Just spent two days at a course on doing business in China run by New Zealand Trade & Enterprise. It was a fantastic two days, run by a very good presenter called Amy Adams, an American living in China, teaching Kiwis how to do business there. Loved it and learned heaps. Highly recommend the course.
There were many juicy insights into Chinese culture and ways of doing things that every business owner should know. But there was one particular tit bit that amused me very much.
At the heart of doing business in China is the cultural concept of Guanxi. Here’s the Wikipedia definition of Guanxi:
Guanxi refers to the benefits gained from social connections and usually extends from extended family, school friends, workmates and members of common clubs or organizations. It is custom for Chinese people to cultivate an intricate web of guanxi relationships, which may expand in a huge number of directions, and includes lifelong relationships. Staying in contact with members of your network is not necessary to bind reciprocal obligations. Reciprocal favors are the key factor to maintaining one’s guanxi web, failure to reciprocate is considered an unforgivable offense. The more you ask of someone the more you owe them. Guanxi can perpetuate a never ending cycle of favors.
With this at the core of the culture, it’s not surprising that business takes on a very social character. It’s all about trust and doing business with people who can add value to your Guanxi.
A lovely Dutch man called Ferdinand, who is a New Zealand citizen living in China, came to share his experience of setting up a WOFE (Wholly Owned Foreign Enterprise) in China. What a great guy and what stories to tell. It has taken him over 12 months to get the company there established and during this time he has been spending a lot of time drinking and eating with his Chinese colleagues, clients and other influential people. He told us how even though Chinese people do not go out and drink for drinking’s sake like the Kiwis, they do have a very big drinking culture when it comes to business and dinner. Where even if you can’t drink, you need to drink to give your business partner face and respect, and also to show him that you are honest and trustworthy by putting your life on the line and drinking more than you are capable of. And here’s the bit I loved the most… some of the very senior Chinese businessmen and officials who may have an intolerance to alcohol (quite common for many Asians) may bring a ‘drinker’ with them. Someone who imbibes the alcohol on their behalf, so as not to be rude and turn down the hospitality.
Now you can picture the reaction to this… a room full of Kiwis imagining a job where you are paid to drink someone else’s drinks all night. We could send bus loads of young Kiwi drinkers over happy to save face all night and drink those Chinese colleagues under the table. Saving face by getting drunk … maybe this could be our next export to China!!