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Relationship Building In China - Suppliers
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Relationship Building In China - Suppliers


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

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

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