Cultural differences

Focused on China

and how it effects dealing with German business men

Berufsbegleitender Studiengang zur

Diplom Kauffrau

FOM - Fachhochschule für Oekonomie & Management

Neuss

6th Academic Semester

Author : Denise Borgos

Düsseldorf, 9 June 2006

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I

Table of Contents

Table of Contents

I

List of Figures

II

List of Abbreviations

III

1. Introduction

1

2. Problem Definition

2

3. Objectives and Metholodgy

2

4. The cultural development of the People′s Republic

3

of China

4.1 An Historical Overview

3

4.2 The Religions and Morals in China

4

4.2.1 Confucianism

4

4.2.2 Taoism

5

4.2.3 Buddhism

5

4.3 Communication and its context

6

4.4 The social behaviour pattern in China ­

6

The Guanxi-Concept

5. Introduction into the cultural theory models

7

5.1 The five dimension model of Hofstede

7

5.2 The value guide lines of Trompenaars

10

6. Case ­ Transrapid

13

6.1 The history of the Transrapid

13

6.2 The Transrapid in China

14

7. Conclusion, critical comments and outlook

15

8. Table of references

17

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II

List of Figures

Figure 1: China′s GDP between 1952 and 2003

Figure 2: The Chinese dimension model of Hofstede

Figure 3: The German dimension model of Hofstede

Figure 4: The Latin American dimension model of Hofstede

Figure 5: The Asian dimension model of Hofstede

Figure 6: The European dimension model of Hofstede

Figure 7: The Arab dimension model of Hofstede

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III

List of Abbreviations

Cf.

Confer

to

CNY

Chinese

Yuan

engl.

english

EUR

Euro(s)

GDP

gross domestic product

IDV

Individualism

km/h

kilometers per hour

km

kilometers

LTO

Long

Term

Orientation

MAS

Masculinism

PDI

Power Distance Index

UAI

Uncertainty

Avoidance

Index

USD

US

Dollar

vs.

versus

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- 1 -

1. Introduction

There is hardly another nation in the world which has changed its picture within the

past two or three decades like the People′s Republic of China. The former communist

regime of Mao Zedong has opened itself to the world since the end of the Cultural

Revolution in 1976. This change is most apparent from the economic point of view

and also from a social perspective. From 1976 on, foreign investors were allowed to

enter the country to present their know-how as well as to bring in liquidity. As a

consequence, there are constantly more goods manufactured in China for the global

market.1

The progress of the economic trend clearly shows the increase of China′s influence

on the world market. In the year 2005, China achieved a gross domestic product of

CYN 18,232 billion (about EUR 18,060 billion) with a population of almost

1.3 billion people. This is an income per capita of CYN 14,025 (about EUR 1,390). In

the year 2000, the income per capita amount was only CYN 7,812 (about EUR 774).

This shows an increase of approximately 55 per cent only within five years.2 The

figure on next page shows the growth of China′s GDP within the past 50 years.

Today Germany has a population of about 82 million people.3 In the year 2005,

Germany′s GDP was located at around EUR 2,244 billion. These figures account a

German′s per capita income of about EUR 27,365. Clearly, the level of the German

income per capita is in absolute much higher. But the increase of Germany′s GDP

compared to the year before only stands at 0.9 per cent.4

Previously, Germany′s companies reacted to the fast growth in China. In the year

1972, Germany obtained goods at an amount of EUR 175 million. In the year 2004,

the value reached EUR 40 billion, which is an increase of 227 times. Since the year

2002, China attained the position of the second leading non-European export partner

for Germany.5

1 Cf.: Vermeer, M., (2002), china.de, p.38.

2 Cf.: http://www.auswaertigesamt.de/diplo/de/Laenderinformationen/China/

WirtschaftsdatenblattChina.pdf

3 Cf.: http://www.destatis.de/download/d/bevoe/bevoe_nach_bundeslaendern04.pdf

4 Cf.: http://www.destatis.de/presse/deutsch/pk/2006/bip2005i.pdf

5 Cf.: http://www.auswaertiges-amt.de/diplo/de/Laenderinformationen/China/Bilateral.html

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