What You Need to Know About Doing Business with China

two business men shaking hands

Outsourcing in China is an excellent strategy to expand operations and improve your business while reducing costs. But outsourcing manufacturing operations in China is not a new concept for many Western countries. For starters, the country has the workforce, infrastructure, and technology that many companies in other countries don’t have enough of.   However, to be successful in dealing with Chinese companies, here are the things that you should bear in mind, especially if you are a foreigner:

1. Be familiar with Chinese business etiquette

In any country, knowing the basic etiquette is vital to maintain respect for the people you encounter. If you are going to be doing business in China or with Chinese business people, you should be well acquainted with proper business etiquette. Things like greetings, handshakes, attire, business cards, and general behavior, for example, can be entirely different from what you’re familiar with.

2. Build Guanxi

Guanxi (关系) translates to relationships. In the business world of China, guanxi is defined by the relationships you form with other people that can help you achieve success. And to reach success, you should learn how to build and maintain guanxi. Many people in China build relationships by gathering for a social event, usually to dine together. So if you want to deal with other successful people, you should attend as many social events as you can and engage with partners as you’re there.

3. Learn as much of the language as you can

It is difficult to learn the Chinese language without a background, and that is why Chinese business people don’t expect foreigners to speak it. However, knowing at least the basic Chinese phrases can help put you at an edge and build better guanxi. Before doing business in China, take a short course on the basics. In this way, you can understand and speak at least the simplest phrases.

4. Be patient

Chinese people prefer to negotiate terms of a contract before they give their ‘yes.’ Unlike Westerners, who typically have a goal in mind prior to the meeting. When you’re dealing with Chinese business people, it’s essential to be patient. Wait until you have built and established guanxi with them before you push for a deal. The Chinese need more time to trust and make business decisions, especially with foreigners.

5. Give appropriate business gifts

guys having a meeting

Gift-giving is a big part of Chinese culture, even more so in the business setting. While it is not common to give gifts to colleagues when there is no special occasion in the West, it’s a whole other story in China. You can build guanxi with your Chinese partners from the get-go by giving them business gifts like tea leaves, red wine, silk, mooncakes, or something from your country that is not available in China. Remember to take note of the gifts that you should not give, as well.

Doing business in China can open up a whole new world of opportunities for your company. So if you are serious about your goals to interact with Chinese businesspeople, be sure to keep these things in mind.