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3 Ways to Kill a Deal in China

Why should you fight over the bill during a Chinese business dinner? Read on to find out.
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Whether you’re a business owner curious about what China’s prospering economy offers, or an entrepreneur making plans to enter the Chinese market or bring on a Chinese partner, the prospect of hopping across the pond and meeting these people may be the most daunting portion of your expansion plan. You’re not alone. But trying to memorize the lists of “don’ts” is no way to prepare for a visit to the Middle Kingdom—it’s more likely to kick-start a nervous tic than a flair for navigating China’s business culture.

This what-not-to-do guide will help you when negotiating your Chinese market entry. Then feel free to sweat out the details—in fact, print our pocket-sized “don’ts” guide for an on-the-spot reference with minimal memorization involved.

A heavily suspicious attitude
A business owner who appears unwilling or hesitant to share information will be particularly undesirable. “I think Chinese firms see three big benefits to working with American companies. [American companies] usually have more managerial experience and, in some cases, better technology, although China is catching up. The biggest reason is that everyone is eager to enter the international market,” says Juny Chu, 36, an IT administrator for Beijing E-Business High-Tech Technology Co. Ltd.

Chu cites the opportunity to learn from American businesses—such as how to move a product in the U.S., or the art of human resources, as key reasons Chinese firms choose to work with their smaller to midsize American counterparts. While American entrepreneurs eye the Chinese market for its abundant natural resources and cheap labor, Chinese entrepreneurs hope that the knowledge gained from their U.S. partners—whom they respect as players in the world’s most prosperous economy, despite recent churnings—will put them ahead of their competitors.

A Chinese firm will make it a priority to extract as much knowledge as possible from its collaborators. Although initial hesitancy is natural, a partner who remains suspicious in his or her dealings despite continued efforts to establish mutual trust will likely be viewed as a bad partner.

Cultural inflexibility
Would you do business with a person who made no attempt to understand or abide by your social customs? Well, the feeling is mutual. “Treating your partners with respect is very important. It’s easy to forget when dealing with the frustrations of China. In the U.S., there is more of a ‘get it done’ philosophy, but in China, [conducting business is] all about having patience,” says Adam Harr, a senior accounts executive at Edelman Beijing.

Edelman, the first international PR firm to enter the Chinese market in 1994, helps foreign firms, Chinese bureaucrats and Chinese companies communicate in tandem. You may get an odd look or two but, most of the time, Chinese businesspeople, particularly younger professionals, will brush off unintentional lapses in etiquette with politeness. Remember, it’s not about getting these social rituals correct as much as it’s about showing respect to your partners through your willingness to learn Chinese customs.

But beware—being culturally flexible doesn’t equate to bending over backward to fit in with the furious pace of doing business in China. Your goals should clearly always be at the forefront of your discussions. Colin Friedman, Founder of Beijing-based consultancy firm China Expert International Ltd. and Beijing Fortune Connection Club, a networking organization, says an entrepreneur’s most important tool is a personal list of “do nots.”

“People get swept away because it is so different here,” Friedman says. “But they should be doing things the same way. If you wouldn’t take a risk like that in India, don’t take it in China. Zero multiplied by 1.3 billion is still zero.”

Thinking your work is done
Don’t be lulled into a false feeling of security even after you’ve done the legwork to find reliable Chinese partners. According to both Friedman and Harr, a predominant characteristic of the Chinese is that they shy away from saying no, sometimes giving vague or even largely incorrect answers instead because they think you expect to hear yes. Learning when yes means no is yet another cultural difference between China and other countries.

“In China, your relationship is as static as the market: As the market continues to change, so does your relationship. The only way to stay up to cultivate your relationship is with a continued, concerted effort to keep it strong and clear,” says Harr.

Next: Pocket Guide to Chinese Business ->>>

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