With nearly 1.4 billion people, expanding into China has almost certainly crossed your or your clients’ minds. But doing business in China isn’t simple – at all. In fact, by most, China is considered to be the most difficult country to break into.
At the same time, though, due to its sheer size it could be one of the most lucrative countries to do business in.
We wish we could give you a definitive step-by-step list to getting your foot in the door, but we can’t.
China is far too complex for one single blog post. We’ve asked our network of Chinese translators for their input on the basics of doing business over there.
We believe that we can give you five vital things to remember about China, though – from our 12 years’ experience in Chinese translation services.
Contracts aren’t really that enforceable
One of the greatest things about doing business in western countries is what we like to call the “unwritten guarantee”. The unwritten guarantee is that if you get a contract, you will be able to bring it to court for enforcement. Sure, enforcement might be expensive and take a while, but as long as the contract is legitimate, the option is there.
In China, things are different. You don’t really have that option as an outsider, so you need to cover yourself accordingly. Trusting every new company you do business with is idealistic, but will often lead to you getting burned.
Try to accumulate as little Chinese debt as possible, because again, if things go awry at the debtor company, you’re usually out of luck. Set up your contracts so that you don’t deliver too much before getting paid – or pay too much before getting something delivered.
You have to do business with the very top
In many Chinese businesses, no one really has any power except for the few at the top. No one gives orders but those select few. Other employees, such as those in middle management, will act as a reaction to something – but they will not be individuals and try to proactively do unique things for the company.
This further emphasises the need for a partner or agent in China – you have to be able to impress those guys at the top, or else you’ll never be taken seriously – or even get a serious meeting that’s worth your valuable time.
You’re not trusted until you prove yourself
In western countries, most people will give a certain amount of automatic trust to a new business partner, partially because of the unwritten guarantee and partially because it’s expected in our culture.
In western countries, if the partner burns you, he or she loses your trust (and you can take legal action against them), and if the partner doesn’t burn you, he or she gains more of your trust (and you can continue doing business with them).
China is completely different. It’s seen as an opportunistic society where everyone is trying to get ahead of each other. No matter how cordial or polite your Chinese connections are, realise that until you establish trust, you’re not trusted and sadly, many business people and companies will not hesitate to go behind your back in its dealings.
You can’t do business without getting personal
Building on the previously mentioned trust aspect, in China, business is based heavily around personal relationships. At meetings, you and your Chinese partners will probably spend most of your time together not working.
And it goes even further – it’s expected that you will have dinner with your Chinese business partners and not talk business in any way, shape, or form.
In China, if you’re not a friend, you’re not a trusted business partner.
Chinese negotiators are absolutely ruthless
Where would you “draw the line” in negotiations?
Would you threaten to get the other party shut down by the government if your terms are not met?
Would you intentionally get the other party extremely drunk the night before, only to show up with a mostly-new team of people to handle negotiations the following morning?
In China, negotiations are much more intense than they are in other countries. The person who you’re negotiating with will want to win at all costs, and he or she will not shy away from using drastic measures – like threatening your business or getting you extremely intoxicated the night before – to achieve that! This isn’t how all businesses are, but our Chinese translators have got more than a few stories to tell!
(Often times, this is amplified even more so if the negotiator can sense that you’re new to China.)
Of course, we’ve only covered the basics of doing business in China with this post, but hopefully, we gave you a firm foundation to build from.
Just remember overall that very little in China is similar to other countries, not just the language! Be on your toes and try to make as many friendly connections as you can.