Hong Kong and Chinese laws aren’t the same; don’t give clocks, and other essential tips to doing business in China.
There was standing room only at Going Global Live when Jon Luk, Head of Alliotts China Desk and Laurel Zhang Head of Sherrards Solicitors’ Chinese Desk guided businesses through the pitfalls to avoid when doing business in China.
Going Global Live, held at London’s Excel recently, is the UK’s leading information hub for businesses looking to expand overseas.
‘The Chinese market is attractive for many UK sectors, but first it’s crucial to understand the Chinese business culture otherwise you could be wasting time and money’ warned London based Chartered Accountant Jon Luk.
With over 35 years of working with the Chinese business community Jon shared eight valuable tips on Chinese culture to help avoid misunderstandings and give the UK business owner a greater chance of success
1. It won’t happen overnight – it takes time to build up relationships and trust and the Chinese will not do business with you until they can trust you
2. Meetings – Accept business cards with two hands; examine the card to show respect. Don’t write on the card. Have your card printed in English and Chinese
3. Losing Face – Do not force confrontation, this will cause a Chinese person to ‘lose face’ and is seriously damaging to a relationship. The Chinese will not give you a direct no, instead try to learn to recognise alternative negative sentiments.
4. It’s good to mix business with pleasure – in fact it’s essential. Socialising is part of the business relationship. You can’t separate work and pleasure, and you can expect to be called any time of the day or night on business matters
5. Clarity of communication – the Chinese don’t like avoidable errors, so write everything down, document any contracts, processes and procedures clearly
6. Business Dress – Formal business dress is a sign of respect and serious intention
7. The perfect host – Hospitality is important, the Chinese host will ensure that his guests have all of their needs looked after. If a guest has to ask for anything, the host will have lost face.
8. Luck – the number 8 is lucky in China, but don’t leave your business to chance. The Chinese regulatory system varies between territories and so it’s essential to have local advisors who can help you navigate the system.
Lawyer Laurel Zhang continued by covering some of the common legal misconceptions, including the assumption that Hong Kong and Chinese law operate similarly when in fact the Hong Kong legal system is more aligned to British law. She also explained the difference in software and systems; that Google and Outlook do not exist in China; you will need to set up an email account that will work; and social media platforms such as ‘We Chat’ are commonly used for business and social interaction.
Paul Marmor, Sherrards’ Head of International, who facilitated the session, shared compelling statistics and information provided by UKTI on the Chinese market.
-China is the world’s second largest economy after the United States and is the biggest trading partner for most Asian economies
-China is the world’s largest exporter and the single greatest destination for global direct investment
-China is an expanding market for UK businesses. UK exports of goods to China have doubled since 2010 and increased by over 37% in the past few years alone with a trade worth £12.4 billion in 2013
-The UK is the second biggest European exporter to China and as of 2013 China stands as the UK’s seventh biggest export market.
Jon and Laurel have access to on the ground accounting and legal knowledge and expertise through Alliott Group, an international alliance of accountants and lawyers represented in 70 countries worldwide. With members in key business regions in China, Hong Kong and through out the Far East Jon and Laurel are able to help their clients gain a competitive advantage by giving them access to local advice.
It if safe to say that if you are considering expanding into China, whether by setting up a company; a supplier or distributor network; or undertaking a one off transaction, the importance of understanding the culture of the way business in conducted will have a greater impact on the success of your project than any other factor.
Mary Kacigeras, Marketing Director at Alliotts Chartered Accountants and Business Advisors.
tel. 020 7240 9971