Managing business relationships in China

Written by Sarah Schatz November 2013. Posted in Business relations, Int. Skills

Managing business relationships in China

When doing business in China it is necessary to know what their idea of a business relationship is. In this article you will learn about the importance of business relationships in China and what to do and what not to do when building one.

China is strongly relationship orientated. Personal relationships are of the greatest importance. The network of professional alliances and personal relationships of your potential business partner is what makes him or her trustworthy and credible in the eyes of the Chinese people.  Therefore getting to know each other is of the highest importance. In the West you can discuss the deal directly at the first meeting, but in China this will not be the case.  Efficient business will not be done when you don’t pay attention to the customs. So what is the best way to get started?

Making time to become acquainted with each other and having meetings in person are the first step in doing business. The introduction is the way you should start. Hire a good intermediary whose mother tongue is Mandarin or Cantonese, who understands something about your potential business partner’s company and who is credible. Prepare the first meeting thoroughly and let yourself be introduced by your intermediary. This will provide a level of trust between the Chinese partners and you. He or she will be seen as playing an extending role of support for both parties.  Provide the company with as much information as possible about your history and product. It will be one of the bricks in building the trust that is needed for doing business in China.

There is little in common between China and the West in terms of managing a business relationship. The differences are major and can be divided into three. First, having a personal relationship and investing in your partner is different than in the West. In the West, professional and personal relations should be separated. It is not appropriate to combine the two in a business environment, while in China this is a must. Knowing your business partner on a personal level from the beginning is the way you know if they are good potential partners and not a waste of time. Second, no email, telephone call or letter will you get into a company in China. You must know people. We know this concept in the West, but it is not very common also more personal connections: partners, colleagues and family members who have a proven record and can recommend you. Finally, it is recommended to invite your Chinese business partner for a dinner. Eating in a restaurant and having good food is a way of maintaining the relationship. Spend good money on a good dinner and do not split the bill. Just pay and show interest in their professional and personal life. It means you are generous and it will be other brick in the relationship-building process.

The road to success consists of maintaining the relationship in the right way. Respect and trust, as said before, are the key elements. Being honest and keeping promises made will gain the trust of your Chinese business partner. A long term relationship can be obtained when you develop a friendship with your partner. In the building process of a relationship a shift will appear from formal to informal if all goes well. Trust on professional and personal levels establishes the friendship between partners. Be aware that this takes time. Keep it formal with personal interest in the beginning, but let it develop and keep coming back. If you show up only a few times, your deal is not sealed, while being very informal right away will harm more than you expect.

When building a relationship make sure to bring different people with you. You can send a manager or a colleague, but age is influential in China. The older a person is, the wiser. It will be highly appreciated if a senior manager or a boss would also attend. It means that you are taking the business relationship between the companies seriously.