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Doing Business in China

Doing Business in China. 13 March 2013 by Sigrid Brevik Wangsness. Gesteland: The Chinese Negotiator. Group B: RF, HC, Formal/Hierarchical, Variably Monochronic, Very Reserved Which other cultures are in the same group?

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Doing Business in China

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  1. Doing Business in China 13 March 2013 by Sigrid Brevik Wangsness

  2. Gesteland: The Chinese Negotiator • 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

  3. Other Sources • UIBE: University of International Business and Economics in Beijing • The Norwegian Embassy in Beijing • Nordic Resource Group Consultancy firm – “Helping You Understand China”

  4. 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 culture before you start the process

  5. Background • 2001: China member of the WTO • One of the world’s largest and fastest growing economies • 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) • RMB (= juan)

  6. 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

  7. Contemporary Chinese Culture- rooted in Confucian ideals • Confucianism (Confucius, 551-478 BC) • How does Confucianismaffect 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.

  8. Contemporary Chinese Culture • Alongside Confucianism, Taoismand 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

  9. 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

  10. Socializing • Respect – interest in Chinese culture Kristoffersen: “To do business in China you need to know a lot more than just business”. • Their sense of pride – avoid politically sensitive issues • Drinking • Karaoke • Gift giving

  11. Joint Ventures: Choosing a Chinese Business Partner • Major language barriers and cultural differences: Need for local knowledge/ network. • China is NOT a homogeneous market (vs. Gesteland) • Hiring your own interpreter? • Conflicts What if your joint venture partner has a second agenda or there is widespread corruption within that company?

  12. Challenges When Establishing a Business in China • Corruption • How to draw the line between corruption and doing favours for friends? • Kristoffersen: “Norwegians are scared to death about corruption.” • The Chinese government’s fight against corruption. • The importance of Hong Kong

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