Despite the fact that China has become an increasingly popular country to do business with there are still some challenges, especially when it comes to cultural and regulatory barriers. According to the World Banks’s 2016 Doing Business index, out of a total of 189 countries, China ranks 84 in terms of ease of doing business.
Below we summarize some tips to take into account when doing business in China based on the report “China: A unique opportunity for LAC businesses”, prepared by the ConnectAmericas research team.
- The importance of face to face: The Chinese place a high value on building interpersonal relationships, before business alliances. If the relationship is productive and trusting, commercial transactions will flow naturally. This differs in Western culture, where successful transactions precede personal ties.
- Guanxi: This term refers to the result of close personal relations based on the principles of mutual interest and benefit. From a business standpoint, guanxi is seen as a reciprocal relationship. This is why it is important to nurture it through regular contact.
- The role of the State: The State, having been a centrally planned economy for several years, continues to play an important role. Many large companies continue to be state-owned or include elements of state control and participation. It is advisable to become familiar with the political environment where your Chinese partners operate and to not underestimate the power in the hands of mayors and political party secretaries.
- Etiquette and protocol: Using the correct form of conversation can produce positive results in China. Individuals must be treated by their professional title and last name, and if you do not know the title, refer to Mr., Mrs. or Miss followed by the last name. Conversation topics for the Chinese include questions regarding your age, income or marital status but are not intended to be offensive. Avoid discussing politics or political leaders at your first business meeting.
- Preparing for meetings: We recommend sending detailed information beforehand, such as objectives, participants’ names and ranks, and tentative discussion items. Business cards are a must, and having them translated into Chinese is considered a sign of courtesy. When you exchange cards use simple expressions like "Ni Hao" (hello), "Zao Shang Hao" (good morning), and "Wu Xia Hao" (good afternoon) to create a friendly atmosphere.
- Gifts: Gifting is very common in Chinese culture and is usually done to express friendship and esteem. Gifts to avoid include watches and cut flowers. The simplest option is to go with liquor or photography books. When wrapping gifts, try to choose yellow or red since they are considered lucky colors and are consistent with the colors of their flag.
If you are interested in learning more about the Chinese economy and the possibilities for Latin America and the Caribbean, we invite you to read the following exclusive document: “China: A unique opportunity for LAC businesses”.