Different cultures have different values and morals, their unique methods of doing things are applied to the way they handle business.

(1)The use of guanxi

In the West, relationships grow out of deals. In China, deals grow out of relationships. Unlike western business relationship which remains professional and aloof even after a long time, Chinese business relationship inevitably becomes a social relationship.

The Chinese not only prefer to work with persons they know and trust, but also think they have the obligation to do business with their friends first. In addition, Chinese guanxi can indirectly link you to new acquaintances and information resources with the meeting of new people.

For westerns, no matter how much experience you have in western business management, the right “Guanxi” in China will make all the difference in ensuring success. The inevitable risks, barriers, and set-ups will be minimized when you have the right “guanxi” working for you.

The Chinese’s main goal in most negotiations is to establish a relationship for future business opportunities. Guanxi is more important in these cases.

To build guanxi needs time and resources, not only money. Small talks before negotiations would be the best way to break ice. The more you share your personal life, the closer you are in your business relationship. Sometimes, a lot of time is spent discussing matters outside of business.

Gift-giving is necessary too, which is considered an important way of showing courtesy. Gifts should always be exchanged for celebrations, or thanks for assistance. It shows you care about your Chinese counterparts.

(2) High-context communication

High context culture and the contrasting low context culture are terms presented by the anthropologist Edward T. Hall in his 1976 book Beyond Culture. In a high context culture, many things are left unsaid, letting the culture explain. Words and word choices become very important in higher context communication, since a few words can communicate a complex message very effectively to an in-group (but less effectively outside that group), while in a lower context culture, the communicator needs to be much more explicit and the value of a single word is less important.

Chinese cultures rely more heavily on high-context communication, while Western countries including United States, Canada, Australia and European countries tend toward low-context communication.

There are clear implications for Chinese business communication. The Chinese might not give you direct answers. You need to find the implications in his/her reply. For example, “Yes” in China can be a way of indicating that one understands or acknowledges a proposal, but not agree with it. If the proposal is unsatisfactory, the Chinese response is likely to be indirect, consisting of such statements as "I'm not sure", "It's under study", or "we will think about it."

(3) Never make quick decision

The Americans think time is money and a good decision is a quick decision. Meetings start and end on time, with an agenda and a plan of action. There is no time for socializing.

A Chinese entrepreneur can make a relatively quick decision. But most decisions take much longer. Deadlines are viewed as a moving target and not as an absolute commitment. Unlike the Americans, they view quick decisions as a form of incompetence. They prefer slow and methodical decisions making process. They will spend considerable time on bargaining, drafting agreements, and even sharing personal lives to build guanxi.

The Chinese are very risk averse. They think the slow process of negotiations will secure their deals.

(4)The importance of hierarchy

There is a strong emphasis on hierarchy in China society and Chinese business culture. Much of this emphasis on hierarchy can be traced to the philosophy of Confucius, which is the root of Chinese culture and has influenced Chinese people's lives for hundreds of years.

The Chinese are often more sensitive towards rank and seniority. Age and experience are given much more credit than in Western culture. The Chinese will share opinions with their colleagues. They will discuss together like the Americans, but it is always the senior executive who makes the final decision.

Ensure you bring a senior member of your organization to lead the negotiations on your behalf. The Chinese will do the same.