1. TEN PRINCIPLES TO CONDUCT
BETTER BUSINESS IN CHINA
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TRUST IS THE CURRENCY OF BUSINESS
RELATIONS SO SPEND IT WISELY
Businesses all over the world rely on trust and proven relationships to
run their operations, but in China these relationships are a requirement
to do business.
Building meaningful business relationships takes time and tends to
happen over several events and dinners. Be mindful during these events
of the tactic, also applied throughout the world, of negotiating after
drinks.
The business relationships that develop into trusting partnerships will
last for years but need to also be regularly maintained.
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PERCEIVED DIRTY TACTICS OF NEGOTIATION AREN’T
AS FROWNED UPON
Keeping your wits about when you are negotiating in China is
paramount, as the Chinese will occasionally push the limits from what
you may be expecting.
There have been several accounts of Chinese business people
threatening use of political intervention to prevent marketization if they
aren’t given the contract.
As another example, the Chinese business people encouraged an
overindulgent night of partying the night before key negotiations, and
when the western firm showed up the next morning the Chinese team
involved a different set of negotiators.
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CHINESE BUSINESS IS VERY MUCH
HIERARCHICAL
Unlike the western business push for front-line empowerment,
company decisions from most Chinese firms, disseminates from the
very top management team.
This results in limited delegation and power being given to middle
management. Take time to ensure that your negotiations occur with
members of this decision making management team, or at least be
aware if they are not present.
The status of each position is quite rigid and it is encouraged to follow
suit, when doing business in China.
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THE CHINESE GOVERNMENT IS MORE
DECENTRALIZED THAN YOU MAY THINK
While any large decisions for the country’s wellbeing are made out of
Beijing, each of the local municipal governments run their own areas, in
different ways. The government realizes the value of decentralization
for its economic growth implications.
By utilizing the best working strategies that are invented by the local
municipalities, they are able to use the data to create the best
sweeping policies in the future. Expect that the conditions will vary
from region to region and that you need to involve the local
governments in the negotiation process for the best results.
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ALWAYS KEEP THE FUTURE STATE OF AFFAIRS
IN MIND
As with most developing nations, the boom in China is being driven by
small and medium sized businesses.
In 2012, they made up over 60 percent of the GDP, and the government
is acutely aware of this information as they are trying to craft their
state-owned enterprises. Try to keep tabs on any of the Government
owned and/or controlled enterprises that are in your industry, as they
aren’t competing on a level playing field.
Just because you are on favorable terms with these companies at the
moment, don’t expect that to be the case forever.
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7. For additional information about Business with China
please visit www.China-Business-Connect.com