For Western businesses, doing business in China requires careful navigation of the cultural differences between China and the West.
There are plenty for reasons for Westerners to do business in China.
The country is the largest exporter in the world and provides many Western businesses crucial intermediate goods and services at low costs. Chinese businesses are also big importers of Western intermediate goods and services.
In 2009, the United Nations estimated the Chinese consumer market to be the fourth largest in the world. In 2010, the Boston Consulting Group (BCG) predicted that China will become the world's second largest consumer market after the U.S. by 2015.
Simply speaking, doing business in China, including traveling to China and meeting with Chinese businesspeople, is increasingly becoming unavoidable for more and more Western businesses of size.
Below are key cultural differences to account for when doing business in China.
Chinese culture is non-confrontational. Producing overt conflicts and situations that embarrass others is considered losing face.
Once people lose face, doing business with each other may no longer be an option.
To avoid losing face, Chinese businesspeople will not overtly show their disagreement or displeasure; instead, they will indirectly express such sentiments, for example by using phrases like maybe or we will see.
Western businesspeople should learn to read these indirect messages. They should also avoid losing their temper and aggressively pressing Chinese businesspeople on questions they have shown reluctance in giving a definitive answer to.
Patience will go a long way for Western businesspeople doing business in China.
Losing one's patience could cause one's Chinese counterpart to lose face.
The Chinese, moreover, are reluctant to do business with people they do not feel comfortable with. They usually prefer to begin a business meeting, especially if meeting someone for the first time, with some pleasant small talk. It may take more than one meeting before they are willing to begin serious, detailed negotiations.
Some Chinese organizations can be bureaucratic and hierarchical. It simply takes a while for senior executives to reach a decision and the decision maker may not even be present at initial meetings.
Some savvy Chinese businesspeople with experience in dealing in Westerners purposely stretch out negotiations, knowing that their impatient counterparts will often offer concessions in order to speed up the process, according to Austrade.
Pauses and silences in talks, which are common in China, can also make untrained Western businesspeople feel uncomfortable and produce the same effect of inducing them to throw in concessions.
Give and receive business cards and gifts with both hands. A Western businessperson's card should have one side printed in English and the other printed in Chinese.
Do not give cutting instruments (like scissors), clocks or flowers for gifts.
When offered dishes at a meal, accept all the offerings; if one does not wish to eat something, leave it uneaten on the plate. In Chinese culture, it is acceptable to not eat all the food on the table and on one's plate.
Try to avoid associating with the number four, which the Chinese consider unlucky; the number eight, conversely, is considered lucky.
Do not point with one's index finger. Be very punctual for business meetings. Do not whistle and snap one's finger, according to Culture Crossing.
Do not expect to do much business during Chinese New Year; this week-long holiday, the most important in China, starts sometime in late January to early February each year.