Business Etiquette in China
Most of us have heard the old saying, "When in Rome, do as the Romans do." Thus, if you are planning to do business in China, it would be to your benefit to learn the proper protocol of the country. The following are a few pointers and tips that you might incorporate into your business strategy.
The official language in China is Mandarin (putonghua), although Cantonese is the language commonly spoken in the southern Chinese province of Guangdong, adjacent to Hong Kong.
English is not widely spoken in China, however most companies dealing with foreigners employ at least one Chinese-speaking staff member.
If you intend to distribute written information about your company while in China, it is a good idea to provide your Chinese counterparts with written translations of the material. It is not necessary to reprint all documents using Chinese text, but you need to provide word-processed translations of the most important material. Often senior decision-makers in a Chinese organization are unable to read English and the effort put into obtaining translations will be interpreted as an indication of your commitment to doing business with their company.
Business cards are essential when conducting business in China. When distributing or receiving business cards, use both hands as a mark of respect.
When receiving business cards, always pause and read each card individually. Never place the card immediately into your pocket or wallet. Cards printed in both English and Chinese are preferred.
It is essential to understand the concept of "face" when conducting business in China. Chinese people regard the respect of their peers and colleagues as a matter of utmost importance. Conversely, to be humiliated or embarrassed in public is regarded with great shame.
This respect or status is regarded as "face". It is very easy for a Chinese person to "gain" or "lose" face and foreigners conducting business in China must remain aware of the public image of the people they deal with.
In many respects, face is merely a matter of common courtesy. It is possible to give a person face by presenting prestigious gifts such as expensive, famous-brand liquor or cigarettes, by publicly praising good performance and by giving credit where credit is due.
Difficult situations must be handled delicately and without anger. To shout at a Chinese person in public, to reprimand them in front of their peers or to raise one's voice when exasperated will cause both parties to lose face and disrupt the negotiating process.
Confrontations that place a Chinese person on the spot should be avoided and resolved quietly. When necessary, always refuse requests or invitations indirectly to avoid embarrassment.
The concept of "guanxi" lies at the heart of the Chinese business relationship. In Chinese, the word means "relationship" and can be summed up by the English terms "it's not what you know, it's who you know," or "you scratch my back, I'll scratch yours."
Essentially, to have "guanxi" means to have a network of useful contacts. It also means a relationship where the parties are bound by personal obligation to assist each other. Having "guanxi," or a contact in an organization, business, or government department can open doors to foreigners conducting business in China.
Chinese people are not as formal about business attire as in Japan or Korea. However, it is usually advisable to wear a suit because the wearer gains face if well- presented.
FOOD AND ENTERTAINMENT
Dining out is a popular method of establishing guanxi. Chinese business negotiations are often conducted over a long multi-course banquet. Large quantities of alcohol are usually consumed at these business functions and drinking is regarded as a useful social lubricant.
Karaoke is a popular form of recreation for Chinese people and foreign business guests are encouraged to participate.
China's official unit of currency is the yuan, or Renminbi. The yuan is divided into jiao and fen. Ten fen make one jiao and ten jiao make up one yuan.
Foreign currency and travelers' cheques can be changed at the main branches of the Bank of China, the tourist hotels, Friendship Stores and some department stores. Exchange receipts must be kept if your remaining RMB is to be changed back at the end of your trip. Travelers' cheques are useful because the exchange rate is more favorable than that for cash. Thomas Cook, American Express and Bank of America are most commonly accepted.
Credit cards are gaining ground in China, with Visa, MasterCard, American Express (branches in Beijing, Shanghai, Guangzhou and Xiamen), and Diners Club the most common. Cards can be used in most mid- to top-range hotels, and Friendship and department stores, but cannot be used to finance your transport costs. Cash advances can be made at head branches of the Bank of China (4% commission).
Tipping is not customary in China, but bargaining is definitely OK. You can bargain in shops, street stalls, and hotels ¨C but not in large stores.
POST AND TELECOMMUNICATIONS
Try to send and receive mail from major cities where postal services have recently been upgraded and are now quite efficient.
Most large hotels have an international telephone service from which calls can be placed overseas. In some hotels, local calls can be made for free from your hotel room. In large cities such as Beijing and Shanghai, modern international phone facilities are attached to selected post offices.
Most Chinese names are three syllables long and Chinese surnames come before given names. Hence, a Chinese man named Jiang Li-hua should be referred to as Mr Jiang. A few Chinese people use an English first name when conducting business with foreigners.
In Beijing, the international airport is located approximately 25 kilometers from the city centre. A cheap $US1 airport shuttle bus travels the route and leaves from the front of the building. Tickets are sold from a desk inside the terminal, not on the bus itself.
Several airlines such as China Eastern, China Southern, China Northern, and Great Wall Yunnan Airlines operate domestically. There is no such thing as a discount, no matter where you buy your ticket, and you also will be hit with an agent's commission. There is an airport tax payable on all domestic flights. Over the past decade, the safety standards of Chinese airlines have greatly improved.
Taxis from the airport should cost around $US15 to Tiananmen Square, but make sure you finalize the price before setting off or ensure the meter is turned on. In Shanghai, the airport is located 8 kilometers from the city center. A taxi fare from the airport to the Bund should cost around $US10. The airport in Guangzhou is located 10-12 kilometers from the city center and it costs around $US12 to make the journey by taxi. Taxis don't cruise the streets except in the largest of cities, and while most cabs have meters, they usually get switched on by accident. Motorcycle taxis, motor-tricycles and/or pedicabs hunt in packs around most major train and bus stations.
Long distance buses can be used to get around on the ground, although modern highways are generally poor or nonexistent. A better option is the train, which reaches into every province (apart from Tibet) along a 52,000 km network.
Never present knives or scissors as a gift as these symbolize conflict. Letter-openers, however, seem to be an exception to the rule.
Naturally, objects which carry a death association are inappropriate gifts. These objects include clocks and cut flowers, white objects such as bed linen and table cloths, and objects which come in a set of four. The number four carries a strong association with death, so it is important not to give a set of four.
It is not uncommon for Chinese people to invite business acquaintances to the weddings of family or friends. In these situations, it is unnecessary for you to buy a gift but simply present the host's family with a red envelope of money upon arrival. Such red envelopes can be purchased at most convenience stores. The amount of money you give should depend on how well you know the person. Usually a gift of $US30 is sufficient for a new acquaintance. Simply place the money in the envelope and write your name on it. If you are uncertain how much you should give, make some discreet inquiries at your hotel. When you arrive at the wedding, there should be a table near the entrance where you hand over your red envelope. Don't be surprised if the envelope is opened in your presence and the money is counted and recorded beside your name on a chart hanging on the wall. Remember to ensure that you don't give a sum of money that is a denomination of four, e.g. $US40 or 400 Renminbi.
When wrapping gifts for Chinese people, never use white paper, as this signifies death and is regarded as inauspicious. The blue-yellow color combination also carries a death association and should be avoided. Purple is generally associated with barbarians, so naturally, this color should be avoided. Red or gold wrapping paper is probably the best color to use for Chinese people.
Never write notes using red ink, as this can convey the idea that the writer will die soon.
When setting down chopsticks between courses, never place them in the rice-bowl vertically or at an angle, as this resembles sticks of incense burned at a funeral and is considered highly inauspicious. Always lay chopsticks horizontally across the rim of the bowl.
Chinese people are superstitious about the number four, which signifies death and should be avoided at all costs. Conversely the number eight is regarded as auspicious.
Avoid discussions which may cause embarrassment, such as the discussion of death, divorce or politics.
Be prepared to answer or at least politely fend off personal questions relating to your age, marital status, income and family background.
BUSINESS HOURS AND HOLIDAYS
Government offices usually open Monday to Friday between 8-9 am, close for two hours around midday and then re-open until 5 or 6pm. Most offices also open on Saturday mornings and remain open until noon. Private companies usually keep longer hours, although a five-day week is now officially encouraged.
Avoid conducting business during Chinese New Year, which usually falls in late January or early February and lasts for a week or more. Most businesses close at this time and it is very difficult to book transport or accommodation.