CHINESE BUSINESS ETHICS | HOW TO DO BUSINESS IN CHINA PART 2

Practical Advice 2: Chinese business ethics and Chinese Cultural Belongings

For the Chinese people, the two most important cultural elements to engage in a long term successful business contract are:

2.1. Face (Giving and Saving)

Here, the first phenomenon Face refers to respecting and caring for the other person’s concerns while avoid putting that individual in any embarrassing or awkward position especially in front of all. Face giving and saving is not only important in terms of business relations but also it holds a key value in personal relations.  It also calls for bearing the blame of some misappropriations to protect others’ dignity. Along with this getting your Chinese colleagues’ feedback especially at decisional levels saves them from losing face.

 

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Losing face being an opposite of face giving is considered as a very degrading and humiliating phenomenon and the person responsible for such situation is not warmly welcomed. It is linked with disrespect, distrust, criticism and embarrassment in public settings especially. If you are intended towards correcting the other person then a healthy criticism behind closed doors can be made. Also, it may sound strange to you but it’s a fact that promotion of a colleague while others are also expecting for it, is also counted as Losing Face and therefore to avoid a rift between them all, most of the time everyone is awarded with a new job title.  It reminds me of my own time, when I started my business operations in Shenzhen and hired new staff. That time our previous employees were very much concerned about their new job titles and they used to discuss it during lunch hours. That moment, my intelligent wife anticipated the situation and suggested me to promote them all to the managerial post to save them all from embarrassment.

2.2. Guanxi (Relationships)

Now let’s talk a little bit about Guanxi which is the second major principle of entering into Chinese Business World. Here both the parties i.e. the foreign investor and the Chinese build up strong relationships based on mutual trust and cooperation. If you have strong Guanxi with your Chinese business partner, success is definitely yours.  Guanxi is a blend of various relationship enhancement tools. It is as already mentioned a relationship of mutual benefits, confidence, face giving and a social network. The process definitely needs hard efforts and patience but once the Guanxi is built, you can enjoy a definite business edge among your foreign counterparts.  Gift giving is also a good idea to build Guanxi but be aware of the occasion and the person you’re giving. Do not give any gift to government officials.

A few important points you need to remember in terms of Guanxi include:

·       Don't entertain empty relationship claims

·       Guanxi is not as important as it was in the past

·       A mean of Chinese communication

·       A direct and explicit business rule

·       Rely on your Guanxi

·       Before a need arises, you must be having your own well developed Guanxi

Be mindful of the fact that Chinese business ethics have changed a lot in the last two decades. Ten years back Chinese business managers would love to invite their prospective business colleagues for Chinese banquet, but now the situation has changed. They now prefer to invite for a quick lunch not for banquet – the later is offered only if you are some very important customer.

 

HOW TO DO BUSINESS IN CHINA