Chinese Business Culture 19 March 2018 by Sigrid Brevik Wangsness

Gesteland: Chinese Business Behavior Group B: RF, HC, Formal/Hierarchical, Variably Monochronic, Very Reserved Which other cultures are in the same group? How does Gesteland describe most Asian cultures? Gesteland: Nat’l culture vs. business culture

How useful are Cultural Guides: How to Do Business with the Chinese? No doubt: Easy to make mistakes – many challenges But how helpful are the Do’s and Don’ts? How crucial is it, for instance, that you present your business cards with both hands or avoid having too firm a handshake? Learn as much as possible about the history/culture before meeting your Chinese business partner

Chinese history «An appreciation of China’s history is central to any understanding of Chinese culture» Ethnocentrism and pride The era of national humiliation Mao’s China: 1949-1976 Immense personality cult despite historical brutality 1978: Deng Xioaping:Reform and Opening up

Recent Chinese history The New China: From early 1980s.Market reforms 2001: China member of the WTO The world’s second largest economy The world’s largest surplus on the balance of payments The world’s largest currency reserves The worlds largest recipient of foreign direct investments The world’s largest population (1.3bn)

China today Current leader: Xi Jinping (may sit for life) China’s most powerful leader since Mao Autocratic/ authoritarian government: No opposition, the CCP in control, government repression of human rights Self-protective leadership style also in government? ( cf. GLOBE study)

Cultural Values Guanxi How important is it, and how different is it from the social networks we have in Europe? Face Give face, save face, lose face is also an essential part of Chinese business culture: Show anger with a smile, polite refusal (not “No”) Communication Hierarchy

Contemporary Chinese Culture - rooted in Confucian ideals Confucianism (Confucius, 551-478 BC) How does Confucianism affect Chinese daily life (cf. the rest of East Asia)? Family-centred / relationship-oriented Collectivism (not individualism) Human relationships in society =hierarchical Virtues: humanity (Ren), righteousness (Yi), friendship, wisdom, trustworthiness, moderation => HARMONY & BALANCE=> indirect comm.

Contemporary Chinese Culture Alongside Confucianism, Taoism and Buddhism are important influences on contemporary Chinese culture, reinforcing the values of Confucianism: Taoism: the harmonization of opposites male and female, man and nature Buddhism: ethical behaviour, wisdom, the middle way

Contemporary Chinese Culture Five words to understand the nature of contemporary Chinese culture: Guanxi=relationships/personal contacts/network Renqing = doing favours for each other Li = courtesy/politeness/doing the proper thing Keqi = guest –> behave like one, respect the host Mianzi = face –> shameful to lose face, lose one’s credit/good name/ reputation

Nationalism Linked to negative historical experiences Increasingly about national pride Patriotic campaigns by the government Collectivism (Confucianism) Xi’s «Chinese dream»: Wealth, Strength, Happy Life, Patriotism, Communism

Socializing Respect – interest in Chinese culture “To do business in China you need to know a lot more than just business” Their sense of pride – avoid politically sensitive issues (remember the ice front between Norway and China) Drinking Karaoke Gift giving

Joint Ventures: Choosing a Chinese Business Partner Major language barriers and cultural differences: Need for local knowledge/ network China is a global power, but NOT a homogeneous market (vs. Gesteland) Hiring your own interpreter + need for a local consultant with good English skills The role of Hong Kong The position of Taiwan

Challenges When Establishing a Business in China Corruption How to draw the line between corruption and doing favours for friends? What if your joint venture partner has a second agenda or there is widespread corruption within that company? (Intellectual property rights…) The Chinese government’s fight against corruption – and against political opponents…