China is the economic superpower at the moment. The country has miraculously overthrown the United States of America and is almost at the top of the "largest economy in the world". Many countries are taking advantage of this and are only too happy to do business with this super power, including us Dutchies. How do you ensure that your business is successful within China and what is needed for that? We are happy to give you some tips!
It’s no surprise that China is completely different from the West. To begin with, it is one of the world's largest countries and the average city has several million inhabitants. China has the dubious honor of having the largest and most crowded metropolis on earth. Local customs deviate enormously from ours and Mandarin Chinese is the most spoken language in the world; for 850 million people, it is the mother tongue compared to 335 million English speakers and 406 million Spanish speakers.
It is inconceivable how China conquered the world in such a short time if you look at how it stood a few decades ago. While in the early 90s it was still a developing country, we now look at countries where trade is running at full speed and the Chinese middle class has grown in a short time from non-existent to larger than that of Europe. And almost the entire (business) world benefits from this.
The coronavirus has temporarily thrown a spanner in the works, but when that is over, according to forecasts, the Chinese economy will have surpassed everything and everyone by 2030. Doing business with China is and will always be big business, but how do you ensure that business with China goes as smoothly and successfully as possible?
1. Political climate
Capitalism has found its way to China, but you must remember that the country still has communist and socialist traits. Because the country has a totally different political climate, the rules, laws and permits are different from what you are used to. For instance, it can take much longer to arrange a permit. In addition, (business) rules must be strictly adhered to. The Chinese government is known for its relentless attitude and they are in the luxury position to do business with this hard hand. For you 100 others. Stick to the laws and duties and do not deviate from this state of affairs. The effort will ultimately be rewarded.
2. Business card in Chinese
In the Netherlands, a business card is no more than a trifle, but in China the exchange of this piece of paper can rightfully be called a formal ritual. Provide a business card with a Chinese translation. This will be greatly appreciated, not only to break through any language barrier, but it also means that you have put time and effort into a ritual that is important to them. Offer the neat (smudge-free and wrinkle-free!) Business card with two hands and receive the business cards from others in the same respectful way
3. Loss of face
The Chinese are very conscious of how they come across to others. If self-esteem is consciously or unconsciously brought down, this is a shame in Chinese culture, especially if it is done publicly. Because this feels like a slap in the face to themselves, they will also ensure that you do not suffer any loss of face. Courtesy is therefore almost an art in China and they expect you, especially during business matters, to participate.
4. Patent or no patent
Everyone knows the words "Made in China". Because of the cheap rates, a lot of production is outsourced to China and that has its downside. Chinese suppliers that you work with see or know exactly what your new end product will be. It is only a matter of time that the supplier starts copying your product. They have the materials and the production process is already set in place, so why not? Applying for a patent in China is not worthwhile, so the Chinese have free rein to imitate what they see. Of course, you can make agreements whereby there is transparency for both of you with regard to the reproduction of "your" product.
Chinese is a language to which many of us cannot be tied. The characters resemble small works of art and it is hard to think that that is a (part of a) word. Learning a few basic phrases in Chinese will surprise you with your Chinese business relationships. It is greatly appreciated and can even provide doors that are opened that would otherwise have remained closed. Nobody expects that you will speak the language fluently and that is why a translator or interpreter is very desirable if you know that the people on site don't speak English. But here too the following applies: with interest in the local language and culture you can go a long way.
6. Chinese staff
Personnel is necessary and if you have a company in / trade with China, it may be vital to invest in Chinese (speaking) staff. They are proficient in the language and know so much more about the work ethic in the immense country than the average Dutch businessman.
7. Beverage and entertainment
Embrace the karaoke bar, learn how to say cheers in Chinese and practice eating with chopsticks. Entertainment, drinks and food is a deep-rooted business tradition. Intended to get to know you better as a person, but mainly to build and maintain relationships. Never decline these invitations and prepare for all the aforementioned elements to pass by one evening.
Doing business with the Chinese is an art in itself. Gradually more will come your way that deviates from the Dutch / European way of doing things. That will take some getting used to, but remember that within 25 years China has undergone a transition for which the Netherlands needed almost a millennium. Respect the local rules, rituals, traditions and laws and you will find that you can go a long way with that.