Ethical & Cultural Issues Influencing Doing Business in China Essay Sample

Executive Summary

The Chinese have a huge web of traditions. imposts and webs that shape their concern civilization. It is of import to larn and understand these critical constituents for making concern in China. It can be a confusing and absorbing experience for a westerner unfamiliar with Chinese imposts and history. To larn the Chinese civilization and history is to larn ancient Asiatic history. It is of import that you do so. Confucianism and history play a major portion in Chinese society and concern today. Guanxi is the most critical constituent of concern success in China. Guanxi is what will set up your company as a major rival or could maintain it from going established at all. A good guanxi relationship. peculiarly with the authorities. can do all the difference to a foreign company making concern in China.

Knowledge of proper protocol for gift giving. salutations and conversation will assist you to set up such of import connexions. The subject of graft and corruptness and how guanxi and other options can counter it. is an of import issue to see for any company. This paper will reflect on how to successfully set up yourself through cognition of the culture/history and guanxi. every bit good as how to cover with corruptness. It will besides demo you the best manner to associate to one another by utilizing the recognized agencies in Chinese civilization.

Ethical/Cultural Issues Effecting Businesses in China

Ethical and cultural issues are of import factors for westerners to see when making concern in China. Due to the differences in imposts and civilization. Asiatic concern patterns vary greatly from that of western civilization. Confucianism has been a major influence in Chinese society every bit good as the concern civilization. Understanding these critical constituents of Chinese civilization will assist you find the best manner of associating to each other. In what fortunes is gift giving appropriate? How do you cognize a gift from a payoff? What is the proper manner of accepting or worsening a gift? Covering with corruptness. the effects of being caught and political reform are besides of import issues to see. The importance of relationships ( guanxi ) and proper protocol for assorted state of affairss every bit good as the differences in communicating manners are important factors for success in China. One must understand Chinese civilization and its history to accomplish concern success with the Chinese.


In order for a westerner to understand the differences in civilization. that individual must hold a on the job cognition of Chinese history and Confucianism. Both of these things have a strong influence on the manner that concern and mundane life in general is approached and conducted. “Although Confucianism is normally followed in a spiritual mode by the Chinese. statement continues over whether to mention to it as a faith because it makes small mention to theological or religious affairs ( God ( s ) . the hereafter. etc. ) ” . Confucianism was favored by Emperor Han Wu Di ( 141BC-87BC ) . the 6th emperor of the Han Dynasty. The Han Dynasty had its biggest enlargement under his reign. He besides made the principals of Confucianism the province doctrine and codification of moralss for his imperium. This must hold had a profound consequence on the spreading and credence of Confucianism.

Confucius ( 551BC-479BC ) had a doctrine of life that gave regard to everyone and stressed peace and harmoniousness. When asked by Chi K’ang-tzu. who became the caput of the three households who ruled in Lu. about how to acquire the common people to be respectful and loyal. Confucius said “Approach them with self-respect. and they will esteem you. Show piousness towards your parents and kindness toward your kids. and they will be loyal to you. Promote those who are worthy. train those who are unqualified ; that is the best signifier of encouragement. ” This really wise advice is a good illustration of the Confucius doctrine of life. Confucius besides stresses “Ren” ( benevolence. love ) and “Li” ( rights ) . demoing his regard for the system of societal hierarchy. Confucianism is portion of the Chinese people’s day-to-day life as it is the foundation of Chinese household construction. and the counsel for personal attitudes and behaviours.

Chinese History

China is the oldest civilisation in the universe. It was ruled by dynasties for over 2000 old ages. The last emperor was overthrown in 1911. everlastingly stoping the regulation of dynasties. Today. China is a communist authorities with a socialist political orientation and a capitalist economic system. In many facets. the passage has non been hard for the Chinese. The dynasties. like communism. were all unrepresentative of the people. The Communist bureaucratism established in 1949 was similar to the dynastic theoretical account that had been used for 1000s of old ages. “Philosophically and culturally the Chinese were already prepared for a socialist political orientation based on communal attempt and stiff hierarchy. so replacing older Confucian driven dynastic hierarchal constructions with totalitarian Communist 1s was non radical ( despite Mao’s rhetoric ) . ” China is a group orientated civilization. The person is non stressed nevertheless ; there is a powerful tradition of single duty. An person who doesn’t perform his/her duties or disregards their responsibilities will lose face and have to cover with effects from the group.

Gift Giving

In concern scenes. gift giving should take the signifier of a gift hat right symbolizes the nature of the relationship. Gift giving is an of import portion of set uping and keeping Guanxi. When traveling to China on concern it is appropriate to convey gifts for all those you will see. There are several factors to see when giving gifts. “The general regulation is pastries for the office staff. high-quality corporate logo points ( all the same ) for concern associates. and an particularly thoughtful. slightly individualized gift for the cardinal adult male you will be working with” . The position of the receiving system is of import. The “key man” that you will be working with should have a individualized gift. Often a bottle of all right whisky or Cognac is appreciated. If giving more so one gift. gifts should non be in an even figure or nine. Eight is considered to be a really lucky figure. Gifts are presented at the start of the first meeting as a mark of earnestness. A farewell gift is presented to you at your last meeting or when you present your gifts. Several points non to give as gifts include redstem storksbills which are a similar word for decease. hankie which symbolize unhappiness and cutter which symbolizes the severance of a relationship. Flowers are non normally given every bit good and hard currency should ne’er be given. Gifts must be good wrapped and in a certain colour depending on the juncture. Green. white and black are funeral colourss. Blue is a colour of mourning. Red and gold are royal colourss while xanthous and pink are happy colourss and are the most appropriate for concern relation gift giving.

The proper method of giving or accepting a gift is of import. Gift giving is a natural portion of a relationship with the Chinese and following the tradition for accepting or giving gifts is necessary. Certain guidelines should be followed for proper gift giving.

Gifts are ever to be presented and received with both custodies. Gifts are non to be opened in forepart of the giver. It is the proper etiquette for gifts to be exchanged for jubilations. as thanks for aid and as a sweetening for future favours. You must hold good ground and/or informant for giving a gift. If you are being given a gift by a Chinese opposite number and are asked what you’d like. something reflecting the Chinese civilization would be a good thought. Tea and ink pictures are gifts that reflect your involvement in the Chinese civilization. This shows your grasp and can assist to set up or keep good guanxi. Business gifts must ever be reciprocated. Not to make so is considered morally incorrect and will do you to lose face.

It is of import to understand how to distinguish between a gift and a payoff. “Gift giving is one of the most pleasant and besides one of the most hard of Chinese imposts to understand ; nevertheless. the lines between gift giving and corruptness are frequently blurred” . Gifts are frequently given in the presence of others. If a gift is given to you in secretiveness. without good ground or under any other leery fortunes it may be best to respectfully worsen the gift. Having a Chinese spouse present with you may assist to maintain things clarified.

Bribery and Corruption

China was ranked by transparence international as one of the most likely states to offer or accept payoffs. The President of Transparency International said “Companies in China are practising graft on an exceeding and unbearable scale” In 2004 China was ranked by Transparency International as being a 3. 4 on a graduated table of one to ten. ten being the most honorable and one the most corrupt. Statisticss show that there have been over 200. 000 reported instances of graft from 1998-2003. China has late made a seeable attempt to check down on corruptness. Many powerful people have been removed from power as a consequence of this latest attempt. One corrupt functionary in southwest China was even sentenced to decease in 2000 after being convicted of accepting payoffs. China’s Supreme People’s Procuratorate ( SPP ) has been charged with supervising the probe and the charging of suspects peculiarly. those above the county degree. “Many felons are now offering functionaries non merely money. expensive place contraptions or jewellery. but besides stock portions. car. houses. abroad travels and even sexual service. ” . These finds illustrate a new tendency in corruptness and the manner payoffs can be and are given.

Stairss should be taken to avoid and counter any corruptness that you may confront. First. since holding a local spouse is of import for success. it would be better to hold the spouse trade with anyone who may be seeking a payoff. This individual would be much more cognizant of the proper channels to utilize to cover with this state of affairs. An abroad Chinese contact might even be able to help you. It is of import to hold a good degree of transparence with who you choose as your spouse. Second. have multiple spouses in different parts if possible. This will let you to maintain your involvements spread out and go forth you unfastened to other options. Be careful non to let any person to hold excessively much power over company concern. This could let for person to ache the repute of the full company or worse. Third. good guanxi is really of import for success. particularly with the authorities. Your local spouses may be able to utilize their guanxi with other companies or the authorities to help you. Forth. offering other options to whomever is seeking a payoff is a manner of avoiding paying the payoff and allows the other party to salvage face and see another option. Other options could include engineering transportation or some other renegotiation of footings.


The constitution of relationships ( guanxi ) is critical for success in China. Guanxi is developed and maintained by two cardinal elements. These are face and renqing. Face is best described as one’s public image while renqing is best described as a societal or humanized duty. “Reqing is therefore a sort of favour with the inclusion of a sentimental element” . Guanxi is a personal relationship that is of a mutual and long term nature. Western civilization tends to emphasize individuality for personal success while Chinese civilization is more group oriented and emphasizes the importance of guanxi.

Western concern people can set up guanxi with Chinese webs but. if you don’t have an intermediary to present you. it may take a good trade of clip to construct up trust. It is non likely that the Chinese will be speedy to swear a alien. If you are without an intermediary and must construct trust on your ain. it is good worth the clip and money to make so. By holding an intermediary. hopefully one that is Chinese. relationships and trust can be quicker established and you can salvage clip holding to turn out yourself believable. You must. nevertheless. remain believable or you will do your intermediary to lose face every bit good as yourself. Remember that guanxi is a relationship of reciprocality and long tally nature ; you will be expected to reciprocate. Guanxi is your most valuable intangible plus when making concern in China.

Greetings/Communication Manners

The western concern traveller must be cognizant of the different salutation manners that exist in China. China is a non-touching civilization. It is typical that you will be introduced and exchange concern cards with your Chinese co-worker. agitate custodies and so bow. Like gift giving. there is a fixed process for interchanging concern cards. First. you should convey plentifulness because you will be giving them to everyone that you meet. Second. while giving or having a concern card you are to make so with both custodies. The card is to be held in the upper right and left corners when showing or having it. You must take attention to do certain that your concern cards are in perfect status. You should fling any set. dirty or written on cards. Having your concern card translated into Chinese on the other side will demo your consideration. It is besides a good thought to hold the Chinese interlingual rendition printed in gold demonstrating regard.

When you present your concern card do so with the Chinese side up. After this you will agitate custodies and bow. The handshaking is done for the westerners benefit. This is non a pattern that the Chinese do amongst themselves. “When the handshaking does happen it is more frequently so non really soft. about hitch. This does non mean falseness ; instead. it is an indicant of humbleness utilizing a western convention” . If a adult female is traveling to agitate custodies she must offer her manus foremost to the Chinese co-worker. The bow is done by puting the right fist in the thenar of the left manus. keeping custodies at tummy degree and profoundly bowing. It is of import to maintain a smiling on your face and do oculus contact when foremost being introduced. Make non keep oculus contact beyond this. Your eyes should drop to the land while bowing.

The differences in communicating manners are of import to understand. Discoursing things that you may hold in common with your Chinese host is a good manner to get down to construct a personal relationship. Subjects such as personal avocations and involvements are safe to speak about every bit is your involvement in anything Chinese. Subjects to avoid include political relations. US-China dealingss. faith and asking about a Chinese colleague’s income or household. The usage of silence is another cultural difference in communicating manners. While silence may do some westerners uncomfortable. the Chinese see this as a societal norm that can be a manner of communicating in itself. “When confronted with silence. for whatever ground. the best response is to stay soundless yourself. although this may be hard and appear unproductive for time-conscious westerners” . Talking excessively much is considered immature so don’t be the one to interrupt the silence or yak excessively much. A popular Chinese stating is “he who speaks the least. speaks the most” . While you might non be discoursing concern at the clip. you are invariably being evaluated by your Chinese opposite numbers and rigorous attachment to the imposts is of import to doing a good feeling.


The Chinese civilization has a great consequence on the manner concern is done with them. It is of import to larn and understand it for making guanxi and finally success. The Confucian doctrine and China’s long history are major subscribers to how Chinese society and Chinese concern operates today. The Chinese are an honest and low people. There are many interesting facets to their civilization that will confound yet amaze many westerners. Know the right state of affairss for giving gifts. Have a Chinese spouse whenever possible. Use options. local spouses. guanxi and any other agencies necessary to counter graft and corruptness. Know the appropriate state of affairss for giving gifts and proper protocol for accepting them. Knowledge of proper salutation manners and the protocol that accompanies them are of import for a good first feeling. You must. must. must set up guanxi.

Whether it is through an intermediary ( sooner ) or your ain invested clip and money. This is likely the most critical component for success. By set uping guanxi you are doing what should be expected as a long term relationship that is reciprocated. sometimes often. The benefits of this can do or interrupt your company. The ground for proposing guanxi as the figure one precedence is because this can do a batch of possible jobs easier to face and suppress. Remember. you must take a common land when get downing relation with your Chinese opposite number. Relate to your host and co-workers through the best impersonal means possible. in order to first set up guanxi.


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