Business Culture in China

A simple cultural difference threatened to scuttle a perfectly good working relationship. To avoid similar cultural disasters, here are some tips on how you can conduct a more successful business in China.
The initial approach
Chinese business are mostly referrals; essentially a business relationship is struck based on another business associate recommendation. The best prices and deals often comes from a strong recommendation.
However, it is common today for cold calls and direct contacts, given the availability of the internet and the competitive nature of Chinese businesses. You may source from the internet, trade fairs, catalogues and brochures, advertisements and approach the Chinese companies directly through a call or email.
Alternatively, if you are seeking to invest in a factory in China, you can approach a investment committee or a business advisory directly. They will be able to advise you on your best location based on your industry, raw material and manpower needs. Please contact us directly if you have such a need and we’ll be glad to advise accordingly.
Relationship
Chinese business relationship inevitably becomes a social relationship after a while. Unlike Western business relationship which remains professional and perhaps, aloof, even after a long time, Chinese business relationship becomes a social one.
The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are in your business relationship. Sometimes, a lot of time is spent discussing matters outside of business, but then a lot of time, the other party is also making up his mind about your deal based on how much he sees your personal relationship with him.
Seniority
Seniority is very important to the Chinese especially if you are dealing with a State owned or government body. Instead of addressing the other party as Mr or Mrs so and so, it is always appropriate to address the other party by his designation ie Chairman So and So, Director So and So or Manager So and So.
When giving out namecards or brochures, make sure you start with the most senior person before moving down the line. When giving out a namecard or recieving one, ensure that you are stretching out with both hands with the card. Remember to face the card you are giving out in a manner such that the recieving party gets it facing him correctly.
Giving Face
Giving face (aka giving due respect) is a very important concept in China. You must give the appropriate respect according to rank and seniority. For example, if you are buying gifts for an initial contact, make sure you buy better gifts for the senior managers instead of buying similar gifts across the board.
Similarly, sitting positions in a meeting room or a dining table is accorded accordingly to rank, importance and seniority. It is good to seek advice before embarking on your first meeting with Chinese business contacts to avoid making the wrong move.
Gifts and Presents
Unlike earlier days when China was very poor, gifts, especially of Western origin was especially appreciated. Today, China produces and imports almost anything imaginable and gifts are no longer a novelty.
However, gifts are always appreciated and especially in the smaller cities or towns, will continue to play an important part in your business relationship. Do note that if you are indeed giving gifts, make sure the senior people get a better gift or at least gifts perceived to have a higher value than their junior staff.
Similarly, expect to recieve gifts from the Chinese, especially Chinese art products. It is polite not to refuse, especially if it is not of too high a monetary value.
Lunch/Dinner
There is no business talk in China without at least one trip to a restaurant. Sometimes, a trip is made to the restaurant even before any business discussion take place! Inevitably, the restaurant will always be a grand one and you are likely to be hosted in a private room.
There is an elaborate seating arrangement for a Chinese business meal. There are fixed seating positions for the host and the guest and then they are seated again according to seniority. This is a very important aspect of a formal dinner and it is important that you follow the rules accordingly. However, it seems that the Northern Chinese are very particular to this formal seating arrangement while the Southern Chinese has loosen the formalities somewhat.
You may like to find out more this interesting China Book.
Drinking with the Chinese
The Chinese are big drinkers especially in Northern and Western China. It does not matter if it is lunch or dinner; as long as a meal is being hosted, there will be alcohol.
Chinese wine is the favorite, followed by red wine and beer. Chinese wine is more like fuel than liquor, having a alcohol concentration as high as 60%! No matter how good a drinker you may think of yourself, never, ever challenge a Chinese into a drinking contest. They will win, hands down!
It is often seen as rude not to drink with the Chinese in a formal dinner. To maintain your sanity, either claim to be a non alcoholic or plead medical grounds as an excuse. This will let you off the hook with little or minimal drinks. Better yet, bring a partner who can drink on your behalf!
After Dinner Entertainment
Formal business dinner normally drags for quite sometime as there will be much social talk, some karoake, and drinking contests. Most of the time, everyone is too drunk to indulge in further entertainment after a dinner. In addition, if you are just new to this partnership, you are unlikely to be invited to further after dinner entertainment.
However, once you are familiar with them, you may be invited to a Karaoke, or a Night Club, or a Suana. Do note that if they are the host for the night, all bills will be picked up by them for the night, including all entertainment. It is impolite to fight for the bill or worst, split the bills.
Similarly, if you are the host for the night, you are expected to pick up all bills for the night.

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China Revolution- Dragon capturing market share of world

The influence in the world economy was started after late 1980s, At the same time trade by china was started also. It was in modern era, where powerful connection between economic openness and political and civil freedom provides an expansion in global trade made by China. Now a days, most of the products that we pick up these days from the market, have made in China stamped on them. Their rate of expansion made them one of the world's fastest-growing economy having average growth rate of 10% over the past 30 years. Main reason behind the growth is the availability of human resource. China have about 20% of world's total population share and only 6% of land share. Another reason is the popularity and low manufacturing cost as compared with other countries.

China is the largest exporter and second largest importer of goods in the world, capturing world share of electronic gadgets and items made of plastics including home appliances, food products, seafood, body jewelry, toys and more.

As per the statistics,

• China's export of goods and services constitute 39.7% of its GDP.
• In December 2011, China’s import & export totaled US$ 332.92 billion with a year on yearly growth of 12.6% in which export was US$ 174.72 billion and its import was US$ 158.20 billion, up by 13.4% and 11.8% respectively.
• In January of 2012, China exports were worth 149.9 Billion USD.China’s import & export totaled US$ 3642.06 billion with a year on yearly growth of 22.5% in which export was US$ 1898.60 billion and its import was US$ 1743.46 billion, up by 20.3% and 24.9% respectively.

What does china exports?

Generally, China's export composes of items which are either to be processed further or assembled or even manufactured products. In 2004, 93% of China's export were manufactured goods.

Mainly, China exports electronics items including office machines, Data processing equipments, telecommunication equipments or parts, daily consumable items like apparels, shoes, toys, seafood etc. Besides this, china also contributes its share toward industrial machinery, transport equipments and mineral products, which includes cotton cloth, tungsten, crude oil, coal and antimony. China's export in agro commodities include rice, wheat, soya been, maize, peanuts and tobacco.

According to a survey done in the year 2010, china's top categories of exports across the world are,

Commodity	Volume (in $ bullion)
Electrical machinery and equipment	388.8
Power generation equipment	309.8
Apparel	121.1
Iron and steel	68.1
Optics and medical equipment	52.1
Furniture	50.6
Inorganic and organic chemicals	43.2
Ships and boats	40.3
Vehicles, excluding rail	38.4
Footwear	35.6

Some facts about china exports

• China is largest producer of food items in world with total production of about 4,078 billion RMB (US$536 billion).
• BBR Future of Wine report, 2008 predicts china will to be on top chart of largest wine producer by 2058.
• China is world’s largest producer of cotton, having almost 30% of world’s total output. Its cotton production has leaped from 440,000 tons to 35.5 million bales from 1950 to 2007.
• Steel industry of china produced 567 million metric tons of crude steel, which amounts to about 46% of total world share.
• China also exports 95% of world’s rare earth metals which are used in manufacturing of high tech products.
• China export almost 50% of the world’s cement and flat glass in 2006
• China is also largest producer of minerals and metals such as aluminum, flourspar, graphite, antimony, barite, coal, lead, tin, tungsten, iron, steel and zinc.
•  In 2007, China produces 276 metric tons of gold, representing over 10% of the world’s total.