Kea Connect helps Kiwi companies go global by connecting them to industry experts around the world. This week we spotlight World Class New Zealander Anthony Aucutt who has lived and worked in Greater China for 20 years. Anthony shares his insights about cultural differences to keep in mind when doing business in China.
Over the last 20 years, I have lived and worked in Beijing, Tianjin, Guangzhou and Shanghai. During this time, I have been lucky to witness the incredible transformation that has occurred across China, its cities and in the mindsets of my Chinese colleagues and friends.
The most obvious and visible changes I’ve seen are the result of the Central Government’s 5-year development plans and reforms. New motorways have been built. Major cities have been connected over bays and seas by some of the longest bridges in the world. Bullet and high-speed trains and rail tracks span the country, including to the far west corners of Xinjiang and Tibet, cutting travel time by two-thirds. Underground subway lines mean you can access most areas of any city. Airports and shipping ports have been upgraded to create efficient and modern logistics and transportation hubs.
However, less obvious and visible to foreigners are the peculiarities of the Chinese culture and how it differs from New Zealand's own. All of these differences matter when doing business in China.
Relationship, friendship and trust culture
- Good relationships or ‘guanxi’ are key to doing business in China.
- The Chinese by nature are friendly and once you have gained their friendship and ‘guanxi’, as well as built up trust, they will be loyal and long-term friends. This is an essential platform for doing long-term business in China.
- Whereas in New Zealand, there is less emphasis on ‘guanxi’ and business may commence quicker, in China there is a longer process to gain trust and respect before a business relationship can start. This can take several meetings and involve the obligatory dinner banquet, where the Chinese host will order multiple courses and ply guests with ‘bai jiu’ or Chinese spirits. The banquet coupled with alcohol is a great leveler. It breaks the ice and gives the host the chance to truly understand the mind-set, personality and character of the potential business partner. Moreover, if the host sees that the guest can handle their wine, the guest will gain added respect.
Gift giving culture
- The Chinese are very generous and, as the business relationship develops and grows, there will be annual banquets and seasonal gift giving. The purpose of these practices is to show appreciation to the continued friendship and to share in the success of the business.
- Gifts are also exchanged in the lead up to the many Chinese festivals throughout the year. The Spring Festival, or Chinese Lunar New Year, is celebrated on the first day of the first month in the lunar calendar by making steamed dumplings for family gatherings. The Dragon Boat Festival is celebrated on the fifth day of the fifth lunar month by eating sticky rice cakes. The Mid-Autumn Festival is celebrated on the fifteenth day of the eighth lunar month by gifting moon-cakes typically made with an egg yolk inside, a homage to the full moon. Nowadays, there are many different types of moon-cakes, including chocolate covered ice-cream moon-cakes.
- As seen with the gift giving culture, most of the festivals are celebrated with food, such as steamed dumplings, sticky rice cakes and moon-cakes. Eating is a very important part of Chinese culture and the food is related to different festivals and varies across China's provinces.
- In contrast to New Zealand where lunch breaks are used for going to the gym, running errands or grabbing a quick bite to eat, lunch in China a very social and important time of the day. The Chinese love to meet at midday and head to a local restaurant to enjoy lunch together. This time is used to get away from the office and talk about life and work in a more informal environment.
‘Face’ and communication culture
- It is extremely important to never make a person ‘lose face’ (be shamed) by criticising, ignoring, or making fun of them, especially in front of their colleagues and friends.
- In fact, many Chinese believe that even saying 'no' to someone will make the other person ‘lose face’, so they tend to communicate in a more indirect style.
- Exchanging business cards is also an important part of conducting business and building relationships in China, so make sure you bring an ample supply. When you meet someone for the first time, it is custom to exchange business cards by giving and receiving the card with both hands. As you receive the business card, make sure you take time to study the name and title of the person as this signals respect.
Leadership and office culture
- In New Zealand, it is common for business leaders and managers to encourage and embrace team members’ feedback and input. In China, this is less common and the authority of a leader or manager is not questioned. Whatever the leader or manager says goes.
- Daily routine in China also differs from that in New Zealand. For instance, the Chinese tend to arrive later at work (about 9am) and work later (they go bed after midnight).
China is a fascinating and rewarding place to do business but understanding these cultural differences will make it a lot easier.
Kea Connect, proudly supported by ASB, is Kea’s business connection service. Realise your global ambitions by connecting with industry experts around the world like Anthony, who can give you valuable advice to help you on your way. Contact Kea today.
Anthony Aucutt, Consultant, Sage Business Consultancy Co Ltd
Anthony is a Partner and Co-founder of Sage Business Consultancy Co Ltd, a Shanghai registered company that helps companies build their presence in China and provides HR consultancy and recruitment services to China-based firms. Prior to establishing Sage, Anthony was the Head of Shanghai for IPS Group, an executive search firm. Anthony has more than 20 years' experience in sales and business development, general management and executive search in Greater China.
Having majored in Chinese at Beijing University, Anthony is fluent in spoken and written Mandarin Chinese. Earlier in his career, he worked in trade development and was the Trade Commissioner to Taipei for NZTE from 1996-1998.
DISCLAIMER: The contents of this article reflect Anthony's personal views only.