Opinion: Avoiding the cultural cringe key to doing business in China

Culture is an important part of doing business in China but Kiwis need to be wary of generalisations and stereotypes. Johnathan Chen, Head of Asia Division, James & Wells, explains how to reduce the risk of embarrassing cultural gaffes.

If you wandered into a meeting in Auckland’s CBD wearing gumboots and a singlet, you would be laughed out of the office. Kiwis who base their view of Chinese culture on crude stereotypes risk a similar fate when doing business in China. Just as not all New Zealanders dress or act like the fictional farmer Fred Dagg, there is no one culture that applies to all Chinese. The country of 1.3 billion people features a range of languages, cultures and religions that make remembering to roll your Rs in Southland seem like child’s play. 

New Zealand businesspeople are generally aware of the importance of culture in doing business in China, but many do not realise the nuances involved. Their understanding is not helped by misleading “How to do business in China” seminars. The sorts of generalisations and stereotypes often touted through such seminars as the key to making it in China should be treated with scepticism.  A one-size-fits-all approach to culture and business is doomed to fail.

Don’t expect to put on an act and be able to impress your Chinese counterparts. They will see through it and be offended by it. If you do not understand the culture, it’s much better to be up front about it and admit your ignorance rather than pretend to know. You will be respected a lot more this way. Or better still, make it a priority to gain an understanding of key aspects of the particular culture you are dealing with.

Rather than wasting money on expensive and generic seminars, Kiwis looking to do business in China need to ask themselves three questions. The first is: Where in China do you want to go? Just like Chinese food, there is a lot of variety – northern Chinese, southern Chinese, western Chinese, Hong Kongese, Taiwanese, etc. The language, culture and mind set of people in these regions differ significantly, due to the variety of political, socio-economic, geo-physical and educational conditions.

If you do not understand the culture, it’s much better to be up front about it and admit your ignorance rather than pretend to know. You will be respected a lot more this way. 

The second question to ask is: Who are you dealing with? Is it Government officials, professionals, general manufacturers, or merchants? General traders are usually more likely to duck and weave through systems, whereas professionals are more likely to stick to the rules. But then again, you need to understand the background of the people before generalising.

This leads to the next question: What is the background of the people you are dealing with? Are you dealing with a self-made man who survived the revolution and civil war, navigating the treacherous political and economic landscape during this time? Or are you dealing with product of the “one-child policy” which resulted in wealthy families?

It always surprises me how few Kiwis can answer these three questions. It is also important to note that business in China has grown much more sophisticated than most New Zealanders think. Many Chinese executives and decision makers have had western education, or have engaged in business with western companies. Even if they haven’t, you can guarantee they have an assistant by their side who has. They are more than able to deal with foreign companies in English, or conduct business with knowledge of how western businessmen think.

The fact that you do not know how to hand over a business card the “Chinese way" is unlikely to bother them. However, treating them like uneducated cash-cows will. Part of the problem is that Kiwis deal with wealthy Chinese immigrants and think it is the same as doing business in China. Just because you have successfully made money from immigrants whose rich parents gave them $10 million to ’go do something’ in New Zealand, doesn’t mean you are able to do a similar deal with business people in China.

My advice is to choose a region in China and spend time there.  If you can’t do this, at least make sure you hire someone who understands the subtleties of the region.  Don’t just attend a seminar and jump on the next Dreamliner to Shanghai.  It is much more complicated than that.

Johnathan Chen heads the James & Wells Asia Division. He was born in China but came to New Zealand from a young age, and has close ties to China and Taiwan through both sides of his family.