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Management Consulting: CHINA SPECIAL Part 3

Preconditions for success in China

Xinjiang - Urumqi

Mount Tian Shan, 2007

In Europe and USA we can find many preconceptions about China. Living and working in the country (and in my case I did it for more than seven years) shows soon, that many of this preconceptions are totally wrong.

In this "China Special" I will focus on some topics, European companies starting economic activities in China should consider carefully, in order not to tap into pitfalls or which could become reasons for difficulties and problems.

In the part 3 we discuss about how to communicate and negotiate with partners in economy, politcs and media as well as some thoughts about the principles of 'GuanXi' and 'La Gou' and last but not least about 'loosing face' and 'giving face'.

Politics and Media

Maintaining Relationships

Chinese Language and Culture as "Door Opener"

Conversation, communication and negotiation with partners from economy, politics or media in China require some empathy and tact. Having and using it in the right way helps to successful establish co-operations. "East" and "West" can learn from each other. Trust needs time to grow and this time has to be spent - often combined with dinners. Who is not willing to spend this time, has already lost.

It is often not considered that also for those activities a careful study of local culture and habits is required. But the experience shows: if a trustful relation is established, you can count on it but but you will also have to show commitment and keep promises. One of the most reasons can be seen for problems in communication in China are missing listening skills and especially the misunderstanding of the heard "YES". Europeans understand "YES", but the Chinese partner means "YES, I have understood you, BUT...."

Meanwhile in Chine exists a broad variety of local, regional and countrywide media who can be excellent communicators.

Last but not least the most significant reason for some unsuccessful economic partnerships in China is it, to cause a 'face-losing' for your partner and even worse in front of other people. But the helpful fact of Chinese culture is that beside "losing face" there exists also the principle of "giving face". Example: In negotiations you promise something, your partner reports that promise to his superior and in the next round of negotiation with the superior you cannot remember having made this promise. The first contact partner would lose face in front of his superior or even worse, if he trusts his employee you would lose face and the first contact partner maybe will never again talk with you.

How you can manage such (intercultural) complex topics of relationships, we can discuss in our consulting.

Chinas 'GuanXi' und 'LaGou'

Contact with Local People

Promises will be taken very serious - keep it!

The term "GuanXi" - to understand very simplified as friendship and network - meanwhile is well known also in the western world. Nevertheless sometimes from this term some danger situations can arise not to violate some borders of "compliance".

Less known in the western world is the much more strict interpretation of a promise in China, especially if a promise is "sealed" by a "La Gou". Even we have in Europe sayings with a similar meaning of "promised is promised and will not breached in hundred years". Such a promise sometimes is worth more than a signature or a chop. To "forget" such a promise - even a minor topic" can have extremely negative influence on relations in business as well as private situations.

Also such topics we cover in our trainings for intercultural competences. Some further examples based on our experiences will amuse you but also increase you sensitivity.

Other Topics...

IPR and Conferences

One of the most dangerous wrong preconceptions in the western world about China is that regarding IPR violations. Since the further development of the local Chinese economy has shown that also local companies are negative affected by IPR violations done by local competitors, the mindset is changing rapidly and IPR is becoming a value to be protected.

And it’s often not seen how excellent the research and development meanwhile in China is. In so many industries there is no need any more for copying and IPR violations as Chinese R&D is world class. Even more dangerous the statistics for patent filings show that compared with stable or slightly decreasing patent filings in US and Europe the growth of Chinese patent filings is nearly exponential.

Also many western companies don’t be active enough to file local patents and trademarks in China. This then competitors do for them and finally the western companies later are violating those patents.

Nevertheless we offer you also our consulting how you can protect your IPR's better in China - Methods for that are available ...

We hope, with this three parts of our China Special we could give you a short - much to short - overview about some of the challenges your economic activities on the Chinese market can face.
More about that soon in the book: "Seven Years Living and Working in China. Experiences and Insights for better collaboration!


These hints or "DO's and DON'T's" should not be understood as simple China critics; during the last decades I could appreciate the country and the people there so much. Nevertheless economy is also a competition and even a fight and competitors are "rivals" also and as we can learn from the excellent Chinese strategist Sunzi: "If you know your rival and yourself well, you don't need to fear about the results of hundreds of battles". This knowledge about the reality and the situation even more can contribute to a "harmonious" economic development. To support that is one of our targets for our consulting work.

Last Change / Update 07.08.2011