Archive for the ‘China Overview’ Category

Chinese culture

March 28, 2011 1 comment

Chinese Culture and Business Practice

by Sara Cheng

Business dress
Professional business attire, such as a shirt, tie, trousers and jacket for men and a suit and blouse (not low cut) or business dress for women, should be worn when doing business.

Writing dates
Avoid confusion by writing out the month in letters, for example: 12 March 2015. If you do write a date in numbers, list the year first, then the month, then the day, for example: 2010.08.11

Business card etiquette
A business card is also called a name card or “ming pian”.
A good supply will be required asyou will need to give out cards to everyone you meet.

Layout of the business card is important:

-if your company is prestigious in any way, (for example the oldest or largest in the country, the market leader, the winner of an exclusive award etc) then this should be clearly stated
-emphasise your title or seniority

Women in business
Western businesswomen are treated no differently to businessmen, and similarly respect is given to seniority and rank.


-Show respect by being punctual whether you are a guest or a host. It may be appropriate to arrive a quarter of an hour early, because your Chinese counterpart may do so.

-Be patient. The first meeting may appear to be unproductive because of its formality. It will be set up on strict lines and will be hierarchical.

-Small talk is considered important at the start of the meeting. There will be a lot of exchange of pleasantries and courtesies but you should avoid trying to move things faster. These formalities and pleasantries are important to building a relationship.

-Chinese are very patient and prepared to spend a lot of time in getting to their goal. Impatience on the foreigner’s behalf could delay the process even longer.

-A good way to establish rapport is to inquire about a Chinese person’s family – this is an important topic of conversation.Other appropriate topics to chat about include the weather, what you have enjoyed about your visit to China, your other travel experiences etc.

-The Chinese regard seniority as being very important. Always determine who is the most senior person and shake hands with that person first. There will be a very strict hierarchy of who greets you first, second etc. and where you will sit.Similarly it is advised that your most senior representative acts as spokesperson and you refrain from having subordinates play a vocal role in the meeting.
-Recognise that certain phrases mean NO. They include “it is inconvenient”, “I am not sure” and “maybe”.

-A common part of a first meeting greeting is for the Chinese to applaud you. This should be reciprocated.
If you are using an interpreter:
– give him/her time to get your message across but maintain eye contact with the person to whom you are speaking
– don’t use long or difficult sentences or speak too quickly
– don’t direct questions to him/her but rather to the official head or your most senior counterpart. If they feel a question should be redirected to someone else in the group they will do so

The language
-Mandarin, also known as “Putonghua” or the common language, is the preferred language for business meetings, formal occasions or banquets. It is the official language and is spoken by all but a minority. -It is the language taught in schools and supported by the government. It is one of the official working languages at the United Nations. Other dialects of minority nationalities can be heard in regional areas.
-On more relaxed occasions people may lapse into their own dialect with other native speakers.
-There is only one written Chinese but with two different forms:
– full form, which has complicated characters and is used in Hong Kong, Taiwan and overseas
– simplified form which has simple characters and is used on the mainland and in Singapore
-English is not widely used in China though it is regarded as the most important international language. Though highly educated people speak English there is limited understanding at the less educated levels.

Forms of address
– Mr, Mrs and Ms are now used.
– On formal occasions people are addressed by their family name. Only when you become familiar with someone do you use other terms of address.
– The Chinese surname goes before the given name. The first character or the first sound is always the family name.
– Don’t assume familiarity quickly. Your relationship may remain on the basis of Mr Zhang forever in some cases.
– When Chinese are friendly with each other they often use Lao Li and Xiao Li, Lao for a senior person; or Xiao for a young person.

Gestures and public manners
– When you want to beckon a person to come closer or to get their attention you hold one hand facing down and move your fingers toward you as though you are scratching the palm of your hand.
– Do not point using your index finger – point using your hand.
– While the Chinese bow to greet each other, the handshake is more often extended to Westerners.

Gift-giving and receiving
-This practice is not official protocol but rather a customary ritual and very common. To help build a solid and friendly business relationship it is advised to take a few gifts along so you are prepared to reciprocate.
When you present a gift there is a ritual for it to be refused a few times out of politeness.
-You should also respond similarly when offered a gift.
-Don’t open a gift after accepting it unless asked to do so, open it privately.
-Don’t take gifts in multiples of four. The Cantonese term for four is thought to have an unlucky meaning.
-Chinese love giving and receiving small inexpensive objects or trinkets. Good gifts to give would include things that are representative of Australia like small furry koalas or small kangaroos or key rings, pens, paperweights, diaries and calendars and the like, branded with your company’s logo or Australian insignia.
-Don’t give expensive gifts, as this will embarrass the recipient(s).Avoid giving gifts of:
– clocks, watches, handkerchiefs or white flowers, as these are equated with death
– scissors, knives and other cutlery, as these are thought of as severing ties.
-The recommended colour for wrapping paper is red.

Dining out and entertaining
-Dining is considered an important aspect of establishing and building business relations.
-In Hong Kong most entertaining is done in restaurants because Chinese homes are often small, crowded units. Mainland Chinese however like to invite guests to their home, considering it an honour.
It is not customary for your partner, or your Chinese counterpart’s partner, to be invited to a business dinner.
-Seating etiquette requires you to wait for your host to gesture where you are to sit.
-If you are the guest of honour for any occasion, business or personal, in a restaurant you can expect to be seated in the middle of the table, facing the door. Your host will sit next to you. Others will be seated in descending order, based on hierarchy.
-When you host a meal, be sure to offer the centre seat to your most senior guest.
-Your host will invite you to begin each course – until then you should leave your food and drink untouched.
-The main beverage drunk during business meetings is beer. Also served are “maotai” or white wine and traditional Chinese spirits.Western wines and soft drinks could also be available.Three glasses usually sit on the table – the largest should be used for your first choice of beverage, the middle-sized glass is for wine and the smaller one is for shots of “mgotai”, or “sorghum” liquor.As a guest you could expect your host to propose a toast either after the first of several courses has arrived, or at the end of the first course. Then toasts will be proposed throughout the meal. You should toast your Chinese host or guest often. “Ganbei” means “Cheers!”
-Chinese are not generally enthusiastic about Western food and they prefer a sit-down meal to cocktail parties or buffets.You may be served one dish for every person at the table, placed on a revolving tray in the centre of the table.
-Good etiquette requires that you eat a little of everything, even if you don’t care for it.
-Don’t be afraid to decline alcohol politely and firmly. Once you begin to drink you are obliged to continue. This also applies if you accept a toast – you are expected to drink the whole tumbler.
-You will be expected to use chopsticks proficiently. When not using chopsticks place them on the rest provided.
-The ritual yum cha means “drinking tea” and is enjoyed socially.The meal is customarily coming to an end when fruit is offered and or hot towels are served. Your host will not initiate the end to a gathering until his guest(s) are preparing to depart.
-You would be expected to tip at the end of a meal. Giving a handful of change, rather than a percentage of the bill is quite acceptable.

When dining in a Chinese home
Chinese enjoy entertaining in their homes. When visiting:
– arrive on time, not early
– be prepared to remove your shoes at the door
– bring a gift for the host
– don’t touch mirrors, ornaments, statues etc. as they may have significant religious meaning
– wait until you are invited before sitting down – customarily you will sit to the left of your host.


Strategies and Methods to Protect Intellectural Property in China

December 13, 2010 2 comments

I recently presented on IP protection in China at a business conference. Here are my notes on some strategies and methods I used as a reference at the presentation, which might be useful for those who are seeking commercial mechanism rather than legal actions to protect IP in China.

 Large companies: Being an industry leader and one-stop solution provider:
-Keep innovating to keep a leading position in the industry. It is a costly approach and work well with large companies;
-Bundle core products/services with non-core but related products/services so that you offer a one stop solution or a whole package for your customers. The demand for your core products/services will drive the growth for non-core business, as your customer will find switching cost or operation cost is to high if they use your core services while using someone else other services.
-Also you may charge for the products/services which are hard to be copied while providing for free other products/services which could be easily copied so that you will take all the market shares your IP infringer may get;
-Build the IP protection in the R& D or product development phase;
-Get involved in the process in industry standard or quality standard development and drafting. Chinese companies are most good at this to protect their IP and monopolize the market.

Vertical integration or horizontal integration: backward acquire your supplier to control the core knowhow or forward integrate with your clients to share risks and cost and better control your IP; or alternatively you enter related industry sectors by acquiring or being partially acquired so you provide a broader range of related products and services to lock in your customers and hence protect your IP;
Target the “right” market, .e.g Microsoft China focused on the market segments which are so concerned about their brand, legal position and market image and also those who could be easily tracked, such as Fortune 500’s subsidies, large Chinese private companies and Chinese government-owned enterprises.
Technical ways, such as dingo for software, online service delivery rather than providing it in the form of softcopy;
Internal IP protection through technical methods:
-Track your sales by offer free membership and free complementary services to your clients so they will not switch to others while you can track your sales and market;
-Firewall, monitoring of emails, back up of materials, etc;
-Leverage media especially online monitoring by brand promotion, online forums, blogs etc.
-Give incentives and retain your key staff who mater your core knowhow;
Protect IP from your stakeholders and Build a network of stakeholders who assist you to protect IP

-In lots of cases, your clients or suppliers are IP infringers so put certain terms and conditions in your contract with them to protect your IP or at least warn them the potential penalty of IP infringement;
-Sharing some knowledge while keeping the core knowhow so rather than taking the risk to infringe IP, potential IP infringers will focus on maximising the benefits as a “peripheral” partner. Microsoft adopted this approach;
-Leverage stakeholders such as clients, suppliers, media, end customers etc to monitor the market and potential IP infringement.
-Get more people to work with you on your IP protection by licensing the IPs or more creative way mutual licensing or multi-cross licensing so you work with a network of organizations to protect and benefit from each others’ IP.
Focusing and giving strategy:
-Look at the cycle of your products and services. If it is at the later stage of product cycle, you may consider the option to share the knowledge for free to beat the market share your IP infringers may get, and hence reduce their profit margins and dampen financial viabilities;
-Last but not least, if you have limited resources, focus on IP protection of your core technology knowhow or in the most important market, the one which you are most advanced, which is hard to be copied and which you can get the best profit margin.

China Snapshot

September 16, 2010 Leave a comment

There are 1.3 billion people in China. While a population of this size might sound like an exciting opportunity for your product or service, it is important to understand the demographics of China to identify your actual potential customers.

  • China is situated in eastern Asia, bounded by the Pacific in the east and Russia and Mongolia to the north.
  • The third largest country in the world, next to Canada and Russia, it has an area of 9.6 million square kilometres, or one-fifteenth of the world’s land mass.
  • A one-party state, it is dominated by the Chinese Communist Party (CCP).
  • Its capital is Beijing.
  • Head of State is President Hu Jintao.
  • Premier, Wen Jiabao, heads the State Council, the most important administrative body of the Central Government.
  • The CCP’s Politburo also plays a key decision-making role in relation to reforms affecting the commercial environment.
  • Has the world’s highest population of 1.3 billion. The eastern part of China is densely populated, while the western part is sparsely peopled.
  • Is the world’s third biggest economy.
  • Has one of the world’s oldest continuous histories and civilisations.
  • It has a rich and diversified culture and is also known for its great historical and engineering achievements – The Great Wall of China, The Grand Canal and the Karez irrigation system. It is the birthplace of papermaking and printing, gunpowder and the compass.
  • Its people have a strong sense of pride based on their country’s history and ancient culture.
  • More than 90 percent of China is comprised of the Han Chinese. The rest are minority groups.
  • Around 60 percent of its population live in rural areas.
  • Mandarin, also known as putonghua or the common language, is the official language and is spoken by all but a minority. It is the language taught in schools and supported by the government. Mandarin is one of the official working languages at the United Nations. Other dialects of the 55 minority nationalities are heard throughout China.
  • China’s currency is the reminbi (RMB) which means the people’s money. The unit currency of the RMB is called the yuan.
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