06 November 2013

Dealing with China Inc - courting for business or getting caught out?

This month one of the Farrer Kane team, Nick Prendergast, an ex web editor at the BBC and Time Out in Beijing, explores how UK businesses must quickly build cultural understanding in order to successfully exploit the opportunities that China offers. 

So to China for the Government's blond-on-brunette charm offensive. The aim: to drum up interest in the UK and get those Chinese investing. That neither Bojo or Georgie met with a high-ranking Chinese official, didn't seem to matter to either of them. Boris, streets ahead in off-the-cuff witticisms and feigned buffoonery, plugged away at his money mantra: the City is the place for trading in renminbi or as it's more commonly known the 'yuan.' Britain, they trumpeted, is clearly if rather belatedly, open to Chinese business.

What does this mean for the Cameron's forthcoming trade visit? And more importantly, are we, due to our lack of cultural understanding, misreading the situation?

Firstly, it means the Chinese are clearly willing to forgive David Cameron's previous meeting with the Dalai Lama. As author and Professor of Chinese Politics at the University of Sydney Kerry Brown argues it also places a centrality on the UK's financial services as an attempt to address the huge trade imbalance.

The flipside however is that this eagerness to court Chinese money puts us at risk of the opacity of vast secretive conglomerates.  Despite assurances from our mainland friends that they'll obey the law, caution must be exercised. It will takes years to fully understand the impact of this all. Historically of course, the situation was the reverse.

When in 1793, the Macartney Embassy was met with a curt patronising rebuff from the then-Qing Emperor Qianlong; it took another forty years and an unfairly matched war to 'gain' access to the Chinese market. Gunboats, mass opium addiction, and treaty ports were the unholy result of that little cultural misunderstanding. We ruled and they followed. But times have changed and the boot is on the other foot.

Secondly, it means we now need to learn how to deal with this new scenario. To paraphrase that oft-quoted sage of war, Sun Tzu, you've got to know your enemy and yourself to win the battles. Market intelligence aside, practically this translates into understanding cultural sensitivities and if you can go that far the language.

Now you might well have seen a TV commercial for a well-known bank in which a hapless European businessman at a Chinese banquet does as he thinks is polite and finishes his meal. Yet in a formal setting to finish your food implies two things: first, you're still hungry (greedy in the eyes of your host) and second that the host has not provided a good spread. Queue comically ever bigger fish landing on our guest's plate much too his consternation.

Well it needn't be like that. You may never master the language but understanding your client's business culture and preferred methods of communication can make a big difference to how your business relationship develops.
From a communications perspective it is worth remembering that Chinese clients will tend to be more sensitive to criticism in the media than we would ordinarily be used to.

There are two reasons for this: face and a differing press culture. Maintaining face for Chinese people is extremely important and might well result in flat denial, in say, moments where an explanation and apology is more appropriate. Navigating that cultural maze takes sensitivity. Similarly, though mainlanders might well engage in lively online debate about societal issues, outright criticism of the Party is totally verboten. The place for politics, if at all, is after years of friendship accompanied by a glass or two of Scotland's finest malt whiskey.

Above all, what's important to understand is face-to-face networking in informal settings is what makes China Inc tick. None of this is rocket science but little gestures do go a very long way. Showing an awareness of another's culture and remembering that communication goes far beyond language, is as flattering as it might well be necessary for the future health of UK economy.