Why Understanding the Culture in China is Vital – Part 4

In this last post in this series I cover a few of the ‘other issues’ we would look at in a typical China cultural awareness training programme we deliver to a client. The issues outlined below should never form the core of a China cultural awareness programme, but they are areas which people are interested in and which usually provoke a number of interesting questions.

The Communist Party

There is no point worrying over the apparent contradiction of a country which exhibits a rampant capitalistic approach but which, at the same time, is ruled by an autocratic Communist Party. This apparent contradiction seems to excite people in the West far more than it does most Chinese people who are mostly concerned with going about their daily business and in maintaining social order. Maintaining good social order is a primary concern of Confucian philosophy, the government and most of the population of China – many of whom lived through the excesses and turmoil of the Cultural Revolution. (When you investigate it, the history of China is littered with examples of the disastrous effects of the breakdown of civil order).

The Communist Party is in power and looks set to remain in power for the foreseeable future and therefore must be recognised in that light and its influence understood. There are many books written on influence of the CP but some key points to bear in mind are:

• The Party maintains an interest in many private companies or ‘new economic organisations’ as they are called, and many companies contain what are referred to as ‘Party cells’ which usually consist of three Party members.
• Many owners of private organisations openly welcome the existence of such cells as they feel it puts them in a good position when interacting with local and national authorities or when pitching for government tenders.
• It is difficult to get figures on how many private companies have such ‘cells’ operating within their organisation, but it is generally viewed that the number is increasing rather than falling.
• This means that in any business meeting in China (or with a delegation from China) you might, or might not, have official party members present – it is unlikely that you will ever know.
• Something like 80 – 90% of the richest 1000 people in China were Communist Party members.
• Ironically, many people join the Communist Party as they see it as a pathway to wealth.

Women in Business in China

Officially, women have the same rights as men in the workplace and the party has promoted this sense of equality over the past thirty years or so. However, traditional Confucian thinking does not fit easily with the idea of gender equality and, therefore, it is still possible (but not definite) that foreign business women will be viewed less favourably as business partners than male colleagues.

Major obstacles remain which prevent Chinese women from moving into higher management. These obstacles are probably mainly cultural, resulting from traditional values and received ideas about the place that women and men occupy in the family and in the wider society. There is a body of evidence that the importance and number of women in senior leadership roles has been growing over the past few years and this trend could be driven by a combination of modernisation within the country and demographics (China has a shrinking population and needs good-quality, qualified workers).

Foreign businesswomen will be treated with respect and courtesy. They may find that, within a delegation, the Chinese defer to male colleagues regardless of the actual seniority of the Western party – the Chinese assumption being that the male will naturally be the decision-maker. Although this may be irritating, it is best not to show that irritation in public.

Corruption

In his outgoing speech, former President Hu Jintao stated that endemic corruption (and incompetence) were threatening the stability of the State and the current Chinese leadership have made this issue an absolute priority. However, getting the Communist Party to tackle corruption is a monumental challenge especially as many Party members are numbered amongst the country’s very richest people.

Corruption amongst government officials – both national and local – is widespread and could be said to reflect the worst impacts of the Guanxi system. People in Guanxi relationships often find it simply impossible to refuse a bribe for fear of offending the giver -and breaking down this age-old culture will be difficult. The government has frequent crack-downs on bureaucratic corruption but China is vast and difficult to govern (the police are themselves seen as massively corrupt). The famous traditional Chinese proverb, ‘Heaven is high, and the Emperor is far away’ points to both the historical nature of corruption and the inability of the centre to control such a huge land mass and population.

There is a feeling that Western companies are more likely to be targeted for investigation than local Chinese competitors and, therefore, Western companies operating in the China market need to be ever vigilant.

Entertaining

Business entertaining is a crucial element of Chinese business culture and should not be immediately associated with corruption. Entertaining is part of the relationship-building process and should not be thought of as a bore or as an irrelevancy. The quality of the entertainment provided reflects the seriousness of your intent to enter a long-lasting relationship and conversely, the lack of quality entertainment can be read as a lack of serious intent.

Budgetary considerations come into play here and, whilst Western business visitors to China are usually royally feted by their Chinese contacts, it is sometimes difficult for Westerners to reflect the same quality of entertainment when the Chinese counterparts repay the visit. This lack of reciprocal entertainment can often be confusing for Chinese counterparties and can lead to a loss of face for senior delegates.

If you are invited to a banquet in China, prepare yourself for a meal to remember. The banquet can consist of up to thirty dishes being served over a long period of time and it is therefore wise to pace yourself. Try to eat a little of each dish rather than sticking to the one you recognize. It is traditional to leave some food on your plate — if you finish everything, this can be taken as a sign that you are still hungry.

Banquets and entertaining in general can involve the consumption of large volumes of alcohol and this can be quite a challenge. You may feel compelled to involve yourself in the lengthy round of formal toasts which often accompany every course of a banquet, but it is perfectly acceptable to give an excuse for not being able to join in – saying you cannot drink for health reasons is probably the best option.

Do not be overly worried about the complexities of seating arrangements as these are a subtle art-form probably best left to your Chinese colleagues or local advisors to organize.
The seating arrangements at a banquet relate to perceptions of hierarchy and status. If you are invited, you will be shown where to sit. However, if you are the host it is probably best to get some local advice on the best seating plan if you want to avoid insulting anybody.

Gift-giving

It is important to state that gift-giving in China is a very separate issue from bribery. Small gifts are very often given and received as this is considered an integral part of the relationship-building cycle.

It is probably good to speak to your central BD team if you have any questions about which gifts are appropriate, but a few simple rules would be:

• Gifts should be wrapped
• Never give anything sharp
• Do not give timepieces
• Gifts will often be initially refused as a gesture of politeness

Conclusion

The advice in this series of posts is meant as a brief introduction to the complexities of Chinese business culture and, as such, cannot be comprehensive and all-encompassing. We go into all these areas in more detail and relate them to your specific business needs in the China cultural awareness training courses we deliver for our clients.

The best advice is to be open-minded and patient when working in China or with the Chinese. Recognise that any frustrations and confusion you may feel are probably mirrored on the Chinese side – they find your approach equally confusing.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.