Face, guanxi, and other cultural norms are changing in China, but acquiring a basic level of cultural competence is still important for doing business there. For neophytes beginning to approach China, the long list of cultural dos and don’ts understandably brings some jitters. Those new to China are told that they must understand the complex web that makes up a guanxi network, appreciate the nuances in the Chinese concept of “face,” and be briefed on the subtlety of Chinese communication styles. Even seasoned China hands, who likely understand the need to develop cross-cultural awareness and skills for doing business in China, find it difficult to determine how to develop those skills and which ones are the most essential.

Understanding several key cultural concepts is useful in personal and business dealings. First, having some basic knowledge of Chinese history and the political, economic, and social challenges that the country faces is helpful before entering China. Second, it is important to understand cultural differences—particularly verbal and nonverbal communication styles—because so much misunderstanding stems from misreading cues and gestures. Third, face and guanxi are still vital concepts, but their importance varies slightly across generations. Finally, knowing the ins and outs of Chinese etiquette, from proper banquet behavior to gift-giving and business card exchange, can only help to enhance business relations and avoid embarrassing faux pas.

Face

The Asian concept of face is similar to the Western concept of face, but it is far more important in most Asian countries. Face is associated with honor, dignity, and a deep sense of pride. Causing someone to lose face, even if the offense was unintentional, could cause serious damage to a relationship.

The collective nature of most Asian societies means that the loss of face affects not only the individual but also his or her family, village, or even country. If one member of a group loses face, the whole group loses face. The notion of face is also present in national sporting events, where losing a game or event can be considered shameful. Chinese athletes have been known to apologize to the Chinese people for not winning a particular game, as this is perceived as damaging not only to the athlete’s or team’s sense of face, but to the national sense of face. Face is also manifest in the case of the Olympics, an event that involves national pride and holds face-gaining and face-losing potential for China.

In addition, the concept of face is important in the business world. In China, where rank and hierarchy are more important than they are in most Western societies, sending someone of lower status to receive a high-ranking guest could cause the guest to lose face. Similarly, seating someone of high rank inappropriately at a banquet, where guests are seated according to rank, could damage that person’s sense of honor and dignity. If the guest attends an event planned in his or her honor—and later reciprocates with a similarly impressive display—both sides can gain face, the host because he or she had the means to put on such an impressive event, and the guest because he or she warranted the event. The absence of the guest of honor from an event that was especially planned could damage the host’s face.

Guanxi

Guanxi combines aspects of face, obligation, reciprocity, and hierarchy. Simply put, it is a network of relationships that carries a certain expectation of mutual benefit. A guanxi network is made up of people one can count on and trust, who can pull strings and arrange for extra help. First and foremost, these people are family, then perhaps classmates or colleagues. In granting a favor or help, there is the unspoken expectation of reciprocity, and the receiver is somewhat in debt until the favor is returned.

Generation gap

Guanxi and face are interconnected and are both critically important in understanding Chinese business practices, particularly with people over age 35. A generational and geographical gap in the importance of these cultural concepts is emerging in China today, however.

Until economic reform and the shift toward the rule of law accelerated in the 1990s, having and maintaining good guanxi was essential to getting anything done. People raised during the Cultural Revolution or before China opened in the late 1970s were shaped by a system that relied on a robust network of relationships to get anything done. From buying train tickets to transferring to a different work unit, guanxi was essential. In the early days of reform and opening, when much of China’s economy was still run by the state, having the right guanxi connection was crucial to landing a decent job. In fact, it was often more important than having the necessary skills and training.

China’s “Generation Y,” or people age 35 and under, particularly in urban centers, spent their formative years in a vastly different society, one in which the focus has shifted from the group to the individual. These young urbanites are more likely to put their own careers and nuclear families before their extended families or communities. As a result of the one-child policy, most members of this generation are only children, raised without siblings but with incredible pressure to succeed and become rich. Many young urbanites in their twenties and thirties have been exposed to Western business practices by attending MBA programs or working in foreign companies. Instead of obtaining their positions through a complex web of guanxi, they tend to rely on their own credentials, helped by professional headhunters. They tend to be more savvy and determined than their elders, more inclined to speak directly, and less likely to be concerned about losing or saving face. They are more likely to have read books on business success by Warren Buffet or Donald Trump than the collective works of Mao Zedong or Confucius’s Analects. For them, getting ahead and making money are often more important than group dynamics or worries about offending colleagues.

Thus, though it is essential for foreign businesspeople to have a deep understanding of face, guanxi, and the more subtle aspects of Chinese culture when meeting with older Chinese colleagues, those concepts are slightly less important when interacting with younger urbanites. The rising importance of sound business principles and credentials makes it easier to accomplish things without relying exclusively on guanxi connections in contemporary China. Also, China’s shift toward the rule of law is weakening the need for guanxi. Guanxi is certainly still relevant—it is a simple fact of life that having the right connections helps anywhere—but it is no longer the golden ticket to obtaining good jobs and accomplishing business objectives in China.

Cultural competence: Understanding prevailing practices

China is a complex society with a long history that is relevant today. Chinese hosts and business partners are often pleased and enthusiastic when a foreigner shows he or she has taken the time to learn even a little about their country’s history and customs. It is also helpful to understand certain precepts in Chinese communication, etiquette, and cultural practices.

History

Although memorizing every Sui Dynasty emperor is unnecessary to succeed in business today, an understanding of the “Century of Humiliation”—the period when colonial powers controlled parts of China—and the sensitivities surrounding Sino-Japanese relations is beneficial. Chinese are still extremely sensitive about these episodes, and it is easy for a foreigner to unwittingly cause offense.

The art of subtle communication

Comprehending the differences between American and Chinese communication styles is crucial for business success. Americans tend to use a direct communication style in which “yes” means “yes” and “no” means “no.” In China, however, a direct “no” would cause the person whose proposal is being rejected to lose face, so an indirect style of communication prevails. Thus, a nod of the head could mean either “yes” or “I hear you, but I disagree,” and silence does not necessarily imply consent.

Knowing how to interpret indirect cues and nonverbal gestures is particularly important when working across cultures. As more direct communicators, many foreigners need to learn to distinguish the subtle ways of saying “no” in Chinese. For instance, “We will think this over again” (women kaolu, kaolu), “That is an interesting idea” (you yisi), or “It’s not very convenient” (bu tai fangbian) are actually indirect ways of saying “no,” and the Western businessperson should learn to recognize them and what they really mean. Learning how to maneuver through this language takes time and attention to indirect nonverbal cues. The Chinese complex character “listen” is comprised of the ear, eye, and heart radicals, implying that listening uses not only ears but also the heart and eyes. This is important for foreigners to keep in mind at a business meeting. Much can be missed in a meeting if the foreigner fails to notice these subtle gestures.

The Chinese banquet: What to expect

A formal Chinese banquet is something that most businesspeople in China will experience. Because the banquet is not a casual, sit-where-you-please kind of meal, the seating arrangement is paramount. A guest should always wait for the host to seat him or her, because seating arrangements are based on rank or importance.

Beginning with cold dishes, followed by at least 10 to 15 hot dishes, and concluding with fruit, a typical banquet lasts roughly two hours. In contrast to the West, where children are taught to “clean their plates” and leftovers could signal to the host that the meal was unpalatable, in China, an empty plate signals unsatisfied hunger and indicates that the host did not prepare enough food. Moreover, Chinese hosts will keep filling guests’ empty plates until the guest leaves some food on the plate.

Chopsticks, when not in use, should be put on the chopstick rests on the table, not upright in the rice bowl. The image of chopsticks in rice evokes incense sticks that protrude from altars honoring the dead and is thus considered unlucky.

When toasting, a general rule of thumb is to wait until the host offers the first toast and then reciprocate, but one should be prepared for a night of drinking, as it is considered rude to toast only one person and neglect others. Alternatively, toasting with soda is considered appropriate for those who do not drink alcohol. Those unaccustomed to drinking may wish to declare at the outset of a banquet that they do not drink, as drinking too much can cause one to lose face.

Humility

Young people in China today may not have a clear understanding of Confucius’s Analects or of his influence on Chinese and other East Asian civilizations, yet aspects of Confucian principles still pervade China today. Despite the current emphasis on making money, concepts like manners and humility are arguably as important today as they were during the Han Dynasty.

It is considered impolite to boast or brag, so a common response to a compliment or praise is to be self-deprecating. Complimented on an exquisite home-cooked meal, a Chinese host would be more likely to make a self-deprecating response about the evening than accept a compliment about the food. Accepting compliments straight out is considered impolite.

Yet a distinction must be made between humility and humbleness, for though it is considered polite to show humility in one’s actions, the tendency for China’s nouveaux riches to flaunt their wealth is anything but humble. A Chinese millionaire, living in a gated community and driving a Porsche is certainly not humble, yet when asked about business, he or she will likely claim not to be doing that well, in an attempt to show humility.

Giving gifts

The concepts of humility and face are also connected to Chinese gift-giving etiquette. For instance, although it is completely appropriate in the United States to open a gift in front of the gift-giver, such an action is generally considered impolite in China. What if, for example, a guest opened a gift that was much less valuable than expected in front of the host? This could cause embarrassment, discomfort, and the possible loss of face for both the recipient and the giver. It is better to accept the gift with two hands, thank the person, and place it off to the side. In this way, no feelings are hurt and no face is lost.

Knowing in advance what to give and what not to give is also helpful. A clock, for example, tops the list of inappropriate gifts because it symbolizes impending death. Other inappropriate gifts include green hats, which have negative sexual connotations; yellow robes, which are reserved for burial; and white flowers, as white is the color of mourning in China. On the other hand, company gear with logos, and local specialty foods or products, are appropriate gifts.

Numerology

An understanding of numerology will yield insights into why certain days and numbers are considered auspicious and what should be avoided or sought. For example, according to Chinese numerology, the number “8” (ba) brings luck because it sounds like part of “to get rich” (fa cai) in Chinese, which is why the opening ceremony of the Beijing Olympics will begin on August 8, 2008 at 8 pm. On the other hand, the numbers “4” and “14,” which sound like “death” and “want death” in Chinese, should be avoided if possible, as they are considered unlucky. In the United States, many buildings skip the thirteenth floor. In China, many buildings skip the fourth and fourteenth floors. In another example, a US company in Hong Kong was dumbfounded when it received very few calls after its grand opening. That was explained by its phone number, 414-1414, which in Chinese sounded like “death, want death, want death, want death,” and few Chinese would dare dial those numbers.

When in Rome…

Entering China with even a rudimentary understanding of Chinese culture and business etiquette can help business interactions go more smoothly. Because China is a complex country to navigate, particularly for the newcomer, knowing how to behave at a banquet or what gift to give your Chinese host help prepare a Westerner for doing business in China. Understanding the larger, more pervasive aspects of Chinese culture provides a much deeper appreciation of the country and yields insights into the cross-cultural issues that may affect business. These aspects include Chinese communication styles and values, such as outward humility and a sense of community. Keep in mind, however, that the rules may vary slightly with the age of the person with whom you are conducting business and that the emerging generational gap in China will likely determine the importance a person attaches to face and guanxi.

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Tips to Save Face

  • Treat your elders and those who outrank you with respect.
  • Try not to show anger, and try to avoid confrontations.
  • Try to convey a negative answer in an indirect, gentle manner.
  • Do not criticize someone in public or single anyone out in a group situation. If criticism is necessary, pull the person aside and speak privately.
  • When reciprocating an invitation, be sure it equals the prior engagement in value.

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Tips to Build and Manage a Guanxi Network

  • The best way to strengthen a guanxi network is to stay connected.
  • Send small gifts or ask for small favors to keep a relationship active.
  • Host an occasional get-together.
  • Remember the major Chinese holidays and send greetings.
  • Get to know your colleagues’ outside interests and find ways to support them, like getting tickets to a sporting event or concert.

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Case Study: The Importance of Relationship Building

A few years ago, a US businessman went to China for a three-day business trip. He went specifically to attend a series of meetings with the ultimate goal of signing a contract, and he had a tight schedule. For the first two days, the Chinese hosts took him out to play golf. This was his first trip to China, and he thought that golf was a complete waste of time.

Like most Americans, he wanted to accomplish specific goals and tasks. He did not understand that from the Chinese perspective, there can be no business deal until there is trust and a relationship, and there can be no relationship until the parties get to know one another. Thus, to the Chinese, the days of golf were essential to get to know their potential business associate. The Chinese wanted to know this person’s character and whether he could be trusted. After the second day of golf, the group shared a Chinese banquet. On the third day, the business deal was negotiated.

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Suzanne Fox is founder and president of Fox Intercultural Consulting Services LLC, which has offices in Beijing and Portland, Maine.

Posted by Suzanne Fox