So many business executives and entrepreneurs said to us “I wish I had met you before I started doing business in China. It would have saved us from making so many mistakes!”
Based on the questions they asked us about different aspects of business operations, we have put together some really simple but practical tips so they can serve as quick guides for those new to doing business in China, but also a reminder for those having some experience but facing new challenges in business expansion in the Middle Kingdom. These cover sales and marketing, sourcing, HR, culture and language, commercial, IP protection, and more. In these practical guides you will also find readily available business services and solutions on our digital platform Crayfish.io.
What are the key elements in Chinese culture that I shall know about doing business in China?
The two most important Chinese cultural concepts include “face”, “guanxi”.
The idea of “face” in Chinese could be loosely defined as “public dignity” or “self-respect”. The Chinese do not normally prove someone wrong in public, particularly those more senior to them in terms of age or position – but it does not always apply the other way around! Any criticism is best delivered privately, discreetly and tactfully, or else the result will be just the opposite of what you wish. Everyone keeping “face” is the best solution to problems or potential conflicts.
The term “guanxi” means connections and relationships with important and useful contacts, e.g. key government officials, large enterprises, decision-makers. Due to the Chinese tradition of respect for hierarchy and the legacy of a centralised economy, the relationship between government and business enterprises, both at central and local government levels, has always been very close. Political and civil “guanxi” therefore continue to be very useful for a company wishing to be successful in China.
Finally, it is worthwhile to consider investing in a China business culture workshop to prepare you and your team for a successful Chinese business and culture experience.
What do I do to be well prepared for a business trip to China?
Translate your business cards into Chinese, and take a lot with you if you are attending a trade show there. Get some marketing and product materials translated into Chinese too if you can.
By all means try to set up meetings well in advance but you must be prepared to accept last minute changes to your schedule. It’s normal in China to make last minute meetings. Make sure you have someone you can brief and who will interpret for you on the ground. Alternatively, consider hiring a local support for your trip to China.
Finally, always invite your host to visit you in the UK so you can return the hospitality.
For tips on how to remain energetic and productive when travelling in China, read Ting’s Blog: Doing Business with China: Making the Most of Your Visit.
What kind of gifts shall I give to the Chinese business contacts?
Gift giving is a common Chinese custom that business visitors to China should prepare for and use to their advantage. Some simple guidelines:
Who: Typically, if you have only one gift then it should be presented to the person in charge or the leader of the group.
What: Gifts need not be expensive and be aware of potential bribery concerns too. If you do not already have a ready made corporate gift, the best gifts to offer can be items that are unique to your country or even better your own region or city. Gifts to avoid include clocks and umbrellas due to cultural taboos.
For more about gift-giving, you can read Ting’s blog on Doing Business with China: Gifting Etiquette.
To get into the Chinese market, as a starting point, what should I get translated?
As a minimum, you should consider getting a Chinese flyer about your company, your product or service and your business track record. You can then post the same page on your website. You can also reuse them in your presentation to Chinese customers and partners.
For the mainland market in China, you need to make sure the Chinese characters used are simplified Chinese not traditional Chinese – traditional is only used in the territory of Hong Kong or in Taiwan.
Creating a Chinese version of your website will make all the difference to your business’s visibility and image in China, which also enables you to improve your SEO ranking in China. If you plan to visit China any time, then consider Translating Your Business Card into Chinese which can break the ice for your first conversation and bring a smile!
PROTECTING YOUR IP
How much protection do I have for my intellectual property?
China is a member of the Paris Convention on the Protection of Industrial Property and The Patent Co-operation Treaty (PCT) and its court system has vastly improved over the past 10 years for IP protection. Most forms of IPR except copyright require registration in China before protection. Remember in China, it is the “first-to-file” rule. Seek advice as soon as you intend to go to China and plan your IP protection well ahead of entering into the market.
For all clients, our first advice is to register your trademark as early as possible to prevent future legal battles and ensure smooth business operation in China.
If you are selling to China via eCommerce, then consider monitoring your brand across the hundreds of Chinese online platforms to identify potential infringements (which can be quite possible) through scheduled Online Brand Protection.
Are there any quick tips for negotiating a commercial contract with the Chinese?
Large contracts usually take several rounds of negotiation, so do not expect they will be agreed in just one meeting. Allow sufficient time for this – if not days then weeks, and even plan for a return trip. In terms of pricing, leave sufficient room for bargaining but you may still have to offer discounts to get a deal done.
Most importantly, you must be prepared to “walk away” if your bottom lines are reached. If you are provided with unconvincing information as a reason for lower pricing, ask for the evidence and the information source. Finally, do not show it too much if you are very happy with the negotiation results, even if you really are, as you will make the other side feeling they have somehow lost out!
If you are looking at licensing your technology to China then consider having a Deal Terms Review to get cost effective initial advice before you and your proposed Chinese partner get into more detailed negotiations.