In order to build effective partnerships with China suppliers, it is important to know some aspects of Chinese business culture. As Chinese business cultures differ from other countries much, nearly all foreigners cannot comprehend the intricacy of the Chinese culture as well as market.This post will only introduce a few of the most important concepts of Chinese business culture briefly, because the Chinese culture is extremely complex and the business carrying out business ways vary regionally.
Confucianism beliefs, which are based on the principle of harmonious partnerships, have a significant influence on business society in China. In fact, the main concepts in Chinese business culture are long partnerships and trust. Guanxi and the concept of face play a big role in the Chinese business world. Guanxi implies a network of relationships offering support and also cooperation among the members associated with business, and it applies to people's personal lives also. The axiom” the important is not what you know, but who you know”,”you scratch my back, I'll scratch yours” may describe well about guanxi. Simply put, guanxi implies the mutual favors between two individuals or companies.
One understanding is that because legislation doesn’t give the legal security it should, individuals need to build another ways for ensuring trust among individuals as well as organizations A person's face, or in another words reputation, is necessary to maintain among individuals in one's guanxi net. In order to maintaining face, Chinese individuals will not take advantage of a person inside their guanxi net. This is because finally everyone in the Guanxi net will finally find out what the person has done, and therefore he or she will lose face and other’s respect..
Furthermore, not responding to an another's request of a favor can highly hurt one's face and guanxi net. Generally in China business partners are supposed to know each other well prior to cooperating in order to establish trust and good guanxi.
The most common ways to establish business relationships is holding meetings to discuss business matters as the main agenda, but it is too frank and untrustworthy to a Chinese company. Normally Chinese companies get to know each other by holding lots of meetings and banquets, where business matters discussions are not the major goals. The objective is to develop excellent guanxi with each other. Decision making takes a long time in Chinese business, since the key person that makes the decision may not present during the negotiations, or the company doesn’t hurry to make a choice. Chinese companies often intend to discuss business matters internally after negotiations, in order to be sure no mistakes are made.
For a foreign company it could be tough to accomplish long-term and close guanxi with Chinese partners, particularly if the firm does not have a strong presence on the China market.
However, the purchaser ought to make efforts to develop good guanxi with the supplier. As China business society is quite relationship-oriented, company visitation is a great possibility to develop connections with the core person of business partner. Gift giving is a solid strategy and an essential part of Chinese company culture, For instance particular things such as clocks and also knives should never be gifts, and numerology plays a part too, the pronunciation of 4 sounds like death ,on the other hand number 8 is considered to be a lucky number.
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