- Networking and personal relationships dictate the course of business in China
- Don’t risk misunderstandings with customers or partners – consider their feelings and reputation first
- Be prepared to move fast into new markets once relationships have been established
Among all the complexities you need to navigate when doing business in China, building and maintaining good relationships should be your top priority. The definition of networking takes on a whole new meaning in the Chinese business community, where relationship building and personal trust are held in the highest regard. Following these top five tips will put you in good stead to start out a business in China:
1. The power of guanxi
Cultivating good business and personal relationships is essential to most business success in China. It is so critical that the local term for relationship, guanxi, is widely recognized around the globe. At its core, guanxi points to the importance of building a strong network within the business community, which is just as important in any country. The Chinese take this further and have high regard for relationships built outside business meetings and boardrooms, so it takes significant patience and effort to nurture guanxi. Once established, it builds personal trust and helps open the door to potential business opportunities. However, having a strong business proposition would still be crucial.
2. Small talk first, big deal later
The Chinese seldom start discussing business right off the bat, preferring instead to get to know more about their business associates first. Don’t take offence if conversation topics quickly become rather personal: the Chinese definition of small talk often includes questions on one’s age or marital status or even salary. However, avoid questions that could negatively reflect someone’s financial or social status.
3. Safeguard one’s reputation
As the previous point might have hinted, reputation is of utmost importance in China. Mianzi, or face, must always be respected and protected, so avoid any situation that might result in a ‘loss of face’ causing them to feel embarrassed. Gaining a better understanding of China’s local customs and business culture can help foreign businesses eliminate potential misunderstandings, which might otherwise break lucrative deals and damage working relationships.
4. Build a local team
China places strong emphasis on its local customs and business culture. Hence, it is important that organizations are supported by local employees who can help them navigate local business deals and work with local partners. The Chinese are most comfortable working with others who understand the local environment, so having an office with local faces is important to put partners and clients at ease and ensure business success. China is also a complex market with tremendous growth potential, and it is essential that organizations have local domain knowledge to help the business develop the right products and implement the right growth strategy.
5. Be nimble – prepare to move fast
Relationship-building can be slow, but the actual business gets done fast in China. Hiring a local team and working with local business partners will help companies quickly identify local preferences and better tailor products to meet the needs of local consumers. They also need to be flexible and be able to move quickly to address the fast-changing Chinese market. Global brands such as Unilever and Nike14, for example, have researched their Chinese audience and designed products that cater specifically to these needs.