Building Effective Business Relationships in China – 4 Expert Tips

Vara Allied

Mature female businesses woman shaking hands

Australia may have tightened its foreign investment rules, but for businesses wanting to work with Chinese manufacturers, it’s very much business as usual. For help with building a mutually beneficial business relationship with manufacturing firms in China, use our tips below. 

#1 Communicate Effectively

You only need to see an exchange between the two nations’ politicians to realise the importance of communication. Effectively communicating and having open lines of communication helps keep professional relationships strong and can repair fractured ones. Due to the pandemic, people may not be visiting China as often, therefore building the bulk of the business relationship over email has been increasingly more important than nailing face-to-face interactions and etiquette.

You don’t need to be able to speak Mandarin to benefit from good communication, but following a few simple rules will help.

  • Keep written correspondence brief by using clear, concise language that tells the reader what you expect.
  • For online meetings, try to speak slowly and in brief sentences. Due to differences in culture, try to avoid using slang words or humour as it’s unlikely to be understood and could offend.
  • Provide questions in a written format, making sure any contracts that need to be signed are clear to both parties. Use sketches, charts or diagrams wherever possible to complement written text.

#2 Building Patience

What's remained consistent over the years is the time needed to build lasting relationships with Chinese businesses. This may take even longer without the opportunity to meet in person. 

It takes time to build trust and strong business relationships in China, which the Chinese refer to as guanxi. While the relationship is still developing, a Chinese business person may ask a range of different questions to start building that trust and relationship with you.

Their due diligence process might be different to yours and you may find the questions too personal or strange, however this is simply due to differences in culture. Within Chinese business culture, a meeting can be 95% conversational talk and 5% business talk, whereas most Western businesses have a quick, friendly opening before it’s down to business.

Negotiations often extend past deadlines so again, you need patience. If you’re willing to invest time and money in the early stages, you will hopefully enjoy more long-term successful partnerships

#3  Gaining Respect

Losing or gaining ‘face’ (mianzi) is an important part of the culture in China. When someone makes a mistake from your team or theirs, be careful not to call that person out. You don’t want to make anyone look bad. Even saying no or politely correcting someone can be seen as rude or arrogant which can hurt relations.  

In Australian culture, we may be happy to be self-deprecating and use sarcasm, however this isn't as appreciated in China. Always show respect for others and yourself. Don’t show too much emotion or affection and try to be yourself. If your Chinese counterpart thinks you’re not authentic and pretending to be someone you’re not, the relationship is unlikely to develop.  

In China, people also consider pointing your finger rude, so only use an open hand and use eye contact to gain attention where possible.

#4 Use a Sourcing Agent in China

It may be hard for every business owner to build successful business relationships with their Chinese manufacturer. Business owners often know it’s important to build business relationships with them, but many often don't have the time, cultural understanding or inclination, so they outsource it to a sourcing agent in China who does.

In the past, an Australian business owner might have travelled to China to visit potential partners face-to-face, but with this option being less available due to the pandemic, outsourcing may be the more effective solution.

The major benefit of using a sourcing agent in China is that the relationship between the agent and the manufacturing company is often already in place. The agent may have worked with the manufacturer for another client and has managed to build trust over the years. A new client comes in, and benefits from the long-term relationship already in place. The new client then has few worries about their intellectual property being stolen or the goods not arriving in the condition they expect.

Sourcing agents in Australia may not be travelling either, but they may have trusted partners in China after having built strong relationships long before COVID-19. They often have people who can visit potential and existing suppliers on their behalf.

If you need help with sourcing a manufacturer in China, contact us.