Understanding the Chinese Psyche

Understanding the Chinese Psyche and Building a Business Rapport

With a population of 1.3 billion in China, making generalisations could be costly in a business environment.  It is important to remember that China has evolved over 5,000 years of complex history and been subject to a diverse range of profound social and cultural influences.  Even modern-day China battles with numerous constraints and pressures such as:

• Its vast geographical area

• Highly regulated and centralised government policies

• The accelerating spread of urbanisation and globalisation

• A continuously evolving technological backdrop

• Environmental concerns

Chinaas an emerging market is undoubtedly going through a complex transitional period.  There are many opposing pressures at play between conflicting social and business environments:

• Central – v-    regional

• Global – v-   national versus local

• Urban – v-   rural

• New – v-   old

• Modern – v-   traditional

• Western – v-   Chinese

Chinapresents the world with many business opportunities and yet its challenges can be difficult to manage.  Overcoming the language barrier is only part of the issue.  The greatest challenge for the Western business person is in developing a real understanding of the cultural differences: the implications behind body language; reading between the lines; adjusting to particular situations; and a strikingly different social environment.  If you are equipped with some understanding of the Chinese business mentality and psyche on the following issues, the challenges can hopefully be turned to your advantage.  At the very least, you will know where you stand!

Collectiveness

China, like many other Asian countries, has a collectivist culture.  Its society places great emphasis on its groups and thinks more in terms of ‘we’ rather than ‘I’.  China bears significant distinctive features of collectivist cultures: harmony and loyalty within a group are very important and should always be maintained.  This means that confrontation is avoided at all cost - subtle expressions or phrases are used to describe a disagreement or negative statement instead of saying ‘no’. The relationship between employer and employee or between business partners is based on trust, harmony and a deep understanding of moral values.  The achievement, pride of the company and the group are far more important than those of the individual.  It is important to ensure that you are aware of this deep-set feeling in any business dealings with Chinese people.  

Patriotism

China’s history is composed of numerous instances of invasion and colonisation by various countries and this factor has contributed to significant unrest.  In recent decades, Mao’s policy to rule China in isolation produced a deeper chasm between China and the Western world.  As a result of its chequered history, patriotism is generally strong throughout China.  Chinese people were at one time very conscious of being judged by their own countryfolk for not being openly patriotic, and some will still express distrust when faced with unfamiliar Westerners.  Hopefully, you will find that the atmosphere is far more relaxed these days.  The Chinese increasingly enjoy Western influences in both business and culture.  However, patriotism is still deep-rooted in the minds of the nation.  It is unwise to criticise China in any way - even the government - in small talk.  It can be detrimental to the atmosphere and generates very negative vibes.  In this case, the well known mantra still applies - “Don’t ever be tempted to stand between the people and their country”.  It is rather like talking about one’s own spouse: it is perfectly acceptable for a Chinese person to criticise their own country, but it is just not the same for you to do so.

Hierarchy

Confucianism runs deeper than most people are aware of.  One of its teachings is a strong hierarchical system which most rulers have used in China’s history to control the people.  Nowadays, everyone has a social rank in the Chinese ‘management’ culture, and all are expected to know where they fit into the hierarchy and to behave accordingly.

There are diverse unspoken requirements in which hierarchy is continually reaffirmed in Chinese management culture.  For example, hierarchy is very clear when entering a business meeting with a group of people.  The highest-ranking person should be given the priority to enter the room, the lift and any other method of entry.  They should then be followed by the most senior member of the Chinese party.  However, guests should also be given priority, and seniority in age should be considered.  When the order is not clearly defined then a great deal of time could be lavished on observing this protocol.  Furthermore, hierarchy also determines introductions in meetings and seating arrangements at banquets.  Therefore, it is very important for you to ascertain where your counterparts fit into their hierarchy and then treat them accordingly.

Likewise, you need to understand your position within your hierarchy and your status in relation to your Chinese counterparts.  If you are of a lower status in relationship to the person you are meeting, keep in mind that you will be expected to show respect to your higher status counterpart.  If you are in a higher position than those around you, you are expected to live up to your status by being more reserved.  Take the time to prepare for this and you will ensure that your trip runs as effectively as possible.

Mao Tse Tung’s famous saying is that ‘The individual is subordinate to the organisation. The minority is subordinate to the majority.  The lower level is subordinate to the higher level’. This quotation embodies the hierarchical nature of Chinese society and companies.  It also explains why Chinese people tend to be oriented more towards groups than individuals and often do not like to take responsibility.  In a similar manner this can result in a situation where people are reluctant to give an opinion before their peers, as it might cause disrespect or loss of face.

Harmony

Apart from Confucius, Tao is another philosopher who has had significant influence on the Chinese psyche.  According to Taoism, Qi (pronounced ‘chee’) is a universal energy composed of 2 polarities: the yin and the yang, therefore balance and harmony are greatly promoted throughout society and history.  This philosophy extends to other aspects of life.  An acknowledgement of this approach will be beneficial during your travels.  On a political level, a key government strategy is to build a “harmonious society”, and this aim is a signature ideology of President Hu Jintao.  This slogan refocuses China’s concentration on economic growth to overall society balance and harmony.  In some aspects, it resembles the characteristics of New Confucianism.

‘Guanxi’

‘Guanxi’ means ‘relationship’, ‘connection’ or ‘contacts’.  Developing a good relationship between people is the main priority in the Chinese business world and relationships should be continuously consolidated and nurtured.  Even in the West, the Chinese word ‘Guanxi’ has become a commonly used term within the Anglo-Chinese business community.  Unlike in Western business culture, in China people believe in developing a relationship with a prospective business partner before they do business.  Historically, in a centralised bureaucratic state, the use of personal contacts was the only way to get things done. Guanxi therefore has been considered as an effective alternative to a commercial and legal system.  In China where the latter can be relatively weak the need to rely on Guanxi continues to be strong.  The members of a Guanxi network are expected to help each other at some point in time in a direct or indirect manner, contributing to a constructive cycle of relationships and development.  Guanxi is key to opening doors - without Guanxi you will find it difficult to meet with senior managers/decision makers.  It is difficult, in fact, near impossible, for a Western business person to connect with the right network of Guanxi within a short period of time.  It is therefore essential that you enlist a dynamic and well connected person to look after this aspect of your business.  As relationships are so highly regarded, the Chinese people will automatically honour them.  Contacts introduced through a reliable and credible source will receive a friendly reception on first meeting and people often go out of their way to initiate connections.  An individual with a widespread Guanxi network is typically referred to as powerful and resourceful, but the reality must always live up to the reputation.  You should aim to understand this and capitalise on the power it can create for your business.

‘Face’

Face is a mark of personal dignity and is a core aspect of the Chinese mindset.  The Chinese people are extremely sensitive with regards to gaining and maintaining face in all aspects of social and business life.  Face is highly prized and can be given, lost, taken away or earned.  ‘Giving face’, for example, can mean to express respect, show support or avoid embarrassing somebody.  In a business environment, ‘giving face’ can also mean complimenting staff in front of their employer, or attending a business meeting dressed immaculately as a demonstration of respect.  ‘Face’ is also linked with hierarchy i.e. recognising and valuing an individual’s position or status, and behaving accordingly.  The opposite of this - to ‘lose face’ - is used to describe an act of disrespect and may involve spoiling someone’s business prospects.  It is important to avoid being critical towards individuals in front of a crowd in the company of Chinese people - a quiet word will always be more warmly received.  Even making fun of an individual in a good-natured, humorous way can be perceived as a sign of lack of respect, so be mindful of this.  Equally, whilst giving face earns respect and loyalty, over-use suggests insincerity, so be careful how you use it!

Modesty

While dealing with your Chinese counterparts or your employees either socially or in business, you may find them very modest.  People are often shy when receiving compliments, or instead, simply reject them to disguise their embarrassment.  It is not that they don’t think they deserve the compliments, it is because they are unable to articulate the most appropriate modest reply.  It is regarded as ill mannered and arrogant to accept a compliment or boast about it, because in Chinese culture, arrogance is a route to failure.  Modesty can also be used before accepting a task or during an interview, as it is the Chinese way to avoid expressing themselves inappropriately.  All of these attitudes are rooted in the Confucius teaching, “A superior man should be modest in his speech, but excel in his actions”. 

Understanding the Chinese psyche and striking a business rapport clearly requires an abundance of common sense and business tactics.  If you are equipped with great communication skills, an attitude to adapt, an open mind and a flexible and diplomatic approach, you will have a great chance of success in China.  Hopefully, this guide will provide you with a good grounding for your thriving business future!

Entrepreneurship

Entrepreneurship has long been held in esteem by the West.  In 2009, according to the State Administration for Industry and Commerce (SAIC), there were over 6 million private companies registered in China. Assuming an average of 3 individual Chinese behind each of these entities, then there are almost 20 million entrepreneurs in China.

Some say entrepreneurship is deeply rooted in the Chinese mentality and thinking that benefited from Taoism teaching.  It believes in the indirect approach, “the changeable is certain”, and applies dialectical logic.  Historically, group traders from places such as Shanxi, Anhui and Zhejiang were well-known for their business techniques and philosophies; these hot topics are widely discussed in today’s China.

However, under the influence of Confucianism and the traditional Communist policies, the Chinese entrepreneur as a social class has never gained much respect in modern Chinese history.  Only in the late 1980s did the Chinese Constitution admit that private ownership was beneficial and necessary for the economy.  In the 40 years prior to that, private companies were absent from the Chinese economy, and accordingly, so were entrepreneurs.   Even today, the more conservative members of Chinese society still view the path of the entrepreneur as one of necessity – for school drop-outs and others who have failed to find decent employment elsewhere.  However, with an increasing percentage of ‘intellectual’ entrepreneurs coming on the scene, the visible and practical benefits brought by financial achievement and entrepreneurship have become much more acceptable, and even fashionable.