How to Maintain A Strong Business Communication in China
China is the second top economy, right under the US. As one of the strongest players in the business world, it is tops in manufacturing, technology, and financial services.
Chinese businesses have flourished around the world as part of Chinese business is intertwined with the focus on profits. One key factor to this focus is business communication in China and Chinese culture called 人际关系 (ren ji guan xi) or just guan xi.
Understanding Chinese business culture is a key aspect when networking in China. So, if you want to expand your business in China or want to work in this industry, then continue reading.
What does guan xi mean in Chinese?
关系 (guan xi) means relationships, but is it most associated with with Chinese business culture. It usually refers to Chinese business connections and networks. You might also see the term 人际关系 (ren ji guan xi), which means the same thing.
Chinese business customs and guan xi
As part of Chinese business etiquette, getting to know the clients is so important in Chinese business culture as it is the first thing they teach you when joining a company.
This relationship is not just for show. A guan xi business relationship stretches outside of the transaction period to stay on good terms. It is about maintaining the business relationship almost like they are family lasting for years and multiple generations.
How does guan xi affect business communication in China?
Guan xi helps build a company’s strengths and have competitive advantages. Despite a couple of guan xi issues, it is still an important part of the business culture in China that helps shape the economy of this country.
Here is one example of how business communication in China is in full effect:
The apparel industry
China is one of the world’s largest manufacturers of fashion. With so much competition, players turn to information sharing for survival. Without information sharing, you will not be able to meet the right person who can become a client who can support your business.
But information sharing does not come easy in any high-competition market, so this is where guan xi comes into play.
Making your connections, maintaining them, and utilizing your resources with the gathered information will give you a strong competitive advantage to survive in the industry especially if you are a new player in the industry.
Guan xi is the key to making sure that your new business lasts, in the long run, is a long-term relationship. Knowing the right person can give you new clients, prepare for what’s to come, and build your name in the industry until you become a mature player once you’ve been long enough in the game.
The important values in Chinese business
In the Chinese business world, people value their relationships with business partners because it is a common practice, especially with Confucian influence teachings.
Within Chinese culture, the value of family and collective community is quite strong as the three key pillars of Chinese society include family, community, and status. Family and community are very important values as you can find them in several Chinese sayings, one of the most renowned being ka ki lang meaning, “Our own kind of people,” in Chinese Hokkien (a dialect).
Chinese businesspeople tend to do business with someone they know or are referred to by a trustworthy friend. The more familiar you are with the business owner, the more you can gain their trust and have more transactions with them. These relationships last over a long time instead of short ones and are passed on to the younger generation where they help shape some of China’s businesses today.
The Starbucks Case
Business communication in China and guan xi can be quite difficult to navigate when foreign brands open their stores in China. Let’s look at what happened to Starbucks.
For those who don’t know, Starbucks is a mega coffee store franchise that originated in the United States. Then they started to spread their business internationally and eventually made their way to open a store in China in 1999.
However, Starbucks in China did not hit success when it first launched until several changes later. One of the changes is that they named shareholders as “Partner Family Forum” which insinuates the value of family. They even created large spaces for their stores to welcome crowds of customers, giving Starbucks a standing in the Chinese business world.
How to create a business relationship in China
Chinese business people maintain their relationships differently than the rest of the world. These differences often went unnoticed by foreign employees.
Keep in mind that these methods will take some time and effort to achieve the desired result.
1. Understand the depth
Rather than just doing the normal business meetings and talks where you make an offer, negotiate the price, or do cold calls to try and understand their depth. What are their values? And what they are looking for in the long term.
Understanding your client like you would a friend is key. Similar to the practice of guan xi, it takes a long time but is very effective and great for the long term.
For example when President Obama went to Shanghai in November 2009. During his speech with the Shanghai youth and members of Fudan University, he expressed genuine interest in the culture and heritage of Shanghai. He also apologized “ I’m sorry that my Chinese is not as good as your English.”
This simple move of giving consideration and respect is the first step to building a great relationship. The willingness to understand the person’s culture and where they came from will help you build a solid bond that will last a long time.
2. Collaborate with a local
Starting or expanding your business in China, it’s always best to partner with a local company to help you out.
The more you “look” familiar to your potential client in China, the more they are willing to do business with you and create that relationship for the long term. Collaborating with local communities and businesses also goes beyond just achieving “The Familiar” look. Local companies or manufacturers have their own set of connections that they have mastered that give you a great step up to make connections for yourself.
Take for example Coca Cola which decided to collaborate with the COFCO corporation back in 2016. This collaboration not only brought efficiency but also created a more market-oriented product for Coca-Cola in China. Tailoring a product takes a lot of work, but receiving help from an insider who is more familiar with the market is more strategic and efficient than doing it yourself.
3. Learn the language
Putting in the effort to learn Chinese shows that you truly value the relationship and are working on better communication without needing a translator.
Learning the language can be a great investment for you and your business as it will give you a great sense that you respect your Chinese counterparts and have your Chinese business partners have a better sense of trust towards you as a business partner.
The values of relationships in family and community are very important in Chinese culture and in business communication in China. You have to adapt to the environment and make the necessary changes to succeed in this market.
There are things you can do to start building a business relationship with a Chinese business person. However, keep in mind that it all takes effort and time. The effort and time you put in will definitely carve a path for you to follow.