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I have been living in Shanghai since 2008. It’s been a long time and I must say I like being here for the most part, both from a private and a professional standpoint. However, it wasn’t easy at the beginning. Immersing myself in a culture so different from mine has been one of the most engaging and exciting experiences of my life so far.

You might get to know a new culture well if you simply live in a country for an extended period, as a student for instance. But if you have a job there, your understanding grows substantially; if you do business with local people, then you gain in-depth insight and that’s really an enlightening opportunity.

If you’re interested in expanding your business to China, there are many aspects that need careful and thorough consideration before taking the first step, starting with culture, society, and customs. Have a look at this interesting article by Forbes. I have had first-hand experience of each of the ten principles mentioned and I would like to give my personal testimony on several of them:

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  • Trust is interpersonal and takes time to build: yes, absolutely true. Chinese behavior can be frustrating initially. People tend to nod and say yes to everything you tell them but what usually happens is that the very next day they are likely to reject or deny all they seemed to have accepted at first. It’s hard to understand at first, and it’s frustrating personally and time-consuming from a business point of view. You will learn after a reasonable period of time that they are sort of testing your reliability and trustworthiness. I found myself repeating the same things over and over again to the same people before gaining their trust.
  • Mistrust and opportunism are endemic: also true and strictly related to the previous point. Since corruption is rather widespread and a well-functioning legal system is still lacking, Chinese people are reluctant to grant their trust, but once you have achieved it, they give more credit to your word than to a contract.
  • Chinese society is hierarchical: this is why the Chinese are so quick in making decisions. When I was entrusted with the establishment of the Marcegaglia plant in China, I first had to locate the appropriate area. After talking with representatives of each eligible municipality, my choice fell on Yangzhou. At that point all procedures and mechanisms started to work incredibly fast. I didn’t have to open everlasting discussions with a line of stakeholders. The deal was made and all systems got up and running smoothly.china business 2
  • Notions of “out-of-bounds” behavior do not necessarily match: this might be embarrassing, as a matter of fact. It’s true that negotiations take place over dinner and you are expected to drink a lot. During the encounter with the municipality representatives mentioned earlier, we were all together having dinner around a table. Each of them, in turn, approached me, provided me with some quick information and then we toasted with a shot. It’s a business custom and you are not supposed to weasel out of it. We were a table of six or seven, and this routine was performed by each person — not just once, but three or four times. Just guess how I ended up the night.

Do you happen to have any funny stories to tell of what doing business in China means?

 

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If you have any comments, input or observations, feel free to share them here. I’d be happy to know your thoughts.

Written by Luciano Giol