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Introduction

China's culture and business practices differ from Canada's. As you start or expand your business in China, having an understanding of Chinese business etiquette is important to your success. Knowing and practicing common customs will also help you relax, avoid embarrassment, and focus on the matters at hand on critical occasions. This document provides a brief set of guidelines on Chinese business customs and practices based on queries that have been received by Trade Commissioners at our Embassy and Consulates in Greater China. For further information, there are reference links at the end of the document. While nothing can beat your own personal experience, we hope that this information will be of assistance in sensitively guiding your activities.

In your business dealings in China, you will make many friends, both Chinese and foreign, who can help you learn the ropes. Follow their advice and example! The toughest business people you encounter will often also prove to be genuinely warm and accommodating hosts, and will overlook simple errors of table manners or business etiquette - as we would in Canada - if your purposes are serious and your conduct respectful.

Background

Before beginning, recognize that the following qualities are valued by the Chinese and therefore relevant to your Chinese business interactions today:

• Saving and giving face
• Respect for elders and rankings (note that the latter is particularly important when dealing with government officials)
• Patience
• Politeness
• Modesty

Approaching Business in China

Top tip: Business in China relies heavily on personal relationships: make sure you have some!

Doing research on the market is important in China, but personal relationships are equally essential to business success here. It is crucial to establish and maintain good relationships with key business contacts and relevant government officials. Attending industry networking events, contacting industry associations and municipal or provincial investment promotion bodies, and following up on personal introductions are all good ways to start the relationship-building process.

While many Canadian firms have done business successfully with credible firms in China, it is important to remain aware of potential scams that you may encounter as you approach business in China.

For further information on scams that can affect your business, please see our report on the Trade Commissioner Service website regarding frauds and scams.

Attending and Conducting Meetings

Top tip: Don't be late, and know who's boss!

In general, meetings in China follow the same format as those in Canada, albeit with a bit more ritual. The Chinese value punctuality, so arrive on time or even slightly early for meetings or other occasions. The following points should be kept in mind:

• Dates: Check the Chinese calendar. If you are scheduling a meeting, avoid all national holidays, especially Chinese New Year, when the entire country effectively shuts down and it can be very difficult to organize meetings with key individuals. The May 1 and October 1 holidays also affect businesses: be forewarned.
• Preparation: Be well prepared in advance of your meetings.Your Chinese hosts will most likely know you and your business quite well. Have a detailed proposition of the value of your company and product; your counterparts will have one for you (see section below on "Materials"). Chinese businesses often meet with numerous foreign businesses seeking to establish relationships; if you are unable to capture their attention at the first meeting, you may not be able to secure follow-up.
• Language of the meeting: Make sure you know the language capabilities of your hosts before the meeting. It is more convenient and reliable for you to have your own interpretation if your hosts don't speak English or have little English capability.
• Meeting room set-up: If you have specific requirements for a meeting room set-up (e.g. projector and screen), be sure to communicate this to your hosts in advance of the meeting. They are usually happy to accommodate, but often do not have the in-house capacity to set up the technology on the spot.
• Materials: Have Chinese-language materials (e.g. brochures, presentations) about your company to share with your hosts. While your contact in the organization may speak perfect English, the decision makers in the company may not. It will be challenging for your interlocutor to convince others of your company or product's value if they are not equipped with Chinese materials.
• Dress Code: Government officials and top management dress formally for meetings, while business people at working levels may adopt a more casual style. If you're not sure, go formal - it will convey respect and seriousness. In the summertime, there can be a suggestion for men to "go casual". This means polo shirts or button-down short sleeve shirts, as opposed to suits and ties (or shorts - which are definitely not appropriate).
• Introductions:
  • Addressing others: Seniority is valued in China. It is important to address your counterparts by their title (Chairman, Director, etc.). Find out who the most senior person in the room is, and address them first.
  • Introducing yourself: Say your name clearly, and remember to state both the company you work for and your position. As a point of reference, know that Chinese will refer to their company first, then their title, and then their name when introducing themselves to others.
  • Handshakes: As in Canada, meetings often start with handshakes. Ensure that you are not too aggressive with your handshake. Don't be surprised if you are at the receiving end of a decidedly non-aggressive handshake. If things go well, you may also be on the receiving end of a prolonged handshake: anything goes. In western business contexts, you have probably found yourself in "squeezing" contests (among men): who has the stronger grip? In China, the question will be "who lets go first?" Don't be shy about holding on if your counterpart is enjoying the contact - it is meant well.
  • Giving/Receiving business cards: Similar to introductions, hand out business cards to the most senior official first. Chinese use both hands when giving and receiving anything of value, including gifts and particularly business cards; you should do the same as this is one of the first points at which you will make an impression. Take a moment to look at and acknowledge the individual's card. Have your own cards translated into Chinese on one side. Your title is important; this is how your hosts will determine who should be invited to meetings, what weight your words carry, and where you will be seated.
  • Your name: Having a Chinese name, ideally one with meaning rather than a transliteration of your English or French name will be taken as a sign of respect as well. The best approach is to have a local contact or native speaker help create one for you. A link to an online Chinese name creator is provided at the end of the document under "Useful Links".
• Seating Arrangements: The host will take the lead, and you will likely have a name card or designated seat based on your role in the organization.
• Meeting structure: Particularly in government circles, meetings may follow a fairly formal structure, with the senior member of the hosting party introducing himself/herself and colleagues, and then proceeding to state his or her views and position on the matter in question. Following this, the leading member of your party should do the same. Subordinate members of the Chinese party will not usually speak unless asked to do so by the most senior person; your observance of the same protocol (even if your management style permits a more fluid approach) will have the advantage of conveying who is in authority and who, within your own team, may have special expertise or authority in a given area.

Dining

Top tip: Follow the leader!

Business often gets conducted during meals. As with business meetings, food and seating are determined by the hosts. The following points should be kept in mind when dining formally with the Chinese:

• Beginning to eat: Follow cues from your hosts and start eating when the hosts begin. There will be cold dishes placed on the table when you are seated; wait to be invited before you dig in.
• Keeping pace: At formal banquets and high-end restaurants, serving staff may keep up an almost constant rotation of dishes. They will also change your plate frequently with a clean one, so as not to mix dishes and flavours. While at first this may be distracting, accept the rhythm and you will soon cease to notice it. In order to have a sense of what is coming next, know that the meal will proceed with meats of various varieties and peak with a fish course, followed by a staple (rice, dumplings, noodles) and wind down with a sweet or dessert.
• Refusing food: The Chinese tend to offer a lot of food, and it is acceptable to refuse food if you have dietary restrictions or allergies. However, it is a sign of politeness to accept some of everything, and sample (even a little of) all dishes served. But don't eat or drink all of something you don't like, since this may be taken as a sign that you want more! This is where the rotation of plates can serve to your advantage: a nod to the wait staff to remove a plate will allow for your preferences to be accommodated unobtrusively.
• Drinking: While local wine can be preferred at banquets, the Chinese more frequently offer strong distilled alcohol called or maotai (a very special type of baijiu) for toasts - and there may be many toasts during a meal. Never drink from the toasting glass except during a toast - and don't let the size of the glass fool you as to the power of the contents! The Chinese know that their alcohol is considered strong for foreigners, and under normal circumstances, they will not push you to drink. Some hosts will provide drinking yogurt to help protect your stomach, which can be helpful to allay the effects of the alcohol. Try to avoid drinking baijiu on an empty stomach as you will feel the effects of the alcohol quickly - it's a good idea to eat something before the toasts begin. If you cannot or do not drink for medical or personal reasons, this is respected but you should advise your host or your working level contact of this at the beginning of the banquet, or even beforehand. It will be noted carefully by your hosts and arrangements will be made to avoid embarrassing you.
• Toasting: Your host will start off the banquet with a toast to your presence / friendship/ cooperation / getting to know each other / clinching a deal. You may choose to reciprocate, toast for toast, or to wait until the host, his or her colleague, and one other member of the hosting party has toasted. Typically, the principal guest is expected to toast a few courses after the host toasts. If you are toasting, your comments should be warm and sincere, and your toast should not be any longer than your host's. When toasting, the Chinese normally say gan bei, which translates to "bottoms up". Note that drinking is sometimes expected as proof of a close relationship where partners can reveal their true selves, even in a business context. While this expectation is slowly changing and may vary by region, it is something to be aware of. If the group at the banquet is very comfortable with each other, it is also not uncommon to go around the table toasting each member of the party. Take your cue from your hosts and from your local contact or interpreter.
  Note: There are great differences in dining and toasting customs among different regions in China. When in doubt, ask your host. He or she will be very happy to explain them to you and will be impressed at your interest in and respect for local customs.
• Conversation: The banquet is generally a social event in a formal context. Discussion will likely centre around pleasantries, background information on the region or the company, but it is not a time for negotiating or challenges. The focus may not be the food per se, but there will be pride in the offerings provided.
• Paying the bill: The host pays. If you are hosting a meal, do not show money in front of your guests. Either have someone slip out and settle the tab or wait until your guests have left before paying.
• Hosting the banquet: It is not common business practice to be expected to host a banquet at the conclusion of a deal. Certainly if you would like to host a banquet this is your prerogative, but it would be considered bad form in a business context for the Chinese company to insist you do so or provide you with the bill at the end of the meal.
• Concluding: There is little lingering at banquets. Formal dinners often end suddenly, when the senior member of the hosting party stands up (quickly followed by staff and subordinates), briefly thanks the guests for attending, and proceeds to leave the room. This may appear abrupt the first few times you witness it, but is simply a decisive and useful way to bring the occasion to a close. If there is a dessert / fruit course, you can expect this to follow fairly shortly before the senior member of the hosting party departs. Gifts (see below) are usually offered at the conclusion of the banquet, prior to departure.

Gift Giving

Top tip: Buy Canadian... and make no allusion to the passing of time!

Gift giving is a common Chinese custom that business visitors to China should prepare for and use to advantage. The advice of a Chinese friend or colleague is invaluable in doing this properly, but here are some simple guidelines:

• Who: Typically, a single large group gift is presented to the chief person or leader of a Chinese organization. Gifts should be presented from the lead of the Canadian delegation to the lead of the Chinese delegation and vice versa.
• What: Gifts should not be too expensive. The gifts you receive will often have strong local associations that are a matter of real meaning (local identity) and therefore pride to the giver. The best gifts to offer in return will be items that are unique to Canada: small paintings, carvings, or books (keep your host's English capabilities in mind!) are appreciated and reasonable as gifts. The Chinese are fond of dark red, gold or blue, which are all appropriate colours for gift wrapping.
• When: Gifts are usually given at the end of an introductory meeting or at a banquet. Delegations visiting China are normally expected to offer gifts to their hosts, and the opposite is true for Chinese travellers to Canada. In both cases, this should be factored into preparations for making a trip or receiving an incoming delegation in Canada.
• How: Always give and receive gifts or anything of value with two hands. Note that it is common in China for the recipient to refuse the offer of a gift at first. The giver should persist, and the recipient will eventually accept.
• What Not to Give: Gifts to avoid include clocks and scissors or other sharp items such as knives or letter openers. Avoid wrapping gifts in white or black, which are colours associated with funerals.

Useful Links and References

• Mandarin Tools
  This link is a good place to start for creating a Chinese name, but ensure that you have a native Chinese speaker check over your name before use.
• Kwintessential
  This link provides a concise overview of Chinese culture, customs and business etiquette.
• Chinese Culture
  This link discusses Chinese culture and how it relates to the business environment.
• Netique
  The link provides a useful guide to gift giving in China.

Books

• One Billion Customers by James McGregor
• Chinese Business Etiquette: A Guide to Protocol, Manners, and Culture in the People's Republic of China by Scott Seligman

[ 1] Important Note: The Embassy of Canada and Consulates in China periodically become aware of various scams perpetrated by Chinese companies. One of the most recent is characterized by an unknown Chinese company approaching a foreign company for a large purchase order of substantial value. The company will insist on an agreement to contract very quickly, at which point they will insist that the foreign companies come to China for contract signing and payment of the notarization fee (typically, a certain percentage of the contract value). It is not mandatory business practice to notarize a contract in China, nor to be required to contract in front of a notary office and share the notarization fee. Should you be approached in this way, beware!