In this probably lies the greatest risk of doing business in China as it is difficult to collect full payment in time. The greatest threat to companies with successful products or brand name is from intellectual property pirates. Any organization planning to do business in China is well advised to take adequate safeguards to protect their intellectual property rights. (Look Before You Leap: Essential Advice for Doing Business in China)
The business environment in China is very attractive and there are many organizations that have already made use of the opportunities offered there and many others are queing up to enter the business market of China. It is very important for these organizations to understand the cultural and business practices that are prevalent in China to avoid any kind of misunderstanding due to the major differences in the underluing cultural practices between the Chinese and Western cultures. These differences in cultures have an impact on the way people think and so the understanding of these differences becomes significant. The logic in the thought process of the Chinese is more indirect and round about in comparison to the Western world which is direct. This makes it more difficult for the Chinese to say no and so any disagreement is likely to be expressed in a non-verbal manner, as against the more argumentative and willingness to express disagreement verbally in the Western world. (Understanding Eastern & Western Culture and Business Practices)
The Western world tends to communicate more explicitly, while the Chinese communicate more through implied meanings or in a manner that the meaning has to be inferred. This means their language patterns is indirect. The Western world has a more overt manner of expression of honesty or to be more transparent. The Chinese in this aspect are less transparent tending to be subtle and non-verbal. The Chinese tend to use more receiver-sensitive expressions of themselves, while the Western world is seen to be more sender-oriented. The Chinese are likely to take context and specific situation into consideration for rule interpretation as against the more rule-based thought process of the Western world. The Chinese believe more in the duty of a group, while the Westerners tend to give more importance to the individual. These are some of the more significant differences in business practices of the Chinese that have come about due to their culture and has to be understood for any business operation to be successful in China. (Understanding Eastern & Western Culture and Business Practices)
The business customs of the Chinese are an extension of their cultural practices. For the Chinese it is essential that a solid relationship develop before important business can be transacted. Written agreements are therefore secondary to their quan xi, which is a relationship that is hard to form and longlasting. Businesses trying to enter China need to understand this so that they do not keep changing their senior people in the country as the Chinese prefer to work with familiar faces. For the Chinese any settlement of business disputes is best done by mediation through third parties. Businesses used to lawyers and courts in this aspect need to keep this in mind in China. To the Chinese there is no winning or losing. They may lose in order to win or believe that losing is the same as winning. (Understanding Eastern & Western Culture and Business Practices)
It is necessary that one is punctual for appointments in China as being late is taken to be an insult. April to June and September to October are considered the best periods for scheduling appointments in China. Scheduling of appointments need to take into consideration Chinese holidays, which are different from the holidays enjoyed in the West. (Chinese Business Culture. Appointment Alert) the business dress is conservative with subdued colours, in China and this applies to women too. Women should go in for flat heel shoes to keep with this conservative approach and their dresses or suits should have high necklines. Jeans is to be used for casual occassions by both men and women and shorts reserved for exercise only. (Business Dress: Guidelines for business dress) in this manner volumes can be written on the business customs in China from conversation modes to gift giving and any business enterprise is well advised to study these aspects before attempting to start operations in China.
This brief paper should drive home the point that there are vast differences in the way business is done in China and these are becoming more and more apparent with the success and failures of business activity in China. What must be kept in mind is that China is an extremely dynamic market and requires a lot of caution and patience in dealing with it. Business organization should test the waters with a lot study before plunging in. After all that is said, it is still possible for companies with proper preparation to make use of the advantageous investment climate in China and profit from the anticipated growth in China in the future. (Look Before You Leap: Essential Advice for Doing Business in China)
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Gallant, Rosemary. Look Before You Leap: Essential Advice for Doing Business in China.
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