How to do business in China

China remains vitally important to Australia’s economy and any business people looking to forge strong working relationships with their Chinese counterparts will need to master the art of banqueting.

Here are some tips from the experts.

Book a fancy restaurant

“You show respect for your guests by taking them to a top restaurant with a pleasant ambience,” notes Savina Yang, who migrated from China to Australia aged 10 with her businessman father and is a lawyer at Lawyers Chambers on Riley in Sydney.

Honour the guest of honour

After both delegations have arrived – on time – the guest of honour sets the pace.

“When the guest of honour has arrived, it is polite to ask them what dishes they would like,” Yang says. “If the guest of honour is unsure of what to order, suggest that restaurant’s speciality dishes. Don’t start eating until the guest of honour does.”

Be patient, respectful and friendly

Most western business people are conscious of the importance of building trusting relationships with their Chinese counterparts and alert to the danger of causing them to lose face, yet wonder what that means in terms of how they should behave.

Wallace Fan, who oversees his boutique financial advisory firm Fidens Partners and serves as adjunct lecturer at the University of NSW’s Australian School of Business, says “the Chinese like people who are generous, easygoing and straight shooters without being offensive”.

“They believe that this type of person will value relationships and be willing to sit down and resolve problems over a drink, should they arise.”

Fan advises westerners to prepare for much banqueting if a major deal is in the offing.

He also points out that after being hosted at several banquets, it is polite to host one yourself or at least start offering to pay the bill.

“A common mistake westerners make is being overeager and impatient, which can result in their Chinese counterparts feeling they don’t value the relationship or see it simply in terms of a monetary transaction,” he says.

“You should always show you are willing to take the time to learn from the other party. The bigger the deal, the more lunches, dinners and, perhaps, after dinner entertainments there will be. The banquets are likely to start out as polite and formal at the beginning of the relationship-building process but may become quite party-like once the relationship has been built and people are comfortable with each other.”

Don’t turn up empty-handed

The traditional Chinese practice of gift giving remains in good health despite the anti-corruption crackdowns by the Chinese government and the anti-bribery policies of western businesses.

The first thing to realise is that the banquet itself is seen as a gift, cross-culture communications specialist Claire Pisani says.

“When two businesses are contemplating working with each other, there will typically be a series of elaborate meals, which act both as a public demonstration of the importance of the person being hosted and a reflection of the position and success of the host,” she says. “The more lavish the hospitality, the more face that is built.”

That noted, it’s expected gifts will also be exchanged.

Fan says: “Gift giving is seen as a polite gesture and particularly important at the first meeting. Size is important, with a large gift being seen as more generous than a smaller one. A cultural or artistic product from your home country works well.”

Toast to future success

“Baijiu rice wine, which tastes like rocket fuel, is the poison of choice for Chinese,” says Dan Baird, who is executive director of EastWest Procurement and spent six years living in China.

“If you’re the guest of honour, it’s expected you’ll do shots with every person from the host’s delegation, which can be daunting if there are a lot of them. Plus, there will often be a beer chaser. Lots of cigarettes will also be smoked.”

Yang says: “Alcohol is consumed after a toast, which involves holding your glass in both hands, saying ‘ganbei’ (cheers) and drinking. It’s expected people will stand up for the first toast but not subsequent ones and the host will refill everyone’s glasses after the toast.”

Don’t talk business or politics

“The point of socialising at a restaurant is to break down the barriers that might have been in place during discussions that took place in the office,” Pisani says.

“The conversation should be friendly and congenial and your attitude should be open, respectful and perhaps a little self-deprecating; encourage your Chinese host to teach you a little about China’s cuisine, culture and history.”

Fan says: “You need to be conscious of hierarchy and seat people from the two delegations near counterparts of the same rank, as well as putting VIPs at the best seats at the table. Definitely don’t put them with their back facing the door or where the waiters serve the dishes.

“Stay away from discussing anything controversial. It’s good to praise your host, their city, the hospitality they’ve shown you and the food you’re eating. Always remember that while it’s a social occasion, you’re being evaluated.

“Your Chinese host will be watching the way you conduct yourself at the banquet to gain an insight into how you are likely to conduct yourself when doing business.”