In recent years, the People's Republic of China has grown to become a major global economic player. The financial crisis has done nothing to change this; quite the contrary. Furthermore, China is becoming an increasingly important partner for Europe due to recent political developments in America. Rapid growth in China has slowed during the political turmoil and uncertainty of the recent past – albeit with a still above-average increase of approximately 6% to 7% ("the new normal"). The Chinese market remains attractive to German investors and cooperation partners, particularly because of its considerable domestic market potential. Conversely, we are seeing a trend whereby Chinese companies are increasingly beginning to invest in Europe, especially in German-speaking countries.
It is not only global players such as Volkswagen, BASF, Bayer, Coca Cola, Henkel, and Procter & Gamble, to name but a few, that are represented in the Middle Kingdom. German SMEs are now also very actively involved in a variety of ways. But is this vast empire really a rapidly developing and promising market of the future that justifies sustainable and long-term investment? China is not China. The People's Republic is a world unto itself, with over 4,000 years of history, different languages and dialects, and diverse social conditions and behaviors. The size of the country, its gradual opening to the West, and rapid economic growth make China an important growth market that is highly attractive to foreign investors. According to Volkswagen, China is the fastest-growing market in the world. But not every economic venture is crowned with success. Many companies have not achieved the quick returns they had hoped for. What mistakes do Western entrepreneurs make when doing business in China? What are the particularities of negotiating and doing business, as well as operating a company locally?
The middleman
Western businesspeople have little chance of closing a deal in China without a middleman, also known as a "zhong-jian ren." This middleman is familiar with the specific, personal, and reciprocal relationship system that prevails in China and goes beyond conventional networking in the Western sense. In the West, we often tend to trust others until we have reason not to.
In China, things are a little different: in business, you cannot build trust, because any kind of business relationship cannot even come about without trust. Instead, trust must be conveyed with the help of "guanxi." This Chinese
This term refers to the network of personal relationships in China, i.e. it stands for mutual give and take. This means, for example, that a business partner you trust will refer you to business partners whom they in turn trust. The decisive first step in China in this phase of the negotiation, also known as the "exploratory phase," helps you establish personal contacts with the respective company or managing director.
A talented Chinese middleman is also indispensable after the first meeting. Consider what happens during a typical negotiation session between Chinese and Western businesspeople. Rather than saying no outright, Chinese businesspeople prefer to change the subject, remain silent, ask another question, or respond using ambiguous or vaguely positive expressions that have a slightly negative undertone.
A native Chinese speaker can accurately interpret and explain the moods, facial expressions, and body language displayed by Chinese negotiating partners during a formal meeting. Often, only the intermediary can determine what is happening. If an impatient negotiating partner from the Western world wants to know what the Chinese think of the proposal, they will invariably respond in an evasive manner, such as "Let's see" or "Let's check it out" – even if they think there is something wrong with the proposal. This is one of the situations in which the middleman can intervene, because his job is less about translating words and more about mediating between cultures.
It often happens that both parties can openly say things to the middleman that they would not be able to communicate directly to each other. In China, it is the middleman, not the actual negotiating partner, who first brings up the business topic to be discussed. In addition, he can often smooth over differences. In fact, a good middleman can succeed in significantly reducing complex situations and considerable differences of opinion.
