China is the only fastest major growing nation with an average annual GDP growth rate of at least 10%. In 2007, China was ranked 1st by current account balance of USD 262.2 billion dollars (9% of GDP).

China’s rapid development of its economy is no threat to any other country but an important opportunity for other countries to come into China and expand and expose their market internationally. China’s globalisation is becoming “the place to be” for exposure to multinational companies and organizations.

The Chinese business culture is very unique. Chinese like to talk about “guanxi” (relationships), and “mian-zi” (to give face).

• “Guanxi” means relationship, any form of relationship. Once “guanxi” is established, it means constant cooperation and support is exchanged with one another. Basically, it goes as far as exchanging favours on a regular basis. The Chinese believe that by knowing how to make the right “guanxi”, it minimizes the risks, frustrations and disappointments of doing business in China.

• “Mianzi” means to give face. If you “give face” to someone, you respect that one person, and you will not do anything to embarrass them. If you don’t “give face” it means you don’t respect them, hence, they should no longer be in any association with you. It can be as absurd as not accepting a cigarette, meaning you don’t “give face” and thus you don’t respect them.

Developing Relationships (Guanxi)

Once you have developed a mutual relationship and cooperation with a Chinese businessman, it literally means you will support each other. “Guanxi” and “mianzi” are very important in China, not only with networking and doing business, but also in everyday life. PRC Study can help you establish and open up your “guanxi” in China, as well as teach you the morality of “mianzi”, and various aspects about doing business in China.

Basic Understanding of Mandarin Chinese

When doing business in China, foreigners often come across the same problems over and over again. The language barriers between English and Mandarin Chinese are completely diverse. Even if you hire a translator, would it not be better if you have some understanding of the Chinese language to ensure that the translator is at least translating what you are really trying to say? Therefore, it is really recommended that those doing business in China have at least a basic understanding of the Mandarin Chinese language.

Chinese Business Protocol

As for business ethics, men or women should never wear bright suits (to the Chinese it seems very inappropriate), and must develop good “guanxi” and give a lot of “mianzi” to show trust, appreciation, honor, and cooperation.

Starting Up a Business in China

To start up a business in China takes anywhere from one month up to 1 year, depending on the type of business one wants to start. There are 13 procedures to go through till you finish setting up a business. To start up a business, you must be obtaining the following items below before you can open your business to the public:

• A notice of Pre-Approval of the Company Name

• Opening a preliminary bank account

• A registration certificate “Business License of Enterprise Legal Person” with SAIC or local equivalent,

• Approval of making the company seal from the police department

• Organisation Code Certificate issued by the Quality and Technology Supervision Bureau

• Register with the local statistics bureau

• Register for both the state and local tax with the tax bureau

• Open a formal bank account

• Apply for authorisation to print or purchase financial invoices/receipts

• Purchase uniform invoices

• File for recruitment registration with local Career Service Center

• Register with Social Welfare

By: Amit Salkar