CHINA BUSINESS CULTURE


Doing Business in China Essentials

BUSINESS MEETING TIPS

Making connections or GUANXI is an important part of the Chinese business process.  Guanxi is relied more heavily in China and in the West even though networking or the "Old Boys" network is eaually  indispensable in the Western setting. Chinese businessmen are more exposed to the globalized business world today and are intuned to the Western business culture. However, one should take the time to understand certain subtleties in their business practices.

1) Don't expect meetings to start on time.

2) Discussions can take an inordinate amount of time with no resolution. This is normal!!

3) They will never give you a straight answer especially when it is the first time they are meeting you.  You have to build the trust with them.

4) MOUs or contracts do not have the same level of importance as in the West. However, they are getting better with more enforcements especially in larger cities like Beijing, Shanghai, Shenzhen and Guangzhou.

5) Most important discussions are held over dinner, KTV sessions or during a massage session (See Entertainment below).

6) Don't schedule a meeting with the owner or CEO before 10.00am. Better if it is after 11.00am or meet them for lunch.

7) Chinese spouses are not included in dinners or after hours activities. So do not bring you wife to dinners with your Chinese counterpart. They will not object but you will not be able to move on to the next level.

8) Chinese are heavy smokers so be prepared if you aren't one.

9) When entering a private room in the restaurant, wait till the host motion you to your seat as there are significance in the order of seating.

10) No tipping is necessary in China. REALLY!! However, if you insist, they will not refuse.

 

ENTERTAINMENT TIPS

Business entertainment or culture is the most important facet of the business process in China.  As mentioned previously, most serious discussions start after dinner. Most Chinese a good drinkers and they can hold their liquor quite well. So don't go one-on-one with them on toasting as you will not last.  Dinner is just the "appetizer" and the real wheeling and dealing is at the KTVs or a massage parlor. 

 KTV - Karaoke TV

KTV or Karaoke is the most popular entertainment that Chinese businessmen will indulge with their clients local or foreign.  KTV clubs are very opulent with some private rooms that can hold more than 30 people. Some rooms are as large as 1000 sq feet with big screen TVs and good sound systems with an assortment of music - Chinese, Taiwanese and English. 

 

When you arrive in the room, a "Mama-san or Mommy" will bring in KTV hostesses for the businessmen to choose.  Each batch can be as large as 20 girls. She will continue to bring in the girls until everyone has their pick. It is OK to be picky so don't be rushed by the Mommy. Depending on the city and quality of the KTV, the fee for the hostesses for singing run from RMB300 to RMB500. With some KTVs in smaller cities, the cost may be as low as RMB200. These are just tips you pay the girls for singing or chatting with you. Pay your hostess when you leave the KTV. Sometimes, your host may even pay the tips for you.  Be sure to sit next to the Chinese party that you would want to establish business with.  There will be a lot of drinking and bonding.

 

Foot Massage

FOOT MASSAGE

Going to the massage parlors is an experience in itself. You will be amazed at the way the Chinese businessmen know how to enjoy themselves. Basically, the most common is the Sauna club where you take a shower and go a lounge at another level to watch TV while you have your foot massaged or have a full body massage.  This is a great alternative to KTVs if one is not a drinker.  Taking a foot massage is the best way to chat with your counterpart while your foot is being massaged.  Kind of a hard when you are doing a full body massage. In most instances, the host will pick up the bill. No tipping is necessary for the masseuse.

 

BEWARE OF SCAMS

1) For first timers who are sourcing from China, make sure samples that are produced are from the factory you intend to buy from. Very often, merchandise samples are taken from another factory and made out to be their own so that you will place the initial order.

2) If at all possible, do not divulge your travel itinerary to your China suppliers. Just schedule the time that you would like to meet and arrange for your own transportation to the factory.  When you get to know your supplier well, you can accept their arrangements for hotel and transportation. 

3) NEVER buy any product you see on B2B websites UNLESS you have done due diligence work on the supplier like making a visit to their factories and getting references. If the order is small, you may be better off buying from US importers unless you are looking at expanding sourcing on a long-term basis.

4) Do not pick up Chinese women at hotel lounges, bars or discos as there is not such thing as a "freebie". There are syndicates that target unsuspecting foreigners looking for sexual activities.

5) Expect calls to your hotel room in the middle of the night even at some 5 star hotels offerring "massages".  Just say no and hang up. You may end up being rob or put in a compromising position particularly if it is an extortion racket.   Call the operator if the call persist.

6) Don't be surprised if a Chinese women approach you on the street and offers to teach you Chinese in return for English lessons. They will suggest that you have a drink at a cafe or club but the bill could run as high as RMB2000 for two cokes.  However, there are sincere Chinese who really wants to make friends with foreigners. Best place to meet them is at a Starbucks (if there is one around).

7) If you are new to the city you in, do not wander into any entertainment establishment by yourself like a KTV club or massage parlor as you can be easily "taken for a ride" (see Entertainment below).  China is an exciting country and can offer visitors many "recreational" activities but one must have a local friend/guide to give you the inside scoop. Better to be prepared!!!

8) Chances of getting robbed is rare unless you venture into places that even locals would not go. Pick pockets are most common in crowded out-door malls or in public transportation.

If you feel you are a victim of a scam, ask your hotel to report to the local Public Security Bureau (aka Police) or dial 110 on your mobile phone.

 

Contact us at culture@china-businesslink.com if you need any suggestions for special situations you may encounter.

 

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