Conducting Business in China

This paper discusses cultural factors, etiquette, and political and economic issues important for foreign business people conducting business in China.

This paper relates that China presents formidable difficulties for a foreign business people due to its vastly different culture, business ethics, and hybrid economic system, which still suffers from a hangover of the command economy of a socialist China. The author points out that, although Chinese people have a natural flair for free-market business, as is reflected in the disproportionate number of successful Chinese businesses in South East Asian countries, the extended period of controlled economy in China under Maoist Communism has dulled this spirit and severely affected the work ethics of the working people. The paper explains that, soon, private property ownership in China is certain to become constitutionally protected, which will be a landmark reform because all property has been owned by the government since the Communist revolution.

Table of Contents
Business Culture
Old habits die hard
“Guanxi” (relationship)
Bribe and Graft
Cultural Etiquette
Some Important Politico-Economic Issues
“Giving gifts is not necessary but acceptable. Care should be taken not to make very large or expensive gifts as they may be considered as bribes. Clocks are inappropriate as gifts for symbolic reasons. Another feature of Chinese culture is that everything is not taken at its face value. For instance, the Chinese may decline a gift more than once (up to three times) before accepting it, as easy acceptance is considered to be a sign of greed; hence it is advisable to continue to insist upon giving the gift and express a lot of pleasure once the gift is accepted. Wrap gifts in red colored paper (red is considered a lucky color) or pink and yellow (happy, prosperous colors) and use both hands while offering or receiving a gift. Avoid wrapping in white as it is the color of the funeral.”

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