Chinese Culture: Making Business, Making Friends

Like most of the cultures in this world, China is known in Europe mostly though the media. Stereotypes reign the knowledge about this far away country and every now and then somebody visited the country as a tourist or even worked there as an expat for some time. Two things are heard very often about China: firstly, one has to be very careful about prices and product quality when buying something in China. A little experience in negotiating prices and especially knowledge of the actual prices should be very important. Secondly, it should be very difficult to make friends with the Chinese. For example, the Chinese should have no interest in joining in for a drink after work. During a networking event in Beijing, in which both Chinese and foreigners participated, I had the opportunity to learn more about the background of these statements.

Making Business

Already during my trip across China I realized that the Chinese are very keen on making business. For example in Turpan, Tim and I had been invited to a wedding, which led to a discussion of several hours the next day on how we could possibly make business and profit from the fact that we had met in such an unexpected manner. Unfortunately we were not creative enough to find out a way to make use of the guys’ animal nutrition, which the had to offer. During the past few months in Beijing, I realized time and time again how it was possible to find someone anywhere who could offer whatever was needed. For example we asked a lady in the Sanyuanli Market for a specific vegetable. Since she didn’t have that particular produce in store, she just walked across the market to pick it up for us at a different stall.

Making business in the 大æ ...栏 (Dashilar) Commercial Street in Beijing

Making business in the 大æ ...æ  (Dashilar) Commercial Street in Beijing

Tough negotiation and initial asking prices, which exceed the real prices up to five times are quite usual. But what is the reason, what is the motivation for such extraordinary prices? In China, business is traditionally made within ones family. A large family could cover all relevant markets and within the family everybody made fair business. As soon as a product had to be bough outside the family prices were naturally high, since there was no obligation to make a reasonable price for an outsider. In order to increase the influence of the family or to get cheap prices for yet another product, the salespeople had to be made part of the family. This was typically done through marriage. If a distant cousin married the daughter of your business partner, suddenly the prices would drop dramatically. Apparently this system is still in place today.
Additionally in today’s world, the Chinese are closer to one another than to foreigners, even if they are not part of the family. This seems to lead to a three tier pricing system, consisting of lowest prices for family members, medium prices for locals who are not part of the family and foreigners. Since foreigners are initially unaware of this pricing system, the even pay the initial asking price. It sometimes still seems low, but even a foreign master in negotiation has a very hard time to achieve the same pricing as a local. The foreigner’s culture usually does not involve as much negotiation as the Chinese culture.
Making business in the old town of Shanghai

Making business in the old town of Shanghai

This distance between local business people and foreigners however does not necessarily mean that it is impossible to make fair business with the Chinese. There is a very simple and efficient means which helps tremendously: relationships. Since China introduced the one-child policy, the families do not reach the extent anymore used to reach a couple hundred years ago. Thus the business network which is the family is naturally much smaller today than it used to be. To make up for this, the Chinese perform in real life, what most Westerners only do on the Web: social networking. Since the Chinese are very curious people there is always a reason to talk about something to people. And why not figure out what that person does for a living and to learn more about him or her. However, requests for support may not be expressed unless a small gift has been exchanged: one hand washes the other! And the more hands one washes, the larger ones influence becomes and the easier it gets to make business. The business network today replaces the extended family of the past. If one is approached as an expat by a Chinese, there is a unique opportunity to get to know one another and to help each other out at a given time. The magic word is called 关系 (guānxì, the relationship).

Making Friends

A different story than making business is making friends in China. Foreigners typically get to know locals at work. They are used to occasionally meet with their colleagues after work for a drink, to go on a weekend trip together or to do some sports together. All this is very common for Westerners. But for a Chinese this behavior is very unnatural. There is a strict separation between business and leisure time. The apartment belongs to the family, so if one is invited by a Chinese, the meal will most likely take place on a nice restaurant, which consists of several small rooms containing one table for about 10 persons each. It is not impossible for colleagues to become friends, since a lot of time is spent together at work. However business and leisure are two distinct topics as far as the Chinese are concerned. For example we observe mostly families and young couples in the Chaoyang Park, the largest park in Beijing. Very rarely we also see groups of friends. The families are typically two to three generations enjoying the outdoors in the city.

Reunion with former colleagues: éª+源 (Luò Yuán) and his family

Reunion with former colleagues: éª+源 (Luò Yuán) and his family

The Chinese are faced with a large dilemma, when approaching a foreigner: on the one hand side they are very curious and interested in anything new and a foreigner in particular. It thus happens that the Chinese try to figure out what I purchased in the super market or on the vegetable market. However on the other hand, many are afraid that they can not communicate with the foreigners. Like everywhere around the world, the Chinese know foreign languages from school, which not always do a good job for actually learning a language. They are very eager to speak to foreigners, but under the impression that their language knowledge is insufficient, they rather not talk at all. Thus knowing Mandarin can simplify the relationship with Chinese a lot. It is the means of overcoming the language barrier. The issue is that most Chinese, who are excellent in English or any other foreign language, are encountered at work and thus not interested in a non-business relationship. However there is no rule without any exception. If one learns to be curious as a Chinese, learns the language and talks to people outside of work, there are many possibilities to make friends. And if all fails, there is still a very interesting mix of foreigners, and there are many organizations where one can meet people speaking the same language natively, such as the Swiss Society or the German-Speaking Club in Beijing.
I am looking forward to how this knowledge will evolve in the coming months and years and what kind of experiences I will make…