Academic journal article Journal of Accountancy

Business Etiquette in China

Academic journal article Journal of Accountancy

Business Etiquette in China

Article excerpt

Faux pas and misunderstandings can easily doom a U.S. business deal in China. To improve chances of a successful venture in China, Len Jui, CPA, a partner at KPMG in Beijing who was educated in the United Kingdom and the United States and worked for the SEC, and Jiake Brownbill, a business culture consultant in the U.K., suggest U.S. executives acquire some essential soft skills:

* Be forthright about your intentions, resources, and goals. Successful business relationships in China are built on trust, loyalty, and honesty, which means Chinese take note of body language, keep track of what foreign investors say and do, and judge them based on their track records. Chinese business people will find out if a foreign investor failed to disclose important information or promised too much.

* Grasp the limitations imposed by a state-run economy. Learning about Chinese regulations, laws, and government policies helps U.S. companies put themselves into the position of their Chinese counterparts and understand the restrictions within the Chinese system. Chinese business partners may be bound by government targets and have little freedom to be creative. For example, structuring a deal so that the Chinese counterpart receives a government incentive is more likely to reduce the costs of the deal than bareknuckle negotiations are.

* Generate goodwill. Treat each encounter as a chance to reach a long-term goal, regardless of whether negotiations are successful. Showing respect toward others is highly esteemed etiquette in China. Diplomacy and tact are required to directly challenge figures of authority. Foreign investors that are looked upon favorably will be invited to bid for contracts.

* Hire a capable translator. Chinese don't expect foreigners to speak the language. But make sure the translator knows technical terms used in your business sector and can properly convey the meaning of figures of speech. …

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