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Relationship Building in China: Suppliers By Biao Wang (MBA) Camellia Universal Limited 8 April 2011 Lomonosov Moscow Stat...
Introduction <ul><li>The relationship in China is called ‘guanxi’.  </li></ul><ul><li>Having the right guanxi is fundament...
What Is Guanxi? <ul><li>Guanxi in China describes the network of relationships among various parties that cooperate togeth...
Why Guanxi Is So Important With The Chinese Suppliers? <ul><li>In China, it is the right guanxi that makes all the differe...
What Do You Need To Know Before Establishing Guanxi With The Suppliers? <ul><li>You need to know and understand Chinese bu...
General Chinese Manners & Customs <ul><li>Manners & Customs   </li></ul><ul><li>-> The Chinese are very easy to get to kno...
General Chinese Manners & Customs <ul><li>Regarding the Politics </li></ul><ul><li>->  If we are to build & facilitate a s...
How Guanxi Is Established With The Chinese Suppliers? <ul><li>Gift giving  </li></ul><ul><li>Trustworthiness  </li></ul><u...
Gift Giving   <ul><li>Small souvenirs are often exchanged. It is usual to wrap the gift in red paper. </li></ul><ul><li>Ho...
Trustworthiness <ul><li>If you promise certain things to your Chinese suppliers and deliver as promised, you are showing t...
Friendship <ul><li>Being dependable and reliable definitely strengthens the Guanxi with your supplier. It is like being fr...
Face <ul><li>Face is a very similar concept to ‘respect’.  </li></ul><ul><li>How to increase face? </li></ul><ul><li>How t...
Being Patient <ul><li>Chinese business people act slowly by foreign standards.  </li></ul><ul><li>The Chinese generally be...
Learning Some Basic Chinese Language <ul><li>It will be helpful for the Guanxi if you learn some basic Chinese language to...
Business Dining & Drinking Together <ul><li>Having a meal together with your suppliers is an important part of the Chinese...
Business Meetings With The Suppliers <ul><li>Dressing </li></ul><ul><li>Arriving at the meeting location </li></ul><ul><li...
Contacting & Visiting Your Suppliers <ul><li>If the Guanxi is established with both parties, frequent contacts with each o...
Conclusion & Recommendation <ul><li>Guanxi is a vital factor to  learn if you are to  be successful in China.  </li></ul><...
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Relationship Building In China - Suppliers

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China business specialist &amp; speaker - consulting on doing business &amp; expanding into China &amp; more on www.camelliauniversal.com

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Transcript of "Relationship Building In China - Suppliers"

  1. 1. Relationship Building in China: Suppliers By Biao Wang (MBA) Camellia Universal Limited 8 April 2011 Lomonosov Moscow State University, Moscow, Russia Camellia Universal Limited 2011
  2. 2. Introduction <ul><li>The relationship in China is called ‘guanxi’. </li></ul><ul><li>Having the right guanxi is fundamental for both foreign and Chinese enterprises to be successful . </li></ul><ul><li>The guanxi culture has existed, and penetrated deeply in to Chinese business society , for several thousands years. </li></ul><ul><li>it is an important concept to learn and understand if one is to function effectively in Chinese business society. </li></ul>
  3. 3. What Is Guanxi? <ul><li>Guanxi in China describes the network of relationships among various parties that cooperate together and support one another . </li></ul>
  4. 4. Why Guanxi Is So Important With The Chinese Suppliers? <ul><li>In China, it is the right guanxi that makes all the difference in ensuring that your business with the Chinese supplier will be successful and long term. </li></ul><ul><li>By building the right relationships with your suppliers, you will minimise the risks, frustrations and disappointments that are necessarily possible in any such venture. </li></ul><ul><li>Your suppliers become willing to give you reasonable prices and good quality products if the guanxi is set up firmly </li></ul><ul><li>Guanxi is the intangible asset. It is one of the most important elements for any foreign business that wants to build a long-term partnership with its suppliers in China . </li></ul>
  5. 5. What Do You Need To Know Before Establishing Guanxi With The Suppliers? <ul><li>You need to know and understand Chinese business culture, the general manners and customs and politics. </li></ul><ul><li>You need to recognise that the Chinese do not do business as you do. </li></ul><ul><li>Many business deals fail at the outset due to fundamental misunderstandings. </li></ul><ul><li>The toughest aspect of understanding a people is to understand their ethics, values, etiquette and protocol. </li></ul>
  6. 6. General Chinese Manners & Customs <ul><li>Manners & Customs </li></ul><ul><li>-> The Chinese are very easy to get to know. </li></ul><ul><li>-> They are warm, generous, interesting, curious, wise </li></ul><ul><li> & thoroughly rewarding people to have as friends & </li></ul><ul><li> business contacts. </li></ul><ul><li>-> You will find that your Chinese supplier may ask quite </li></ul><ul><li> a lot of personal information about you. </li></ul><ul><li>-> The Chinese supplier wants to know you more with a </li></ul><ul><li> personal touch before doing business with you. </li></ul>
  7. 7. General Chinese Manners & Customs <ul><li>Regarding the Politics </li></ul><ul><li>-> If we are to build & facilitate a successful guanxi with the </li></ul><ul><li> Chinese suppliers, we must learn, not only to leave our </li></ul><ul><li> prejudices & negative opinions behind us. </li></ul><ul><li>-> but also to learn to accept & respect the ways (both </li></ul><ul><li> cultural and political) of the Chinese. </li></ul><ul><li>-> You need to know that most Chinese are very happy & </li></ul><ul><li> proud of China. </li></ul><ul><li>-> It is recommended that you don’t talk about the politics, </li></ul><ul><li> especially the sensitive issues of Taiwan, Tibet & </li></ul><ul><li> Tiananmen Square. Remember that you are doing </li></ul><ul><li> business with the suppliers & you are not a politician. </li></ul>
  8. 8. How Guanxi Is Established With The Chinese Suppliers? <ul><li>Gift giving </li></ul><ul><li>Trustworthiness </li></ul><ul><li>Friendship </li></ul><ul><li>Face </li></ul><ul><li>Being patient </li></ul><ul><li>Learning some basic Chinese language </li></ul><ul><li>Business dining and drinking together </li></ul><ul><li>Business Meetings with the suppliers </li></ul><ul><li>Contacting and visiting your suppliers </li></ul>
  9. 9. Gift Giving <ul><li>Small souvenirs are often exchanged. It is usual to wrap the gift in red paper. </li></ul><ul><li>However choosing a suitable gift will challenge your perceptions of what is and is not proper. </li></ul><ul><li>Never give a Chinese gentleman a green hat. </li></ul><ul><li>Try to avoid giving things to Chinese that contain the number four. </li></ul><ul><li>Never give someone anything written in red ink. </li></ul><ul><li>Do not give clocks, knives, scissors or letter openers. Avoid white flowers. </li></ul>
  10. 10. Trustworthiness <ul><li>If you promise certain things to your Chinese suppliers and deliver as promised, you are showing trustworthiness and the Chinese suppliers would be more inclined to deal with you again. </li></ul>
  11. 11. Friendship <ul><li>Being dependable and reliable definitely strengthens the Guanxi with your supplier. It is like being friends, and friends can count on each other in good and tough times. </li></ul>
  12. 12. Face <ul><li>Face is a very similar concept to ‘respect’. </li></ul><ul><li>How to increase face? </li></ul><ul><li>How to increase your own face? </li></ul>
  13. 13. Being Patient <ul><li>Chinese business people act slowly by foreign standards. </li></ul><ul><li>The Chinese generally believe that foreigners are always in a hurry and want fast answers. </li></ul><ul><li>Patience is a Chinese virtue. </li></ul><ul><li>If you want to do business with the Chinese suppliers, patience is vital. </li></ul>
  14. 14. Learning Some Basic Chinese Language <ul><li>It will be helpful for the Guanxi if you learn some basic Chinese language to indicate that you are interested in Chinese culture. </li></ul><ul><li>-> Hello (Ni n Hao) </li></ul><ul><li>-> Thank you (Xie Xie) </li></ul><ul><li>-> Sit down, please (Qing Zuo) </li></ul><ul><li>-> Cheers (Sui Yi) </li></ul><ul><li>-> Miss (Nv Shi) </li></ul><ul><li>-> Mr (Xian S heng ) Call the surname first and then title. Surname </li></ul><ul><li> first to respect the ancestor </li></ul><ul><li>-> Good-bye (Zai Jian) </li></ul>
  15. 15. Business Dining & Drinking Together <ul><li>Having a meal together with your suppliers is an important part of the Chinese business culture and is vital to the relationship building process. </li></ul><ul><li>It is very important for you to invite back the Chinese supplier to have a meal with you, before your business trip ends in China. </li></ul><ul><li>Using Chopsticks </li></ul><ul><li>Smoking </li></ul><ul><li>Drinking & Toasting </li></ul><ul><li>Refusing the food </li></ul><ul><li>Finishing the meal </li></ul>
  16. 16. Business Meetings With The Suppliers <ul><li>Dressing </li></ul><ul><li>Arriving at the meeting location </li></ul><ul><li>Shaking hands </li></ul><ul><li>Exchanging business cards (Receiving and presenting) </li></ul>
  17. 17. Contacting & Visiting Your Suppliers <ul><li>If the Guanxi is established with both parties, frequent contacts with each other foster understanding and emotional bonds. </li></ul><ul><li>The Chinese suppliers often feel obligated to do business with their friends first. </li></ul><ul><li>You should also go to China to visit them once or twice each year in order to facilitate a long-term relationship and ensure the relationship continues to grow stronger. </li></ul><ul><li>It is always recommended that you use the same team or intermediary on each visit. </li></ul>
  18. 18. Conclusion & Recommendation <ul><li>Guanxi is a vital factor to learn if you are to be successful in China. </li></ul><ul><li>Building guanxi takes personal commitment and time. </li></ul><ul><li>It is fundamental to understand, implement and nurture guanxi with your suppliers in Chinese business society . </li></ul><ul><li>If you only remember three things, they should be: Guanxi ….. Guanxi ….. Guanxi. </li></ul>
  19. 19. Questions & Answer Time
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