Doing Business in China

1
Doing Business in China

• 22 February 2012
• by
• Sigrid Brevik Wangsness

2
Gesteland The Chinese Negotiator

• Group B RF, Formal, Monochronic, Reserved
• Other cultures in the same group?
• How does Gesteland describe most Asian cultures?

3
New Sources

• UIBE University of International Business and
  Economics in Beijing
• The Norwegian Embassy in Beijing
• Nordic Resource Group
• Consultancy firm Helping You Understand China

4
How useful are Cultural Guides How to Do
Business with the Chinese?

• No doubt Easy to make mistakes many challenges
  
• But how helpful are the Dos and Donts?
• How crucial is it, for instance, that you present
  your business cards with both hands or avoid
  having too firm a handshake?
• Learn as much as possible about the culture
  before you start the process

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Background

• 2001 China member of the WTO
• One of the worlds largest and fastest growing
  economies
• The worlds largest surplus on the balance of
  payments
• The worlds largest currency reserves
• The worlds largest recipient of foreign direct
  investments
• The worlds largest population (1.3bn)
• RMB ( juan)

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Aspects to Keep in Mind When Doing Business
with China

• China is NOT a homogeneous market
  (vs. Gesteland)
• Market potential?
• Customer preferences
• Marketing

7
Cultural Values

• Guanxi
• How important is it, and how different is it
  from the social networks we have in Europe?
• Hierarchy
• Face
• Communication

8
Contemporary Chinese Culture- rooted in
Confucian ideals

• Confucianism (Confucius, 551-478 BC)
• How does Confucianism affect Chinese daily life
  (cf. the rest of East Asia)?
• Family-centred / relationship-oriented
• Collectivism (not individualism)
• Human relationships in society hierarchical
• Virtues humanity (Ren), righteousness (Yi),
  friendship, wisdom, trustworthiness, moderation
• gt HARMONY BALANCEgt indirect comm.

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Contemporary Chinese Culture

• Alongside Confucianism, Taoism and Buddhism are
  important influences on contemporary Chinese
  culture, reinforcing the values of Confucianism
• Taoism the harmonization of opposites
• male and female, man and nature
• Buddhism ethical behaviour, wisdom, the middle
  way

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Contemporary Chinese Culture

• Five words to understand the nature of
  contemporary Chinese culture
• Guanxirelationships/personal contacts/network
• Renqing doing favours for each other
• Li courtesy/politeness/doing the proper thing
• Keqi guest gt behave like one, respect the host
• Mianzi face gt shameful to lose face, lose
  ones credit/good name/ reputation

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Chinese Business Culture

• Give face, save face, lose face also an essential
  part of Chinese business culture
• Show anger with a smile, polite refusal (not
  No..)
• Gesteland National culture vs. business culture
• Kristoffersen To do business in China you need
  to know a lot more than just business.

12
Socializing

• Respect interest in Chinese culture
• Their sense of pride avoid politically
  sensitive issues
• Drinking
• Karaoke
• Gift giving

13
Joint Ventures Choosing a Chinese Business
Partner

• Major language barriers and cultural differences
  Need for local knowledge/ network
• Hiring your own interpreter?
• Conflicts
• What if your joint venture partner has a second
  agenda or there is widespread corruption within
  that company?

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Challenges When Establishing a Business in China

• Corruption
• How to draw the line between corruption and doing
  favours for friends?
• Kristoffersen Norwegians are scared to death
  about corruption.
• The Chinese governments fight against
  corruption.
• Time and costs

15
Challenges and Comparisons

• Laws and regulations
• Financial restrictions
• The importance of Hong Kong
• Comparisons
• China vs. Japan
• China vs. Singapore Hong Kong Japan