7 - Setting up a business meeting
[Return
to the Contents menu]
[Previous] [Next]
Introduction
7.1 Meetings and greetings
7.2 Conducting a business meeting
7.3 Negotiation skills
7.4 Business ethics/work practice
7.5 Food and drink
7.6 Business etiquette
7.7 Gift Giving
Introduction
Communication by fax, telephone and email
are popular. A confirmation letter of meeting and banquet
is appreciated. You and your Chinese host should decide
and confirm the venue, the participants and the date of
the business meeting.
[Top]
7.1
Meetings and greetings
The business dress code
for men in China is plain and simple; by contrast, Chinese
women tend to prefer colourful blouses. Shirts, suits (with
tie on more formal occasions), or jackets for gentlemen;
suits, blouses or long dress for ladies (no shorts) are
all acceptable. In general it should be remembered that
initially Chinese people are formal, serious and courteous:
men should remember not to appear too frivolous –
so leave the cartoon tie at home!
Chinese people always shake hands and exchange business
cards (with the Chinese side face up) upon greeting. Always
prepare more cards than you anticipate will be needed; these
should be printed in both English and Chinese, the Chinese
side uses ‘simplified’ characters, not the ‘traditional
characters’, as used in Hong Kong and Taiwan. Spend
a few seconds reading the cards you receive, don’t
put them straight into your pocket – this is considered
rude.
Since many Chinese are expert at hiding their emotions,
don’t be surprised if they appear to be smiling at
you all the time; the Chinese take pride over their hospitality
to their guests, and they smile when greeting guests to
show politeness. When you are introduced to a Chinese group,
they may greet you with applause, you can just bow or nod
back in acknowledgement.
The simplest greeting to a group of Chinese is Nimen hao
(Knee men how) (‘hello everyone’), or to one
person, Nihao (Knee how). The easiest option is to follow
the lead given by your interpreter, and notice that greetings
tend to follow a strict order of seniority, with the oldest
and most senior member of the group being introduced first.
When introducing yourself, it is generally best to adopt
the following order: name, company and title.
The following behaviour is considered very rude for both
foreign and Chinese business people. We mention them that
you might avoid giving any unintentional offence:
• Whistling (suggests disinterest)
• Pointing at a person with your index finger –
use your open palm instead: the finger gesture can be interpreted
as threatening
• Snapping your fingers – this can be considered
arrogant
• Gesturing at or passing an object with your feet
– suggestive of contempt
The Chinese often appear shy and quiet, regarding sobriety
as a virtue. Emotions are generally held in check –
but this is not always the case. Chinese people do tend
to ‘let go’ under the influence of alcohol.
If your Chinese host likes you or sees you as a friend,
s/he may pat you on the shoulder just to show a closeness
to you.
For more information, see:
http://www.windowontheworldinc.com/countryprofile/china.html
[Top]
7.2
Conducting a business meeting
A formal Chinese business
meeting generally consists of 5 main steps or stages:
1. Introduction
There is generally a secretary or an interpreter to guide
the business meeting, and to introduce the representatives
from both parties to each other. A senior member of the
company will then generally give a speech to welcome the
UK visitor(s) and highlight the theme of the meeting, and
the intentions or expectations of the day.
2. Presentations of both parties
Your company presentation should be prepared in advance
in Chinese
In order to help each party understand each other’s
backgrounds, both parties are likely to be asked to give
a short presentation on themselves and their company this
may include a brief history of the company, current opportunities,
reasons for cooperation, including the benefits both parties
anticipate to gain.
3. Exchanging viewpoints
This stage invites initial enquiries, questions or doubts,
even probing for solutions of some of the existing or anticipated
problems. Participants are expected to address the ‘how’,
‘when’, ‘where’, ‘what’
and ‘why’ of working together.
4. Discussion for agreement
Business relationship can be built or broken at this stage,
since further cooperation depends on the level of agreement.
A contractual agreement is unlikely to be arrived at through
one single meeting – rather it is likely to be the
result of an arduous process, involving several meetings
before a mutually satisfactory conclusion is reached.
At this stage there
may still be a degree of ‘detachment’, but there
is a Chinese saying: “even if we do not make a deal,
we are still friends.”
5. Conclusion
If conditions are favourable for both parties, the process
will usually be concluded by formal hand shaking, followed
by a banquet. Occasionally, however, you may find that the
Chinese party suggests postponing the negotiation process,
or leaving it to a further meeting. This need not be a cause
for concern; a sudden cessation of contact is very rare
and it is more likely that your hosts wish to discuss things
amongst themselves for a while longer. Once a decision has
finally been made, appropriate information and agendas for
future meetings will also be agreed on and distributed.
[Top]
7.3
Negotiation skills
Whilst punctuality is important when
you take part in negotiation, friendship and trust are the
first step for establishing a basis for negotiation. You
may be invited to a banquet which should be seen as a vehicle
for the development of the relationship. You can also, of
course, use such opportunities to develop your guanxi with
others. Later on, eating out with business partners may
become an integral part of the negotiation process.
‘Face’ issues
‘Face’ issues are critical for Chinese
partners. ‘Face’ (Mianzi), or more importantly,
‘loss of face’ (Mei Mianzi), is an important
concept to understand. To Chinese people, respect from society
at large, and especially from ones’ immediate peers
is of vital importance. Anything that detracts from someone’s
image or standing or ‘face’ is, therefore, a
serious issue. Remember to respect your hosts’ feelings
at all times, and especially in public, show respect and
courtesy. This will demonstrate your consideration for your
host, and help to create a good impression.
Be extremely persistent and patient
You may need to be extremely persistent and patient when
dealing with Chinese people, and especially when working
with the government. You are well advised to study very
carefully the following items on a contract:
• Definitions of the ventures business - define all
the elements and nature of the business very clearly.
• Terms of Equity Investment - define what the partners
will invest in terms of cash, equity, capital, and facilities
to the venture.
• Charges from the parties - discuss and agree upon
what charges and/or support will be provided to the venture
and whether it is part of the investment or to be charged
to the enterprise.
• Percentage of ownership between partners - the percentage
of ownership will not only determine the level of investment
and risk for both partners, but also force discussion around
issues of further growth and investment in the business.
• Board Members and Voting Rights - issues such as
the number of members and the voting rights of each party
allowed on the board.
• Protection of Minority Interests - in case the board
makes decisions that tend to favour the majority partner,
the rights of the minority member must also be contractually
assured.
• Currency for Transactions and Equity investment
- agree upon currency – generally this will be US
dollars, £ Sterling or Reminbi.
• Protection of Trademark and Patents - this is an
important area, as many companies have had problems with
trademarks, patents, and IPR (intellectual property rights).
Make sure that you are certain of the legal implications
of any agreement.
• Financial Business Case
Prepare and agree to the Profit and Loss, Balance Sheet
and Cash Flow of the enterprise.
• Repatriation of Profits - agree upon how profits
will be returned to the shareholders and/or re-invested
into the business.
• Termination Clauses - company attorneys should advise
and establish termination clauses suitable to each company,
thoroughly considering all the potential acceptable reasons
for termination, including termination penalties.
More information can be found at:
http://chinaunique.com/business/negotiat.htm
http://business.virgin.net/robin.nunley/negot.htm
[Top]
7.4
Business ethics/work practice
Winning Chinese business
requires a combination of tactics and strategies. Some even
refer to Sun Zi ‘s classic ‘The Art of War’,
and apply this ancient wisdom to modern business life.
Honesty and trust are at the heart of good business ethics.
Consistent honesty may gain trust and vice versa. In many
instances, Chinese business people prefer to rely on trust
and established relationships between people, rather than
on legal documents and contracts.
[Top]
7.5
Food and drink
For Chinese people, food
plays a major part in everyday life: its centrality can
not be overstated, a result in part of the food deprivation
China has suffered down the centuries. There is a great
variety of cuisine, based on regional flavours and raw ingredients.
When you are with your Chinese host, you can do little worse
than follow his/her table manners. The host’s seat
is normally facing the door, and the guest of honour sits
on his/her right. Before eating, you may raise your glass
to toast your Chinese host and gan bei, meaning literally
‘dry the cup’. Toasts may be made throughout
a meal - to good health, Sino-British friendship and so
on. A formal meal generally consists of large quantities
of food, and you are likely to leave the meal feeling full.
Even if you don’t wish to eat a particular dish you
might say that your religion will not permit you to eat
it, and this will be understood.
Normally, if your Chinese hosts book the restaurant, you
are the guest, and your hosts will not allow you to pay
the bill but you should always offer. Next time you eat
together aim to be the host. You can also use the event
to offer similar hospitality to your host for a future occasion.
[Top]
7.6
Business etiquette
Handouts and brochures with
Chinese translations are essential when you conduct a presentation.
If you need a projector, make sure that your host is aware
of this in advance.
Each party should have their own interpreter, but regardless
of the level of translation /interpreting available, it
is always advisable to make your speech simple, clear, easy
to understand, and pause regularly. The audience will usually
show appreciation by clapping their hands.
Whilst banquets are the most traditional and popular way
to entertain foreign visitors in China, some Chinese hosts
may also invite you to join in leisure activities, such
as sight-seeing, bowling, golf, karaoke, and dancing.
[Top]
7.7
Gift giving
You should present a gift
with both hands to show your politeness. The recipient(s)
may refuse your gift at first, present it again. You can
give a gift to a Chinese group in the name of your company,
but do not give a gift to one person and ignore the others.
If you have a special gift for the most senior person, present
it when you are alone. If you have small gifts, you should
be prepared to give gifts to everyone present.
Valuable gifts are only encouraged when you have established
a business relationship with your Chinese host (e.g., a
deal has been completed, or a contract has been signed).
When you are invited to someone’s home, remember to
bring the hostess a small gift, but it is not considered
appropriate to give gifts such as perfume. ‘Safe’
gifts generally include items such as:
• Books and paintings
• Premium brandy, whiskey, or other spirits
• An invitation to learn more about your business
and the sector as a whole, and a chance to do a little sightseeing.
• A corporate gift (such as paper-weight etc.)
• Accessories, such as pens, home decorative items
Avoid giving the following things as gifts:
• Clock (it means accompany till death in Chinese
pronunciation) This does not apply to watches.
• However, if you would like to give an electric watch,
rather than give it to your Chinese business partner, you
should give it to their child: if it is an expensive watch,
it hints of bribery, if it is a cheap watch, it could be
embarrassing.
• Chrysanthemum (also related to death)
• Money (maybe considered straight bribery)
• Green hats and caps (all Chinese married men are
sensitive on this as it suggests the wife in a family is
an adulteress)
• Avoid black and white wrapping paper. Red is regarded
as good luck
• Avoid writing names in red on a card or note (it
signifies that these people are dead)
• Umbrella and fan (they all mean separation in Chinese
pronunciation)
For more information, see http://www.culturalsavvy.com/china.htm
[Top] [Previous]
[ Next] |
