Doing Business in China? Avoid These Costly Mistakes

doing business in china

 

Top Tips for Doing Business in China: Costly Mistakes to Avoid

As the second largest economy of the world, China offers many lucrative business opportunities for Western businesses. However, with a political system and a business culture that is notoriously different, it can sometimes be tricky to develop fruitful commercial relationships with Chinese partners. In order to ensure you are fully prepared for the Chinese market we have put some tips together to help you improve your chances of success. Here are the top 5 mistakes you should avoid at all costs:

1. Expecting to Conclude a Deal on the First Day

In the West, business relationships are often developed transaction after transaction. China has the opposite approach. Developing trust before doing business is essential. As a result, the first meeting will be about building rapport and trust rather than concluding a deal.

2. Not Reciprocating Favours

“Guanxi” (pronounced ‘gwanshee), a form of networking based on the exchange of favours, is central to building business relationships in China. Developing guanxi takes time, and is based on the exchange of favours. If your partner does you a favour, you will be expected to reciprocate later. Favours are not necessarily commercial and can take the form of small gifts, recommendations and any form of help.

3. Saying No Directly

Face, or “mianzi” in Chinese, is a key psychological concept when doing business in China. Keeping face means maintaining dignity and social status. Your partner can lose face if openly criticised or teased. While you may have very good reasons to say no, saying something along the lines of ‘I agree with you, but…’ will be a subtle way to do so. By avoiding any direct confrontation and expressing your disagreement softly and indirectly, you will maintain trust between you and your partner.

4. Losing Patience

Time can be used strategically and the Chinese know how to use time constraints to their advantage. This is especially true with Western businesses used to working at a fast pace. Your Chinese partners may very well adopt a slow pace if they are consulting or delay for no obvious reason to test your patience and drain you. On the other hand, they may speed up things with consecutive late evening meetings to meet tight delivery dates. Be prepared for short deadlines and intense negotiating, but also for long delays.

5. Talking Business at a Banquet

When doing business in China, it is likely that your host will invite your to banquets and other social activities. Chinese delicacies and dishes will probably be in abundance. It is a good idea to try each of them, even if you leave some unfinished. It is best not to discuss business during mealtimes. Instead, focus on developing good relationships.

How to be Ready: Cross-Cultural Training

Having Chinese Mandarin language skills will help you develop business partnerships in China, but being culturally aware will optimise your chances of closing a deal and establishing strong business relationship. Cross-cultural training will help you develop key cultural awareness skills for doing business in China. At Cactus Language Training, we offer several options that you can combine together to be fully trained and ready:

Business Chinese Training
Cross-Cultural Training
Chinese Mandarin for Tourism

Contact Us

To receive more information about how Cactus Language Training can increase your profits, or to get a quote, simply call us or contact us with any questions you may have. Cactus also offers a free no obligation language consultation for corporations and individuals.

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