Current business situation
China is Australia’s largest trading partner and Australia is China’s 7th largest goods trading partner with two-way trade valued at $A214.6 billion in 2018. China remained Australia's largest two-way trading partner, export market and import source.
Austrade’s partners at Asialink Business have identified the following tips for maintaining good business etiquette in China:
Never publicly criticise or contradict anyone, refer to a mistake, show anger or disagree with a business contact – this is known as losing face. Discuss any concerns discreetly in private, or use an intermediary.
The Chinese concept of guanxi refers to the quality of your agent or representative's contacts. Business introductions are vital – companies will not deal with unknown contacts. Your agent or representative should have sufficient guanxi with the right people and companies.
Chinese business hours vary from 8:00am-5:00pm, 8.30am-5.30pm or 9:00am-6:00pm. At government offices, working hours are usually 9am-5pm. If you are not sure what time your business contacts commence work, avoid scheduling meetings early or late in the day.
Ensure you bring a large amount of business cards with you. Present your business card by holding it in both hands between your thumb and index finger at the top of the card. If you've had your card translated into Mandarin (recommended), present that side face up.
Remember that with Chinese names the family name comes first. A contact with the name of Wong Li Qiang should be addressed as Mr Wong.
Building good business relationships and trust are very important in China, so expect to spend plenty of time at meetings and banquets with your potential business partners. Often these will be done out of business hours, with karaoke or business dinners being a favourite medium for developing relationships.
Chinese business people prefer to establish a strong relationship before closing a deal, and never start a discussion or meeting by getting straight to the point about business - they will expect to develop a personal connection first.
You may be applauded when you first meet your Chinese contacts. This is common in Chinese greetings and should be reciprocated.
If you are asked ‘Have you eaten?’ you are not being asked if you are hungry, but rather ‘How are you?’.
Don't use red ink when writing or signing documents – this implies you are severing ties.
The number eight is considered the luckiest number, while the number four is considered unlucky due to it sounding similar to the word for death.
Direct questioning is common in China, so don't be offended if you're asked how old you are and how much money you make. Privacy, especially of one's personal life, is generally not practiced in China.
Draw on the informal, personal relationships you have with local cultural informants to understand the hierarchy.
In meetings or negotiations, note the key Chinese decision makers by observing who walks into the room first, who opens the discussions in the meeting, who sits in the middle of the table and who the delegation defers to.
In addition, China is an advanced digital economy. It’s no exaggeration to say that Wechat, a Chinese multi-purpose messaging, social media and mobile payment app developed by Tencent, similar to (but more than) ‘What’s App’, has penetrated into every aspect of life in modern China including the way of doing business. Make sure that you set up your Wechat account while doing business in China for network connection and enhancing market reach.
Setting up in market
China is a complex and challenging market with an often uncertain regulatory environment. Investing time and resources in understanding your market segment is essential to build the right networks and develop a market entry strategy. Relationships are key, as is engaging local Chinese staff or China based partners to provide on the ground insight and representation. Companies should not assume that success in Australia, or other export markets, will automatically translate in China.
In summary, always be aware of the following:
- Diverse sources of advice and local connections
- Be adaptable and consider national and regional level industry policy
- Don’t leave commercial nous and ethics in the departure lounge
- Halve your expectations and double your time horizons
- Manage risk with legal advice and well researched market entry models
- Connect with your customer in their language and on their platforms
Links and Resources
Government, business and trade
Asialink Business: China
Australia Unlimited: Innovation Landing Pads
Brookings Institution: China’s growth prospects in the next 10 years
China Briefing - Introduction to China’s Plenary Sessions and the CPC Central Committee
Department of Foreign Affairs and Trade - China Australia Free Trade Agreement (ChAFTA)
Ernst & Young - Insights of the China Pilot Free Trade Zone
Export Finance Australia: Exporting to China
Global Connections Fund
Global Innovation Linkages Program
Shanghai Free Trade Zone Official Government Site
The State Council of the People’s Republic of China
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.