Any individual -- or corporation -- going into the Chinese culture for the first time must understand the many ways in which its business culture differs from its Western counterparts. China’s long and storied history and communist society have had to make room for increased entrepreneurship and free market ideals, which means that the rules of engagement are changing rapidly even for the Chinese themselves. However, there are a number of basic tenets that remain constant and should be followed for day-to-day business.
Generally, business in China is framed by the importance of relationships. This concept, guanxi, is based primarily around the importance of building these relationships, and this process takes place over an extended period of time. Relationships in China tend to be much more difficult to establish that in Western cultures but can be deeper and exist on a more personal level, based around a number of mutual favors that both sides balance between one another. These relationships are often long-lasting and rewarding.
Respect is another major tenet in Chinese culture (and by extension business), likely due to Confucian roots. This respect is especially extended to those who are higher in seniority and status, business contacts with an establish rapport, and guests. Guests can often expect to be treated with extra formality and attention.
The concept of “face” and saving face helps tie these concepts together. Considering the feelings of others and avoiding humiliation is a major aspect of the Chinese culture, and causing someone to lose face can be devastating. This means that often there will be considerable attention given to avoiding causing someone else to lose face, even if it means agreeing to a decision without intention of execution. These tenets explain the apparent delay in business negotiations in China, as “face” and building relationships are considered an essential part of the negotiation process, just as much as the ultimate result.
These concepts overlap, and while they seem intuitive enough in concept, in practice truly grasping these tenets can be daunting for a newcomer to adapt, especially as other (less deep but more apparent) aspects of Chinese culture are shifting. While a newcomer will take some time to adapt, having connections with those who have built guanxi of their own will help to ease the process.