How to Handle Business Relationships in China

China is set to become the next big super power, and so the corporate wellness of your company may soon depend on getting into China. However, trying to establish a Chinese operation presents many potential pitfalls, due to differences in business cultures, so how do you avoid them?

Firstly, cold calling will be greeted with a frost reception. According to Alexander Bowe who studied in Beijing and worked with the US and Foreign Commercial Service, ‘Cold approaches don’t work in China. I met someone who was trying to get into China to sell chicken feet and other snacks, but he didn’t know anyone. He thought he could break in with cold introductions, but he kind of got a reputation as culturally insensitive and no one over there would talk to him…It’s just not how things are done over there; someone has to vouch for you or no one will listen to a word you say.’

Carl Jetter, of Australia China Connections, noted that you need to become friends in China before you can talk business. ‘Before you start talking about business you really get to know each other and talk about everything but what you really want to talk about,’ he said. Clea Wiebenga, director of the Asia Pacific desk at ANZ, added, ‘There’s no such thing as a quick win in China…I think sometimes people can be daunted because they hear so much about building relationships, but nothing beats just getting on the plane, getting over there and talking to as many people as possible. You can’t expect to go over on the first visit and form a deal or form a solid relationship. Things take time.’

Finally, if you can’t be in China then make sure there is someone there who you can trust. Bowe commented that there have been many cases of Chinese middle managers on the ground that have funnelled profits into a shell company and forced those in charge to sell their company for pittance when they went broke. Jetter explained, ‘It’s not that you don’t trust the Chinese, it’s a matter of understanding and tolerating the way it is. They will just cheat if they can to get an advantage. You have to check and triple check everything.’

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