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China Factory Visit – Buyer Diary #1: Culture & Customs

We asked one of our clients to give us their impressions during a China factory visit during a buying mission recently. Read below to get an idea of what they felt during this trip. This is one of a series of blogs that we will title: Buyer Diary.

As a foreigner, doing business in China may seem tough. Especially as a client to China factory visits, there will be some practices that must be adapted to. China has a distinct business etiquette and culture which can be summarized into the few points below –

Business is built on personal relationships

No Chinese businessman will be willing to talk business without getting to know you. Call it breaking the ice or earning your trust, business is always secondary to building personal relationships. Take note of this during your China factory visits.

In contrary to business meetings in western countries, business in China usually starts off informally.  Take for example – business meetings in western countries are usually done in meeting rooms immediately after a handshake and self-introduction. However in China, a business meeting only starts half way during a meal. Expect this during your China factory visits.

Why is building personal relationships so important during China factory visits?

Due to the political environment in China, it is definitely much easier to do business with a wide network of connections. It is culture in china to rely on another’s help for business. Therefore, this is why building personal relationships are so important with the trust element. With such help offered, business processes are less rigid and of course less time consumable. In short, Chinese businessmen will only work with trustworthy parties.

What builds up personal relationships?

Ironically, the process of building up these relationships may not be as personal as it seems.  Decipher for yourself, is this really relationship building? Not so much on chatting and understanding one another, it seems as if building personal relationships are more evident and acknowledged by the following practices.

Money
It is a practice that factories in China generally pay for their client’s stay at the hotels, transport and meals. At times, they may offer to pay for your personal items. Some factories however would take your acceptance of these offers as leverage. They may see it as a favor to be returned and make use of this chip during business negotiations.

The key is to learn how to draw the line.
Some questions to ask yourself includes –

  • What is the other party offering to pay for – Are these items related to business?
  • How expensive are they?
  • What kind of businessman is he – Is he generous as a person?
  • Does he show contrast when dealing with other matters?

At the end of the day, make sure that accepting these offers will not hinder business progression during your China factory visits. It is definitely important to hold your ground as the client and ensure that the project progresses smoothly.

Smoking
Being the world’s largest consumer of tobacco, smoking is a social custom in China. Chinese give out cigarettes during social interactions habitually as this signifies respect and friendliness. Accepting cigarettes in China is shown as respecting and ‘giving face’ to the party whom offered the cigarette as well. I was offered cigarettes throughout my entire China factory visit.

How well does smoking aid in building personal relationships? Surprisingly, chit chatting and talking about your hobbies seems out of the picture and smoking is another level all together. It seems as if it’s the next best activity to build up relationships other than drinking.

I noticed that some Chinese actually accept the cigarettes offered even though they are non-smokers. This usually occurs when there is a guilt factor involved. They feel bad rejecting the offer, especially when they owe the other party for certain matters. What happens is that the cigarette is accepted and lit out of courtesy and there is no actual smoking.

Of course, the key question to ask is – can I reject the cigarette if I don’t smoke?
As China is improving towards civilization, nowadays Chinese generally do not push for you to accept the cigarettes they offer. You can definitely decline the offer courteously.

Entertainment

By playing host, factories may bring you out for some entertainment. Depending on the situation, entertainment can range from shopping, viewing the local attractions to other activities such as Karaoke. Simply drop a subtle hint on a place that you would like to go during your China factory visit!

  • Meals and Drinking
  • When you dine as a group during China factory visits, usually the host pays for the meal. Rarely or never do you see Chinese splitting costs among themselves. Similarly, as the client, you never have to pay for your meals – the factory will do so.  Paying for meals is one of the highly valued approaches to show hospitality in China.

The Chinese place great emphasis on dining etiquette. The host shows respect to the guest and vice-versa.  Usually both parties will invite each other to start the meal. Throughout the meal, the host will serve tea and place some of the dishes onto the guest’s bowl. If you’re the guest, simply graciously accept these kind gestures.

Unlike western cultures, the Chinese have communal dining whereby everyone takes food from the many dishes on the table instead of having your individual share. Well, the Chinese definitely appreciate foreigners who enjoy communal dining. Most importantly, they love foreigners who can use the chopsticks!

This is Patrick, a german intern from ODM Group whom accompanied me to the China factory visit. We had dinner with the factory boss on the right. ODM Group sends translators down along with clients in order to aid in communication and build good relationships!

China Factory Visit Dinner

China Factory Visit Dinner

干杯’ (gan bei) is what you usually hear during meals. It basically means cheers. However in the Chinese culture, by saying gan bei, it is to finish drinking the entire cup or can of beer before placing it back on top of the table. Take note that if you shout gan bei with an entire bottle of beer, you would have to finish the bottle! It is culture in China that a toast must be offered to someone that you first met, your client or host. Beware because that means taking a cup of beer each from every person seated at the table throughout the entire meal if you are the guest! You definitely don’t want to end up drunk during your China factory visit!

It is definitely seen as disrespectful and rude if you refuse a toast by someone. Sometimes, the other party may even feel mad that he has lost his face.  This is when the businessmen will start pushing to finish your toast and continuously offer you more.  This is the true test to hold you liquor!

At times, instead of gan bei, they say ‘随意’ (sui yi). It means at your will. Now you have the freedom to drink as much as you like instead of gulping down the entire cup. Don’t place too much hope on this phrase, because this is only during rare occasions when they have no way to hold their liquor.

Needless to say, even though factories will invite you for drinks at all times of the day during these China factory visits, it is important that you choose to drink after work. What if you cannot hold your liquor well enough? We advise best that you stay away from these meals. Otherwise you can reject the drinks right from the very start of the meal or when you can no longer hold your liquor. However once you start drinking, it would be tough to stop as you are unable to refuse their constant pressure of pushing the cup into your hands.

干杯 (gan bei) after China Factory VisitChinese businessmen love to talk business during meals and we have to take extra caution in that. This is when business negotiations surface. For foreigners, we generally dislike talking about business during meals and will leave these topics for a formal business meeting. However, it is the prime business meeting time for the Chinese and all related issues would be raised.

These agreements can mean a lot to the factory and they take your word for it. It is important that we give a definite answer for any issue raised by the factory. Answers such as – ‘Can we talk about this later’ or ‘Let’s see about it’ can be really risky as factories generally take your uncertainty or silence towards their advantage. Factories can be tricky at times and we have to be firm on business related matters.

The gauge issue

One habit that may seem unbearable for most foreign businessmen is the uncertainty and approximate gauges that Chinese businessmen give. These gauges can be for cost, time, volume and others. Take for example that you would like to place an order for a soft toy. It was quoted as 4RMB. At the end of the day, take no surprise when the amount adds up to 6RMB. There was a factory that I worked with, together with ODM when we required 205,330 pieces of lanyards. The factory assumed it as 205,000 pieces and that the remaining 330 pieces were extras used to replace defects! After so many dealings from various factories, ODM makes it a point to press for definite answers – be it regarding time, cost or anything else.

The face issue

面子’ (mian zi) means reputation. A man’s reputation is of utmost importance in China. By losing face or reputation can mean a ruin of dignity.  When dealing with Chinese businessmen, try to avoid situations when you make them lose face in the public. Such situations may occur when you refuse a toast or when you point out their mistakes in front of the employees. During such circumstances, it is likely that these Chinese businessmen would be really mad and upset. It would be even tougher to come to an agreement then. Some on the other hand would give in to the clients more after being yelled at. It really depends on the situation during the china factory visits and is only for you to judge.

With such extensive knowledge on the culture and customs faced in during China factory visits, you are definitely ready for your trip!

 

2017-09-22T18:47:27+00:00