Belgian-Chinese Chamber of Commerce (BCECC)

BCECC Newsletter: Fundamentals of Chinese business culture

When doing business with China, effective communication is crucial for successful business. Despite China’s impressive modernization, many Belgian companies continue to face difficulties when communicating with their Chinese partners, suppliers or customers. The cultural nuances and business practices in China require a nuanced approach to communication.

The two most important cultural aspects to be taken into account when doing business and communicating with Chinese professionals are ‘Guanxi’ (关系) and ‘Face’ (面子).

Guanxi (关系)

Guanxi, which could be translated as ‘relationship’ or ‘connection’, plays a crucial role in Chinese business culture. Building and maintaining strong personal relationships with your Chinese partner can significantly impact business success. This involves more than just business transactions; it includes social interactions and showing genuine interest in your counterparts’ personal lives. This also explains why the separation between private and business is much less visible in China than it is in the West.

Guanxi is quite different from what western business people understand under ‘networking’. In the western business world, a person’s network is usually limited to people with the same background or companies in the same sector. There’s a good chance that a person working in one industry will keep working in the same sector during his or her entire career. The relationship is mostly between companies, not between individuals. Business always comes first: having a good personal connection can be helpful, but is not necessary to work together successfully.

In China, relationships are often far-reaching, with surprising connections across different business and political levels. A Chinese person’s ‘spiderweb’ of connections is extremely complex and difficult to grasp for foreigners. People change industries more easily, because they happen to have a good connection with someone from another sector. Much more than in the West, relationships are between people: first you need to build friendship and trust, and only then you are able to do business together.

A noticeable example of the power of Guanxi is WeChat. Unlike most western social media platforms, WeChat is used for both private and business purposes in China. WeChat should be an indispensable tool for your business in China. This multifunctional application is an important communication tool in China, but it can also function as your company’s window to China and a vital marketing tool. It is used as a payment system, email-type communication, but also as a newsletter, a mini-website and much more.

For many foreign business people it is often difficult to see what is going on ‘behind the scenes’ or ‘below the surface’ of this Chinese spiderweb of ‘business friends’. A Chinese person’s guanxi can be extremely powerful. That is why, as a foreign business person, having a good Chinese partner or working with someone you trust in China, can be a major factor to define your success in China. That is why it is so crucial for foreign companies to spend sufficient time in China and work on your relationships.

Face (面子)

The concept of ‘face’ is inherent to Chinese culture. It encompasses respect, dignity, and social standing. Losing face goes beyond what Westerners understand as ‘humiliation’ or ‘embarrassment’. Therefore, when dealing with Chinese people, it is important to avoid putting your Chinese counterparts in situations where they might lose face, such as public criticism or direct confrontation. Conversely, giving face by showing respect and acknowledgment can strengthen relationships. This trust is essential in Chinese business, where long-term relationships are often valued over immediate gains. A manager who publicly recognizes an employee’s efforts, for example, not only boosts confidence, but also strengthens loyalty and teamwork.

Chinese society is deeply rooted in Confucian principles, which emphasize hierarchy and respect for authority. In a business setting, it is vital to recognize and respect the hierarchical structure. Address senior members appropriately, often by their titles and last names, and understand that decisions are typically made at the top level. A lot of what people and companies do in China, private or professional, is linked to giving face to one’s person or one’s company not losing face.

The concept of face also affects negotiation strategies. Chinese negotiators often seek to ensure that both parties can walk away with their dignity intact, aiming for win-win situations. This is reflected in the preference for indirect communication.

Understanding the importance of face can be crucial for foreign businesses operating in China. Western business people tend to focus on efficiency and straightforwardness, potentially clashing with Chinese expectations of respect and subtlety. Misunderstanding the importance of face can lead to miscommunications and strained relationships. Therefore, foreign business people need to be aware of cultural nuances and adapt their behavior to show respect and preserve face through careful language, gestures, and attention to hierarchy.

Please contact the Belgian-Chinese Chamber of Commerce (BCECC) in case you need more information.