ASIA FAQS
The Importance of “Guanxi”
“Guanxi” refers to the connections and networks that lie at the heart of all relationships, business and otherwise, in China.

In China, often accomplishing the most basic objectives will require contacts or some amount of “Guanxi.” In Chinese, the word simply means “relationship.” However, in Western terms, it is comparable to the concepts of networking and using good contacts to increase one’s influence.

A person with strong “guanxi” is considered powerful and will have a network of useful relationships and contacts. These networks are held together by the common understanding that favors received must be reciprocated at a future time.

The concept of “guanxi” has important implications for doing business with the Chinese:

  1. When attempting to establish relations with a Chinese company, an introduction from a common acquaintance is always preferred. The right connections and introductions can help to ensure that your proposals and ideas will be taken seriously.
  2. “Guanxi” often includes elements of graft, as people with connections will try to profit from them. It is not uncommon for well-connected people to receive “commissions” for their help in securing or obtaining new business. Although this looked down upon in Western business culture, it is simply a fact of life when doing business in China.
  3. In China, almost anything can be accomplished with the right “guanxi.”
“Mianzi” (Face)
The Chinese concept of “face” is similar to Western ideas of status, respect, and pride. The Chinese are very concerned with gaining or losing “face.”
  1. The respect of peers and colleagues is very important to Chinese people. Never humiliate or embarrass a Chinese acquaintance in public as this is a major insult.
  2. Foreigners doing business in China must be aware of the public image of their Chinese business partners at all times.
  3. Often, “face” is simply being polite and gracious. Giving gifts and praise is a good way to give “face.”
  4. Problems or criticism should be discussed in private and not in public. To criticize in public or to create a scene will severely insult your Chinese colleagues and disrupt any negotiations or business proceedings.
  5. Avoid raising your voice or getting angry. Criticism should be delivered discreetly and tactfully. Criticize in private or use an intermediary.
  6. When receiving requests or invitations from Chinese people, any refusals must be given very carefully and indirectly to avoid insult.
  7. The Chinese do not like to lose “face” or risk others losing “face.” As a result, Chinese do not like to say “no” or bring bad news. Expect that your Chinese acquaintances will say “yes” to nearly everything, but often these positive responses are empty. They will often use polite excuses or suggestions to avoid making negative comments directly.
“Keqi”
“Keqi” means being considerate and polite, and also has the added connotation of representing humility and modesty. It is another important concept in Chinese society.

Generally, arrogance and bragging are looked down upon and a Chinese person will make every effort to appear modest. If complimenting a Chinese person, do not be surprised if they deny it or say it is not so. It is customary for the Chinese to deflect compliments in this way and it is not meant to insult the giver of the compliment. The expression most used to deflect compliments is “bu yao keqi,” which means “you should not be so kind.”

Furthemore, Chinese people will usually try to express their feelings in an indirect way. They will restrain their emotions and feelings when in public. Foreigners are advised to do the same, but the Chinese will generally be more forgiving of foreigners who are not aware of these concepts.

Gift Giving
  1. Knives or scissors are not acceptable gifts as these symbolize conflict. Letter-openers are OK.
  2. Some objects have an association with death and are not suitable for gift giving. These include clocks, cut flowers, white objects, and sets of four. The number four has a strong association with death.
  3. Do not use white paper for wrapping as white represents death. The blue & yellow combination should also be avoided for the same reason. Red or gold wrapping paper are the best colors to use.
  4. Do not write notes using red ink as this is associated with death as well.
General Business Tips
  1. Bring a large supply of business cards and advertising materials. The exchange of business cards is an important ritual when doing business in Asia. Business cards will typically be exchanged with both hands and a slight bow of respect. Expect to perform this ritual with nearly every new business acquaintance you make in Asia.
  2. Arriving early is respectful and looked upon favorably, even though the Chinese are not always on time.
  3. Chinese are typically more reserved and stoic and may not smile as often as people in other Asian countries.
  4. Chinese respect rank and seniority and will be more attentive to senior representatives.
  5. In Chinese, the family name precedes the given name. For example Yao Hua would be called Mr. Yao. However, many Chinese adopt English names when dealing with foreign businesspeople.
  6. Friendly conversation and small talk is important before settling into business discussions. It is important for the Chinese to establish smooth and friendly relations before moving on to business issues as they feel this will ensure that negotiations will proceed fairly and agreeably. Be patient as the Chinese tend to maintain a certain level of formality at first.
  7. Drinking tea is a very important part of Chinese culture and business, especially in Hong Kong and Guangdong province. Expect to drink tea and exchange formalities even in the hottest weather.
  8. Avoid bringing up any sensitive political or human rights topics for discussion.
  9. Gifts are not expected at initial meetings, but small gifts such as samples or items with your company logo are acceptable.
  10. Do not be surprised if your Chinese contact attempts to arrange meals and entertainment at all times. In China, it is the responsibility of the host to ensure that you are always comfortable and entertained. Be polite when requesting to spend time alone. Dining out is a popular way of building “guanxi” and large quantities of alcohol are often consumed. Karaoke is also very popular.
  11. Chinese have varying negotiating styles. The Cantonese tend to have a more Western style as they have been influenced by Hong Kong and a higher degree of Western contact in general.
  12. Chinese do not like to say “no” or bring bad news. Expect that your Chinese acquaintances will say “yes” to nearly everything, but often these positive responses are meaningless.
  13. Chinese will often ask personal questions about age, income, etc. This is not meant to be impolite.
Sources:
http://www.business-in-china.net/chinabiztips.html

http://www.goingtochina.com/misc/chinese_etiquette.htm

http://www.tomcoyner.com/china_etiquette.htm