.

Gender equality

Although women have historically been viewed as subordinate, work opportunities have grown, with more women visible within executive positions in Chinese business.

Business culture in China

Guanxi

In China, personal relationships are key to professional success, so it’s important for you to understand the business culture, especially the concept of guanxi. Guanxi refers to the relationships you build with others in business and the process of maintaining them.

Many early business meetings in China focus on building these relationships. The goal is for both parties to be able to rely on each other for support or favours. If you do something for someone, they will likely return the favour later.

Guanxi is all about trust, and without strong relationships, you may struggle to succeed. You can maintain guanxi by exchanging gifts, being flexible in negotiations, or inviting business partners out for meals.

It's also essential to be patient and not rush decisions or negotiations. This is a crucial part of doing business in China, and while it may be slow at times, the long-term rewards are worth the wait.

Saving face

'Saving face' is closely tied to the concept of guanxi, or relationships. 'Face' is divided into two parts: mien-tzu, which is about reputation and success, and lien, which relates to a person’s integrity and moral character.

It's important not to embarrass anyone in public. You should act with dignity and in a way that matches what is expected of your role in Chinese society. Causing yourself or someone else to lose face can harm business relationships.

As an expat, you’ll need to balance guanxi and saving face carefully, especially for legal reasons. Building close relationships and giving gifts can be tricky, as there’s a fine line between showing goodwill and crossing into bribery.

Hierarchy

Hierarchy and seniority are also key elements of Chinese business culture. Elders and senior associates should always be given respect, which is done by avoiding eye contact and showing deference at meetings.

Attitudes toward foreigners in China

Chinese companies are often eager to work with Western businesses. Unfortunately, there is sometimes a degree of distrust, at least partially because of the country’s troubled history with the West and political differences. But foreign businesspeople who try to respect and understand Chinese culture are better regarded than those who expect to be accommodated.

Dos and don’ts of business in China

• Do acknowledge senior associates first
• Do make every effort to avoid offending or embarrassing Chinese associates in public
• Don't be offended by personal questions
• Do say “maybe” or “let me think about it” rather than a flat “no”
• Don't make remarks about communism or discuss Chinese politics
• Don't gesture with your hands when talking
• Do exchange business cards at every introduction. Ensure cards include the business title, as well as a Chinese translation on one side of the card.