DUH? Guide to Chinese Business Meetings

 

Doing business in China has many advantages, and many pitfalls.

A complete guide to doing business in China would be several volumes long; in a nutshell, without expert guidance, expect MAJOR problems. Your not in Kansas any more.

Business meetings are important, and frequent, and there are several cultural differences that you should familiarise yourself with.

Preparation:

• You must have an interpreter of your own, not a biased interpreting employee of your Chinese counterpart. You should already be using a phone-interpreter to speak for you for your daily getting about in China, but there is no way you can use over-the-phone interpretation for a successful or professional meeting. Ignore this advice at your peril.
• Dress in a manner that reflects how your Chinese counterparts are dressed – if you dress like a bum you'll be treated like one.
• Leave plenty of time to get there, punctuality is good business manners that reflects respect and professionalism - in fact we often phone the manager's office just as we get to the factory gate, just to let him know we have arrived.

The introduction

• Begin your introduction with an exchange of business cards   – they love these things and you should show the same enthusiasm: offer yours with TWO HANDS, and accept theirs with TWO HANDS; then study the thing, even if it is all Mandarin squiggles, study it as if you have been handed a picture of their recently departed mother; and don't put it away, keep their card in front of you throughout the meeting, (do not put it in your pocket ESPECIALLY NOT YOUR BACK TROUSER POCKET this is an insult you will regret – meetings have ended abruptly after an innocent faux pas like this).
• Begin with   praise, praise, praise. What a super business card, what a fine office, lovely factory, beautifully manufactured goods – treat the situation like you are trying to impress your girlfriend's mother. DO NOT PRAISE THEIR BEAUTIFUL RECEPTIONIST; they will think that you are asking to have sex with her. The same applies if you are introduced to their wife – just don't go there, smile and say hello, no personal compliments, please.
• You may be ushered into a very elaborately decorated waiting room and offered copious amounts of tea by smiling girls. Whether you like tea or not, (I don't particularly), just say thank you and accept it, don't refuse it, just let it sit there if you don't want it.
• The same applies to cigarettes; expect to be offered enough ciggies to kill you – either smoke very slowly to avoid the next one, or very politely thank them and explain that you don't smoke. If you are a smoker and have a packet of your favourite brand in your pocket, be sure to share in return – they are smoking connoisseurs and will greatly appreciate a Western brand.
• If you have brought a gift for the owner or manager, realise that if they do not have to opportunity to return the gesture they will be embarrassed, this is ‘loss of face' – don't go there. The same applies if you want to reward some of their employees with gifts, it is rude to by-pass the management hierarchy, so make sure you have permission from the top first.

During your meeting

• If you ask a question to which you want an affirmative answer, and you get a boardroom table full of nodding smiling heads in response, this may just mean that they understand your argument, NOT that they agree with your proposal. Clarify everything.
• Face is very important to the Chinese. NEVER insult, or belittle, or make fun of, or scoff at your Chinese counterpart, especially not in front of his colleagues. If you do cause him to ‘lose face' consider your business relationship terminated. I once had a meeting with a businessman who was pirating my designs – the meeting ended with both sides agreeing to disagree; my partner gave the pirate a very cool handshake, but I refused to shake hands altogether and ignored his outstretched hand. This, in front of the owner of another factory and attending interpreters was a HUGE insult to the man, (more effective, and less exhausting, than beating seven bloody bells out of the crook).
• This may sound extreme, but it works for what I do:  write notes of everything that is discussed and agreed or disagreed during the course of your meeting; then pass your notes to your personal interpreter, (never theirs), and have it translated, (help your interpreter with this to ensure it is correct, draw pictures if it helps illustrate your changes, points, etc.); then have your Chinese counterpart read the translation; and both parties sign it, photocopy it, give them the copy and keep the original for yourself – I learned to do this the hard way, save yourself a lot of grief and make the time to do it, otherwise expect to age considerably by the frustration of wasted time.
• Don't forget to insist on deadlines. Remember that Chinese civilisation has remained unbroken for over five thousand years, if a relative time-scale is applied to your project you could be in for a long wait. Verbal guarantees are worthless; insist on financial penalties for late delivery.
• It pays to write Wethern's Law of Suspended Judgment across the top of your Filofax: Assumption is the mother of all screw-ups This law applies particularly to any assumptions you may have before, during, and after your Chinese boardroom meeting.

 

Lunch

One of the best things about doing business in China are the sumptuous   luncheon   banquets which they insist spoiling you with.

They will order all the food and drink, so don't worry about having to make menu decisions. The table will be filled to overflowing with the most expensive local cuisine, and the drink will flow like the rain in Donegal.
Your host may raise a toast to you every three minutes, so go easy on how much you slurp; and if he raises his glass and says something that sounds like 'Gom-Buy' you are expected to empty your glass in one, followed by a satisfied gasp, (this may happen several times, so it may be wise to keep your glass less than half full if you can).
Much as these meals are a real treat, they can become tiresome if you are keen to get on with business, and often we will try to make appointments timed to avoid the necessity to join them for lunch. And even though you are the invited guest, attempt to pay the bill - they will refuse to allow you this honour, but your offer will be noted and appreciated.

 

Warning

• Many successful or aspiring Chinese businessmen have two women: a respectable and presentable well-maintained wife at home, and; one he keeps for having fun with. My personal rule of thumb on this matter is that if they are happy to cheat on their wife, you can bet your bottom dollar they'll have no hesitation cheating you in business.
• Beware of SHORT-SIGHTED Chinese business relationships. In my line of work, time and time [and time and time and time] again we come across this make a fast buck attitude. By this I mean that they will produce excellent samples, make wonderful promises, and dispatch a load of crap . In the West we expect to build on business, grow with our suppliers, and prosper symbiotically; beware of the Chinese business owner who does not want your repeat business and only wants to ‘take your money and run'. Always use a reputable and experienced QC and sourcing agency, preferably one with Western partners so that Western standards are applied and met.
• Quality Fade is a major problem, and one which you can only control by staying on top of your manufacturer constantly. We try to show our face every day that our production is happening at a factory – take a walk through the production line, check the back rooms for ‘surplus', make sure that the highest standards are maintained, and ruthlessly reject everything that does not meet your highest standards of quality.
• Surplus stock is a very easy way for a factory to make a little extra pocket money. It's a genuine product, made to all the highest production standards, it even has authentic labelling, QC approval labels and genuine packaging – but the only connection with you is that you've paid for it. You order 5,000 items, and the factory manufactures 6,000 items – you receive your 5,000 items, and the factory sell the other 1,000 genuine items out the back door. The night markets are full of this stuff (you can get some great bargains). But the only way to prevent this dishonesty is to expect it, look for it, and enforce stringent spot-checks on your production. And when you do discover it happening, make merry hell – I promise you it will all have been a huge 'misunderstanding': have another cigarette; lunch, perhaps; what about a massage parlour?

 

A couple of years ago one of my own designs of was displayed at three major international furniture shows in the same year; however one of these shows, (the one in Kuala Lumpur ), was exhibiting my furniture illegally. It was my furniture okay, manufactured in our licensed factory, to our specifications, it had even been QC'ed and approved by my business partner, Robert; but we were not exhibiting it, neither were any of our licensed international distributors. In fact we would never have known about this illegal activity until we received a phone call from a client of ours, Stuart, the buyer for the Australian furniture chain BedShed, who knew our furniture, and wanted to know why we were advertising cheaper prices than we had offered him.

It is a long story punctuated with managerial lies and deception, but in a nutshell the owners of our licensed manufacturer were trying to make a quick buck. He had introduced our furniture to a friend of his from a neighbouring district who also manufactures furniture, and together they had smuggled a complete bedroom suite of my furniture to Malaysia (from a retailer in England) and taken a stand at the KL furniture show, complete with brochures, pricelists and, of course, displaying the authentic articles. They had no intention to manufacture any of my furniture, they didn't even intend copying it, they were just out to get sales, accept orders and disappear with the subsequent 50% deposits. Even if they had attempted to reproduce my furniture, the quality would have been horrible and would have damaged our reputation for years.

The point to this story is that you can have a wonderful relationship with your licensed suppliers, but at the same time they are shafting you silly. Like a game of who can fleece the dopey Westerner for the most money.

I, and my Texan business partners who live in China , have a general rule of thumb which has always proved useful when conducting a business meeting in China : you can tell if they are lying if their mouths are moving. I know that this is a horrible generalisation, but one which I recommend adopting - just in case.

Tips to avoid such potentially disastrous situations: use a reputable and experienced QC and sourcing agency, preferably one with Western partners so that Western standards are applied and met; one that can smell B.S. at a hundred paces; one that is intolerant of compromised quality; one that has a proven track record of stamping out illegal activities by greedy factory managers.
(That'll be us then.)
(Other outsourcing agencies are available)

 

 

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The above information is copyright property of Thomas Brian Bailie 2009
All information is written in good faith and the writer cannot accept liability for loss or injury which might result from the use of the information.