Russian Sayings: It’s All Chinese to Me

One man is No Man

The majority of attempts to independently enter the Chinese market end in failure. Building a close relationship with China requires a systematic effort that takes into account Chinese traditions and mentality. The search for and selection of a potential partner is the first step, and one of the most important, on this path.

Naturally, one could go it alone. You could search for companies on the Internet, write them e-mails, or make contact through other official channels. But receiving an answer, especially when writing to them in a foreign language, would be unlikely. Even if these letters were understood, a Chinese businessperson’s distrust of a stranger would likely outweigh the potential benefits to them. A much more effective way would be to find an agent or partner with demonstrated experience in joint projects with Chinese companies, and then try to go through them. To do this, it is recommended that you participate in business missions and similar events under the auspices of prominent Russian and Chinese organizations – ministries, integrated companies, or trusted unions.

There is also no need to make your immediate aim the ‘contract of the century’ or huge trade volumes with your new partner in China. Instead, you should start by working with smaller shipments. This would allow the Chinese company to minimize its risks, test an unfamiliar market, and assess your viability as a partner.

While it is Fine Weather
Mend Your Sails

An important and practical piece of advice: be patient when starting to work with China. The search for potential suppliers, setting up negotiations, and executing deals will take time – most likely, a lot of time. China’s history and traditions have formed over the last 5,000 years; the country has a distinct decision-making system that is very different from the Western model. Their process is measured, level-headed, and devoid of hustle and bustle. The concept of ‘crunch time’ that we are so used to in Russia does not exist in China. Forcing events and insisting on meetings may be perceived as disrespectful and could lead to the cancellation of a deal or total non-cooperation.

A Good Beginning is Half the Battle

Once potential partners are identified and the dates for business meetings have been set, the next question is how to present and negotiate your project. Presentation preparation must obey a few strict rules.

First and foremost, presentations must be prepared in the Chinese way – even if that way seems pretentious or inappropriate to a European – and it should be written in proper Chinese. Second, the main focus of the presentation should not be on promoting your own company (in that case, why look for a partner in China at all?), but on the opportunities that your project could afford your Chinese counterparts.

Attention should be devoted to the needs and characteristics of a particular region, industry, or segment, which will demonstrate your understanding of a particular industry or province. It is a good idea to expressly emphasize your willingness to provide assistance to the Chinese partner when working in a market they are unfamiliar with, like when it comes to organizing a supply chain or setting up manufacturing in Russia and other countries.

It is also important to mention how your company already works within your own country, including partnerships with government authorities as well as public and integrated organizations. All of this will raise your status in the eyes of Chinese businesses, and ‘give you face’ (that is, it will earn you respect).

It is important to specify and establish in advance the range of issues that you plan to discuss during the negotiations. Do remember that trying to expand the ‘agenda’ in the middle of the process will not work. Determine in advance who will be part of the delegation, outlining each participant’s area of responsibility. After the first or second meeting you should suggest signing an agreement of understanding or intent. It will formalize your relationship with your Chinese partner and become another building block for further development.

Be sure to offer meaningful gifts, and do not forget to take into account how they will be perceived in the Chinese tradition. For instance, a clock would not be a good gift – to any Chinese person, it would serve as a reminder of the impermanence of life. The phrase ‘to give a clock’ sounds similar to a phrase that means ‘terminating’ or ‘attending a funeral’ in Chinese.

Finally, you must use the services of a professional, highly qualified interpreter who is a native Chinese speaker. The interpreter must be a member of your team who will see the negotiations through from start to finish – in other words, until the final agreement is signed. This person should be interested in the project, lobby for your interests at meetings, understand the opposite side, and be detail-oriented. The last point is extremely important.

Draw Not Your Bow
Till Your Arrow is Fixed

Every round of negotiations should be logged and carefully recorded. Summarize the results of every meeting, make electronic copies of decisions, and specify the date for the next round of talks in advance. Stick to the roadmap of negotiations originally set out. Inform potential partners in a timely manner of any changes to the project and any other developments that will affect its prospects. It is also important to remember that the art of bargaining is well-developed in China. Therefore, when starting negotiations with Chinese partners, one needs to clearly know their red line, the point beyond which they will not negotiate. It would be best to not even come close to it.

When in Rome, Do as the Romans Do

The peculiarities of Chinese business ethics have inspired countless volumes of literature, but there still remain a tidal wave of questions from foreigners who are just beginning to build business relationships with Chinese partners. Do you shake hands when you meet? How do you hand out business cards? Do you talk business over lunch? What should be on the menu? The most important thing to remember is that business agreements are signed by people – the key is to win over your future colleagues. To do this, one should remember the particulars and respect the rules. Here are just a few of them.

This is a textbook example. In China, it is tradition to hand over your business card using both hands, with your name facing your counterpart. Many foreigners feel uncomfortable doing this because it seems so unusual. But when it comes to winning the sympathy of potential partners and extending simple courtesy, that bashfulness is misplaced – especially since observing this formality earns approval and respect on a human level. By following the necessary ‘rituals,’ you show respect and demonstrate that you are prepared and know the established rules.

Another thing to remember is that respect for hierarchy is critical in Chinese office culture, even in the seating arrangements around a table. The head of the company always takes the most important position, facing the door, and the subordinates take their seats to the left and right of their boss in descending order according to hierarchy. All food and drink is offered in the same way, starting with the head and down his chain of subordination, even if women take part in the negotiations.

After the official meeting, it is customary for participants to have lunch together. It gives the foreigners an opportunity to get to know their Chinese partners better, and to establish a trusting relationship. This, in turn, increases the chances of getting the desired investment and support for the implementation of a project. In the restaurant, just as in the office, seating arrangements in accordance with the existing hierarchy should be strictly observed.

The right to speak at the table also depends on the individual status of each guest. The first and last toast are always shared amongst everyone; the rest are personal. A polite way to show respect to a particular individual, which will surely be noticed and appreciated, is to lower the rim of your glass below the rim of the person being toasted. By the middle of lunch it is okay to move on to business discussions and conditions for possible cooperation.

It should be remembered that in China key business decisions are made at the dinner table. Office meetings, even while heeding all these formalities, are merely to formalize agreements reached during a shared meal.

You Reap What You Sow

China has long been considered the ‘workshop’ of the modern world, and rightly so. What’s more, it is not only large international corporations that outsource their orders to China, but also small and medium businesses, including those from Russia. At the same time, China is often seen not only as a ‘wholesale dealer’ but also as a major potential investor and a huge consumer market for Russian products.

Recent trends indicate that China can play a role not only as an important supplier, but also as an extremely interested buyer of Russian products, in particular agricultural products that are considered more environmentally friendly (in comparison to local products).

There is every reason to believe, especially after last year’s devaluation of the ruble, that Russian exports to China will keep growing in the coming years. This fact makes promotion and positioning in the Chinese market all the more relevant, which means that strengthening your company’s image in the eyes of Chinese partners and consumers is paramount.

Such work requires a verified strategy and resources. A good tool would be participation in industry visits, business missions, trade shows, and business forums in China. This is where it is easy to make contacts that later develop into full-fledged and sustainable partnerships for years to come.