China is among the leading economic giants in the world. Moreover, the economic, political and social stability coupled with favorable government policies and numerous growth opportunities make it an ideal market for international expansion. However, doing business in a foreign country isn’t without challenges – China included. Even though the business landscape is slowly adopting modern western business approaches, some traditional elements are still entangled in the way people conduct business. It is important to understand Chinese culture if you are to do business successfully in China. Let’s look at how different aspects of the Chinese culture shape the business landscape in the country.

1. Employee management

If you are doing business in China, you will need to hire employees to help you execute your vision. However, strict guidelines exist for foreign companies requiring hiring employees in the country. It is illegal to hire directly, so employing the help of China PEO will be your best bet.
After having your workforce in place, it is important to know the Chinese work culture if you are to manage your workforce better. For starters, hierarchy is highly regarded and job titles are very important in the society. Junior employees hold the seniors in high regard. They respect job titles and managers’ ideas and talking directly to seniors is seen as a sign of disrespect. Additionally, employees who share opinions and suggestions during meetings are perceived to be showing off. For these reasons, you will have to talk to individuals in private to get more information as well as their ideas and opinions on different things.
Another thing to note is the concept of ‘saving face’ to protect each other’s dignity, reputation and influence. Employees don’t question their colleagues or managers in public. Likewise, managers do not correct or show employees mistakes in public. Punishments and negative feedback are given in private.

2. Business meetings

Building relationships is important in China. Additionally, decision-making follows strict procedures and hierarchy must be respected, which makes it quite slow. Moreover, your Chinese partners won’t be pleased if you rush the process. Thus, expect to hold several meetings with partners and stakeholders before the deal is closed. This can be anything from formal meetings, home visits, and invitations to dinner, drinks or sport events.
When attending meetings, keep in mind that punctuality is valued among the Chinese people. Be sure to arrive on time, or inform the people you are meeting early if you are running late. Dress formally and avoid bright colors. Hierarchy is also observed in meetings, as the highest-ranked person should be the first to arrive and first to talk, including in your team. If you are unsure, it is always good to let the hosts set the pace. Moreover, address the people in the meeting with their professional titles and last names and greet everyone individually.
Exchanging business cards is common during meetings, but respect and attention is respected as it is interpreted to reflect the attention and respect you will show the business card owner. Use both hands or your right hand to give or receive business cards. Take some time to pay attention and wait for everyone to sit before putting it away. Refrain from putting it in your back pocket as the Chinese people could interpret that as sitting on their faces. When giving your business cards, make sure that the writing faces the receiver. It is also prudent to have them printed in English and Chinese.

3. Communication

When communicating with your Chinese counterparts, pay close attention to what they are saying and their body language. Nodding doesn’t necessarily mean agreement and the Chinese people are careful about using negative statements. Look out for hesitations and be careful when interpreting the answers that you get. Similarly, be careful when using negative answers as that can be considered rude. Moreover, take your time before rejecting a proposal as that could be seen as you rejecting the person. Additionally, interrupting a person is considered impolite. The Chinese people don’t interrupt a person, so be sure not to interrupt someone when speaking.

4. Gifts and favors

The Chinese business culture is relationship oriented. So, negotiations are aimed at building trust, loyalty, harmony and long lasting business relationships. In the course of building these relationships, there could be several gift and favors exchanges. However, the principle of reciprocity is highly reflected in this regard. If you receive gifts and favors, the expectation is that you will do the same in return. When choosing gifts, remember the principle of ‘saving face’ and choose a gift that is easy to reciprocate. In addition, keep it professional and avoid expensive gifts as they can be mistaken for bribery.

Doing business in China can be great for your global expansion strategy. However, you have to keep in mind the business culture in the country if you are to realize your business objectives. Chinese culture regards hierarchy, saving face and relationship (Guanxi), which reflects in different business aspects. Be sure to prioritize these values in business meetings, employee management and the like. If unsure, it is recommended to work with an intermediary who can show you the ropes.