Chinese business culture

Table of Contents

  List of graphics  2

  List of tables  2

  List of abbreviations  2

1.  Introduction  3

2.  China overview  4

2.1.  General Facts  4

2.2.  Geography and History  5

2.3.  Economy  7

3.  Chinese Culture  8

3.1.  Hofstede’s cultural dimensions  8

3.2.  Hall’s cultural model  11

3.3.  Confucianism, Taoism and Buddhism  11

4.  Chinese Business Culture  12

4.1.  Western vs. Chinese Business Practices  12

4.2.  Guanxi  13

4.3.  Conversations  14

4.4.  Chinese Names  15

4.5.  Business meals  15

4.6.  Others  16

5.  Conclusion  18

  Bibliography  19

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  List of graphics  

  Graphic 1 : Process of studying Business Culture  3

  Graphic 2 : Map China  5

  Graphic 3 : Map EU  6

  Graphic 4 : Hofestede’s cultural dimensions - China  9

  Graphic 5 : Hofestede’s cultural dimensions - European countries  9

  List of tables  

Table 1  : General Facts  4

Table 2  : Economic Facts  7

Table 3  : High- and low-context cultures  11

Table 4  : Western vs. Chinese Business Practices  12

Table 5  : Western vs. Chinese Networking  14

  List of abbreviations  

  ASEAN Association of Southeast Asian Nations  

  BC Before Christ  

  est. estimation  

  EU European Union  

  GDP Gross Domestic Product  

IDV  Individualism  

  LTO Long-Term Orientation  

  MAS Masculinity  

  NAFTA North American Free Trade Agreement  

  PDI Power Distance Index  

  UAI Uncertainty Avoidance Index  

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1. Introduction

This paper is the final paper for the course Chinese History and Culture. China has become a global business power and therefore it is important for Western people to know about China and the way they do business. This paper is written preliminarily for Western people who want to know how to do business with Chinese. The paper puts much emphasis on comparing the different cultures. Therefore it is also interesting for Chinese who want to know more about the differences between their and Western culture. A mutual understanding of the different cultures can help to reduce misunderstandings and communicate more effectively. First of all, it is important to give a brief overview of the country. To get a better understanding of the information, China will be compared with the European Union (EU). Chapter 3 will give an overview of Chinese culture in general using Hofstede’s and Hall’s approach to describe culture. It is important to understand Chinese culture in general to understand Chinese business culture. Then chapter 4 deals with some important aspects of Chinese Business culture. Besides that learning the Chinese language can be a complementary part of getting a better understanding of Chinese business culture and Chinese culture in general. This paper does not deal with studying the Chinese language. If the business language in your special case is not English, it is advised to use an interpreter unless you speak Chinese fluently. However, just knowing the basics of the Chinese language can impress your business partner and shows the seriousness of your business relation. Graphic 1 summarizes the process of studying Business culture:

Finally, this paper ends with a conclusion in chapter 5.

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2. China overview

This chapter gives an overview of the most important statistics about EU and China, which are relevant for business.

2.1. General Facts

First of all, let’s take a look at some statistics to compare the two countries. China has with its 9.5 billions sq km more than double the size of the EU and with 1.3 billion people almost three times more inhabitants than EU. The average Chinese inhabitant is much younger than in the EU and despite of the one-child policy China is growing more rapid than EU.

The average European citizen lives six years longer than the average Chinese one. Especially with the life expectancy of women there are huge differences. The two most important politicians in China are President Hu Jintao and Prime Minister Wen Jiabao, while the most important EU-politician is Jose Durao Barroso, the head of the EU commission.

Area: 3,976,372 sq km Area: 9,596,960 sq km Population: 455 million Population: 1.3 billion

Age Structure: Age Structure: 0-14 years: 16.3% 0-14 years: 22.3% 15-64 years: 67.2% 15-64 years: 70.3% > 65 years: 16.6% > 65 years: 7.5% Population growth rate: 0.17% Population growth rate: 0.57%

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Life expectancy at birth: Life expectancy at birth: total population: 78.1 years total population: 72 years male: 74.9 years male: 70.4 years female: 81.4 years female: 73.72 years

President of the European Com- PresidentHU Jintao mission Jose DURAO BARROSO Premier WEN Jiabao

Source: Own table using data from CIA Worldfact Book (2006)

2.2. Geography and History

China is an Eastern Asia country, bordering to several countries. The People’s Republic of China was founded on 1 October 1949. After the reforms of Deng Xiaoping, commencing in the year 1978, China opened to the world and has become an important power in the global world. As this paper does not deal with Chinese history in more detail, it is recommended to inform yourself about Chinese history, when you want to do business in China.

The European Union is located in Europe, consisting of 25 independent countries. This means that the EU is no country; it is a federation of independent countries.

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