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Tips for Dealing with Business People in China: How to Deal with Chinese Businessmen
Needless to say, China is the world's factory at present. Finding a 'made in China' tag in your closet is a pretty easy task nowadays. Many manufacturers and traders tried to find their business partners in China to start producing their products with a lower cost. But in my previous years working as a trading consultant in Hong Kong, I've witness so many unnecessarily loses or hurdles that these manufacturers from the West faced with Chinese factories and business men, purely due to some minor misunderstanding and cultural differences.
Common Behaviors of Chinese Manufacturers
Below are the top two common behaviors of Chinese Manufacturers. I will explain the rationale behind their behavior and once you know their root-attention, it should help you to understand their mind-set and therefore have better strategies in dealing with them.
Insightful Books for Understanding Chinese Mentalities
Common Behaviour #1: Over-Promising
One of the most common behavior of Chinese factories is OVER-PROMISING. One has to understand that the main goal of Chinese businesspersons is to get the business and make sure they would be able to get the revenue NO MATTER WHAT.
They might promise you everything you asked, give you a low projected cost or a very short delivery lead-time before they got your contract. However when the production line is up, they might give you something slightly or in very unfortunate situation, something totally out of your expectation.
How to Tackle?
To tackle this over-promising behavior, first of all, you should understand the prevalent market production cost of the good that you want to product. It is not an easy task for yourself to find out, as most factories would quote you a lower price than the accurate price. If you are a newbie in dealing with Chinese manufacturers, try to use local sourcing companies to help you in finding out a more reliable market product cost and assist you in establishing a first-time business partnership with Chinese factories.
In times of scoping your product details with Chinese manufacturers, do have a fair contract on penalties on product quality (for instance a penalty of a certain % of cost if the product does not meet a certain lab test requirement, or a delay in delivery that leads to a air-transportation of your goods instead of by ship as planned.) Many sourcing companies or local trading houses would be able to help you in doing negotiations.
The above mentioned is not only suitable for newbies, but also for many companies which already had relationships established with Chinese manufacturers. The investment used in hiring agents makes perfect sense to avoid a complete failure in your production. Personally, I highly recommend using agents from Hong Kong, as these companies in Hong Kong do have resources that can speak Mandarin, which is the main local language in China. At the same time, they understand the mentality of mainland Chinese people while at the same time familiar with how business should be in the Western world.
Tip for You: Be Realistic & Alert
If you opt for not using any middlemen in trading with Chinese manufacturers, my biggest tip is to be realistic. Be realistic about the promises that they offered, and don't feel embarrass to question them again and again.
Another tip is to follow-up very closely on the production progress. The factories might not tell you immediately after they notice some problem with your product's design or any quality issues. Rather, they would wait and keep quiet until you discover it. Be sure you are very alert about the production progress.
Common Behaviour #2: Denial of the Intangible Barrier of Language
Another common problem that western business persons face when dealing with manufacturers from Mainland China - Language.
No one can deny that the English language proficiency among Chinese population in China itself has improved over the years. The raised level in education in bigger cities as well as easy access to learning materials available on the internet has definitely helped.
Yet, being a non-native speaker in a language that is completely different from Chinese, many meanings that they tried to convey in their conversation, especially in business settings, can cause misunderstandings.
Subtle Differences in Interpretations
Talking about language barrier, the most dangerous scenario is that your counterpart seems to understand you but actually, they don't, or that they interpret differently.
Many companies in China nowadays are able to hire employees who speak very good English. Most of the time they understand English perfectly but still, with different interpretation in words, you can bump into troubles.
Must-Have Business Etiquette Guides about China
How to Tackle?
Be as Direct and Clear as possible
Sometimes vague and indirect questions do not help much in business settings. Being direct and clear is also unnecessarily impolite. Open and subjective questions like ' do you think it's possible to do this and that...?' would most probably generate a positive reply, as no Chinese businessmen would like to turn down businesses due to some impossibilities.
Try always to give measurable requirements (in fact for all business settings not only in China!) and keep questions objectives in order to get a more reliable answer from your vendors.
Tips for you:
1. Beware with Yes and No questions
Be very careful with yes and no questions. This misunderstanding is purely contributed by the grammatical difference in languages.
In Chinese language, it is possible to have the following combination in question and answers:
Question: Is this a pen or not?
Answer: Yes, it is NOT a pen.'
(Where in English, you always say 'No, it's NOT a pen.'
This confusion is a problem even for Chinese who speaks perfect English. Therefore, in times when having yes and no questions, make sure you got a complete answer!
2. Avoid colloquial and slang
Colloquial and slang in somebody's second language always require extra effort to master. If you do not want to screw up your own business, do not use them in critical messages that you would like to bring to your Chinese manufacturers. It is quite easy to understand this rule right?
As said at the very beginning, the English proficiency of Chinese people at workplace has improved tremendously over the years. Yet, whenever possible, you should be active in trying to avoid unnecessary misunderstandings and misinterpretations.
Hope the information above can help you in dealing with manufacturers and factories in China.