GCS's Focus on China

The accelerating trade and investment flows of the global economy offer unparalleled opportunities to firms and organizations able to effectively operate in this rapidly changing environment. This is especially true for China, as middle-market US and European firms invest and outsource in this dynamic area. And while the magnitude of foreign investments in China has been increasing, foreign investors continue to encounter different challenges and issues.

Doing business in China requires a deep understanding of key political, crucial, and social aspects. Following there are some of the most common historical and cultural disconnects between Western and Chinese business people.

Guanxi ("relationship") - Networking is an aspect of doing business around the world, but it takes on added importance in a society with a complex bureaucracy and a weak legal system. A web of guanxi helps firms navigate China's bureaucratic and distribution challenges.

Collectivism - American's and European's way of dealing in business is more individualistic and liberal, while Chinese's way is more collectivist. For a collectivist culture maintaining social harmony and relationships is paramount.

Hierarchy - Chinese have a deep respect for hierarchy. Loyalty and obedience binds laboring groups together. There are clear rules to be respected based on one's role in the social order.

Speak the same language - Despite China's commitment to and success in developing human resources with good English-language skills, companies that are serious about doing business in China should supply company information in Chinese and be prepared to initiate contact in Chinese language and with a Chinese perspective to maximize effective communications.

Be patient - Very often US and European businesspeople want to quickly "cut to the chase" or "get to the bottom line." This is simply not how business is done in China. The Chinese people have a different concept of time as compared with Westerners. Dealing with the Chinese people requires patience and an understanding and appreciation for the Chinese culture and the Chinese way of doing business.


Copyright © 2009 GCS Business Capital LLC

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