|Tips for Doing Business in China|
I. Management Tips
1. Currently, the most important business issues for managers (natives and expats) in China are:a. Staff retention
b. Obtaining finance
c. New contract law
d. Transfer pricing
e. Finding markets locally
f. Protecting intellectual property
2. Effective leadership in China includes the following behaviors:• Respect for Chinese history and culture
• Even temper
• To make the distinction “what we do in (home country)”and “what we do in China” – recognition that the West is not automatically better!
3. Business is not conducted during the following times and or occasions:Chinese New Year – 23 Jan – 1 Feb 2009
QingMing Festival – 4-6 April 2009
Labor Day – 1-3 May 2009
Dragon Boat Festival – 28-30 May 2009
Mid-Autumn festival 1-8 October 2009
National Day 1-8 October 2009
New Years Day 1-2 January 2010
In China most of the dates are decided according to the moon, so they vary every year. The exceptions are:
• Labor Day
• National Day
• New Years Day
II. Expats in China
1. What are the most important issues for expat managers in China to get right?a. Respect for China
b. Using proper channels to hire and fire workers
c. Understanding the laws
2. How are expat managers typically perceived?a. It depends which country they come from, so difficult to say exactly. However, many expat managers are regarded as aloof and not in tune with their Chinese workers. This is particularly an issue with HK and Taiwan Chinese (local workers think that HK/Taiwan managers look down on mainland Chinese).
b. If an expat doesn’t give proper respect to China, he or she can be perceived by Chinese nationals as arrogant and insensitive.
c. Some actions and behaviors are appropriate for locals of China, yet should not be adopted by expats who are not completely fluent in China’s practices and culture. Here are a few examples:
ii. Criticizing the government
iii. Causing the Chinese party to lose face (by embarrassing them for example)
III. Clients and Business Development Tips
1. How can vendors be effective at building rapport with potential clients in China?
a. Identifying and selecting the right partner in China is key.
2. What should vendors do when visiting a prospect or a client?a. Spend some time at the beginning of the meeting in social small talk rather than launching straight into business.
b. Address the counterpart by Title and Name (General Manager Wang etc).
c. Have a proper business card in Chinese and English to give the Chinese counterpart. Give the card with both hands with a small nod of the head.
3. What should vendors avoid doing? [ re: rank / formality ]a. Never put the Chinese counterpart’s business card straight into the pocket, look carefully at it and keep it visible until the end of the meeting.
b. NEVER fold the card.
4. What are the most important things to keep in mind when negotiating with prospects or clients from China?a. Circumstances/context change so the terms of agreements change as well.
b. Patience is key. The period that often takes the longest time and therefore is unsettling for unaccustomed negotiators, is when developing the “GuanXi” (relationship) with the Chinese part.
5. What is considered a conflict and how are conflicts handled?Conflicts can arise out of what western managers might consider a very trivial thing which in the west would be resolved between the parties concerned by an apology. Formal apologies bring “shame” on the Chinese party (even if they are in the wrong) and should be done in private or handled by a third party, neutral to the conflict, who will ensure that no-one loses face.
6. After the end of the contract, the most effective thing one can do to maintain a relationship (for the purpose of getting follow-on business) is:
a. Call or visit on a regular basis.
For additional information, please contact ITAP China (Shi Bisset & Associates).
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