10 Tips For Doing Business in China

Hello monkeys, just thought about doing this since it's applicable to many industries (i.e. Investment Banking, Management Consulting, Private Banking, and many more)

Beginning the Relationship

  1. Always remember the saying, "Let's first become friends, then do business." This is vital! Remember that it's building relationships first, then do business later. Westerners may find that it is the other way around.
  2. Start from the bottom. Subordinates can either be your best friend or your worst enemy! If you treat them well, they'll definitely pass this on to higher management as someone that can help the business in many ways. The reverse is true as well.
  3. Try your best to meet the client/partner face-to-face. For example, my father regularly has business trips to China simply to "make relationships" and nothing more. They rarely talk business! Of course, this may look like a very slow and costly relationship building especially in the banking industry where everything goes by real fast.

Getting down to business

  1. In China, it is very common that business is done over dinner and drinks, unlike in Western countries where it's done in boardrooms or on the golf course. One thing worth noting is that most "contracts" are done through conversations and not on paper. Of course, there are some risks that the "contract" may not be fully fulfilled since they're done informally.
  2. Always, and I mean ALWAYS "fight" to pay for the food and drinks. This is often seen as a good indicator of how thrifty you'd be later on.
  3. Table etiquette is very, very important. There are very many "rules" that need to be followed, but take it slow; foreigners certainly get more lenience. Just make sure you don't do some taboo things like sticking chopsticks in the center of the rice, as this is the way to sacrifice and is therefore considered to be inauspicious. Take a look at this for more information: Customs and etiquette in Chinese dining
  4. It is customary to drink while/after the meal. Make sure you have a strong liver and don't reject drink offers/toasts (unless, of course, you think you're drunk!)
  5. Don't take offense to the Chinese way of "making relationships". For example, they may ask you direct questions, for example, if you're a man, you might be asked about your financial assets; if you're a woman, you will undoubtedly be asked about your marital status.

Keeping in contact

  1. I think this aspect is pretty much the same as the Western way of doing business. Keep contact regularly, make phone calls, ask your clients out for lunch/dinner, and treat them well when they're in your city!
  2. Control your temper when things don't go your way. Save your client's "face" when something bad happens. This concept of "face" is very important in China, and it refers to a person's dignity and reputation. Don't ever let it flush down the drain due to some minor problem.

I guess that's it! Feel free to add more, I might've missed some important things too.

Sources:
Personal experiences
Doing Business in China
10 Subtle Cultural Mistakes You May Make Doing Business in China

Comments (65)

Best Response
Apr 14, 2017

Also, google and study the 36 Ji. That is the playbook for how they will cheat and manipulate you throughout your relationship.

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Apr 15, 2017

Loot a Burning House

When a country is beset by internal conflicts, when disease and famine ravage the population, when corruption and crime are rampant, then it will be unable to deal with an outside threat. This is the time to attack.

Replace The Beams With Rotten Timbers

Disrupt the enemy's formations, interfere with their methods of operations, change the rules in which they are used to following, go contrary to their standard training. In this way you remove the supporting pillar, the common link that makes a group of men an effective fighting force.

Yea I see what you mean

Array

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Apr 16, 2017
Paladin:

Also, google and study the 36 Ji. That is the playbook for how they will cheat and manipulate you throughout your relationship.

I've never heard of this, so I Googled it. Very helpful. Thanks.

Apr 14, 2017

1: Be Chinese. 2: Be Chinese.

Don't say this in a banking interview:

Which superhero would you be and why? I want to be like Robin Hood, stealing from the rich and giving to the poor - me.

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Apr 15, 2017

Informative read. +1

Apr 15, 2017

This reminds me of a book co-authored by Muddy waters' Block. Good stuff OP

Apr 15, 2017

all about that guanxi

WSO's COO (Chief Operating Orangutan) | My Linkedin

Apr 16, 2017

Read James Clavell's Asian Saga for a primer on Chinese and Japanese customs. Read it before my internship, and it went quite good.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

Apr 16, 2017

Care to provide a very high level summary, i.e. cliffs? Thanks

Apr 17, 2017

It's a 5-novel saga. Mainly adapted from the story of Swire & Co. and Jardines Matheson.

Stuff you'll learn: the concept of "face", "luck", gambling, cheating, blackmail, payback, "gifts"

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

Apr 17, 2017

My business partner is Chinese, so I delegate all China-related interactions to her.

Apr 17, 2017

They don't call it Guanxi for nothing.

Apr 17, 2017

should have intimidated

Apr 17, 2017

The US will be the dominant power until the end of the world... in 2012.

Anyways... I'd imagine bankers in China are more well off than 99% of the population. Are you saying that we're in a position to step on the backs of the poor & powerless there?

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We are excited to formally extend to you an offer to join Bank of Ameria

Apr 17, 2017

No absolutely not. @piperjaffray.

Power >> Money in China because the CCP is an authoritarian government that controls everything. No matter how rich you are, if you piss off someone who is in the power hierarchy in the CCP, you will lose all your assets like that/

Power > Money. Bankers can have all the money in the world, but perhaps even more than in the west, they can be fucked over big time by 'big brothers'.

Apr 17, 2017

So this incessant corruption among the rich and those in control will hinder China from being the ultimate economic power eh? I can just imagine having to pay an exorbitant protection fee to these "big brothers" with tire irons just to walk across the street every morning. How is the situation in HK where it's mostly governed by legacy British rule of law?

=========================================
We are excited to formally extend to you an offer to join Bank of Ameria

Apr 17, 2017

Oh Hong Kong is completely different story. Definitely much, much better. The legal structure there is very mature and definitely comparable to the State. Hong Kong also has legit dry-cleaners.

Apr 17, 2017

I've heard about rudeness in China like people spitting on the ground or bumping into you like it was nothing, but spilling bleach on your expensive suit at a well-known laundry chain and then telling you to GTFO is just medieval man.

=========================================
We are excited to formally extend to you an offer to join Bank of Ameria

Apr 17, 2017

you gotta pull out your glock like we do in the states....

Apr 17, 2017
ibhopeful532:

Summarily, just wanted to give everyone who perhaps has never had the chance to work in China some perspective. China, for the foreseeable future, is a society governed by "Ren Qing "- relationships, and power hierarchy. It is a society in which the rich and well-connected routinely mold, bend, and break laws to further their own self interests. It is a country where who-you-know is often a sufficient condition to do whatever you need. All people, from the poor, to the rich,live in fear. They fear a change to the status-quo of the power hierarchy.

I'm really not seeing how this is any different than the States...

Apr 17, 2017

you are stupid. i will elaborate later.

Apr 17, 2017

I don't know. If a small dry cleaner in the US fucked up your suit do you think they will pay $1,000 just like that? I don't doubt your claim that china has much more corruption, but the US is far from perfect too.

In the US I suppose you could go to court for your suit. But that would take alot of time/effort. And if they refuse to pay after the court sentence than it will take even more time. Most people would probably just give up and end with the same result.

Apr 17, 2017
ReadLine:

I don't know. If a small dry cleaner in the US fucked up your suit do you think they will pay $1,000 just like that? I don't doubt your claim that china has much more corruption, but the US is far from perfect too.

In the US I suppose you could go to court for your suit. But that would take alot of time/effort. And if they refuse to pay after the court sentence than it will take even more time. Most people would probably just give up and end with the same result.

exactly my thoughts... my suit got shrank by a NYC dry cleaner and I got about 5 minutes of "i dont understand what you're saying" when I tried to explain that they've fucked up my only-interviewsuit-in-college (okay I had bought more at the time but this was really my first investment of that scale) of >$500. the other owner came out and basically told me to bring the suit and somehow prove that it was shrunken ... yea didn't happen

when you demanded your refund, did you tell them that it was a "$1000-us-dollar" suit? any small business owner of the right mind would do whatever they can to avoid that payment. the bleach could've been just a mistake..

sorry to hear about your suit though ..

Apr 17, 2017

Big law suits take a lot of time, but this would be a small claims case in the U.S. (think judge judy). A single afternoon. Collection might be more difficult.

Apr 17, 2017

In the US, banks control the government. In China, the government controls the banks. It's no coincidence that the Chinese stock markets are highly correlated to the successes and failures of governmental policies

Apr 17, 2017

China did not start modernizing until about 30 years ago, the U.S. has been at it for 200 years...what the hell are you expecting? Are India, Brazil, and Russia any better? For China to have gotten to where it is now in such a short span of time is already unprecedented. True, the legal, financial, and government systems in China have not kept up with the pace of economic growth, but give it some time. There's a reason China is still a "developing nation."

Apr 17, 2017

The real shocker in all this is that you paid a $1000 for a Brooks Brothers suit?

Apr 17, 2017

Nothing in that post was surprising...

Well actually maybe the part about the $1000 suit.

Apr 17, 2017

The future of Chinese Economy hinges on a bottle of bleach and a suit (owned by a 20 something year old).

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Apr 17, 2017
brick:

The future of Chinese Economy hinges on a bottle of bleach and a suit (owned by a 20 something year old).

Very well said. Silver banana for you.

OP, your myopic outlook and self-centered world view is laughable. Corruption and an inadequate legal system are the signs of a developing economy. Over 100 years ago, the US was the number one counterfeiter in the world.

And if you think any dry cleaner in the US will compensate you for a ruined suit, think again. All cleaners absolve themselves of all responsibility for shrinking, dying, or otherwise damaging your clothes.

Sorry to hear about the suit though.

Apr 17, 2017

IDK if evidence of corruption and lawlessness in Chinese society suggests that country will not continue to progress. Look at the US over the past 50 years. Mobsters used to run NY, Boston, Chicago etc.

Maybe money is circulated in the corrupt circles, but eventually even the mobsters have to go to Starbucks (retail) and spend money that is taxed. Gov't eventually benefits from the increased $$ in the country and they can finance the proper law enforcement.

Apr 17, 2017

actually they don't have sales tax in china

Apr 17, 2017

I agree with Power>money but the chinese government is very centralized, although corrputed but very efficient to get things done. They only have one party in their congress. Think about how efficient will that be when they execute their policies. Very dangerous with a dictator but very efficient with a good congress leader. That is all it matters. Can we get a bill pass within a month? Hell Noooooooooooooo

Apr 17, 2017

China's stimulation package roll out has been considered the best among all countries (including US and most of Europe) this time around. They have gotten a lot done with tight control in last 20 years compared to rest of Asia, with no significant natural resource like floating in oil.

Apr 17, 2017

$1000 Brooks Brothers suit......thanks for the laugh

Apr 17, 2017

US will be the dominating force in mid-future. I believe most Chinese eilites know that too.

Apr 17, 2017

Honestly, that is by FAR not the worst thing that could've happened to you. Sorry for the loss though.

Apr 17, 2017

The Rio Tinto guys in Chinese jail for alleged price fixing, now that's something worth complaining about.

Apr 17, 2017

Fucking hilarious thread. Here is my only response, though: http://www.youtube.com/watch?v=qQx_AN02XuM [scroll to exactly 1:42]

Apr 17, 2017

Everyone seems to be missing the point that there is no such thing as Power > Money. In China no power = no money, and that's all you really need to know.

Apr 17, 2017

It's cranberry juice... cran-apple.

Apr 17, 2017
jackofalltrades:

It's cranberry juice... cran-apple.

I know it's insane to come all the way up here but they really ARE the best!

Apr 17, 2017

That's why you always ask a native for recommendations in China.

But same thing happens anywhere. My college only had one dry cleaner in the 20 mile vicinity and messed up clothes all the time. If you actually think American cops would deal with something like this... you're dead wrong.

Only difference is Americans can sue for the most minor of offenses. This doesn't really exist anywhere else.

Are you a CEO, CFO or other executive facing these or similar charges?
Why should you go to jail for a crime someone else noticed?

Apr 17, 2017

Well in America you can sue for just about anything, I see it as the flip side of China being too authoritative, power gone to the layman's head.

Anyone remember the $67 million dollar pants story?

http://abcnews.go.com/TheLaw/LegalCenter/story?id=...
the Korean cleaners actually wanted to settle for $8000 which was already too good of a deal...

=========================================
We are excited to formally extend to you an offer to join Bank of Ameria

Apr 17, 2017
PiperJaffrayChiang:

Well in America you can sue for just about anything, I see it as the flip side of China being too authoritative, power gone to the layman's head.

Anyone remember the $67 million dollar pants story?

http://abcnews.go.com/TheLaw/LegalCenter/story?id=...
the Korean cleaners actually wanted to settle for $8000 which was already too good of a deal...

Ha! I was interning with a lobbying group in D.C. that summer. We went to the trial to support the cleaners and talk about tort reform. That judge is a douche, and every colleague hated him (surprise, I know).

Apr 17, 2017

You generalize your experience with one dry cleaner into making broad statements that Chinese government is corrupt/isn't bounded by law? Drawing some pretty big conclusions there coming from someone with little experience

Apr 17, 2017

Im sorry, but you yanks are funny........

How does a story about a cleaner messing up your suit have anything to do with whether or not China can become a major superpower. I dont see the logic...what you described can happen to anyone and anywhere....

It is true that you nedd Guan Xi to get anything done in China......you just gotta accept that.....and if you dont have any good contacts....then tough...ppl have worked hard down the years to gain this......

Apr 17, 2017

Pardon me, but "Guan Xi " is Guan Xi, which is the word for relationship you seemed to have referred to.
"Ren Qing " is Ren Qing.

I think the current way of Chinese business will stay for a long time, maybe a century or two.
At least until majority of the Chinese are educated in a Westernized culture/system, which is unlikely to happen given China's growth for the past decade while the rest of the world actually are adapting to China's ways instead of the other way round.

I believe in any business culture there are bound to be pros and cons. China's culture does not hold much onto meritocracy as much as the Western world, which allows the less-privileged class of the society to go out there and make their way up in the society irregardless of their background/credentials. One would just need to adapt and recognize the new way of achieving their goals to benefit/exploit the "system".

Put simply, instead of "building up a solid resume", one would need to place much more emphasis on "networking", so to speak.

Personally, I think Guan Xi and Ren Qing are godsend. It is a way of business which allows the rest of the world to "exploit" China's culture and be part of their system with more ease. It is like exploiting a loophole which everyone recognizes as acceptable, perhaps even barely lawful.

Apr 17, 2017

I don't think the anecdotal evidence is too convincing precisely because you can't generalize from one experience.

But when push comes to shove, we still have 11 aircraft carriers and they don't.

Apr 17, 2017

You could always just throw a molotov cocktail through the front window at 2 a.m....at least that's how I'd handle this situation, in true Space Monkey fashion.

"I just want to be a monkey of average intelligence who wears a suit. I'll go to business school!"

Apr 17, 2017

thats such a dumb example. cant believe from this example you would be able to draw such a conclusion.
good job.

Apr 17, 2017

it might be just one example. But anyone who worked/lived in Taiwan/China know that it is how biz works there...Taiwan might be less extreme but China is definitely the case

Apr 17, 2017

Lol at him asking for them to drop $1,000 USD in Beijing. A meal there costs $1 USD and a bespoke suit costs $150. It would be like you walking into a dry cleaner and demanding $7,000 USD for your suit. I feel bad and I'm sorry, but it's really not like that wouldn't happen in the US either.

Apr 17, 2017

OP: I agree with your conclusions and I sympathize with you. There's really nothing you could do unless you're connected with the authorities. Even then, expect to pay for their time and energy getting your $$ back. In the United States, I'm certain the police would file a report and refer you to small claims court. Eventually they'd be order to repay you, but probably renege on the obligation later on...

One of my friends was confronted by these local "big brother" types because they believed he had extorted money from them. Basically my friend had a business deal in that village that went south due to mismanagement on the Chinese end, and the managers resorted to hiring goons to try to rough him up. A few punches were thrown, the police were called, and he basically got the run-around for 6 hours sitting in the police station where he was refused medical treatment. The attackers got off with a warning, even though charges were pressed. Apparently the Chinese businessmen were well connected with the village cops.

Apr 17, 2017

Sorry about your suit. But...policemen arent really the go-to people if you get in situations like that in China.
Connections are just as important in the U.S as in China, only thing is China is pretty blunt about it, while U.S is doing all it can to make its people tnk its all about democracy.....

Apr 17, 2017

Should have said this:

Wo cao ni shi ba bei zu zong!

Apr 17, 2017

[Deleted! No longer relevant.]

Apr 17, 2017
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Apr 17, 2017