Resources - Business etiquette in China

Business etiquette in China

(Business meetings, gift giving, importance of "the face", formula to success)

Business etiquette in China

The hierarchy and self-esteem

  • The recognition of the hierarchy is extremely important in relationships with the Chinese.
  • Every breach of the hierarchy-related etiquette is considered by the Chinese partner to be an attempt of humiliation.
  • Never criticize the Chinese in front of the others.
  • Don’t make jokes about the Chinese.
  • Never treat your Chinese partner in a way that does not reflect his position in the company.

Introduction and greetings

  • A handshake (up to 10 sec.) is the acceptable way of greeting, but its usage is not as common as in the Western countries. Chinese commonly greet each other by bowing. As for the handshakes, the Chinese should have the initiative.
  • A typical greeting is “ni hao ma [nee haw ma]”, which means more or less “how are you?”
  • Visiting cards are an important part of Chinese business etiquette. While receiving a card, one should take it with both hands, to show the proper respect.
  • The whole exchanging visiting cards procedure is important for the Chinese because it can help them to determine the rank and importance of the delegation members and their influence on the decision-making process.

Meetings

  • Arriving late for the business meeting is considered offensive.
  • Usual work day in China starts at 8 am and lasts till 5 pm. The majority of the workers have a lunch break between 12 and 2 pm, it is not reasonable to schedule a meeting during that time.
  • The business meetings are usually started by the Chinese hosts’ speech. The most important host addresses his speech to his foreign counterpart.
  • Usually, the first topics during the meeting are not related with the professional matters. Delegates share their opinions on some trivial topics, which helps them to relax before “getting down to business”.

Negotiations

  • Negotiations in China are always lead by the head of negotiations. If we want the Chinese to send an important person to negotiate the deal, we shall bring a high-ranked guest with us.
  • The head of negotiations should enter the room first, the hierarchy-related etiquette should be observed.
  • During negotiations, we should be accompanied by our own interpreter. Most of the Chinese doesn’t speak perfect English, or their pronunciation is not understandable.
  • For the Chinese, subjective opinions and personal experiences are more important in the decision-making process than pure facts.
  • The sine qua non condition of the successful negotiation is establishing a personal relationship between both parties. The oral agreement between the parties is more important than the written document.
  • Therefore, we should be ready for the situation in which the Chinese are constantly proposing amendments to the text of our contract.
  • We should be ready that the negotiations will take a long time and results may be unsatisfactory.
  • While we negotiate in China, we should accept the Chinese rhythm of negotiations: remain calm and concentrated, don’t show emotions or growing impatience.
  • We need to remember that the Chinese very seldom voice their doubt openly, in most cases they will not criticize our propositions during negotiations using literal language.
  • Therefore, we may hear that “we shall discuss it later” or “your offer is good, but we need to reconsider”, in most cases those just mean “no”.
  • Chinese doesn’t like short deadlines, so we have to be realistic when it comes to setting the time of every stage of cooperation.
  • In order to simplify the communication process (and to make the interpreter’s work easier and more effective) we should use the plain language without euphemisms, and refrain from using slang or acronyms. We shouldn’t discuss religious or political topics.

Entertaining guests

  • You are not supposed to discuss business during parties and banquets.
  • In most cases, banquets take place in restaurants; usually start at 5.30 pm, last for two-three hours. The guests are welcomed at the gateway.
  • The host signals the beginning of consumption by proposing a toast, than he places the first portion of a meal at the most honored guest’s plate.
  • Usually, the host orders more meals than the guests could possibly eat. It is done to prove that the hosts are generous and hospitable.
  • During the banquet, 20-30 dishes are served. You should try a bit of everything. The guests place the desired portion on their plates on their own, with an exception for soup.
  • The toasts are proposed very often: group toasts are the common tradition around the world, but the Chinese sometimes approach you in person and propose a toast that only two of you should share. It is very hard to avoid drinking in this particular case.
  • You should praise the food quality and the choice of food.
  • Skilled usage of chopsticks will earn you some respect among the Chinese, but fork and knife will be served at your request.
  • Making slurping sounds, especially while eating noodles, is acceptable.
  • The large quantities of alcohol are being consumed during banquet (even larger in the Northern China), it is a good occasion to establish a personal relationship between you and your Chinese hosts.
  • Those who do not drink should prepare a credible excuse beforehand.

Institutions and bureaucracy

China’s bureaucracy is probably the most elaborate in the world; it dates back to the imperial times, and the Communist Party also added a lot to this dubious heritage. Many companies are associated in the form of Chambers of Commerce. While dealing with officials, you should remember that the hierarchy looks more or less like this:

  • Local government
  • Chamber of Commerce
  • Official
  • Businessman

Gifts

Giving gifts is a good step for establishing successful business relationship. We should know what is the best gift and how the ceremony of giving gifts looks like. The most important rules are:

  • A gift should be always packed.
  • The safest color of packaging is red, there are also other good choices, such as gold, silver and pink. We should avoid black and white, associated with mourning.
  • Traditionally, when the Chinese receive a gift, they don’t unpack it. We can follow their example and do the same.
  • Gifts should be adressed to individuals and the company.
  • The gift-giving ceremony has some particular features. The person, who receives the gift, should refuse to take it, only to agree after several requests. Than the person who receives the gift should express gratitude. The Chinese expect the similar behavior from us.
  • Valuable gifts shouldn’t be given in front of the others.
  • One should not take pictures during the gift-giving ceremony.
  • There are several things that are prohibited: clocks, umbrellas, handkerchiefs, chrysanthemums and other white flowers, sharp objects, any things that come in fours (four is ill-omened number, because its pronunciation resembles the pronunciation of the word “death”), green hats.