We haven’t seen the relationship with Australia’s biggest trading partner, China, this strained in decades. Australia may have tightened its foreign investment rules, but for businesses wanting to work with Chinese manufacturers, it’s very much business as usual. Use our tips to help build a mutually beneficial business relationship with a Chinese manufacturing firm.
#1 Communication is Everything
You only need to see the barbs being exchanged between the two nations’ politicians to realise the importance of communication. Open lines of communication keeps relationships strong and repairs fractured ones. It’s unlikely you’ll be visiting China any time soon so you need not worry about any face to face communication and etiquette, you will build the bulk of the relationship over email.
You don’t need to learn Mandarin to benefit from good communications but following a few simple rules will help. Keep written communication brief to make it more likely they’ll read your emails. Use clear, concise language that tells the reader what you expect is also helpful. If you do a meeting over Zoom, try to speak slowly, in brief sentences. Don’t use slang words or humour, it’s unlikely to be understood and could offend.
If you have questions, provide them in written format and make sure any contracts you sign are clear to both parties. Use sketches, charts or diagrams wherever you can to compliment your plain English written communications.
What hasn’t changed is the time needed to build a relationship with a Chinese business. It may take even longer without the opportunity to meet in person.
You can’t rush into the transaction. It takes time to build personal trust and a strong relationship which the Chinese refer to as guanxi. While the relationship is in its early stages, a Chinese business person may ask you a range of different questions that you may find personal or strange. Nothing is off-limits. Your Chinese counterpart is gathering information and building the relationship with you.
Their due diligence process might be different to yours but try to appreciate and work with them. A business 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 months, you will hopefully enjoy a long-term beneficial relationship.
Losing or gaining ‘face’ (mianzi) is an important part of Chinese culture. When someone makes a mistake from your team or theirs, be careful not to call the 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’re happy to be self-deprecating and use sarcasm but it’s not 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.
It’s best to use eye contact to gain attention. The Chinese consider pointing with your finger as rude so only use an open hand.
#4 Use a Sourcing Agent
It’s not possible for every business owner to build a relationship with their Chinese manufacturer. They often know it’s important but they don’t have the time, the cultural understanding or inclination so they outsource it to someone who does.
In the past an Australian business owner might have travelled to China to visit potential suppliers face to face, but with this option not available, outsourcing may be the best solution.
The major benefit of using a sourcing agent is the relationship is often already in place. The agent may have used the manufacturer for another client, possibly for many years. A new client comes in and benefits from the long term arrangement already in place. The new client 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 often have trusted contacts in China who can visit potential and existing suppliers on their behalf. They’re able to use the relationships they built long before COVID-19.
If you need help with sourcing a manufacturer in China, contact us