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Roots of Chinese Culture

Four threads of Chinese Culture

Agrarianism 2/3 of Chinese people still lives in villages.

Laboring primarily in Rice/ wheat Cultivation,

Chinese philosopher- Fung Yu Han

Chinese sages historically distinguished between the root(agriculture )and the branch( commerce)

Social and Economic theories and policies tended to favor the root andslight the branch.

People who dealt with the branch i.e. merchants were looked down

upon.

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Morality Writings of Confucius served as the foundations of the Chinese

education for some 2000 years.

Confucius maintained- Society organized under a benevolent

moral code would be prosperous & politically stable & hence

saved from attack.

Confucius defined 5 relations.

1. Ruler and ruled

2. Husband and Wife

3. Parents and Children

4. Older and Younger brother

5. Friend and Friend

Concept of Yin and Yang

1. Yin- feminine

2. Yang-M

asculine

Hierarchical

Oppose and

complement oneanother

YinYang

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Chinese Pictographic language

Chinese children learn to memorize thousands of pictorial

characters. In Chinese words are pictures rather than sequence of letters. Chinese thinking tend towards more holistic processing of 

information.

Chinese People Wariness of Foreigners

Long and violent history of attacks from all points of compass. It can

be said that Chinese trust in only 2 things.

Their families

Their Bank account

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The Eight Elements

Guanxi- Personal Connections

Americans- emphasize Networking, information and Institutions.

Chinese- premium on individuals social capital.

Good Guanxi based on strict system of reciprocity.( Hui- Bao)

Doesnt mean immediate returns like Americans.

Favors are almost always remembered and returned

Ignoring reciprocity in China is not just bad manners: its immoral

If someone is labeled Wangen fuyi (one who forgets favors and fails onrighteousness & loyalty) it poisons the well for all future businesses.

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hongjian Ren(The Intermediary)

In U.S- tendency to trust others until or unless were given reason

not to.

In China, suspicion and distrust characterize all meetings with thestrangers.

A trusted business associate of yours must pass you along to histrusted business associates.

In China first crucial step, in the phase of negotiation called as

Non Task sounding-finding the personal links to your targetorganization or executive.

Those links can be hometown, family, school or previous businessties.

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Shehui Dengzi(Social Status) At some point, negotiations may require a meeting of equals in

the hope of stimulating more co-operation.

E.g. The U.S company sent a relatively young and low level salesrepresentative to a high level negotiation . The Chinese executiveremarked . ah you are about the same age as my son . theChinese felt insulted by the Americans failure to send anexecutive whose rank at least equaled theirs.

Renji Hexie( Interpersonal Harmony)Chinese sayings A man without a smile should not open a shop.

Sweet temper and friendliness produce money.

Importance of harmonious relations between business partners.

Respect and responsibility- glue that binds hierarchical relationships.

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Instance 1:On the eve of negotiation between the CEO of a U.S firm and

one from major Chinese firm, Chinese hosted a lavish dinner at the best

banquet hall in the city. The Chinese CEO proposed a toast: Lets drink

to our friendship! Well have long cooperation! But if you arent drunk

tonight, there will be no contract tomorrow. The executive from the

American firm matched him drink for drink- and couldnt remember how

he got back to his hotel. The next morning he was greeted with a

hangover, a big smile & a fat contract.

Instance 2: A V.P of U.S computer maker went to Beijing hoping to close a

deal with the Ministry of education. The local sales team had been

working with an intermediary on this case for more than 6 months.

Intermediary arranged a dinner. Deputy Educatn minister and Vice

president from the U.S company arrived. Many toasts to mutual

cooperation were made, no business was discussed. The next day V.P 

went to Deputy Minister(right environment- Previous night dinner)

V.P asked so when can we sign the contract?. The deputy minister politely

replied Mr. V.P you just arrived in Beijing. You must be tired. Why not

take your time & see the city first.

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Zhengti Guannian (Holistic Thinking) Chinese thinks in terms of whole while Americans in sequential or break up manner.

Americans consider the negotiation finished when they have come to the end of thelist . Chinese people feel its at that point they can begin thinking about the packageas a whole.

Chinese discuss all issues simultaneously & in an apparently haphazard manner.Nothing is settled until everything is.

How to know whether negotiation is progressing well

Its a good sign if higher level Chinese executive attend the discussion.

If their questions begin to focus on specific areas of deal.

If Chinese increasingly talking among themselves in their own language, it could mean they aretrying to decide something.

Request to bring intermediaries.

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Jiejian(Thrift) Chinas long history of economic and political instability has taught its

people to save their money, practice known as jiejian.

According to market research firm Euro monitor international, MainlandChinese save nearly 4 times as much of their household income asAmericans do.

In defending pricing positions, the Chinese use patience and silence asformidable weapons against American impatience.

Mianzi (face or Social Capital)The Chinese notion of saving face is closely related to American concept of dignity and practice.

e.g. Honeywell Bull had won negotiation rights for an order of 100 ATMsfrom the Bank of China. Towards the end of the process, the bank buyerasked for deeper price cuts. To him sticking point was not just a matter of thrift.

He told Honeywell Bull representatives, if the price is not reduced furtherIll loose the face.

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Chiku Nailao (Endurance) While American place high value on talent as a key to success, the

Chinese see Chiku Nailao as much more important andhonorable.

Thats why Chinese children attend school 251 days per year, in

contrast to the Americans 180 day school year.

Chinese diligence reflected primarily in 2 ways:

1) Chinese will have worked harder in preparing for the negotiations

than the Westerners.

2) They will expect longer bargaining sessions.

Harvard Business Review on doing Business in China