Doing Business In China with Dan Paulson
The key to any relationship is trust. It is something that takes time to build and can be lost very quickly. In the United States trust is built a number of ways ranging from face-to-face meetings, research, referrals, social media, published works, etc. Trust is a valuable asset in business and critical in China.
In China, trust is one of several cultural values you must establish in business. Like you would here, without trust, your business network will crumble. In China suspicion prevails when a relationship doesn’t exist. When new relationships are formed, initially your Chinese contact may appear suspicious and cold. They haven’t learned to trust you yet. The Chinese rely on a tight social network. This sphere may include family, friends, classmates, and colleagues. This obsession with trust comes from an obsession with another “value” called dishonesty.
We have all heard stories of bad business dealings. You may have even dealt with these challenges yourself. I often hear about business relationships gone wrong. Often this is because we take our Western approach to doing business and try to apply it to the Chinese culture. Without trust being established, many opportunistic behaviors may surface.
I was talking with a colleague who owns a prototyping company. He was frustrated with the quality of some parts that were being spec’d in China. He was working through a third party to have the parts made and sent back to the states for testing. Despite being very clear on the quality and composition of the part, he found that he was often shipped junk parts made out of inferior materials. When speaking with his Chinese counterpart, he was told that the parts would be made correctly and reshipped. Yet he still continued to run into these problems.
The key to any serious business relationship is establishing trust. In order to do that, one must follow these rules:
- Get connected – Getting connected requires face-time. In the US, we are comfortable placing a call to a local vendor we do not know and getting what we ordered. Doing this half way around the world can be far more challenging. Without actually meeting your contact and forming a relationship, you may find that what you are told and what you receive are two different things.
- Get to know your contact – Like in the US, personal relationships count. It is important to build these relationships. Learn about the individual. What likes do they have? What dislikes? What about family and recreation? Truly caring for the individual can make a world of difference.
- Respect the culture – In China, cultural roots run deep. There is a different pace and a different process by which they do business. Be respectful of they way they do things. Be prepared to change course if necessary. Accept and expect long negotiations..
- Introductions are valuable – Remember that the Chinese have tight circles of trust. An introduction to a business colleague is a great way to build trust early on. Remember, referrals matter.
- Hire a good translator – Your translator needs to be someone you can trust. Find someone who is able to understand what you are communicating and can translate it effectively. You need to create understanding and a good translator can find the best way to communicate your ideas.
- Small talk is appropriate – In any meeting it is important to start the conversation light. Do not become formal too quickly. Avoid political or controversial topics. Discussing the weather or recent travels can be a good way to get things started. Allow the conversation to develop.
- Use their real name – Many Chinese in the business world adopt a western (English) name over their true given and surname. It’s not unusual to be contacted by a “Lucy Smith” or other combination of English names. Ask them for their Chinese name. Repeat it so you can understand the pronunciation then use it. This will be perceived as a sign of respect and goes a long way to build trust.
Building trust takes time. These are just some examples to help get you started. Like here, relationships are important. In China, the emphasis is even greater. Do a lot of research. Get connected with people who understand the culture and have developed relationships already. Not only will it save you time, it can also save a great deal of expense in the long run.
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