Business culture in China and how companies can adapt

Talking about crossing borders to do business in China means having a good knowledge of business culture in China. China’s incredible expansion in the business world in recent years has prompted many companies to enter this lucrative market.

For years now, China has been the world’s second superpower in terms of GDP (only behind the United States), to the point where the World Bank estimates that China’s GDP is equivalent to 18.4% of the total world economy. Given this economic potential, it stands to reason that many of the companies that are considering expanding into foreign markets are focusing on China. 

However, some of the customs of China’s business culture can be disconcerting or confusing to those used to doing business in the Western world. This article describes some of the keys to better understanding the business culture in China and gives some practical advice on how to adapt to that market.

Business culture in China: keys to understanding it

Business culture in China is strongly influenced by the country’s broader cultural context. The underlying philosophical basis draws from sources that differ from Western knowledge, especially Confucianism. 

This philosophical and religious system places value on personal effort to achieve harmony in life. Its translation to the business world might be that in China’s business culture the aim is for a harmonious relationship between business partners. 

Consequently there are some points about the business culture in China that need to be understood before embarking on an expansion into that market:

• Preference for relatively slow, risk-free decision-making processes. In China’s business culture, decision-making is often more protracted than in a typical Western context. Delays are common and people may not be comfortable with strict deadlines. This is because in the Chinese context the preference is to take into consideration all the long-term problems and alternatives, seeking to limit risks to a level to which Western companies are not accustomed. Patience and calm reflection are valued.
• Strict respect for hierarchies. In China’s business culture, those considered leaders are shown great deference, and vertical hierarchies are highly respected. In meetings, for example, people considered subordinates are not expected to express their opinion. 
• Emphasis on developing a relationship of trust. This means that a deal with a Chinese trading partner is more likely to be successful if it comes from an already known and trusted contact, capable of acting as an intermediary. It will also mean meetings need to be held to work on the more personal side of business (sporting events, dinners, etc.) where Chinese partners hope to get to know their potential Western counterparts better. On the other hand, once sufficient trust has been established, there is a preference for cultivating long-lasting business relationships. 
• Special preferences in negotiations. Bargaining is common: failure to negotiate prices can be seen as a sign of weakness and derail a business relationship. On the other hand, the use of psychological tactics or tactics that attempt to put pressure on the negotiation are not appreciated, as they are taken as a lack of respect or a breach of trust between partners.

How businesses can adapt to Chinese business culture

The business culture in China has caused many a headache for many companies, so knowing some of its special features indicated above is key.

There is one key tactic to maximize your chances of success: if you want to integrate into the business culture in China, knowledge of their language is absolutely essential.

The first reason to work on developing a specific communication strategy for China is that Chinese people value their own culture and language very highly. Knowing their language and preparing a communication strategy in Chinese is a crucial starting point for any later agreement.

But there is another fundamental reason for having a communication strategy in Chinese: the business culture in China has a communication style that is completely different from the West’s; the communication barrier consists of more than not speaking the language.

Business culture in China does not like tacitly expressed disagreement: partners often rely on indirect statements. The business culture in China stands out for its highly complex communication, going beyond the most common cultural problems for companies operating in foreign markets.

This complicates communication even more and again requires language and cultural experts who are able to interpret the communication of Chinese partners.

Seprotec: your partner to adapt to business culture in China

At Seprotec we work to become the partners of companies that are looking to expand their borders and want to make the leap to localization in China. 

Our translation, localization, and interpreting services can become the command center from which to manage communication in a disparate context such as that of China. 

Through the alliance between our human team and our access to state-of-the-art technologies, at Seprotec we are able to develop a successful communication strategy. 

We help businesses understand exactly the communications they are dealing with even in a complex language like Chinese. In turn, we generate a clear and transparent message about the company, capable of making a difference and gaining a foothold in the promising Chinese market.