How to Maintain A Strong Business Connection with China

China is currently one of the strong players in the business world across several industries. Be it manufacturing, technology, or financial service, China is a powerhouse not to be underestimated. Because their strong success and international power do not lie solely on their industry billionaires or economic policy. The Chinese business culture is said to be one of the deciding factors that strongly influence China’s international economic power. 

In a previous article about money in Chinese culture, we discussed why Chinese culture is obsessed with money. Chinese business flourishes all around the world for similar reasons. Chinese businesses tend to focus on profits and the details of why and how they can earn more of it. Above all that, remains one significant cultural practice that you can still find today, 人际关系 (ren ji guan xi).

Age Old Relationships

photo of man reading newspaper
Photo by Hasan Albari on Pexels.com

人际关系 (ren ji guan xi) is the business culture practice where you build and maintain relationships with clients. Getting to know clients is so important that this is the first thing they teach you from the first day you join the company. The relationship in this contact is more than just the formula contact you do during the period of transactions. This stretches to times outside of the transaction period in which companies try to stay on good terms. Good imagery for this would be maintaining the business relationship like that of family. These relationships can last years and years and are often continued by the generations after.

The question remains, how does this cultural practice affect business in China?

crop payroll clerk counting money while sitting at table
Photo by Karolina Grabowska on Pexels.com

In one simple sentence, ren ji guan xi helps build the strength of a company and in certain cases competitive advantage. There have been controversies surrounding the practice as many businesses use it to maintain questionable relationships with government officials. Nevertheless, it is still an important  part of the business culture that helps shape the economy of China. Let’s take a look at one industry example to give us an insight into how this cultural practice takes into effect. 

The Apparel Industry

Take for example the apparel industry of china. China is one of the world’s largest manufacturers for fashion. Be it the fast fashion for american brands like H&M or bigger brands like Chanel. However, the industry is also high in competition. With more and more brands looking to move their production to China to cut costs, manufacturers have to fight for the cost they can offer and the quality they can make.

With so much competition, players turn to information sharing for survival. To survive in this industry, information sharing. A manufacturer or factory owner can own many skills and resources, but information sharing is believed to be the best tools they can own. Without information sharing, you will not be able to meet the right person who can become a client that can support your business. Information sharing does not come easy on a high competition market and so this is where guan xi comes into play.

Making your connections, maintaining them and utilising your ressources well with the gathered information, will give  you a strong competitive advantage to survive in the industry especially if you are a new player in the industry. The key to making sure that your new business last in the long run is long-term relationship. Literally knowing the right person can give you new clients, prepare for what’s to come and build your name in the industry until you become a mature player once you’ve been long enough in the game.

The Important Values in Chinese Business

multiethnic colleagues discussing contract on paper
Photo by Alexander Suhorucov on Pexels.com

Chinese value their relationship with business partners because it is a practice that’s embedded with the Confucian teachings which shaped China’s past and present.

In China, the value of family and collective community is quite strong in both society and business. The three key pillars of Chinese society include family, community, and status. 

Family and community are very important values as you can find them in several Chinese sayings, one of the most renowned being Ka Ki Lang (meaning: our own kind). This phrase is popularized in the film Crazy Rich Asian, a movie based on a book with the same name written by Kevin Kwan. Chinese businesspeople tend to do business with someone they know or are referred to by a trustworthy friend. The more familiar you are with the business owner, the more you are able to gain their trust and have more transactions with them. These relationships last over a long period of time instead of short ones. These relationships are then passed on to the younger generation where they help shape some of China’s businesses today.

The Starbucks Case

close up photography of starbucks disposable cup
Photo by Adrianna Calvo on Pexels.com

This Chinese culture surprised many foreign brands that open their offices in China including Starbucks. Starbucks is a mega coffee store franchise that originated in the United States. They then spread their business internationally and made their way to open a store in China in 1999. Starbucks in China did not hit success when they first launched until several changes later. They named shareholders and company meetings “Partner Family Forum” where partners were employees and parents were the shareholders. They created large spaces for their stores to welcome crowds of customers. Following the three pillars, Starbucks made great changes and is currently quite successful in China. 

Making or Breaking the Relationship 

selective focus photoraphy of chains during golden hour
Photo by Joey Kyber on Pexels.com

So, how can you start and keep a relationship with a Chinese businessperson? In China, business people maintain their relationship differently than the rest of the world. These differences often went unnoticed by foreign employees. There are several things you can try to start building the relationship and not ruining any chances when you first try. However, keep in mind that these methods will take some time and effort to achieve the desired result. 

Understand The Depth

yard of buddhist temple on sunny day
Photo by John Lee on Pexels.com

Rather than just doing the normal business talk where you make an offer, negotiate the price or do cold calls, try and understand their depth. What are their values? What they look for and try to maintain that relationship for the long-term instead. Understanding your client like you would a friend is key. Similar to the practice of ren ji guan xi, it takes a long time but is very effective and great for the long-term. 

Take for example the trip that president obama took in November 2009 to Shanghai, During his speech with the shanghai youth and members of the Fudan university, he expressed genuine interest in the culture and heritage of ShangHai. He also apologized that “ I’m sorry that my Chinese is not as good as your English”. This simple move of giving consideration and respect is the first step to building a great relationship. Willingness to understand the person’s culture and where they came from will help you build a solid bond that will last a long time. 

Collaborate With a Local

person in white long sleeve shirt holding a clipboard with resume
Photo by cottonbro on Pexels.com

If you want to start your business in China, it would be better if you have a  local company help you out. The more familiar you “look” familiar to your potential client in China, the more they are willing to do business with you and create that relationship for the long term. Collaborating with locals also go beyond than just achieving “The Familiar” look. Local companies or manufacturers have their own set of connections that they have mastered. This conenctions will give you a great step up compared to starting all the connections from scrath.

Take for example Coca Cola. They decided that they will be collaborating with COFCO corporation back in 2016. The collaboration not only brought efficiencycy, but also created a more market oriented product for Coca Cola in China. Tailoring a product takes a lot of work. Receiving help from an insider who is more familiar with the market is more strategic and efficient than doing it yourself.

Learn the Language

pink background with speech bubble
Photo by Miguel Á. Padriñán on Pexels.com

You can always do it yourself, although it is not the easy way. Putting the effot, gives you off as a person that cares deeper than the transactions. Learning the language can be a great investment for you and your business. This will not only give you a great sense that you respect your partner, but your partners can also have a better sense of trust towards you as a business partner.

Conclusion

Family and community are very important in Chinese culture and also in business. You have to adapt to the environment and make necessary changes to succeed in this market. There are things you can do to start building a business relationship with a Chinese business person. However, keep in mind that it all takes effort and time. The effort and time you put in will definitely carve a path for you to follow.

8 Amazing Chinese Business Cultures Advice To Know

China is now the fastest developing nation and already the second-largest economy in the world (after the US). This growth is creating a ‘rush’ of investment from multiple countries worldwide. As the global economic stage shifts, it’s likely that the Chinese language will play a major role in shaping its future, and the importance of Chinese for business will grow.

You don’t even necessarily need to be proficient in the Chinese language. Only by showing that you’ve been making efforts in learning the Chinese language and understanding Chinese people, you will definitely build up a better company reputation in the Chinese market and achieve a deeper relationship with ideal customers. However, if you put in the time needed to acquire Chinese language proficiency, you will stand out as someone well-positioned to reap benefits that your competition simply can’t have.

Here are some of the benefits of learning Chinese that you can expect to enjoy.

1. Learn Chinese And Know Your Customers Better

Buyers’ behaviour is always a big part of designing products and services for your markets. You need to understand who is your customer and in what scenario they will likely buy your product. To help you know your customers, it will be easier if you know a bit about their languages and culture. Being able to predict Chinese buyers’ behaviour using some key Chinese linguistic phrases is your secret to let you into the Chinese mindset, motivations, cultural traits and behaviours.

Risk avoidance is an example of a cultural trait in China. It is referred to as “Feng Xian Gui Bi” (风险规避), which relates to the level of uncertainty or ambiguity a person will prefer. In China, people tend to have a higher level of risk avoidance, preferring safe options. For example, Chinese people will strongly prefer to buy products and services with a solid money-back guarantee if they are not satisfied with the product. Doing business in China, you need to take risk avoidance into consideration. Additionally, knowing some language and concepts in Chinese can help you accurately frame the perception of how your customers think, feel and behave. This helps you be prudent in evaluating your audience and positioning your product and services.

2. Learn Chinese To Effortlessly Navigate Chinese Social Media

Knowing the systems of the major Chinese social media and payment gateways helps you understand and navigate conversations around the Chinese social media business architecture. 

Did you know that 71% of payments made last year in China were via mobile methods? 

Chinese consumers spent US$5.5 trillion via mobile payment platforms in 2016 (China goes cashless with consumers spending $5.5 trillion via mobile payments). So you can see what is the hottest trend now in China. Just like in Western countries, social media is increasing rapidly in China.

For all the popular social media platforms you can find in the U.S., there is an exact equivalent in China, where social media platforms dominate the whole China market. Chinese consumers use Weibo (微博) instead of Twitter, Wechat (微信) instead of Facebook and WhatsApp, and numerous video platforms like Youku (优酷), iQIYI (爱奇艺), Letv (乐视), PPlive (聚力视频) instead of Youtube.

It is always challenging to study a new group of customers, but if you know their language, you can get customer insights more efficiently than your competitors. Imagine how convenient and effective it would be if you can easily handle these platforms in Chinese!

3. Learn Chinese Language And Cultivate Your Business Acumen

Business nowadays is worldwide business. Meanwhile, in China, the business culture is changing rapidly to adapt to world business. However, there is still a strong grasp on traditional paradigms, for example, the concepts of Communism, hierarchy in relationships, and ‘rules’ or traditions of business. Understanding these concepts in Chinese will not only give you respect as a business person in China but also help you acquire an authentic understanding of the way of business protocols and etiquette in Chinese business culture.

4. Learn Chinese To Acquire The Art Of Developing Successful Business Relationships

In the same way, cooperation between businesses is better understood through unique Chinese concepts that are not easily expressed in English. Believe me, your business partner will be favorably surprised if you say “wo hen gao xing lai dao zhong guo” (I’m glad to come to China) rather than simply say “ni hao” (hello).  Chinese people are open, friendly and intuitive. Your business partner will feel your sincerity in cooperation when they listen to your Chinese because they can see your efforts in understanding their language and culture!

Successful business partnerships are based on mutual understanding forged through both verbal and non-verbal communication protocols. By knowing each other’s language, you will be on a more equal playing field with your prospective business partner. Learning Chinese languages will propel you forwards in your quest to develop your Chinese business acumen, achieve greater impact and lock-in more favorable outcomes in your business negotiations.

Relationship – “GUANXI” (关系)

“Guanxi” (关系) is the word in the Chinese language to describe a relationship. In addition to saying ‘hello’, there are more important and in-depth business linguistic elements and etiquettes affecting the success of your relationship.

As an example, exchanging gifts in China is an important part of business etiquette! In any business visit, both parties are likely to prepare a gift for each other. In particular, where the meeting is between a Chinese business and an international business, Chinese business delegates always like to prepare some gifts with traditional Chinese meaning. And they would also be happy to receive some special gifts from you!

There is so much more to Chinese business protocol and etiquette. 

For example, do you know what is the most appropriate distance between two persons in a business meeting? Do you know that business in China is sometimes conducted during meals? Do you know the character of personal relationships in Chinese businesses? By building your capability in speaking the Chinese language alongside your savviness in Chinese business culture you will definitely put yourself ahead of your competition!

So, start learning the Chinese language in time to wow your new business partner, and develop a better “Guanxi” for your future success!

5. Learn Chinese and Build Empathy to Strengthen your business relationships

Many foreign business owners in China feel frustrated by how businesses are administered in China. For both the foreign company representatives and Chinese business partners, it is easy to find mis-communications and mis-understanding leads to a breakdown of trust in the relationship. One example of a process that can cause frustration is the heavy requirement for paperwork for many business operations.

Administrative Paperwork-XING ZHENG WEN SHU” (行政文书)

The administrative burden of business in China can be high, as an example, “Xu Ke Zheng” (许可证) permits are frequently required. This is part of the comprehensive approach to business by the government in China, although feeling counter-intuitive at first, learning and fostering an appreciation for the way things are done will increase your trust in your Chinese business partners. For example, a foreign company running an event will be given a list of items that may and may not be included in a public address by the permit issuer. These rules should be respected as it is your Chinese event co-organisers who stake their reputation to acquire and vouch for your company permits.

You can see how your command of key aspects of Chinese languages is the secret to your success by improving your understanding of business protocols and building empathy to strengthen your relationships with your Chinese counterparts.

6. Learn Chinese and Expand Your Business Network

There are a lot of Chinese speakers in the world. According to Ethnologue, there are roughly 1.117 billion speakers of Mandarin Chinese, and of those, about 918 million are native speakers. Those stats make Mandarin Chinese the second most spoken language in the world as well as the language with the greatest number of native speakers. While most of these speakers reside in China, Chinese speakers have also formed communities around the globe. These are all potential contacts with whom you can personally do business—if only you can communicate with them.

With Chinese language skills, you will be able to navigate the vast global Chinese linguistic community to meet new business partners, clients, and customers. Learning Chinese for business can teach you how to speak Chinese with confidence in both professional and casual venues, setting both you and your business up with new networking opportunities that others can’t access.

This is not just about language but also about culture. Education in Chinese will allow you to socialize with Chinese speakers in more natural settings and establish cordial relations that can lead to future business proposals and collaborations. It will provide you with cross-cultural competencies that will impress your interlocutors and help you avoid committing a cultural faux pas that you might otherwise be unaware of. You can also demonstrate your seriousness and respect for your commerce by showing your commitment to learning how to communicate with potential business partners in their native tongue. Once you’ve established a solid rapport with a native Chinese speaker, you can benefit from their own business networks, capital, and know-how.

7. Learn Chinese And Adapt to the Global Economy

One of the biggest reasons to learn Chinese is that you will be able to do better business with Chinese firms. It’s not news that China is a major player making waves in the global economy. China’s economy is the second-largest in the world according to nominal GDP, representing about 16.34% of the entire global economy. China was also the only major economy to get through the tumultuous year of 2020 with an actual increase in GDP.

As China’s economy evolves, more opportunities continue to avail themselves to businesspeople looking to grow their businesses. Some highlights from the US-China Business Council’s 2017 report Understanding the US-China Trade Relationship include the following: China’s middle-class consumers are growing at a rapid pace and are expected to reach a population of 160 million by 2025; China has been the third-largest market for US goods and services, purchasing $165 billion of goods and services from the US in 2015; China continues to form an integral piece of the global supply chain and has allowed companies like Apple, GM, and Ford to compete at international levels; Chinese companies are investing more in the US, putting $14.8 billion in the US in 2015. It’s no wonder why working with China looks so attractive.

If you learn Chinese for business, you can apply your language skills to take advantage of China’s central place in the global economy. With your capacity to interface and network with Chinese business people, you can facilitate plugging your business into China’s lucrative industries and markets.

New business connections are invaluable, there are some other perks to knowing Chinese, especially if you’re already doing—or would like to do—business in China.

You can run your business, hold meetings, and attend conferences with Chinese speakers while minimizing the involvement of intermediaries like translators. You can also directly access knowledge and information provided by Chinese language websites, newspapers, TV programs, and books, giving yourself advantageous access to critical resources to plan your next moves. You would also be well-positioned to localize your products, services, and digital content to attract Chinese-speaking consumers and markets.

8. Learn Chinese And Get Your Edge in International Business With Chinese Business Giants

The Chinese language is an important tool for networking and remaining competitive in the global marketplace. For the savvy businessperson who already has some experience with Chinese under their belt, learning Chinese for business is a powerful next step.

Chinese business language can help you specialize your language skills and tailor them to your specific industry.

Focusing your studies specifically on Chinese for business will equip you with the specific cultural and linguistic vocabulary you need to speak intelligently about your business and interests with Chinese speakers. What you choose to do with this opportunity—whether in China or elsewhere around the globe—is ultimately left to you.

Learning Chinese Language and Culture Today!

At the current time and looking ahead, China has opened its giant domestic-facing market to the world and put on the table the best policies it has ever had. This means the time is ripe to kickstart your Chinese language learning and acquire new insights into Chinese markets and consumer behaviours. There is 300 million middle class now in China, and this number is predicted to grow to 500 to 600 million in the next 10 to 15 years (For those of you who are interested, check how Jack Ma, the executive chairman of Alibaba Group, explained the China opportunity at Gateway ’17). This is an indication of a huge demand for high-quality goods and services.

To impress your prospective Chinese business partners now is the time to start learning Chinese languages alongside formal business protocols and etiquette! Understand and prepare yourself and your business to enter into China and build your business on the second-largest international stage. To seize this incredible market opportunity in China and stand out among your competitors, you should indulge the perspicacity in you and really start with learning the Chinese language and developing your Chinese business acumen and awareness.

Lock in your lessons with Pandanese to start your journey in the Chinese language and business culture now, or find out more about how to succeed in learning the Chinese language and Chinese business culture with Pandanese!