Ten principles to conduct better business in china


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Ten principles to conduct better business in china

  1. 1. TEN PRINCIPLES TO CONDUCTBETTER BUSINESS IN CHINAFor additional information about Business with Chinaplease visit www.China-Business-Connect.com
  2. 2. www.China-Business-Connect.comTRUST IS THE CURRENCY OF BUSINESSRELATIONS SO SPEND IT WISELYBusinesses all over the world rely on trust and proven relationships torun their operations, but in China these relationships are a requirementto do business.Building meaningful business relationships takes time and tends tohappen over several events and dinners. Be mindful during these eventsof the tactic, also applied throughout the world, of negotiating afterdrinks.The business relationships that develop into trusting partnerships willlast for years but need to also be regularly maintained.2
  3. 3. www.China-Business-Connect.comPERCEIVED DIRTY TACTICS OF NEGOTIATION AREN’TAS FROWNED UPONKeeping your wits about when you are negotiating in China isparamount, as the Chinese will occasionally push the limits from whatyou may be expecting.There have been several accounts of Chinese business peoplethreatening use of political intervention to prevent marketization if theyaren’t given the contract.As another example, the Chinese business people encouraged anoverindulgent night of partying the night before key negotiations, andwhen the western firm showed up the next morning the Chinese teaminvolved a different set of negotiators.3
  4. 4. www.China-Business-Connect.comCHINESE BUSINESS IS VERY MUCHHIERARCHICALUnlike the western business push for front-line empowerment,company decisions from most Chinese firms, disseminates from thevery top management team.This results in limited delegation and power being given to middlemanagement. Take time to ensure that your negotiations occur withmembers of this decision making management team, or at least beaware if they are not present.The status of each position is quite rigid and it is encouraged to followsuit, when doing business in China.4
  5. 5. www.China-Business-Connect.comTHE CHINESE GOVERNMENT IS MOREDECENTRALIZED THAN YOU MAY THINKWhile any large decisions for the country’s wellbeing are made out ofBeijing, each of the local municipal governments run their own areas, indifferent ways. The government realizes the value of decentralizationfor its economic growth implications.By utilizing the best working strategies that are invented by the localmunicipalities, they are able to use the data to create the bestsweeping policies in the future. Expect that the conditions will varyfrom region to region and that you need to involve the localgovernments in the negotiation process for the best results.5
  6. 6. www.China-Business-Connect.comALWAYS KEEP THE FUTURE STATE OF AFFAIRSIN MINDAs with most developing nations, the boom in China is being driven bysmall and medium sized businesses.In 2012, they made up over 60 percent of the GDP, and the governmentis acutely aware of this information as they are trying to craft theirstate-owned enterprises. Try to keep tabs on any of the Governmentowned and/or controlled enterprises that are in your industry, as theyaren’t competing on a level playing field.Just because you are on favorable terms with these companies at themoment, don’t expect that to be the case forever.6
  7. 7. For additional information about Business with Chinaplease visit www.China-Business-Connect.com