Culture

Religion

Confucian, Buddhist, Taoist, Christian, Muslim

China is a multi-religious country. The most widespread religions are Buddhism, Taoism and Islam. The majority Han nationality believes in Buddhism, Christianity and Taoism. The Chinese Communist government professes atheism, regarding religion as superstition and a tactic to keep power. However, it permits open religious activity.

Cultural classification

Reactive, listening culture

Languages

Mandarin, Cantonese and several regional variants.

China’s language is officially Mandarin, as spoken in Beijing. The Chinese call it Putonghua. About 70% of the population speak Mandarin, but that's just the top of the linguistic iceberg. The country is awash with dialects within dialects – and few of them are mutually intelligible. However, there are seven major strains of dialects, two of them being Shanghainese and Cantonese. The only linguistic commonality in China is written Chinese.

Values and core beliefs

Enduring Chinese Cultural Traits

When a nation believes in its own intellectual superiority, it does not abandon its ways lightly. This is particularly true when it perceives its superiority as having derived from moral and spiritual values, as China does. These are in abundant supply in Chinese self-assessment; they include wisdom, patience, gentleness, purity, impartiality, sense of duty, filial piety, kindness, courtesy, respect for hierarchy, sincerity, family closeness, loyalty, moderation, respect for learning, diligence, self-sacrifice, thrift, and humility.

Looking at these self-ascribed qualities, the Westerner might conclude that such nice people will be easy to deal with. When faced with a dilemma, obviously they are going to do the right thing. Unfortunately, there are some complications. For instance, what, in Chinese eyes, is the right thing? They see us though their cultural spectacles, as we see them through ours. If we Westerners place truth before diplomacy and the Chinese reverse that priority, how should we assess their veracity? How can we come to terms with their inherent Confucian belief in human inequality, the basis of their respect for hierarchy? If, as collectivists, they perceive intellectual property rights as the product of the achievements of generations, how do we react if we see our technology appropriated without payment? How can we become reconciled to the view that human rights in the Western sense can only be fully granted after the stability of society has been guaranteed?

These dilemmas are engendered not so much by differences in basic, universal values (kindness, sincerity, loyalty, etc.) as by different notions of these concepts emerging from centuries (even millennia) of philosophical, spiritual, political, and locally pragmatic conditioning. The Chinese will comport themselves in the way they view as morally upstanding. We can predict with some confidence that the Chinese people and their authorities in this century will pursue their core beliefs such as diligence, moderation, stoicism, respect for the elderly, conscientiousness, patriotism, and pride. The West’s relations with China will improve only to the degree that we make an attempt to gain insight into their cultural patterns and behaviors and learn to interact with them more effectively. Which characteristics are going to predominate throughout the century, and how should we deal with them? I list what I believe to be the most important traits in random order below.

Confucian Tenets



The Confucian ethical system has prevailed in China since 500 B.C. and will continue to set the tone for Chinese behavior in the twenty-first century. To review, Confucianism teaches that people are not equal, that they play different roles in society. People are also regulated by specific relationships that dictate their obligations toward other people. When the Chinese are engaged with Westerners, they will act in accordance with these ancient tenets. We must remember they do not have “free hands.”

Confucianism is more of a social code for behaviour than it is a religion. The basic tenets of Confucian thought are obedience to and respect for superiors and parents, duty to family, loyalty to friends, humility, sincerity and courtesy. Confucius identified five types of relationships, each with very clear duties. They are: ruler to people, husband to wife, parent to child, older to younger and friend to friend.


Ruler to people

In the Confucian view, the ruler commands absolute loyalty and obedience from his people. They are never to question his directives or his motives. In return, the ruler is to be wise and work for the betterment of his people. He should always take their needs and desires into account. (In the world of business, ‘ruler’ is replaced by ‘boss’ and ‘people’ by ‘employee’).


Husband to wife

The Confucian husband rules over his wife as a lord rules over his people. The wife is to be obedient and faithful, and she has a duty to bear her husband sons. The husband has the duty of providing his wife with all the necessities of life.


Parent to child

Children must be loyal to their parents and obey their wishes without question. While the parents must raise and educate their children, the children must care for their parents in old age and always love and respect them.


Older to younger

Respect for age and obedience to all older family members is a key element of the Confucian ethic. Grandparents receive deferential treatment from grandchildren as well as from children.


Friend to friend

The relationship between two friends is the only equal relationship in Confucianism. Older friends, however, are expected to give guidance to younger friends. Friends have a duty to be loyal, trustworthy and willing to work for each other’s benefit. Dishonesty between friends is a social crime and demands punishment.

There is a strong bond among friends in Chinese society. Chinese people who have established mutual trust and respect with each other will work hard to make each other successful. Favours and gifts between friends must constantly be reciprocated.

Humility remains an honoured Confucian trait. Chinese people are seldom boastful or self-satisfied, even if their accomplishments are laudable. When Chinese people are being polite, they can seem excessively self-deprecating.

The Chinese can be the most courteous people in the world toward their friends. When a Chinese friend visits a friend, every detail of his or her stay may be prearranged, and the guest may not be allowed to spend money on even the smallest items. For individualists from the West, this form of courtesy can be overwhelming.

Guanxi

Guanxi is a special relationship within the Confucian framework, governing the exchange of favors and usually involving position or rank. Westerners operating with the Chinese in the twenty-first century will not be able to remain wholly outside the guanxi system. It is an important part of building positive personal relationships and entails reciprocal gift giving, which is seen as a social investment. Through guanxi, eventually two people are linked in a relationship of mutual dependence. Gift giving and exchange of favours are not seen by the Chinese as a form of bribery. Guanxi is intuitive, not calculating, and it is not limited to the business scene. The weaker party may expect to receive more and contribute less to the exchange — this is another form of Confucian unequal relationships and laudable in Chinese eyes. Westerners should be generous when circumstances afford and when the relationship is important. The guanxi process should begin before actual business or social transactions take place; it is more elegant that way. Incidentally, once begun, the process never stops — so be cautious!

Many Chinese believe the system operates in your country. If you receive an expensive gift, it means they expect a major favour in the near future.

Face

The concept of “face” in Asia is unlike face anywhere else. Face (personal reputation) completely dominates everyday behavior in China, Japan, Korea, Vietnam, and, to a lesser degree, in other Asian countries. The Westerner dealing with the Chinese must learn to coexist with and respect face as a living reality. To the Chinese, one’s personal dignity, reputation, and honor are precious attributes, to an even greater degree than is the case with sensitive Spaniards, Mexicans, and Sicilians. Latin honor is often intertwined with macho aspirations, bravery, and the like; Asian face involves moral repute, basic integrity, trustworthiness, and even such disparate qualities as kindness, competence, and conscience. May the Westerner beware of imputing any base motives or deficiency of character that might impinge on or in any way threaten the Chinese perceived wholeness. Should we do so, our own integrity will be shattered as well, and any further relationships will be difficult, if not unattainable.

One’s ‘face’ is when one claims certain characteristics for oneself. These might involve:

Regard or disregard for one’s own personal appearance
Order or disorder of one’s possessions
Attitude to religious values
Self-restraint or indulgence
Kind or demanding towards others
Creative or conformist in thinking
In the East ‘face’ is socially and psychologically vital, generating a personal sense of dignity.
In a social situation, everyone tries to preserve everyone else’s face, often by ‘white lying’.
Loss of face occurs when someone’s face is called into question (implicitly or explicitly).
A person who unintentionally causes loss of face, also loses face. Focus shifts on how to repair the damage.
Face has greater social significance in China than in the West. (Entire life spent in one place). Causing someone to lose face is a challenge to his or her place in the hierarchy (therefore anti-Confucian)

Virtue

The Chinese consider virtue more important than truth, for they believe there is no absolute, scientific truth. Truth depends on circumstance and is at its most meaningful in a virtuous context. A good example of this is seen in the Chinese saying, “A lie is not a lie if it prevents shame.” This is no more illogical than the Western saying, “A thing of beauty is a joy forever.” Is beauty any more durable than truth? Saving face and preventing the embarrassment of another is obviously virtuous, so there you have it. It will take the Chinese more than a mere century to change this view. Virtue has, over the centuries, been of paramount significance for the Chinese. It is one of the goals of life. They also believe they are more virtuous than others. Truth and honesty are ambiguous concepts, open to many interpretations. Virtue shines brightly; it is unmistakable.

Harmony and Patience

The Chinese idea of harmony is similar to the Japanese concept of wa—a system of conciliatory relationships and actions that smooths the running of business and the functioning of society. First meetings in China are devoted to the creation of early stages of harmony and attempts to establish trust and status. There may be several meetings of this kind, interspersed with no little amount of socializing. The Chinese prefer not to start discussing business seriously until at least a modicum of harmony with the other side has been achieved. Americans, in particular, are often impatient to “get the show on the road” and begin meetings and even negotiations at an early stage. This does not and will not work in China. The Chinese will continue to establish social and work relationships according to their timetable, which will inevitably involve many preliminaries and “toing-and-froing” that will test American and European patience. The Internet and the electronic proximity it provides may speed things up a trifle, but the essential getting-to-know-you procedure will continue. It is a well-tried and essential component of Chinese cultural procedure.

Patience

Which brings us to the question of patience, for which the Chinese are well-known. They are in fact two or three times as patient as the British, who are not known for their impetuosity. Americans would certainly not even be in the top ten. The Chinese, now well aware of Westerners’ impatience, often use delaying tactics to gain advantage, frequently causing Westerners to make errors of judgment born of imprudent haste. The maxim “More haste, less speed” is true nowhere more than in China. The Chinese qualities of patience, perseverance, and stamina are factors to be seriously reckoned with in the future. They can— and most likely will—outlast all of us.

Humility

Humility, as prescribed by Confucius, is one of the cornerstones of Chinese behavior; any form of ostentation or boasting is an absolute taboo. The greater one’s ability to demonstrate personal humility, the higher the esteem one will enjoy. Westerners, though they will never be able to plumb the depths of Chinese self-abnegation, would do well to try to achieve at least some degree of modesty if they wish to win respect. An eighty-year-old Chinese master carpenter visited his son in the United States. The son introduced him to a prospective temporary employer (an American), who reportedly had the following conversation with the carpenter:

Employer: Have you done carpentry work before?

Carpenter: I don’t dare say that I have. I have just been in a very modest way involved in the carpenter trade.

Employer: What are you skilled in, then?

Carpenter: I won’t say “skilled.” I have only a little experience in making tables.

Employer: Can you make something now and show us how good you are?

Carpenter: How dare I be so indiscreet as to demonstrate my crude skills in front of a master of trade like you.

Hierarchy

Hierarchical differences — another Confucian feature — are greater between Chinese of different ranks than between Americans, Britons, and Northern Europeans. The Chinese social or business pyramid is rarely flat by Western standards, and seniors are normally approachable only on their own terms, though kindness is expected to radiate downward. One can foresee a reduction in hierarchical extremes in the twenty-first century, as the Internet and more facility with foreign languages will enable many Chinese to bypass their superiors, but the general hierarchical principle will endure. Westerners should respect it. Frank, open exchange between colleagues of different ages and ranks is not going to be typical of Chinese office routines for decades to come.

One must always bear in mind that one of the basic premises of Confucian philosophy is that inequality creates stability in human affairs. Chinese, Japanese, and other Asians feel uncomfortable when having to deal with people of exactly equal rank. Equality engenders rivalry, competition, perhaps confrontation, conflict, or dispute. Subordinates on both sides suffer confusion without clear directives from above. Superiority or inferiority settles the issue. Superiors may command freely, while demonstrating kindness and compassion as well as wisdom. Inferiors are happy to obey wise instructions, and they benefit from benevolent advice, while demonstrating loyalty and trust. They are also absolved from responsibility and blame. It is a mutually satisfactory and essentially comforting situation. New generations of Chinese may seek to moderate the steep slope of the pyramid, but they are hardly likely to envision horizontal communication.

Indirectness

“Brutal” frankness on the part of Westerners is indeed brutal (or barbaric) to the Chinese. Enough has been said in other parts of this book to remind the reader that indirect, oblique—often opaque—speech is a keystone of Asian communication. Criticism, appraisal, even laudatory comments are all couched in hesitant, woolly forms of expression that allow the listener to read between the lines and enjoy the protective ambiguity that such parlance offers. It is the same with questioning. The more indirect the question is, the clearer the answer is likely to be. The Chinese excel in such courtesies—the Westerner should listen and learn the game.

Wizened and Wiser

Confucianism also bestows power on elderly men. This has been noticeable in postwar years in the structure of Chinese leadership. It is not easy in Asia for a younger man or woman to command seniors, and Chinese look askance on visiting American and European executives who are rich in titles but poor in years.

Collectivism

The shining individual brilliance often displayed in the West — and certainly strongly in evidence in the early years of the IT Revolution — is not greatly prized in Chinese or Japanese society, although among younger generations of Japanese a new form of tentative individualism is on the rise. Even young Chinese habitually subordinate personal goals to those of the collectives. Many see their personal and collective goals as being the same. The collective feeling—that of belonging to a group — is so strong in China that the average Chinese does not feel whole, or complete, as a single human unit. Only by being a useful component of a caring group, assembly, or organization can he or she experience complete self-fulfillment. Western egotism or persistent individualism is an entirely alien concept to a Chinese. How can such selfishness — conceit — be possible? Western businesspeople would do well to respect the Chinese collective spirit, which is in harmony with the rest of Asia and will not disappear in this century.

Human Rights

When we are discussing national values, the question of human rights comes into focus. What value do certain nation-states place on a human’s life? It has sometimes been asserted that life in China is cheap. Seen from a Chinese individual’s point of view, this is most unlikely; more accurately one might say that human rights are seen by Chinese according to a different perspective from that of Westerners. Chinese see it more as a judgement of priorities, the first of which, in their eyes, must be basic sustenance. What significance has the perception of human rights for someone who lacks food and shelter? Is economic progress more important than basic health? The following diagram compares Western and Chinese priorities with regard to human aspirations and well-being.

Culture (cont'd)

The Chinese ‘self’

The Chinese concept of ‘self’ is quite different from that of a Westerner. The British (Cobuild English Language Dictionary) define ‘self’ as “the essential part of one’s own nature which makes one different from everyone and everything else.” The concept is supported, or buttressed, by 104 compounds, used extensively from the OE period onwards, such as ‘self-controlled’, ‘self-contained’, ‘self-conscious’ etc., emphasizing the self-determinant nature of the word. Webster (American) defines it as “a person regarded as an individual apart from everyone else” elaborating this individualism with no fewer than 205 combinations, many of them with a power-related impact such as self-assertive, self-aggrandizement, self-approbation, self-centered, self-confident, self-defence, self-directed, self-esteem, self-executing, self-help, self-important, self-interest, self-made, self-reliant, self-regard and self-serving.

Most, if not all, of these descriptions would be regarded as negative by Chinese, in the same way that some Westerners might view ‘self-serving’ or indeed ‘selfish’. In the Confucian-affected countries (China, Japan, Korea and Vietnam) the term ‘individuality’ generally has a negative connotation. These cultures are reluctant (or unable) to envisage a person or individual with power, influence or impact superior to that of a group, or plural entity, however small. No human exists alone on this planet, therefore in the Confucian view, he only lives on account of, and by virtue of, the web of relationships that surround him. His individuality, if there is such a thing, can only be defined by his location or centrality amid these relations. In the same way that speech or music have no meaning if there is no one to hear them, or personal beauty or that of a painting has no impact if there is no one to see them, or the exquisite aroma of the rose is wasted if there is no one to smell it, so the idea of a person only makes sense, or has any kind of effect in the world, if there are others in his vicinity to react to him. One might say that he is defined by the sum of his relationships. His current relations with parents, teachers, employer, subordinates, older and younger friends, create his reputation or ‘self’. They have moulded him, just as simultaneously he is moulding some of them (his children, junior colleagues etc). His particular interdependence is the key to his personality, if we can use the word. When judging his actions, a Westerner must bear in mind that he is not an isolated decision-maker, or a free independent mover. His hands are always tied, though this is not necessarily a disadvantage for the foreigner. If (he) decides in your favour, he brings a lot of people with him.

In order to deal with, negotiate or relate effectively to a Chinese, the foreigner must keep in the forefront of his mind the Chinese counterpart’s fixation with the plurality of self. His obsession with collectivism is whole and unchangeable. He is wedded to an ‘in-group’ whose interests he will defend at all costs. The in-group is of course his family, favoured colleagues, close superiors and subordinates, representatives of the society around him, especially those who share his experiences, memories, aspirations.

You as a non-Chinese start as an outsider, nevertheless there is a way forward – you can become a member of his in-group if you persist with certain behaviours. The most important thing is sharing. Chinese, like Japanese, want to feel they share as many things as possible with an interlocutor. These include, naturally, country or locus of origin, but also a shared profession, project, interest, hobby, goal or aspiration. Common acquaintances are valuable, especially mentors, persons of repute, university colleagues, schoolmates. Shared experiences can be remembered or created: lunches, dinners, picnics, excursions, tennis matches, theatre outings, visits to museums, galleries, festivals, sporting events, exhibitions.

One cannot over-emphasize the importance of pre-negotiation socializing with a Chinese; he is in no hurry to cut short these preambles as he is basically getting to know you and evaluating your ‘self’ (even though he may have perceived it smacks of individualism!). He may forgive you for this if he feels that you show sufficient altruism to appreciate his bonds and connections. There may be a deal in the offing, but he is not too interested in the short-term aspects of the transaction. What he is interested in are the long-term implications of a business (or private) relationship with you. Are you shaping up as a suitable partner for him over the next 20 years? You many demonstrate your competence and intelligence, but Chinese prioritize compatibility over competence (or at least it must accompany it).

Such compatibility makes it possible (and desirable) for you to become a member of his in-group. Therefore you must strive, during the preambular activities, to build up trust. A Chinese seeks in you, above anything else, sincerity. He gains trust not through your words, but based on your actions. He has no pre-conceived notions of good and bad, true and false, right and wrong, even absolute truth. The notion of guanxi, mentioned earlier, dominates his evaluations. He sees your sincere self as the sum total of reactive behaviour to your influences and he reacts to you accordingly. He wants ‘we’ instead of ‘I’ and you should try to think the same way. Such sensitivity to the other can get you a long way in China.

Cultural black holes

The Chinese Cultural Black Hole is their concept of the “Chung-kuo” — the Middle Kingdom. China is the centre of the world, has the oldest civilisation (true), therefore other countries are peripheral, young, inexperienced, often immoral and lacking in real values, certainly not properly civilized. This belief is held not only by Chinese intellectuals, but is also observable among the rural farmers. If you are able to converse with a farmer in his rice paddy, he will politely interrupt his work for a few minutes, ascertain vaguely where you come from, exchange a few pleasantries and then quickly resume his toil. He is not particularly interested in you (a foreigner). He is already at the centre of things. This is where it is all happening.

Concept of space

China has the most crowded cities on earth. The Chinese live very close together, work space also very limited. Lack of hygiene due to overcrowding is noticeable in most parts of China. Traffic is still relatively light as millions of Chinese use bicycles for transport. Motorists give cyclists a wide berth. In Beijing however there are now more cars than bicycles. Underground mass transit railways are beginning to ease traffic jams in some major cities.

Concept of time

Chinese have a keen sense of the value of time. This can be noticed especially in their attitude towards taking up other people’s time, for which they frequently apologize. It is customary, at the end of a meeting in China, to thank the participants for contributing their valuable time. Punctuality on arrival is also considered important – more so than in many Asian countries. Indeed, when meetings are scheduled between two people, it is not unusual for a Chinese to arrive 15-30 minutes early “in order to finish the business before the time appointed for its discussion”. In that manner the Chinese is not stealing any of the other person’s time! It is also considered polite in China to announce, 10 or 15 minutes after a meeting has begun, that one will soon have to be going. Again, the worthy aim involved is to economise on their use of your time. The Chinese will not go, of course, until the transaction has been completed, but his point has been made.

This is indeed a double standard. The Chinese penchant for humility demands that the interlocutor’s time be seen as precious, but on the other hand Chinese expect a liberal amount of time to be allocated to repeated consideration of the details of a transaction and to the careful nurturing of personal relationships surrounding the deal. They frequently complain that Americans, in China to do business, often have to catch their plane back to the US “in the middle of the discussion”. The American sees the facts as having been adequately discussed; the Chinese feels that he has not yet attained that degree of closeness – that satisfying sense of common trust and intent – that is for him the bedrock of the deal and of other transactions in the future.

Chinese do not have the linear concept of time, where Germans etc. like to list their daily tasks in sequential form, e.g.



and complete one task fully before going on to the next one.

Reactive people, like Chinese, prefer to put the same tasks in a kind of pool and walk round it for some time before doing anything at all. When they have made their major decisions, they then drop some tasks as unnecessary (BCE) and concentrate on others (AFD) in random order, moving forward on all of them during the day, Also, perhaps a new idea (G) will be attended to.



Self image

The Chinese truly believe that they possess a huge store of positive traits which makes them superior to others. A gathering of professors compiled the following description of the Chinese people:

modesty
tolerance
patience, respect for elderly
filial piety, courtesy, thrift
sincerity, loyalty, family closeness, tradition
trustworthiness, stoicism, tenacity, self-sacrifice, kindness
moderation, patriotism, asceticism, diligence
harmony towards all, resistance to corruption
learning, respect for hierarchy
generosity, adaptability, conscientiousness
sense of duty, pride (no losing face)
being undemanding, friendships
impartiality, purity
gratitude for favours
wisdom
gentleness

A Westerner, ploughing through this list of self-ascribed values, might wonder about modesty and impartiality, but, in the main, the Chinese do go about their daily lives, especially at the individual level, exhibiting many of those characteristics.

Culture: communication

Communication patterns

Courteous patient discourse, generally indicating great humility and understanding. Chinese are more explicit and less introverted than the Japanese, having been more in contact with Westerners in the 19th and early 20th centuries.

Chinese attend meetings in sizeable numbers and negotiate collectively. The problem for Westerners is that there is generally some state involvement and the real decision-makers are not actually in the meetings. Patient and courteous discussion is normal, but a frequent tactic is ‘tough talk’ in fits and starts. Everyone protects everyone’s face, though the Chinese often moralise about Western decadence.



Body language and non-verbal communication

More overt than in Japan, but rarely exaggerated. In the larger cities, the customary greeting is a handshake. The handshake is usually light, but may last several seconds. In the rest of China, the most common form of greeting is a nod or a slight bow. If you bow, never bow with a hand or hands in your pocket. The Chinese do not usually look straight into someone's eyes when greeting them. They may lower their eyes slightly as a sign of respect. Looking directly into their eyes too quickly and prolonged may make them feel uncomfortable and make you seem rude.

Listening habits

Good listening is good manners in China. Being essentially reactive, they strive to accommodate the other side’s wishes in their own proposals. Often reply with “My immature opinion is ...”

Mainland Chinese are eager to acquire know-how from Westerners and Western markets for their products. They listen carefully and patiently in these areas, though most audiences are heavily dependent on interpreters. The manner of the speaker is considered more important than the content, so one needs to inject sufficient flattery and protect everyone’s face. They are traditionally suspicious of “foreign devils”, so work hard at creating trust.



Audience expectations at presentations

• know-how
• humble tone
• reserve and patience
• investment from you
• long term view
• licensing
• help and advice
• equality of treatment
• older speakers
• respect for their elders

Culture: interaction

Concept of status

In recent years status has been accorded in relation to one’s position in the Communist Party, but the concept of elderly leaders still prevails. Status through entrepreneurial and administrative competence increased as reforms affect Chinese business.

The mayors and chief officials of large cities and provincial centres have acquired added status, especially when they are rather distant from Beijing.

Gender issues

Chinese women are more active in business than Japanese or many other Asians and are shrewd at handling money and people. In rural areas, however, they often bear a heavy physical work load.

Leadership style

Consensus is generally highly valued in China, but in companies controlled by the state a leadership group (often invisible) will decide policy. In the developing expansion of capitalist-style companies, leaders are emerging with reputations of competence, also locally-elected officials (e.g. mayors) are becoming influential in the business sphere and may have only loose ties with Beijing. In Chinese family businesses (and there are many) the senior male is the patriarch and the usual nepotic structure is observable.



Language of management

There are many varieties of Chinese, though Mandarin (Putonghua) is in gradual ascendancy. Cantonese, and Shanghainese are, however, likely to retain their importance as languages of commerce. Mandarin sounds authoritative to many Chinese and commands obedience. Chinese managers rely heavily on Confucian precepts, which support their authority to no small degree. Their language implies the 5 unequal relationships as taken for granted; it is delivered softly, implying Confucian standards of wisdom, kindness, moderation and frugality. Like most Asian tongues, it thrives on a certain ambiguity. Politeness and courtesy are mandatory. Subordinates are invariably wooed by this linguistic style.



Motivation factors

The Chinese will not stray from their reverence of Confucian views on order, family and consensus. Show unqualified respect for these.
Study Buddhist and Confucian tenets, see how they affect Chinese behaviour, and show compassion for Chinese difficulties. It will pay off.
Be extremely deferential at all times.
Combine courtesy with firmness.
Show humility - the Chinese prize this trait immensely.
Show respect for age and rank, irrespective of your evaluation of the person.
Don’t overdo logic. Chinese are strong on intuition.
Prepare your meetings in detail - they will appreciate your preparedness.
Don’t speak in a loud voice - they respect a calm manner.
Be patient, don’t rush them. Allowing adequate time for reflection is a key to making progress, however slow it may seem.
Know your Chinese history - China has been the most important country in the world for a considerable part of recorded human history. Praise their inventiveness and artistic achievements.
Power distance between different Chinese is large. Inequalities are expected and desired. Find your ‘rank’ and behave accordingly.
Make sure that the persons you send to deal with Chinese are old enough. For important business, anyone under 40 is immediately suspect.
When a big deal is cooking, visit and visit and visit again. Chinese desire follow-up! The visitor’s rank must be as high as possible.
Remember that relationships are far more important than tasks.
Subordinates expect to be told what to do. Tell them, but kindly.
When entertaining, do not hesitate to be lavish. Chinese are frugal people, but not when feasting.
Preserve harmony by saving face for everybody on all occasions. This is guiding principle no.1
Be careful how you look at the concept of truth. Chinese do not believe in absolute scientific truth. The search for virtue is more important than the search for truth. A and B (opposites) can both be right and wrong if both are virtuous.
When dealing with Chinese, long term orientation is essential. They have been doing business for 4000 years.
On account of this, they consider themselves extremely experienced, knowledgeable and shrewd. You may think you are more au fait with international business methods, but don’t let this show through.
They will not do business with you if they don’t trust you. Show your reliability through your deeds.
Imitate their skill in combining affability with arm’s-length politeness.
Never reject a Chinese proposal out of hand. When you negate someone’s idea, you negate the person. Allow that anything is possible - you may qualify this later.
Learn to read between the lines. Chinese arguments often go around in circles. Try to triangulate to get a fix on the real point.
Do not hesitate to do business through go-betweens. It often speeds up progress strikingly.
Remember gift-giving is an important feature in business and social relationships. Choose appropriate rather than lavish gifts.
Remember that in China the buyer comes first and expects added respect.
Dress neatly and conservatively. Beards and other excessive hair cause Chinese to feel uncomfortable.
Close all meetings you control by thanking everyone for attending.

General behaviour at meetings

They negotiate in large numbers. They prefer group discussions as opposed to individual. The real decision-maker rarely attends the meeting – there will be a ‘leadership group’ which discusses issues behind the scenes. Government officials are usually involved at some level. It is difficult to know where accountability lies. Time frame is often too long for Westerners. Harmony must be created before business is transacted. Chinese often assume all Westerners are very rich and push their luck too far in negotiating. They are keenly aware of the size of their market and orders and will use this knowledge for driving down prices. They often introduce last minute changes before signing a contract. They generally comply with agreements, but ask for re-negotiation if their profit falls through unforeseen circumstances.



Negotiating characteristics

Chinese prefer meetings to be formal, though dress is usually comfortable.
Seating will be according to hierarchy. Business cards exchanged.
Senior man must be shown great respect and attention at all times, even though he takes little part.
Deputy or vice chairman is often the decision-maker.
Real decisions will be made outside the meeting, which is principally for information-gathering.
Pace will be slow and repetitious. The time frame is too long for westerners who may see the slow-down techniques as bargaining ploys.
Politeness is observed at all times. Confrontation and loss of face (for both sides) must be avoided.
Chinese rarely say “no” – only hint at difficulties.
Collective spirit prevails, nobody says “I”, only “we”.
In a collectivist culture, accountability for decisions is avoided. Authority is not passed downwards from the leaders.
Decisions have long term orientation. Negotiations in China are important social occasions during which one fosters relationships and decides if the people on the other side of the table are suitable partners in the long run. The Chinese, who have been doing business for 4,000 years, certainly are.
They consider you technically competent, otherwise inexperienced in business relations.
They negotiate step by step in an unhurried manner. They prefer to open proceedings with a discussion of general principles of mutual interest. That is probably enough for the first day. They dislike US eagerness to sign a contract.
Deal-oriented Americans and many Europeans agree to perform specific tasks over an agreed period of time. Chinese, looking beyond the deal, prioritize mutual trust in the long term.
They are thrifty, cautious, patient. You will have to match their patience and stamina, otherwise deals and opportunities will be lost.
They combine flexibility with firmness and expect both these qualities in you.
Once they have decided who, what, when and how is best, they are very trustworthy.
They know the size of their market and use this in their pricing strategy.
They have an exaggerated idea of your wealth. They will expect you to be generous and foot many bills such as hotel, transport and entertaining.
They show little interest in quality control unless you force them to by strong complaint.
You can talk tough, but must preserve politeness.
They are patient and persevere at all times. They have great stamina.
Since Deng the idea of mutual benefit has been accepted.
If connections (guanxi) become close, they will expect favours on a personal basis.
Gifts are expected and acceptable, though not cash. No fuss made over them, only cursory glance.
They distinguish between ‘new friends’ and ‘old friends’. You need, therefore, to visit China several times before you make much progress.

A Chinese as a member of an international team

Kong Dehai (China)

Kong Dehai is a mainland Chinese who worked several years for IBM in China and has substantial experience of working with westerners and traveling abroad. Now a member of an international team belonging to a European company with extensive interests in China, he has secured his position by giving his team insights into the Chinese mentality and markets. A native of Shanghai, he is more free-wheeling in his thinking than Chinese from Beijing and the bureaucratic North, in the same way that Vietnamese from Saigon show more initiative than those from Hanoi. Though familiar with westerners, Kong cannot, however, be classified as a fully fledged “overseas Chinese” similar to those from Hong Kong or Singapore (who rank among the most impressive, all-round business people in the world).

Nevertheless, Kong is an impressive human being. His values, molded by an unbroken 5,000-year-old civilization, are multiple and resolute. His Confucian tenets define him as humble, modest, kind, considerate, dutiful, respectful, loyal, sincere, and courteous. Imbued by a sense of hierarchy, his respect extends to his team leader, colleagues, even subordinates and opponents. Thinking collectively, he readily exhibits the necessary ingredients for team working: punctuality, conscientiousness, work ethic, diligence, tenacity, stamina, and, when appropriate, self-sacrifice.

Like most Chinese of a certain age, Kong seems to evince a kind of ancient wisdom, displaying moderation, frugality, gentleness, huge reserves of patience and tolerance, quick generosity, as well as a refreshing proclivity for self-disparagement (“My immature opinion is…”). Britons and Finns often excel in self-deprecation (in the Finnish case self-effacement), but nobody can outdo the Chinese in this area. Humility, as prescribed by Confucius, is one of the cornerstones of Chinese behavior; any form of ostentation or boasting is an absolute taboo. The greater one’s ability to demonstrate personal humility, the higher the esteem one will enjoy. Westerners, though they will never be able to plumb the depths of Chinese self-abnegation, would do well to try to achieve at least some degree of modesty if they wish to win respect from a Chinese colleague.

There is a story of an 80-year-old Chinese master carpenter who visited his son in the USA. The son introduced him to a prospective temporary employer (an American), who reportedly had the following conversation with the carpenter:

Employer: Have you done carpentry work before?

Carpenter: I don’t dare say that I have. I have just been in a very modest way involved in the carpenter trade.

Employer: What are you skilled in, then?

Carpenter: I won’t say “skilled.” I have only a little experience in making tables.

Employer: Can you make something now and show us how good you are?

Carpenter: How dare I be so indiscreet as to demonstrate my crude skills in front of a master of the trade like you?


Kong, a good and careful listener during team discussions, follows the usual Chinese practice of asking others to speak first, just as he would when negotiating with opponents. This custom, shared conspicuously by Japanese and to a lesser extent by Koreans, denotes the Asian predilection to hear the other side’s position before declaring one’s own. By speaking second, they are able to modify the degree of variance between their opinion and that of the other side (a preliminary alignment of views might be available); at the very least a head-on collision can be averted. In this way Asians are fundamentally reactive, not in the sense of being passive (the opposite of proactive), but with the aim of avoiding possible pseudo-conflicts due to different degrees of self-assertion or pontification. Another advantage gained by this tactic is that it leaves one’s options open for a little longer.

Kong’s colleagues notice that by seeking their opinions in advance and seemingly accommodating their point of view, he invariably appears compliant and cooperative. His comments are occasionally ambiguous, though never discordant or antithetical. He seems adaptable but trustworthy. Modestly, he asks the team leader if he may speak, as opposed to barging in like German and French members do.

On the occasions when Kong is called on to negotiate on behalf of the team, his colleagues see quite a different side of his character. Whether dealing with fellow Chinese or other nationalities, Kong reveals himself as a canny, tough negotiator in the time-honoured Chinese tradition. To begin with, he avoids getting down to business with the other party, preferring to spend an inordinate amount of time chatting about anything but the deal in hand, socializing, eating and drinking with his adversary, getting to know them in a friendly, unhurried manner. When the business discussion eventually starts, Kong uses his incipient “friendship” (on the back of excessive entertaining) as a tool to ask for concessions, smiling all the while. If he makes little progress, he falls back on other tactics such as flattery, feigned anger, or indignation, mentioning competitors and threatening to take the business elsewhere, canny repackaging of conditions, faking indifference to success or failure, making a show of granting a series of concessions (in reality minor throwaways), using his opponents’ own words against them, and generally, through patience and tenacity, tiring the other by attrition. Chinese are experts at making last-minute changes at moments that are most inconvenient to the other party, who may regret letting Kong know of any time constraints that affect their decision making. Kong’s colleagues see that where other Chinese are concerned, any written contracts are meaningless compared to the personal commitments made by the negotiators.

In his own team circle, Kong is regarded somewhat warily by some colleagues. Mainland Chinese are less ubiquitous on international teams (and therefore less familiar) than Singaporeans and Hong Kongers. Kong seems westernized enough and certainly on side, but suspicion lurks in western minds, no less than it might in eastern ones. For one thing, he rarely seems to give straight answers to straight questions and, slightly annoyingly, he doesn’t seem to ask straight questions, either. He is a master of the oblique, only hinting at positives and negatives and rarely coming down hard on either side. One often has the impression that what he has not said has considerable significance. And certainly, he frequently says what he thinks you want to hear. How do we know? Well, he smiles when he is nervous. Kong’s concept of the truth is not the same as ours. Chinese seem not to believe in the existence of absolute truth, only situational or contextual veracity. Of course, we all say sometimes “It all depends…,” but Kong seems to inhabit a very dependent world indeed. Is he a free thinker, or is he in a sense being controlled? Sometimes he remains silent, then it is “Yes, but not easy…,” or “I suppose anything is possible,” or “That is a moot point.” If we are not English we look up “moot” in our dictionaries, to discover that it means “discussable” or “debatable,” which does not get us much further in the matter of what Kong really thinks.

He also flatters us a lot (which we can see through) and frequently sneaks us little gifts, which annoys us, as we don’t know what to give back. We can’t decline the little presents, as the manager says this would cause him to lose face and it has been drummed into us often enough that the dominant factor in an Asian’s behavior is protecting everybody’s face, so we do this diligently and go to great lengths not to upset or criticize Kong. This can be quite a strain in the long run, as we are not innately polite like he is. And he is so status conscious. He’s certainly respectful to the manager, but always contrives to sit on his immediate right, which, as we are told, denotes him as the second most important personage in the room (or would in China, at any rate). We don’t mind this too much, but he does have a tendency to moralize (to westerners) and often hints at the numerous Chinese virtues (we sometimes wonder about their modesty!).

Although we like direct questions and answers (and Kong often fails us in this regard), he lacks no directness when it comes to grilling us about personal details. In this respect, he appears just as inquisitive as Indians, who have no qualms about invading our privacy. “Are you married, Mr Lowe? No? Don’t you ever feel lonely? Do you have any children? How old are you? What is your income? How much did the watch you are wearing cost? I hope you are in good health? Do you have any brothers or sisters? Are your parents well?” Of course, we impute the best motives for this curiosity, but Germans, Brits, Swiss, Norwegians, Swedes, and Finns are not comfortable with these incursions. French, Italians, and Americans don’t seem to mind.

At the back of Kong’s colleagues’ minds is the question: How do the Chinese really look at us? What do they truly think of us? Are we still the “foreign devils” of yore? In fact, Kong is more enlightened in this respect than one might think, but he certainly does not see westerners in the same light as they see themselves. Chinese recognize western technical competence, but consider both Europeans and Americans as inexperienced in business relations. European civilization is considered as of short duration. Chou-en-lai, when asked what he thought of the significance of the French Revolution, replied, “It’s too early to tell.” Chinese see American hegemony as shallow and short-lived. More than even the Japanese, French, and Italians, Chinese are convinced of their cultural superiority over all other nations. China – “Chung-kuo” or the Middle Kingdom – is, and has long been, the center of the world. Until recently, some 90 percent of Chinese had not only never seen the world outside China, but had never thought of it.

Of course, Kong has transcended this restrictive mentality, but he has a silent agenda that differs from western ones. China today has no deep conflicts of interest with Europe (as it has with Japan and the USA), but Kong’s version of history differs wildly from that of the West. Not only does China boast the oldest civilization in the world (Yellow River, 5000 BC), but he is aware that for most of recorded history his country was the most populous, influential, inventive, and technically advanced nation in the world. Europe, in no uncertain terms, was a latecomer. Rome boasted about 350,000 inhabitants in 200 AD; China at the same time had a population of at least 60 million. But weight of numbers is only one thing. Most people know of China’s early technological achievements and inventions – gunpowder, pottery, silk, canals, paper, block printing – but few realize that throughout history China always had the world’s biggest economy, until it was overtaken by the USA in the 1890s. China’s return to economic preeminence in the twenty-first century is no great surprise for Kong.

How should a team manager get the best out of a mainland Chinese colleague – valuable as an East–West bridge and still on a learning curve, but inherently complacent about his qualities compared to others? First of all, Kong, though incontestably Asian, undoubtedly has the interests and aims of the team at heart. He may not have “changed sides,” but he is more than anxious to bridge cultural gaps, liaise successfully between his paymaster and Chinese markets, and, like most Chinese, make money through commerce. He knows his place in the current hierarchy: his team leader must tell him what to do, as clearly as possible. The manager must combine courtesy and firmness, maintaining a deferential manner (dropping his eyes when giving orders), always keeping the correct power distance from subordinates. Kong does not like surprises or any form of pressurizing and expects his superior to protect his face at all times.

Team leaders will have no problem remembering this maxim and trust will consequently develop in due course. They must support the tenets of Confucianism – showing respect for order, consensus, and family – and avoid difficult subjects such as the Tiananmen Square protests, Communism, human rights, Taiwan, and Tibet. Kong will be gratified if he sees the manager’s behavior as non-self-centered and respecting intuition as opposed to implacable logic. A Chinese team member needs to be given time to reach conclusions – he likes them to be long term – though he quickly reciprocates favors and sympathy. Kong rarely (or never) says “no,” but his manager must read between the lines. Sexual jokes are taboo, those based on irony or sarcasm risky before the group. The number 4 is unlucky and Kong certainly believes in feng shui. It does no harm to refer to the millennia of China’s cultural glory and an occasional Chinese meal together will do much to help bonding.

Culture: interaction (cont'd)

Andy Chen (Hong Kong)

International teams who do business with China or with Chinese business people in South-East Asia (Indonesia, Thailand, Malaysia, Singapore, the Philippines) are glad to have Andy Chen, a Hong Konger, as a colleague. To begin with, he seems more European than Chinese, or at least Anglo-centric, and often conveys the impression of looking at mainland Chinese as an outsider rather than being one of them. In fact, 99 percent of Hong Kongers are ethnic Chinese, so that Andy’s mentality is basically Chinese and for this reason he is a valuable team member: he knows how “the other side” thinks.

The basic characteristics of Hong Kongers are similar to those of mainland Chinese, but they are not the same. In the first place, their ancestors came almost exclusively from the Guangdong province, which means that they speak not Mandarin, but Cantonese. People from Hong Kong and Beijing have difficulty understanding each other orally, though they can do so in writing. In the world at large, language determines thinking rather than the other way round: people who speak different languages or dialects think in different ways. In the brain our thoughts are channeled along Anglo-Saxon grooves, neo-Latin grooves, Japanese or Chinese grooves, and so on. Regional speech determines regional thought, so that Canadian and Louisiana speakers of English think differently, as do Yorkshire people and cockneys and, moreover, speakers of Mandarin and Cantonese. People from Shanghai, speaking and thinking in Shanghainese, act differently (and in a freer way) than inhabitants of Beijing. Andy, who has been brought up speaking Cantonese and who was partly educated in English, is closer in mentality to Anglos than are mainland Chinese or most other Asians.

If we look at some of the differences in the psychological attitudes between Hong Kongers and mainlanders, it is fairly clear why there is ample compatibility between the British and the inhabitants of the former colony. This compatibility also extends to other English speakers who are familiar with British traits. How much do Hong Kongers and mainlanders diverge? In the first place, Andy is no stranger to English history and traditions. Hong Kong, founded in the 1840s by the British for the sole purpose of trade, is by any standards one of the world’s leading business centers and the preeminent focal point for trade in East Asia. Comparable to New York, London, and Tokyo in commerce, development, and wealth, it is the meeting place of two great cultural traditions: East and West. Andy is versed in Hong Kong law, which is based on the British legal system, and not only has he conducted business according to British principles and practices, he knows all about Ascot, Wimbledon, Oxford, Cambridge, Harrods, soccer, cricket, fair play, and parliamentary rule. His familiarity with British institutions is therefore the chief difference between him and continental Chinese. There are also numerous differences in behavior. In business, mainlanders are slow and methodical, Andy is brisk and speedy; mainlanders are by necessity bureaucratic, Andy cannot stand red tape; mainlanders are patient, Andy is impatient; on the mainland delays are common, in Hong Kong they are avoided; mainlanders often have complex commercial aims, Andy is single-minded (profit); mainland China brings eastern wisdom, Hong Kong combines eastern and western strengths; mainlanders may not lose face doing business, Hong Kongers are pragmatic; orthodox Chinese habitually resist change, Andy is adaptable; mainlanders make concessions slowly, Hong Kongers act quickly to secure business; mainlanders focus on process, Hong Kongers on the bottom line.

Mainland Chinese are hard-working and diligent, but in Hong Kong the pace is different. Energy levels may be comparable, but in Hong Kong energy is concentrated on speedy decisions and opportunist action. Mainlanders doing business may be slowed down by government control or the necessity for numerous lateral clearances. In Hong Kong, where most of the business is carried out by small families, entrepreneurship has free rein (American style). Mainlanders strive for the collective good, Hong Kongers think more individually (about the family good). On the mainland people are generally statically employed, in Hong Kong job mobility is an important factor – that is why Andy is on an international team.

His negotiation abilities are similar in character to those of Kong Dehai. He combines tenacity and canniness with surface courtesy and amiability; he can, however, be more openly rude to over-cautious opponents and often interrupts them (which mainlanders rarely do). Though he observes a certain amount of preamble and small talk with opposing parties, he often barely tolerates this procedure and betrays his anxiety to get down to business without undue delay. In Hong Kong grass does not grow under the natives’ feet!

Andy’s team manager knows how valuable he can be when the team has to engage with any party east of Kathmandu. He is not difficult to manage, since he is familiar with British mentality and knows a lot about westerners in general. His Sinic traits of work ethic, calm, and a sense of order and hierarchy make him a compliant recipient of instructions and discipline, while at the same time his entrepreneurial spirit, relish for speedy action, and lurking sense of humor lead to frequent displays of initiative and endeavor. He could almost be described as the ideal team player, especially when looking East.

Contracts and commitments

Chinese regard their word as their bond and can be generally trusted to adhere to agreements and commitments. They do, however, have the Asian notion of a contract, inasmuch as they regard it as a statement of intent, which may be invalidated by changes in circumstances beyond their control. In these cases, they seek re-negotiation of clauses in the contract.

Manners and taboos

Naming Practices:

Family name first - usually one syllable.
Use occupational titles.
Xiao for younger people lao for older (when acquainted)
Zhang Xiangshang (Mr. Zhang)
Zhang nishi (Mrs. Zhang)
Zhang Xiaojie = unmarried (Miss)
Laoshi = teacher = general respect
Shifu = technicians, plumbers etc.
N.B. Don’t use first names

Greetings:

Ni hao = hello
Nin hao = hello (shows more respect)
Say person’s name: Mr. Zhang!
Qu nar? = where are you going (needn’t be answered) or I’m going there!
Chi le ma? = have you eaten? Say yes.
Chinese state the obvious to show solidarity “you’re writing a letter.”
Chinese talk about weather only if it is bad.

You should open conversations with questions about:

Their families
Their hometown
Their region’s food
Scenic and historical spots.
N.B. Age is not sensitive, but Chinese are curious if you are over 30 and not married.

Entertaining:

Chinese are used to sit-down dinners. Uneasy at cocktail parties with no fixed hours.
Toast with anything (even soft drinks) but don’t ask for cold water and ice. Chilled water is fairly common in big cities.
If you are the senior guest you should thank your hosts over soup (near the end of a meal). If you are host, thank everybody for coming. That is the end. Hosts finish parties in China, not guests.
Host serve guests. Fingers not used for food, so no napkins provided. Exceptions are Peking Duck and fruit.
Chinese habits unfamiliar to Westerners include:
– Making noise with lips, etc.
– Touching dish or plate with lips
– Smoking at table
– Spitting on floor

Use of time:

Usually punctual
Make appointments 2 weeks in advance with high level officials, 1 week with minor officials
Length of meeting is usually specified by them.
4 signs when they wish to close the meetings:
– offer of more tea
– host sums up what has been said
– thanks you for coming
– stands up
Chinese visitors often arrive 15 minutes early. They don’t want to waste your time. They imply they can finish the meeting before it was scheduled to begin. This is out of deep respect for you.

The better they know you, the later they come.

Western concept of privacy does not exist in collectivist culture of China. They just show up. Mealtimes are 12 -1 lunch; 1 - 2.30 wushui (nap – in state enterprises); 6 - 7 supper. If you arrive at a Chinese home just before a meal you will be invited to table. You should decline.

Humility:

Chinese usually engage in self-disparagement:
e.g. “only a simple meal.” “only trying my hand” (painter)
If one pays them a compliment the standard reply is “Bu hao” (not good)
They also criticise all their family members.
They seldom mention titles or qualifications.
When pictures are taken it is good manners to try to get in the back row.
Good listening is good manners.
When applauded, they clap back.
When offering an opinion, they say “my immature opinion is…”

N.B. Humility is a centuries-old Chinese tradition. Linguistically, a series of honorific and self-deprecating terms was in use more than 2,000 years ago.

Guanxi:

Guanxi = the linking of 2 people in a relationship of mutual dependence.
Reciprocal gifts is seen as a social investment. It is not bribery. Problems may arise if Chinese views a gift as being unusually large or small.
No one in regular contact with Chinese can remain wholly outside the guanxi system. It is part of the way one builds positive personal relationships.
Most Chinese believe the system operates in your country. If you receive an expensive gift, it means they expect a major favour in the near future.

Face:

One’s ‘face’ is when one claims certain characteristics for oneself. These might involve:

Regard or disregard for one’s own personal appearance
Order or disorder of one’s possessions
Attitude to religious values
Self-restraint or indulgence
Kind or demanding towards others
Creative or conformist in thinking
In the East ‘face’ is socially and psychologically vital, generating a personal sense of dignity.
In a social situation, everyone tries to preserve everyone else’s face, often by ‘white lying’.
Loss of face occurs when someone’s face is called into question (implicitly or explicitly).
A person who unintentionally causes loss of face, also loses face. Focus shifts on how to repair the damage.
Face has greater social significance in China than in the West. (Entire life spent in one place). Causing someone to lose face is a challenge to his or her place in the hierarchy (therefore anti-Confucian).

Gifts:

You should decline a gift 3 times before accepting.
Gifts not opened in front of giver
When giving, suitable gifts are toys or games for younger children, coins wrapped in red paper for older children, food or drink for adults, items of kitchenware from your country at weddings, English language books or tapes, handicrafts.

Occasions of Giving Gifts

Among most Chinese from the People’s Republic, gift giving is associated with the following occasions:

Attending a birthday celebration
Visiting a sick person at home or in the hospital
Visiting relatives or good friends during Spring Festival, Mid-Autumn Festival, and New Year celebrations
Attending a Wedding
Arriving for lunch or dinner given by an individual with whom one is not on very close terms
Returning from a long domestic or foreign journey
Thanking an individual for a special service or kindness
Thanking an institution for hospitality rendered in the course of a brief visit (such as during a study tour)

Taboos

Taboos include boasting, pressurising, bluntness, criticising and causing anyone to lose face. Any number containing the figure 4 is unlucky. Avoid giving white gifts - white is the colour for death. Don’t discuss Tiananmen Square demonstrations or the independence of Taiwan. Don’t criticise the party.

Other

The work ethic, entrepreneurial spirit and experience in business are emerging clearly in the Reformist period. There are no racial tensions in China and spectacular growth is likely to continue well into the next century as long as political stability is maintained

How to empathize with them

Humility is the number one requirement. Everything is to be gained by being modest, courteous, extremely deferential. Old people have a lot of power, even in their eighties. They should be nurtured. Give adequate time for your dealings with Chinese. Visit them often, don’t send anyone under 40 and take thoughtful gifts from your own country. Remember they are very proud not only of their 5000-year history and artistic achievement, but also of their personal and collective integrity and moral standards.

You are dealing with people who place values and principles above money and expediency.
The Chinese will not stray from their reverence of Confucian views on order, family and consensus. Show unqualified respect for these concepts.
The Chinese see their language not only as a cultural tool which has historically influenced Japan, Korea, Indo-China and other areas, but as a repository for transmitting cultural values. In other words, the undisputed link between language and culture gives them a strong motive to increase the currency of the Chinese language at least on a regional basis. You would do well to have one or two individuals in your company or organisation develop reasonable fluency in Chinese.
As William Rees-Mogg points out, there are no deep conflicts of interests between modern China and Europe, as there are between China and Japan, Russia and the United States. Britain in particular has long experience in China and many connections in East Asia. Chinese also react favourably to Nordic calmness, German technology and French savoir faire. Europeans should study Buddhist and Confucian behaviour and show compassion for Chinese difficulties. It will pay off.
Final golden rules – be extremely deferential at all times, combine courtesy with firmness, show humility and respect for age and rank, don’t overdo the logic, prepare your meetings in detail, don’t speak in a loud voice or rush them, know your Chinese history, always keep your calm and remember that patience and allowing adequate time for reflection are the keys to making progress, however slow it may seem.

Special notes

Face

No understanding of the Chinese mentality is complete without a grasp of the concept of face. Having face means having a high status in the eyes of one’s peers, and it is a mark of personal dignity. Chinese are acutely sensitive to having and maintaining face in all aspects of social and business life. Face can be likened to a prized commodity: it can be given, lost, taken away or earned. You should always be aware of the face factor in your dealings with Chinese and never do or say anything that could cause someone to lose face. Doing so could ruin business prospects and even invite retaliation.

The easiest way to cause someone to lose face is to insult the individual or to criticise him or her harshly in front of others. Westerners can offend Chinese unintentionally by making fun of them in the good-natured way that is common among friends in the West. Another way to cause someone to lose face is to treat him or her as an underling when his or her official status in an organisation is high. People must always be treated with proper respect. Failure to do so makes them and the transgress or lose face for all others aware of the situation.

Just as face can be lost, it can also be given by praising someone for good work in front of peers or superiors or by thanking someone for doing a good job. Giving someone face earns respect and loyalty, and it should be done whenever the situation warrants. However it is not a good idea to praise others too much, as it can make you appear to be insincere.

You can also save someone’s face by helping him to avoid an embarrassing situation. For example in playing a game you can allow your opponent to win even if you are clearly the better player. The person whose face you save will not forget the favour, and he will be in your debt.

A person can lose face on his own by not living up to others’ expectations, by failing to keep a promise or by behaving disreputably. Remember in business interactions that a person’s face is not only his own but that of the entire organisation that he represents. Your relationship with the individual and the respect accorded him is probably the key to your business success in China.

Recurrent problems and challenges for foreigners doing business in China

It is not one market of 1.3 billion China is the most populous country in the world; it is also the 3rd largest in area. With its sprawling regions and regional cultural diversity, China has many markets, each requiring a different strategic approach
The market is fast-changing The explosive growth of the Chinese economy over the last decade has generated kaleidoscopic changes and realignments in many industries

One often has to invest up-front Chinese partners are keen to acquire rapid technological advantage and require capital and modern equipment. Returns on investment for foreign partners often seem far in the future

Chinese partners want to control the workforce They are the best to do this, of course, but foreign investors often feel control should be commensurate with the level of investment

Control, whether by Chinese partners or by China’s government, is a dominant feature of Chinese society. China, with its diverse regions and numerous ethnic divisions, fears chaos more than anything else. Foreigners often feel they are over-regulated

Chinese concern about consensus and stability is a parallel problem for more individualistic foreigners

Approvals and licences for most commercial activities often seem tedious and time-losing for Westerners

Resistance to change is a Chinese characteristic. Though quick action is mandatory in a fast-changing market, the national penchant for control ensures gradual change – so desired by the Chinese

Rules interpreted differently by each regional authority. Provincial governors and mayors of big cities wield considerable influence

Contract law is in the early stages of development This constitutes a huge disincentive for some investors. In the first few decades of the PRC’s existence, the courts were largely instruments of the political leadership. Since 1990 efforts have been made by the State Council and the People’s Congress to invoke rule by law rather than rule by man, although this requires a radical change in generations of habitual practice

Protection of intellectual property rights can be difficult under existing law. Copyright infringements are common and compensation hard to obtain.

Government has greater impact in China than in most countries. This is felt in a myriad different ways from extra margins paid to state-licenced importers, retailers and so on, to the protection of unwanted employees and the social liabilities pertaining to them

Under-performance by Chinese partners occurs in many cases. This applies to poor quality of management, inadequate supply of components, inferior distribution channels and dodgy, unreliable accounting. Chinese partners often sell their ability to influence the authorities at various levels, but in practice turn out to be little better than foreign China hands

There is no large, local pool of managerial talent Several decades of Communism went a long way towards destroying the traditional Chinese entrepreneurial spirit. State-appointed managers were allocated tasks and funds and instructed to produce goods of indifferent quality for a captive, state-controlled market. They were required to show little initiative – those who did risked reprimand. Managers from Communist times never learned how to optimise capital and labour. They had no feel for market forces or free competition. Foreigners, used to being able to recruit promising, even experienced middle managers in countries such as Singapore, Malaysia and Japan, find that there is a dearth of capable managers in China

Loyalty to old methods Such managers as can be recruited often show stubborn loyalty to old methods employed by the Communist regime. Aversion to risk and disinclination to assume responsibilities inhibit initiative and innovation. Younger Chinese can be moulded more easily, but energetic training and monitoring of activity are paramount

Few free thinkers Foreign managers get little help from Chinese colleagues in developing fresh approaches to problems or generating new ideas. The Chinese educational and social systems for centuries have encouraged learning by rote, memorisation, regurgitation of the same knowledge when asked to perform. This places an extra burden on foreign managers trying to address situations in which business is not moving forward, stagnating or showing signs of failing to beat the competition

Competition is everywhere China, with its promise of one billion plus customers, is a fiercely competitive market. Americans, Japanese, British, French, Germans, Italians are all there. In some fields, Chinese companies are able to compete successfully, often aided or protected by the state or regional governments. One has always to be vigilant and on one’s toes!

Over-capacity through over-investment Enthusiastic investment after Deng’s “opening up” and especially in the early 1990s led to a massive over-capacity in such industries as automobiles, consumer products, electricity generation, electronics and other forms of new technology. In these areas, supply exceeds demand, thereby minimising margins and delaying expected returns on investment.

Debt collection can be difficult. While Chinese individuals and companies traditionally honour their debts, debt collection in cases of failure is hampered by inefficient officialdom and obscure procedures

Chinese nationalism often rears its head. This is not unexpected in view of historical injustices and insults visited upon the Chinese by previous generations of foreigners. One must also remember that for 50 years China was isolated from the global economy, therefore Chinese do not fall easily into habits of international co-operation, participation in multinational teams, ready mobility etc.

“Same bed, but different dreams” This Chinese expression touches upon one of the key problems that foreigners encounter when finding themselves in joint ventures with Chinese partners. China is an old and vast country. The culture is as complex as any other – more so than most. Millennia of traditions and activity have imbued Chinese culture with a host of aspirations, goals, prejudices, nuances, subtleties and numerous other complexities which a newly-arrived foreigner is in no condition to comprehend. The foreign manager is nevertheless faced with the task of harmonising the two cultures and the different expectations of each party. These expectations vary all along the line, but outstanding differences can be summarised by saying that foreigners expect long term profit, access to a huge market and low labour costs; Chinese expect quick dividends, transfer of technology and know-how, and generous allocation of capital equipment and state-of-the-art accessories. In the long term, Americans and northern Europeans want to maximise profit; in the case of the Chinese they often seem to want to maximise employment. (This latter tendency is also observable in Japan, S E Asia, Latin America and Mediterranean countries).

The foreign on-site manager is usually not the same person who negotiated the joint venture (JV) at the outset. It is common for there to be a considerable gap between original expectations and agreements and subsequent practice. If the Board Member responsible for China in America or Europe changes, there may be a lack of understanding of the main thrust of the agreement or the ultimate goals of the JV. The expatriate manager is often in a difficult position. The incidence of failure among expatriate senior executives in China is said to be about twice the world average. The backing of the board of management at home is essential when the expatriate manager indicates certain policies must be pursued. This is unfortunately often lacking

Entertaining and relationship-building is one of the most important tasks of the expatriate manager. The more successful ones understand this necessity and devote adequate time to it. It is often hard for HQ to appreciate the inordinate amount of time and effort that this requires. The whole guanxi concept of mutual back-scratching and networking is often beyond the grasp of the board member back home. In most cases it is fatal to criticise the expatriate manager’s involvement in this area

“Face” is another area which the expatriate manager will neglect at his peril. Protection of the face and reputation of all partners, colleagues and even employees is mandatory at all times. The expatriate manager often understands (but his board members back home probably do not) that every action or utterance undertaken by a Chinese during his working day or social intercourse is dominated by his estimation of whose reputation is being affected, either positively or negatively (and to what extent) by his word or deed. The unwritten rules in this area are stronger than any law (or even religious view). Failure of the foreigner to comply with these rules spells immediate failure in dealing with the Chinese.

Meeting the challenges
In spite of the operating difficulties mentioned above, the expatriate manager can succeed in China by observing the basic features of Chinese life and taking steps to minimise friction and create meaningful and lasting relationships. The Chinese have their own perceptions of their historical achievements and cultural superiority. In order to align oneself with these perceptions one has to question one’s own assumptions about what is self-evident.
The following solutions are suggested:

Listen well Frequently Chinese partners are able to come up with creative ways of meeting the foreigner’s needs. One has to put oneself forward as “a friend of China” and be prepared to consider seriously Chinese advice

Be part of their system without abdicating one’s own principles. One cannot become a Chinese, so it is better to remain oneself, albeit a person who is sensitive to Chinese perceptions and willing to accommodate them. It is better not to compare or contrast cultural traits, but to recognise differences and attempt to harmonise them or draw strengths from each side. One should be neither euphoric nor negative. Chinese culture is hardly better or worse than any other. It is rich, subtle and a challenge for a foreigner to penetrate

Trust must be established and cultivated. Though subtle and delicate at times, Chinese are strongly impacted by a sincere, open, frank and direct approach. They recognise sincerity intuitively. Ask the right questions, you will find they answer precisely. What they do not do is volunteer information you do not seek

Respect, courtesy and patience are qualities the foreigner must consistently display. There is little corruption in Chinese JV business and one has everything to gain by imputing best motives

Training is very important and is of mutual benefit. Through training one is able to allow Chinese to become truly equal partners in a Joint Venture. The advantages of localisation of managerial authority are obvious. To optimise these, one has to allow the Chinese to develop new skills through skilful and consistent training. They will then be able to solve many problems of a local nature for you. Bringing along Chinese managerial staff is what true guanxi is all about. One should attempt to create an environment where Chinese colleagues dare to speak their mind. (This is not natural in China)

A paternalistic approach does not always come naturally to Anglo-Saxons and Protestant Northern Europeans. This is however a useful strategy in China. Listen to their personal problems if they draw these to your attention. If you do not, they will turn to their Chinese managers for emotional comfort. One cannot alter the expectations of Chinese employees about their relationships with their managers. There is an absence in China of intermediary organisations (so common in the West) such as clubs, societies, associations where they can unburden themselves of personal problems. There is not much between the individual and the state, except the people in the employee’s working life. The expatriate manager who plays a sympathetic role quickly establishes a reputation and gains loyalty.

Manage relations at different levels The expatriate manager must constantly try to know where authority is invested. In China one must balance negotiations between the state government and regional or municipal authorities. It is unwise to have all one’s “eggs in one basket”. Relationships, once established, must be maintained in the long term. The cultivation of these may be hard work and time-consuming. It must remain a high priority. One has in fact to maintain vigilance at 5 levels:

central government
local government
JV partners
customers
employees

Contracts in China, while serious, are often seen as a statement of intent rather than a document of any finality. Often the real negotiations begin after a contract has been signed. The expatriate manager must build this tendency into his calculations.

Privatisation in China is taking place at a rapid pace. One must recognise this without making political capital out of it. The change of direction of the Communist government is to the Westerner’s advantage. It is not referred to particularly explicitly by the authorities. A euphemism for “privatisation” is “introducing diverse forms of ownership””

Hong Kong je obrađen posebno, ako zatreba.

Eh da je vlasnik FIS imao ovo kad je počeo...

Volvokse, ovo je za ozbiljne poslovne ljude, ne za jebivjetre kao što si ti

In the long term, Americans and northern Europeans want to maximise profit; in the case of the Chinese they often seem to want to maximise employment. (This latter tendency is also observable in Japan, S E Asia, Latin America and Mediterranean countries).

Profesoru/Doktoru/Emeritusu/Akademiku/Antropologu Volvoksu (koliko ono reče da imaš 16 ili 17 godina) se do sada nije svidila ni njemačka, ni austrijska ni kineska analiza.

Culture

Religion

Buddhist majority, Christian minority

Cultural classification

Reactive (with linear-active tendencies) Data oriented (with dialogue oriented tendencies)

Languages

Cantonese, Mandarin, English

Values and core beliefs

Cultural black holes

Hong Kong was created to make money. Most of Hong Kong’s inhabitants are imbued with this philosophy and horizons are consequently somewhat restricted by this obsession. Impatience is another characteristic of both Chinese and Europeans working in Hong Kong.

Concept of space

Used to crowded conditions, both as to living space and transportation environment, personal space is more than one metre, though when travelling this is often infringed upon.

Concept of time

Hong Kongers of all races are punctual. People walk fast and impatience is seen in most circumstances. Speed of action resembles American. Punctuality on arrival is also considered important – more so than in many Asian countries. Indeed, when meetings are scheduled between two people, it is not unusual for a Chinese to arrive 15-30 minutes early "in order to finish the business before the time appointed for its discussion". In that manner the Chinese is not stealing any of the other person’s time! It is also considered polite in China to announce, 10 or 15 minutes after a meeting has begun, that one will soon have to be going. Again, the worthy aim involved is to economise on their use of your time. The Chinese will not go, of course, until the transaction has been completed, but his point has been made.

This is indeed a double standard. The Chinese penchant for humility demands that the interlocutor’s time be seen as precious, but on the other hand Chinese expect a liberal amount of time to be allocated to repeated consideration of the details of a transaction and to the careful nurturing of personal relationships surrounding the deal. They frequently complain that Americans, in China to do business, often have to catch their plane back to the US "in the middle of the discussion". The American sees the facts as having been adequately discussed; the Chinese feels that he has not yet attained that degree of closeness – that satisfying sense of common trust and intent – that is for him the bedrock of the deal and of other transactions in the future.



Self image

Money-makers. Internationalists. Pragmatists

Culture: communication

Communication patterns

People in Hong Kong speak faster than Chinese mainlanders and wish to conclude deals and negotiations faster. These diagrams contrast the speech style:



Body language and non-verbal communication

More overt than in Japan, but rarely exaggerated.

Listening habits

The diagrams contrast the listening habits of Hong Kongers and mainland Chinese.

Hong Kong, with entrepreneurism in its blood, sense of urgency, driving always in the fast lane, stands in close comparison to the bustling USA.



Audience expectations at presentations

• know-how
• humble tone
• investment
• licensing
• pragmatic suggestion
• older speakers
• show us the way to profit
• technological short cuts
• innovation

Jesi li ti pročitao, druže Metemma??

Nego, natjerao sam se, i našao nešto zanimljivo...

Ovaj model očito postupno vodi do stagnacije, ali stanovništvo živi kvalitetnije, imamo primjer imovine Nijemaca i Ciprana... Nažalost, ovo se u Europi pokazalo neodrživim, no čini mi se da Japan funkcionira

Culture: interaction

Concept of status

Status is according to wealth and position. This is changing as political circumstances change.

Gender issues

Chinese women are very active in business and are shrewd at handling money and people.

Leadership style

Consensus is generally highly valued in Hong Kong, but in companies it was autocratic. New leaders are emerging with reputations of competence, and are becoming influential in the business sphere and may have only loose ties with Beijing. In Chinese family businesses (and there are many) the senior male is the patriarch and the usual nepotic structure is observable.



Language of management
There are many varieties of Chinese, though Mandarin is in gradual ascendancy. Cantonese, and Shanghainese are, however, likely to retain their importance as languages of commerce. Mandarin sounds authoritative to many Chinese and commands obedience. Chinese managers rely heavily on Confucian precepts, which support their authority to no small degree. Their language implies the 5 unequal relationships as taken for granted; it is delivered softly, implying Confucian standards of wisdom, kindness, moderation and frugality. Like most Asian tongues, it thrives on a certain ambiguity. Politeness and courtesy are mandatory. Subordinates are invariably wooed by this linguistic style. In Hong Kong there is more of a sense of urgency.



Motivation factors

The Chinese will not stray from their reverence of Confucian views on order, family and consensus. Show unqualified respect for these.
Study Buddhist and Confucian tenets, see how they affect Chinese behaviour, and show compassion for Chinese difficulties. It will pay off.
Be extremely deferential at all times.
Combine courtesy with firmness.
Show humility - the Chinese prize this trait immensely.
Show respect for age and rank, irrespective of your evaluation of the person.
Don’t overdo logic. Chinese are strong on intuition.
Prepare your meetings in detail— they will appreciate your preparedness.
Don’t speak in a loud voice - they respect a calm manner.
Know your Chinese history - China has been the most important country in the world for a considerable part of recorded human history. Praise their inventiveness and artistic achievements.
Power distance between different Chinese is large. Inequalities are expected and desired. Find your ‘rank’ and behave accordingly.
Make sure that the people you send to deal with Chinese are old enough. For important business, anyone under 40 is immediately suspect. Unlike mainland Chinese, Hong Kongers realise that westerners often utilize younger people for important assignments.
When a big deal is cooking, visit and visit and visit again. Chinese desire follow-up! The visitor’s rank must be as high as possible.
Remember that relationships are far more important than tasks.
Subordinates expect to be told what to do. Tell them, but kindly.
When entertaining, do not hesitate to be lavish. Chinese are frugal people, but not when feasting.
Preserve harmony by saving face for everybody on all occasions. This is guiding principle no.1.
Be careful how you look at the concept of truth. Chinese do not believe in absolute scientific truth. The search for virtue is more important than the search for truth. A and B (opposites) can both be right and wrong if both are virtuous.
When dealing with Chinese, long term orientation is essential. They have been doing business for 4000 years.
On account of this, they consider themselves extremely experienced, knowledgeable and shrewd. You may think you are more au fait with international business methods, but don’t let this show through.
They will not do business with you if they don’t trust you. Show your reliability through your deeds.
Imitate their skill in combining affability with arm’s-length politeness.
Never reject a Chinese proposal out of hand. When you negate someone’s idea, you negate the person. Allow that anything is possible — you may qualify this later.
Learn to read between the lines. Chinese arguments often go around in circles. Try to triangulate to get a fix on the real point.
Do not hesitate to do business through go-betweens. It often speeds up progress strikingly.
Remember gift-giving is an important feature in business and social relationships. Choose appropriate rather than lavish gifts.
Remember that in Hong Kong the buyer comes first and expects added respect.
Dress neatly and conservatively. Beards and other excessive hair cause Chinese to feel uncomfortable.
Close all meetings you control by thanking everyone for attending.

General behaviour at meetings

Personal connections are the key element of doing business in Hong Kong. As in mainland China and Taiwan, little or no distinction is made between business and personal relationships. This point cannot be overemphasised. For a foreign businessperson to succeed with Hong Kong Chinese, he must cultivate close personal ties with business associates and earn their respect and trust. Attempts to establish long-term businesses in the colony have failed because foreigners did not recognise that business relationships are also personal relationships. Any successful person in Hong Kong, Chinese or Western, will be a member of a loose network of personal friends, friends of friends, former classmates, relatives and associates with shared interests. These people do favours for one another and always seek a rough balance between help given and received.

The one area of business in Hong Kong where the importance of personal connections is minimal is export trade. Because Hong Kong has been exporting to the West for decades, Hong Kong businessmen understand that foreigners have little understanding of their society and traditions. Selling goods to foreigners is now itself a tradition, and since it usually does not involve close co-operation between the two sides, it can be conducted impersonally. But to market products or engage in co-operative ventures in Hong Kong, foreign businessmen must cultivate connections.

The importance of personal connections has its roots in the traditional concept of family. For the Chinese, individuals are parts of the collective family whole. The family is the source of identity, protection and strength. In times of hardship, war or social chaos, the Chinese family structure was a bastion against the brutal outside world, in which on one and nothing could be trusted. As a result, trust and co-operation were reserved for family members and extremely close friends. Moreover, ancient China was ruled more by decree than by laws. A high official could act with immunity and innocent people could get hurt unless they had powerful friends to protect them. By establishing close connections with other households and persons of higher rank, Chinese could survive and perhaps even prosper.

The social situation in Hong Kong today is more secure than it was in the past, but the tradition of personal connections is as strong as ever. In essence, the Chinese possess a clan mentality under which those inside the clan work co-operatively and those outside the clan are seen either as inconsequential or as potential threats. To be accepted into a network of personal or business relationships in Hong Kong entails responsibility and commitment to the members of the network.

In the fast-paced, competitive business environment of Hong Kong, executives and entrepreneurs work constantly to maintain and expand their networks of connections. These networks extend to Guangdong Province in the PRC, to Taiwan and abroad to South East Asia, Europe and the Americas. While the purpose of such contacts is often mutual financial profit, the criteria are the same as for personal networks: trustworthiness and loyalty. Cultivating friendships in the business world is an art learned through practice and close attention to the needs of expectations of others. You form such relations by doing favours and demonstrating integrity.

Although Hong Kong is relatively small and almost all its people are ethnic Chinese, it is not easy to generalise about work styles and office environments. Management styles can range from traditional Confucian to ultramodern and Western, but they are usually a combination of the two. Everything depends upon the executive’s personal background and degree of Western influence.

But at the risk of oversimplifying, business in Hong Kong is conducted formally, often in emulation of the British style. Punctuality, efficiency and frugality are usually present in business environments. Because Hong Kong is one of the world’s most densely packed cities, working spaces are often cramped.

In contrast to Korea and Japan, companies in Hong Kong are characteristically small and rather entrepreneurial in spirit. Thousands of offices conduct the bulk of trade to and from China, and small back-alley garment shops employing ten people or fewer produce most of the colony’s textiles for export. This small scale of operation gives overseas business people looking for Hong Kong associates many opportunities. Because so many different interests are clamouring for a piece of the business action, it is difficult for larger companies to lock out their smaller competitors.



Negotiating characteristics

Chinese prefer meetings to be formal, though dress is usually comfortable.
Seating will be according to hierarchy. Business cards exchanged.
Senior man must be shown great respect and attention at all times, even though he takes little part.
Deputy or vice chairman is often the decision-maker.
Real decisions will be made outside the meeting, which is principally for information-gathering.
Politeness is observed at all times. Confrontation and loss of face (for both sides) must be avoided.
Chinese rarely say “no” – only hint at difficulties.
Collective spirit prevails, nobody says “I”, only “we”.
Deal-oriented Americans and many Europeans agree to perform specific tasks over an agreed period of time. Chinese, looking beyond the deal, prioritize mutual trust in the long term.
They are thrifty, cautious. You will have to match their stamina, otherwise deals and opportunities will be lost.
They combine flexibility with firmness and expect both these qualities in you.
Once they have decided who, what, when and how is best, they are very trustworthy.
You can talk tough, but must preserve politeness.
They persevere at all times. They have great stamina.
If connections (guanxi) become close, they will expect favours on a personal basis.
Gifts are expected and acceptable, though not cash. No fuss made over them, only cursory glance.
They distinguish between “new friends” and “old friends”. You need, therefore, to visit Hong Kong several times before you make much progress.

Contracts and commitments

Hong Kongers regard their word as their bond and can be generally trusted to adhere to agreements and commitments. A few years ago, many Hong Kong Chinese viewed written contracts as virtually meaningless compared to personal commitments between associates. This view still causes problems in mainland China, but Hong Kong business is based on the rule of law and under Hong Kong law a contract is a legally binding document.

Yet in contrast to the Western view, some Hong Kong Chinese still consider a contract to be a loose commitment to do business, not a document outlining every aspect of the business relationship. Some head executives would rather sign a short agreement in principle and allow subordinates to work out the details at a later time. Avoid this situation if you can, because it increases the chance of misunderstanding on both sides and necessitates further negotiations, which can be costly.

While negotiating a detailed contract is important, understand that the Hong Kong Chinese often view any deal with foreigners as only one component of a larger, ongoing relationship. They see the immediate issue as a sort of building block that allows them to measure and strengthen reliability and co-operation. This is a practical and realistic philosophy that any Westerner who wants to do business in Hong Kong over the long term should appreciate and adopt for his own ventures.

Manners and taboos

Naming Practices:

Family name first - usually one syllable.
Use occupational titles.
Xiao for younger people lao for older
Zhang Xiangshang (Mr.)
Zhang nishi(any woman) = madam
Zhang Xiaojie = unmarried (Miss)
Laoshi = teacher = general respect
Shifu = technicians, plumbers etc.
N.B. Don’t use first names

Greetings:

Ni hao = hello
Nin hao = hello (shows more respect)
Say person’s name: Mr. Zhang!
Nar qu ya = where are you going (needn’t be answered) or I’m going there!
Chi le ma? = have you eaten? Say “yes”.
Chinese state the obvious to show solidarity “you’re writing a letter.”
Chinese talk about weather only if it is bad.
You should open conversations with questions about:
Their families
Their business
Hong Kong’s food
N.B. Age is not sensitive, but Chinese are upset if you are over 30 and not married.

Entertaining:

Chinese are used to sit-down dinners. Uneasy at cocktail parties with no fixed hours.
Toast with anything (even soft drinks) but don’t ask for cold water and ice.
If you are the senior guest you should thank your hosts over soup (near the end of a meal). If you are host, thank everybody for coming. That is the end. Hosts finish parties in Hong Kong, not guests.
Hosts serve guests. Fingers not used for food, so no napkins provided. Exceptions are Peking Duck and fruit.
Food that falls on the floor may be retrieved and eaten.
Chinese habits unfamiliar to Westerners include:
– Making noise with lips, etc.
– Touching dish or plate with lips
– Smoking at table
– Spitting on floor

Use of time:

Usually punctual
Make appointments 2 weeks in advance with high level officials, 1 week with minor officials
Length of meeting is usually specified by them.
4 signs when they wish to close the meetings:
– offer of more tea
– host sums up what has been said
– thanks you for coming
– stands up

Humility:

Chinese usually engage in self-disparagement:
e.g. “only a simple meal”, “only trying my hand” (painter)
If one pays them a compliment the standard reply is “Bu hao” (not good)
They also criticise all their family members.
They seldom mention titles or qualifications.
When pictures are taken it is good manners to try to get in the back row.
Good listening is good manners.
When applauded, they clap back.

N.B. Humility is a centuries-old Chinese tradition. Linguistically, a series of honorific and self-deprecating terms was in use more than 2000 years ago.

Guanxi:

Guanxi = the linking of 2 people in a relationship of mutual dependence.
Reciprocal gifts is seen as a social investment. It is not bribery. Problems may arise if Chinese views a gift as being unusually large or small.
No one in regular contact with Chinese can remain wholly outside the guanxi system. It is part of the way one builds positive personal relationships.
Most Chinese believe the system operates in your country. If you receive an expensive gift, it means they expect a major favour in the near future.

Face:

One’s ‘face’ is when one claims certain characteristics for oneself. These might involve:

Regard or disregard for one’s own personal appearance
Order or disorder of one’s possessions
Attitude to religious values
Self-restraint or indulgence
Kind or demanding towards others
Creative or conformist in thinking
In the East ‘face’ is socially and psychologically vital, generating a personal sense of dignity.
In a social situation, everyone tries to preserve everyone else’s face, often by ‘white lying’.
Loss of face occurs when someone’s face is called into question (implicitly or explicitly).
A person who unintentionally causes loss of face, also loses face. Focus shifts on how to repair the damage.
Face has greater social significance in China and Hong Kong than in the West. (Entire life spent in one place). Causing someone to lose face is a challenge to his or her place in the hierarchy (therefore anti-Confucian).
[See further notes on ‘face’ in the Special notes section]

Gifts:

You should decline a gift 3 times before accepting.
Gifts not opened in front of giver
When giving, suitable gifts are toys or games for younger children, coins wrapped in red paper for older children, food or drink for adults, items of kitchenware from your country at weddings, English language books or tapes, handicrafts.

Occasions of Giving Gifts

Among most Chinese, gift giving is associated with the following occasions:

Attending a birthday celebration
Visiting a sick person at home or in the hospital
Visiting relatives or good friends during Spring Festival, Mid-Autumn Festival, and New Year celebrations
Attending a Wedding
Arriving for lunch or dinner given by an individual with whom one is not on very close terms
Returning from a long domestic or foreign journey
Thanking an individual for a special service or kindness
Thanking an institution for hospitality rendered in the course of a brief visit (such as during a study tour)

Taboos

Taboos include boasting, bluntness, criticising and causing anyone to lose face. Any number containing the figure 4 is unlucky. Avoid giving white gifts - white is the colour for death.

How to empathize with them

Humility is the number one requirement. Everything is to be gained by being modest, courteous, extremely deferential. Old people have a lot of power, even in their eighties. They should be nurtured. Give adequate time for your dealings with Chinese. Visit them often, don’t send anyone under 40 and take thoughtful gifts from your own country. Remember they are very proud (and not only of their 5000-year history and artistic achievement.)

Special notes

Confucianism

Although Hong Kong has a huge foreign population of expatriate business people, its population is 98 per cent Chinese. Although their traditions and values have been influenced by the Western presence, they are still essentially Chinese, and Hong Kong inhabitants possess many characteristics which are difficult for Westerners to understand. Moreover, Hong Kong business is inextricably bound to business in mainland China and other Chinese areas less affected by Western culture. Foreign business people operating in Hong Kong must therefore grasp the moral values and traditional concepts which shape the Chinese mentality if they are to operate successfully in a Chinese or Hong Kong business environment.

The mentality of modern Chinese is still largely by the teachings of Confucius, who lived more than 2,500 years ago. Confucianism is more of a social code for behaviour than it is a religion. The basic tenets of Confucian thought are obedience to and respect for superiors and parents, duty to family, loyalty to friends, humility, sincerity and courtesy. Confucius identified five types of relationships, each with very clear duties. They are: ruler to people, husband to wife, parent to child, older to younger and friend to friend.

Ruler to people

In the Confucian view, the ruler commands absolute loyalty and obedience from his people. They are never to question his directives or his motives. In return, the ruler is to be wise and work for the betterment of his people. He should always take their needs and desires into account.

Husband to wife

The Confucian husband rules over his wife as a lord rules over his people. The wife is to be obedient and faithful, and she has a duty to bear her husband sons. The husband has the duty of providing his wife with all the necessities of life.

Parent to child

Children must be loyal to their parents and obey their wishes without question. While the parents must raise and educate their children, the children must care for their parents in old age and always love and respect them.

Older to younger

Respect for age and obedience to all older family members is a key element of the Confucian ethic. Grandparents receive deferential treatment from grandchildren as well as from children.

Friend to friend

The relationship between two friends is the only equal relationship in Confucianism. Older friends, however, are expected to give guidance to younger friends. Friends have a duty to be loyal, trustworthy and willing to work for each other’s benefit. Dishonesty between friends is a social crime and demands punishment.

In modern Hong Kong, westernisation and competing philosophies have diluted Confucianism somewhat, but its ethic is still manifest in people’s behaviour.

There is a strong bond among friends in Hong Kong society. Chinese who have established mutual trust and respect with each other will work hard to make each other successful. Favours and gifts between friends must constantly be reciprocated.

Humility remains an honoured Confucian trait. Hong Kong Chinese are seldom boastful or self-satisfied, even if their accomplishments are laudable. When Chinese are being polite, they can seem excessively self-deprecating.

Chinese can be the most courteous people in the world toward their friends. When a Hong Kong friend visits a friend, every detail of his or her stay may be prearranged, and the guest may not be allowed to spend money on even the smallest items. For individualists form the West, this form of courtesy can be overwhelming. However, when Chinese in Hong Kong deal with strangers, they are often rude or uncaring. Such behaviour is a psychological necessity in a city as densely populated as Hong Kong (or New York or Paris). Crowds everywhere push and shove: no apologies are given, and none expected.

The effect of Confucianism on Hong Kong businesses has been to develop a hierarchical working environment in which workers are dedicated and industrious. As in most Confucian societies in the Far East, productivity is high and labour relations are generally harmonious.

Face

No understanding of the Chinese mentality is complete without a grasp of the concept of face. Having face means having a high status in the eyes of one’s peers, and it is a mark of personal dignity. Chinese are acutely sensitive to having and maintaining face in all aspects of social and business life. Face can be likened to a prized commodity: it can be given, lost, taken away or earned. You should always be aware of the face factor in your dealings with Chinese and never do or say anything that could cause someone to lose face. Doing so could ruin business prospects and even invite retaliation.

The easiest way to cause someone to lose face is to insult the individual or to criticise him or her harshly in front of others. Westerners can offend Chinese unintentionally by making fun of them in the good-natured way that is common among friends in the West. Another way to cause someone to lose face is to treat him or her as an underling when his or her official status in an organisation is high. People must always be treated with proper respect. Failure to do so makes them and the transgress or lose face for all others aware of the situation.

Just as face can be lost, it can also be given by praising someone for good work in front of peers or superiors or by thanking someone for doing a good job. Giving someone face earns respect and loyalty, and it should be done whenever the situation warrants. However it is not a good idea to praise others too much, as it can make you appear to be insincere.

You can also save someone’s face by helping him to avoid an embarrassing situation. For example in playing a game you can allow your opponent to win even if you are clearly the better player. The person whose face you save will not forget the favour, and he will be in your debt.

A person can lose face on his own by not living up to others’ expectations, by failing to keep a promise or by behaving disreputably. Remember in business interactions that a person’s face is not only his own but that of the entire organisation that he represents. Your relationship with the individual and the respect accorded him is probably the key to your business success in Hong Kong.

U Evropi, zapadnoj, imaš takav standard, socijalna davanja i potrebe tržišta radne snage da neka strukturalna odluka o maksimalnoj zaposlenosti nije potrebna.

U Kini kad bi se primjenio zapadni model, odnosno onaj koji zapad danas ima, imali bi 100 bogatih i milijardu bogalja.

Tajvan, Koreja, Japan... svi oni su imali protekcionističku i egalitarističku fazu prije nego što su se upustili u tržničnu ekonomiju.

I moja razmišljanja idu u tom pravcu, ako je država propustila primarni val industrijalizacije, gotovo je nemoguće da će se razviti bez snažne državne intervencije...
Imamo primjer KJ i SFRJ, gdje u prvoj navodno superiorno slobodno tržište nije donijelo nikakve rezultate...
Ali, vrijedi i suprotno, treba pogoditi granicu mogućnosti planske ekonomije, a to mi nismo uspjeli...