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BUSINESS AND CULTURE -- KNOWING THE 
CHINESE CULTURE AND BUILDING UP THE
 BUSINESS RELATIONSHIP WITH CHINESE
 Paul Herbig

SUMMARY
	China has a quarter of world’s population. It is also the one of fastest growing countries and largest markets in the world. A lot of MNCs went to China for doing business. Some are very successful but some were failed. The important one of failure reasons is that a lot of MNCs and business people did not  well understand the Chinese culture. They use their own cultural terms to judge the Chinese culture. This paper present a brief of Chinese culture from the four aspects- geography, history, Chinese mentality and Chinese way. This will provide some information and some guides to those who plan to do business with Chinese.

INTRODUCTION
	This paper is written for Western businesspeople who plan to do business with citizens of People’ Republic of China. It is designed to help them to understand the Chinese culture and engage in cross-cultural business more effectively.
	China’s population is over 1.2 billion. China has huge untapped resources. Great China , consisting of the PRC, Hong Kong, and Taiwan probably has more economic and business potential than Japan in the future, and they shared same culture and tradition. 
	This paper will present a brief of Chinese culture in how these people view themselves, their families, work, culture and so forth. Their attitudes toward these have a profound effect on the way they do business. There is also a case study illustrating how Chinese have different views with westerners in doing business.





GEOGRAPHY
	China, located in East Asia, is the third largest country in the world in terms of area (after Russia and Canada) and the world's most populous nation, with a population of more than 1 billion, or nearly one-fourth of the world's total.  Its coastline, bordering on the Yellow, East China, and South China seas, is about 12,000 km (7,500 mi) long.  China shares a land border of about 21,260 km (13,210 mi) with 14 other countries: North Korea, Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan, India, Nepal, Bhutan, Myanmar (Burma), Laos, and Vietnam.  Other neighbors include the British Crown Colony of Hong Kong and the Portuguese territory of Macao, scheduled to return to Chinese control in 1997 and 1999. 
	The official name of China is Zhonghua Renmin Gongheguo or the People's Republic of China.  The republic was established in 1949, but the name China, which is commonly used by foreigners, is probably derived from the Qin dynasty (221-206 BC), which first unified the nation.  The Chinese themselves use the name Zhonguo ( Middle kingdom), which originated with the early Chinese concept that China was the center of the world. 
	China is divided into 23 provinces (including Taiwan), 4 municipalities, and 5 autonomous border regions, where other ethnic groups constitute a majority of the population.  For ease of reference the provinces and autonomous regions are usually grouped into 6 large administrative regions. 

HISTORY 
	China's written history begins during the 16th century BC with the Shang dynasty (c.1600-c.1027 BC).  Since then, China has been ruled, until modern times, by a series of dynasties.   By this time the Chinese had developed their sophisticated ideograph system of writing-in which words are portrayed as picturelike characters, a system that continues to be used today-and they had already developed the technology and art of bronze casting to a high standard. From the fifth to third centuries B.C., the level of literature and arts was comparable to that of Greece in the Classical Period, which occurred at the same time. Science flourished, and the philosopher Confucius developed a highly sophisticated system of ethics for government and moral codes for society. These were dominant until the early twentieth century, and even today they influence Chinese though and behavior, not only in PRC, but also in Taiwan, Hong Kong, and Singapore.
	After the fall of the Qing dynasty in 1912, a republic was established. In 1921 the Chinese Communist party was founded.  The Communists successfully took over all of China by 1949, establishing the People's Republic of China.  
	
 Demography
 PEOPLE’S REPUBLIC OF CHINA 
Population
1,211.21 million (By the end of 1995)
Ethnic group
94% Han Chinese, 6% other 56 ethnic group
Religions
Buddhism, Muslim and Christian
Education
Literacy, 73%
Land
9.6 million square km (3.7 mn square miles)
Government
People’s Republic, a Communist State
Per Capita Income
US$528 (1996)
GDP
US$ 817.0 billion (1996)
Unemployment Rate
3.2% (1996)
Exports
US$151.1 billion (1996)
Imports
US$138.8 billion (1996)
Foreign Currency Reserves
US$105.0 billion (1996)
Foreign Debts
US$110.5 billion (1996)


ECONOMIC ENVIRONMENT
	China has one of the fastest growing economies in the world. As home of a quarter of the human race and a substantial portion of its resources, it has great potential. So has Great China.
Great China consists of the southern coasts of China, Hong Kong, Taiwan, and the overseas Chinese in Southeast Asia. It is neither an official trading bloc nor a political entity. Instead Greater China is a freewheeling economic driven by a common culture and profits.
	While most of  the world has endured recession and weak growth Greater china  has enjoyed a boom. The rise of Great China may be the transcendent economic event of the next two decades.
	The building blocks for this successful machine have always been there, but they are now coming together. The parts are linked by shared Confucian values: savings discipline, passion for learning, family value, and group priorities. 
	Each unit of Great China makes a distinct contribution. China offers huge resources in land and raw materials. Its labor not only produces at low cost but also provides a large market for goods and services. Hong Kong provides world-class servicing, marketing, trading, communication, and design expertise. A product may be patterned in Hong Kong, assembled in a Chinese plant financed by Taiwan, and shipped to Singapore for distribution. Taiwan contributes capital, technology, and financial prowess. Many overseas Chinese return to their ancestral homes with cash in their pockets. Chinese from Singapore and San Francisco are financing the real estate boom on China’s gold coast.


CHINESE CULTURE
	China’s culture, like all others, was conditioned by the land which nurtured it. A large, disparate resource-rich physical setting produced a large, disparate, self-sufficient society. The land was the stage; the people, the cast. Together they produced one of the world’s greatest dramas. The land was both blessed and victimized by geography. Isolated by the world’s highest mountains, largest ocean, and driest deserts, China established a high culture and a towering ego. Behind this curtain of isolation a unique and glorious civilization arose and flowered. In time, due partly to lack of challenge and stimulation from outside, it stagnated and declined from 17th to mid-20th century.

BUSINESS AND CULTURE
	Your business activities can benefit in many ways from a knowledge of Chinese culture. It will help you understand and anticipate the behavior of your Chinese business counterpart. Your knowledge of Chinese culture will guide you in proper etiquette, win respect from Chinese associates, and help you enjoy Chinese festivals, literature, arts, music and cuisine. An awareness of Chinese styles of non-verbal communication and a rudimentary familiarity with Mandarin can enhance your business communication.

UNDERSTANDING THE CHINESE MENTALITY
	Chinese possess many characteristics that are difficult for Westerners to understand. Their world view has been shaped by very different experiences and cultural traditions. To operate successful in China, foreigners must grasp the moral values and traditional concepts that shape the Chinese mentality.

Confucianism and Taoism
	Neither Confucianism nor Taoism is a religion. Confucianism is an ethical system concerned with relationship between people. Taoism is a philosophical system concern with a person’s relationship. Both stress harmony and achievement by living within the rules of nature.
	Confucius, who lived 2,500 years ago, largely shaped the modern mentality of the Chinese people. Its influence is so pervasive that people in China unconsciously function in a Confucian manner. The basic tenets of Confucian thought are obedience to and respect for superiors and parents, duty to family, loyalty to friends, humility, sincerity, and courtesy.
	Age and rank are respected in China, and young people are expected to obey their elders unquestioningly. In the workplace, respect and status increase with age. Older foreign businesspeople have an advantage in this regard, and they are likely to receive more serious attention than younger people.
	The family is the preeminent institution in China. One’s first duty is to the welfare of one’s family, and working family members often pool their financial resources. In many ways, Chinese view themselves more as part of the family unit than as free individuals. Growing children typically live with their children even if they are married ( often with the husband’s parents). The Chinese constitution even stipulates that children have a duty to support their parents in old age.
	Confucianism honors humility and courtesy. Chinese are seldom overly boastful or self- satisfied, even if their accomplishments are laudable. When Chinese are being polite, they can be excessively self-deprecating. Chinese are among the most courteous people in the world toward their friends. Every detail of a guest’s stay with a Chinese friend may be prearranged, and the guest may not allowed to spend money on even the smallest items. For individualist from the West, this form of courtesy may be overwhelming. More than two millennia of Confucian indoctrination have made China an extremely conformist society. The word individualism has a decidedly negative connotation in the Chinese language, and people can create enemies simply by standing out of the crowd. To function as an individual is to invite criticism of being selfish and opportunistic.
	Taoism can also be called "the other way," for during its entire history, it has coexisted alongside the Confucian tradition, which served as the ethical and religious basis of the institutions and arrangements of the Chinese empire.  Taoism, while not radically subversive, offered a range of alternatives to the Confucian way of life and point of view.  These alternatives, however, were not mutually exclusive.  For the vast majority of Chinese, there was no question of choosing between Confucianism and Taoism.  Except for a few straightlaced Confucians and a few pious Taoists, the Chinese man or woman practiced both -- either at different phases of life or as different sides of personality and taste.
	Classical Taoist philosophy, formulated by Laozi (the Old Master, 5th century B.C.?), the anonymous editor of the Daodejing (Classic of the Way and its Power), and Zhuangzi (3rd century B.C.), was a reinterpretation and development of an ancient nameless tradition of nature worship and divination.  Laozi and Zhuangzi, living at a time of social disorder and great religious skepticism (see article on Confucianism), developed the notion of the Dao (Tao -- way, or path) as the origin of all creation and the force -- unknowable in its essence but observable in its manifestations -- that lies behind the functions and changes of the natural world.  They saw in Dao and nature the basis of a spiritual approach to living.  This, they believed, was the answer to the burning issue of the day: what is the basis of a stable, unified, and enduring social order?  The order and harmony of nature, they said, was far more stable and enduring than either the power of the state or the civilized institutions constructed by human learning.  Healthy human life could flourish only in accord with Dao -- nature, simplicity, a free-and-easy approach to life.  
Taoist ideas and images inspired in the Chinese a love of nature and an occasional retreat to it from the cares of the world to rest and heal, and it also inspired an intense affirmation of life: physical life -- health, well-being, vitality, longevity, and even immortality. 

Face Value
	No understanding of the Chinese mentality is complete without a grasp of the concept of face-mianzi in Chinese. Having face means having a high status in the eyes of one’s peers, and it is a mark of personal dignity. Chinese are actually sensitive to having and maintaining face in all aspects of social and business life. Westerners should always be aware of the face factor in their dealings with Chinese and never do or say anything that could cause someone to lose the face. Doing so could ruin business prospects and even invite recrimination.
	The easiest way to cause someone to lose face is to insult the individual or to criticize him or her harshly in front of others. Another way is to treat him or her as an underlying when his or her official status in an organization is high. People must always be treated with proper respect.
	Just as face can be lost, it can be given by praising someone for good work in front of peers or superiors or by thanking someone for doing a good job. Giving someone face earns respect and loyalty. However, it is not a good idea to praise others too much, as it can make you appear to be insincere.
	A person can lose face on his own way by not living up to other’s expectations, by failing to keep a promise, or by behaving disreputably. Remember in business interactions that a person’s face is not only his own but that of the entire organization that he represents. The relationship with the individual and the respect accorded him is the probably the way to business success in china.

Relationships
	Personal connections or guanxi in Chinese are the key element of doing business in China. As in Taiwan and Hong Kong, little or no distinction is made between business and personal relationship. This point cannot be overemphasized. To succeed in China, Westerners must cultivate close personal ties with business associates and earn their respect and trust. Attempt to establish long-term businesses in the country have often failed because foreigners did not recognize that business relationships were also personal relationship.
	“In China,” someone said, “ if you don’t have guanxi, you don’t have anything.” This statement may seem extreme, but it is true. Everything in China seems to be in short supply, and to get things done. Any successful person in China will be a member of a loose network of personal friends, friends of friends, former classmates, relatives, and associates with shared interests.
	 The importance of guanxi has its root in the traditional concept of family. For the Chinese, individuals are parts of the collective family whole. The family is the source of identity, protection, and strength. In the times of hardship, war, or social chaos, the Chinese family structure was a bastion against the brutal outside world, in which no one and nothing could be trusted. AS a result, trust and cooperation were reserved for family members and extremely close friends.
	The social situation in China today is more secure than it was in the past, but the tradition of personal connections is as strong as ever. To be accepted into a network of personal or business relationships in China is an honor for foreigners.
	In the new business environment of China, executives and entrepreneurs work constantly to maintain and expand their network of connections. Networks extend to other companies and individuals, to Hong Kong, Taiwan, and even abroad to Europe, the US, and Southeast Asia. While the purpose of such contacts is often for mutual financial profit, the criteria are the same as for personal networks: trustworthiness and loyalty.

Cultivating Relationships
	For the foreign businessperson, the difficulties in cultivating solid relationships can be the biggest obstacle to success in China. A Chinese who does not already know a potential associate will hesitate to do business with him until he has had time to get acquainted and size up the potential associate’s character and intentions.
	The best way to make contact with potential Chinese business associates is to have a mutual friend serve as an intermediary and introducer. If the third party has close relationships with both side, that  alone may constitute solid grounds for the conduct of business. 
	On the first and perhaps even the second trip to China, they may accomplish nothing more than getting to know several possible candidates for business relationships. Rushing into business before they have established a personal relationship is an invitation to failure. After making the first contacts with businesspeople in China, be prepared to spend a lot of time deepening and strengthening relationships through visits, dinners, gift giving, and many small favors.While this can be costly and time-consuming, Chinese appreciate all sincere efforts in this area.The odds are good that you will be expected to reciprocate in the future.
	 Finally, foreign businesspeople will benefit from the process of cultivating personal connections. It gives them an opportunity to learn about the people with whom they are dealing.
Getting to know their business associates is practical regardless of their culture.

LEARNING THE CHINESE WAY
	A knowledge of Chinese etiquettee and rules for social behaivior is a major asset for foreigners doing business in China. Body language, subtle remarks, and patterns of conduct can tell you more about a situation than blunt verbal commucation. In contrast to Americans and other Westerners who value straight unambiguous dialogue, Chinese are masters of the oblique. In conversation, what is not said can be more important than what is said. Even the seating arrangement can tell you how the Chinese view a certain meeting. Knowing how to respond to a situation appropriately can mean the difference between success and failure.
	Chinese will not expect you to understand all the nuances of their behavior. But knowing how to read between the lines can give you an inside view into what is going on, whether Chinese wish you to know it or not.  By displaying a sensitivity to the native way of doing things, you can make  Chinese respect you and feel more comfortable interacting with you.

Chinese Concept of Time
	Time orientation differs between Chinese and Americana.  Americans view time as a scarce resource.  Chinese, based on their philosophy of life, look at time as  a process of eternity.  What is point of keeping such a tight schedule?  Rice will grow by seasons not by minutes and the sun will rise day after day. What really matters is how life can be made natural and enjoyable.  According the Chinese cultural values, the highest reward in life is the spiritual enrichment  received from the contemplation of one’s living environment. It is valuable when it is used to achieve this ultimate human reward.

Meeting Chinese
	When meeting Chinese businesspeople, foreigners should display sincerity and respect. Handshaking, imported from the West, is generally the acepted form of salutation. The handshake is always followed by an exchange of business cards. Foreigners should always carry an ample supply of  business cards, preferably with English text on one side and Chinese on the other.
	When Chinese greet someone, they do not look a person straight in the eye, but lower their eyes slightly. This is a sign of deference and respect. A visitor should refrain from looking intensly into a person’s eyes, as this can make a Chinese person feel uncomfortable.

Body Language
ï	When Chinese want someone to approach, they extend the hand palm down and curl the fingers, as if scratching an imaginary surface.
•	Holding one’s hand up near the face and slightly waving means no, or it can be a mild rebuke.
•	Pointing at someone with the forefinger is an accusatory motion considered rude or hostile. When you point, use the entire hand, palm open.
•	While shaking hands is now the standard form of greeting, traditional etiquette calls for making a fist with the left hand, covering it with the right palm, and shaking the hands up and down. It is also a formal way of saying thank you and a sign of reverence.
•	When Chinese are embarrassed, they cover their faces with their hands.
•	Chinese are not a “touchy” people, and they rarely hug in public. Lightly touching another person’s arm when speaking is a sign of close familiarity. Men and women rarely hold hands in public, but it is not uncommon for friends of the same sex to hold hands or clasp each other by the shoulders.

Language
	Language differences can, of course, be a big obstacle to meaningful dialogue between Chinese and foreigners. It is immense asset in China to know some Mandarin Chinese. Mandarin pu tong hua in Chinese is the official national language in China, although there are many dialects that are mutually unintelligible. Chinese dialects are related, but each is an independent language. They differ from other languages, though, in that their writing system use exactly the same charecters, and only the pronunciations of characters are different in each dialect. It is possible for a person who speaks Cantonese and a person who speaks Fujianese to communicate fluently in writing. But in coversation, they are most likely to communicate in Mandarin.

Names and Forms of Address
	In Chinese, an individule’s family name precedes his or her personal name. The family name is almost always monosyllabic, and the personal name usually has one or two syllables. Each syllable is the pronunciation of a single writen character.
	People outside the family almost never call each other by their personal names, often even if they are very close. Westerners should use Mister, Miss, or Mrs. When addressing Chinese, just as they do in Western society. Although a woman does not take her husband’s family name when she marries, it is acceptable for Westerners to address a married woman in the Western form, such as Mrs. Hu if the woman’s husband is Mr. Hu.
	Another common form of address is to use a person’s designated position in society. This form of address also applies to company managers, directors, and higher-ranking officials.

Banqueting
	It is fair to say that the number one pastime in China is eating. As one Chinese said, “When foreigners are happy, they dance. When we are happy, we eat!” If somebody like the Chinese food, going to a traditional banquet may be his or her most pleasant experience in China. Banquets are usually held in restaurents in private rooms that have been reserved for the purpose. The banquet table is large and round and can seat up twelve people.
	It is possible that the host will offer cigarettes throughtout the banquet. Most Chinese men smoke, but it is perfectly acceptable to decline the invitation to light up. It is rude to light a cigarette without first offering cigarette to others. If at all  possible, bear with the secondhand smoke. Beer is the standard drink of choice at banquet, but anyone can  feel free to substitute soda. The first round of food at a banquet consists of small plates of coldcuts. They may already be on the revolving tray when you sit down. The dishes may contain pork, chicken, pickled vegetables, codfish, scallops, tofu, or any number of different foods.
	 It is the host’s responsibility to serve the guests, and at a very formal banquets people do not begin to eat until the principal host announce the eating has begun. After this point, one may serve oneself any amount. After the first course of coldcuts comes a succession of delicacies, waiters will constantly remove and replace dishes as they are soiled or emptied. Some banquets can include more than twelve courses, but ten is more likely. Remember to go slow on eating. Don’t fill yourself up when five courses are left to go.
	The high point of a Chinese banquet is often the presentation of a large whole cooked fish. The final rounds of food follow, usually a soup followed by rice, concluding with fresh fruit. Chinese consider soup to be conductive to digestion.
	Table manners in China often have no relation to manners in West. There are no prohibitions on puting one’s elbows on the table, researching across the table for food, or making loud noises when eating. Although banquets have their prescribed methods for behavior, manners conform more to praticality than they do in West. In fact, banquet time tends to be the most relaxed and comfortable for businesspeople.

BUSINESS NEGOTIATION
	China is group-oriented society and any negotiation must cover the interests of many different parties. In meetings, Chinese will examine a counterpart’s attitude and speech and apply it to the problem solving. The Chinese rank among the toughest negotiators in the world, but they are reputable and honorable. The following points regarding  Chinese negotiators are from discussions with American negotiators.
ï	Emphasis is placed on trust and mutual connections.
ï	Chinese stick to their word.
ï	They are interested in long-range benefits.
ï	During first encounters, the Chinese usually seem to be bound by their traditional non- 	legalistic practice.
ï	Once Chinese decided upon who and what is the best, they show great steadfastness.
ï	Chinese sometimes put pressure on visiting business persons when discussing the final  	arrangements by suggesting that they have broken the spirit of friendship was originally 	established.
ï	In negotiations with Chinese, nothing should be considered final until it has been 	actually realized.
ï	So as not to lose the face, Chinese prefer to negotiate through an intermediary.
ï	Initially, a business meeting is devoted to pleasantries-serving tea, chit chat, fencing,  	waiting for the right opening to begin serious discussions.
ï	An early key signal of the intensity of Chinese interest in doing business with you is the  	caliber of the Chinese assigned to the sessions.
ï	Chinese posture becomes rigid whenever they feel their goals are being compromised.

CASE STUDY
	The case study  illustrates the importance in cross-cultural interchanges of the perceptions held by people from different cultures. Their attitudes and behavior toward people from other cultures depend on how they perceive them, and the way they look at things depends on where they stand.
	The people of the world's diverse cultures are increasingly dependent on each other, and in today's fast-paced business world, it has become critical for them to understand each other. Yet many things get in the way.
	The following case study about how an American company pursued a contract with a Chinese paper mill for the purchase of a papermaking machine illustrates that the inability to interact effectively in a cross-cultural interchange can lead to misunderstandings and have a negative effect on people and business between two countries--such as China and the United States.
	Because of a shortage of paper supplies in China, the Chinese Central Planning Committee in the early 1990s had approved funds for the purchase of advanced papermaking equipment from abroad, and a paper mill in Hebei Province was looking for a supplier.

Innocents Abroad
	Mr. Johnson, the president of a papermaking machinery factory in the American midwest, learned of the opportunity through his local Chamber of Commerce and responded immediately with the relevant data and specifications. A month later, Johnson was invited to visit the paper mill, and he and his senior engineer, Mr. Smith, left for China, enthusiastic about a potential contract that could generate $15 million to $20 million in sales.
	When they arrived in China, they were met by the mill's general manager himself, Mr. Wang, and other people from the mill. They were escorted to a nice hotel and told to rest up for a while; a banquet would be held for them that evening.
	At the banquet, the American visitors were warmly welcomed by several officials of the Hebei provincial government and Wang, as well as others from the mill. One of the officials toasted "friendship and long-term working relationships" between the Chinese and their American guests. Both Johnson and Smith were somewhat puzzled; as far as they were concerned, their mission was to promote the sale of papermaking machines. The food was delicious, and the Americans were overwhelmed by the many courses. They were told several times during the evening: "This is your first time to visit China. The Chinese have a saying: first time as a stranger, second time as an old friend."
	In the next three days, Johnson and Smith were totally involved in a very busy schedule. They visited the paper mill, looked around the workshops, and had a full-day meeting with Wang and several engineers; they spent half a day with officials from various government departments (including those in charge of the paper mill). The Americans had expected the meetings to focus on specifications, data, price, and contract terms, but most of the time was spent on introductions and descriptions of the Chinese mill and the American company. The Chinese spent a significant amount of time explaining the importance of the purchase and the expansion of paper production in China.
	In the remaining day and a half, the Americans were escorted on sightseeing tours and treated to two full meals a day, each consisting of 10 or more courses. Mr. Wang was with them at every dinner (he said he wanted to make sure his visitors were treated well). The night before they returned to the U.S., Johnson and Smith were given a farewell dinner, with one toast after another, and one course after another. The atmosphere was full of hospitality. Finally, the hosts and guests stood together for several pictures, their arms full of presents, from Chinese silks to handicrafts.
	The Americans were touched by the kindness and generosity of their host, but they were disappointed because neither could figure out whether the Chinese had any intention of buying their papermaking equipment. The talk of "friendship" and "long-term working relationships" had perplexed them; they didn't want to waste time on a relationship until they had a contract. In addition, the tight schedule had exhausted them. On the one hand, they had been well looked after, but on the other hand they had felt constrained. They had expected to have free time to look around on their own.
	After their return to the U.S, Johnson and Smith sent a "thank you" note and an invitation to Mr. Wang and his colleagues to visit the American company. Two weeks later, Mr. Wang accepted, and the visit was scheduled for early fall.

The French Connection
	In the meantime, the Chinese had also invited Mr. Pierre, the president of a French papermaking machinery company near Paris. He and his senior engineer arrived for a four-day stay and were treated as the Americans had been.
	The weeks after returning to Paris, Pierre sent three company representatives--an engineer, a salesperson, and the public relations director--to visit the Chinese mill. They stayed for two weeks, spending most of their time in the workshops, chatting with the engineers, workers, and Mr. Wang himself. They also spent time with authorities at different government levels. They were aware of their competitor in the US, who had better technology than theirs.
	Through their casual conversations, the French learned the price range and the specific equipment features the Chinese were looking for. They also learned that the Chinese wanted the manufacturer to provide training and other after-sales services. They invited Wang and other senior managers and engineers to dinner several times. On Sundays, they paid visits to Wang's family and other employees' families, leaving presents from Paris. These friendly gestures made the Chinese feel quite comfortable in working with the French.

Hospitality, American Style
	In early fall, Mr. Wang, a senior engineer and an interpreter visited the American company. They arrived on a  Sunday to find a taxi waiting for them at the airport. They were taken to a nice hotel and were notified that their dinner was arranged for 6:30 p.m. at the hotel. They dined alone on salad, steak, steamed vegetables and mashed potatoes, all of which tasted strange and pretty awful to them.
	The next morning, a taxi picked them up and took them to the American company, where Mr. Johnson and his colleagues greeted them at the gate and escorted them to a conference room. The piles of materials were ready and waiting for the Chinese visitors, including the U.S. company brochure and technical information. The Americans had prepared full professional presentations with lantern slides and a projector, but the meeting went slowly because of the difficult translations. A lunch of sandwiches was served in the conference room.
	The Americans felt they had done their best to impress the visitors with their technology and facilities, but they got no clue as to how their presentations were received. When Johnson sounded out the interpreter, the response was, "Not bad."
	That evening, the Americans held a dinner for their guests at a French restaurant, but the beautiful tableware and elaborately prepared French food did not seem to stimulate the visitors' appetites. After dinner, the Chinese were presented with pens and leather briefcases as gifts.
	On the second day, the Chinese were shown around the factory and watched a demonstration of the operational process. They were very impressed with the technology, which was considered first class worldwide. They learned that the price was reasonable, and after-sales services would be provided. However, the training would be at the Chinese firm's expense.
	At the end of the day, when Johnson asked what the next step would be, Wang replied that the Chinese would report to their supervisory authorities, make a decision, and inform the American firm. Before they said goodbye, Johnson told the visitors that the next day would be "free time," in which they could do some shopping and sightseeing on their own. The Chinese were taken back to their hotel, where they again dined alone.
	Wang and his colleagues spent most of the next day in the hotel. They didn't know where to go or what to do. They felt that the day was wasted and that they had been left alone because they were not respected. The Americans seemed to think that their own work and time were more important than spending time with the visitors. The Chinese were angry and disappointed. Good prices and superior technology did not make up for the perceived slight.

Hospitality, French Style
	The next month, Wang, his senior engineer, and a French interpreter left China for Paris. Although they arrived on Sunday, they were met by Mr. Pierre and his assistant. The French drove their guests to the hotel, helped them settle in, and then took them to a Chinese restaurant for dinner. During the next three days, the visitors met with Pierre, his senior engineers, and salespeople. They we shown around the workshops and watched demonstrations of the operational process. The Chinese realized that some of the specific features of the facility were not as advanced as those of the American company. Moreover, the French firm's price was higher, but it offered to provide free training and after-sales services.
	During their four days in Paris, the Chinese ate mostly Chinese cuisine; Pierre took them to a French restaurant just once. On their last day, the Chinese were escorted on a sightseeing tour by their hosts. At the farewell dinner held for the visitors, Wang told Pierre that he would send a letter of intent as soon as he got back to China, and both sides could then prepare for negotiations. He stated that the Chinese felt comfortable working with their French host. There was one toast after another to friendship and a long-term working relationship.
	As this case study illustrates, the inability to interact effectively in cross-cultural interchanges generates misunderstandings and can be costly not only in terms of  lost business.
	In this case, the American firm seems to be the main loser: it lost a potential opportunity to make an attractive deal. But the Chinese company was also a loser: it lost the potential opportunity to obtain a papermaking facility with world-class technology at a reasonable price. The Chinese government had modified its budget in order to purchase the most advanced facility, and it lost the opportunity to achieve this goal.
	While the French company won the contract, it sold noncompetitive technology, and thereby may have been a loser in the long term: had it lost the business, it may have been forced to upgrade its technology to become more competitive.(1)
	
CONCLUSION
	The culture of China is difficult to analyze because it is in a state of flux. Basically, the culture system is influential in all aspects of Chinese social lives including business management. Unique Confucianism, familyism, and group orientation philosophy of life and mode of thinking have made the Chinese cultural system distinctive and powerful. 
	For Western businesspeople, the three points should be considered:
1. Build up a primary understand of Chinese culture.
2. Maintain an open and adaptable mind for different management and negotiation style and   practice.
3. Minimize value judgements exclusively based on western cultural terms about Chinese business deviations.


REFERENCE

1.	The Chinese culture system: Implications for cross-culture management. Xing, Fan. Sam Advanced Management Journal. Winter 1995. 60(1): 14-20.

2.	 Doing Business With China: Culture Aspects. Zhao, Jia. East Asian Executive Reports.
Jan. 15, 1991. 13(1): 10-11.

3.	Trends in international business thought and literature: Parallels between the East and West. Lui, Alice Y L. International Executive. May/June 1996. 38(3): 389-401.

4.	Keeping up on Chinese culture. Personnel Journal. Oct. 1996. 1(1): 16-17.

5.	Management in China During the Age of Reform. Academy of Management Review. Shenkar, Oded. April 1996. 21(2): 568-571.

6.	Chinese business dinners are based on tradition. Toy, Tommy. Nation’s Restaurant News. Jan. 15, 1996. 30(3): 24.

7.	The impact of culture and ideology on managerial work values: A study of the United States, Russia, Japan, and China.

8.	Culture and business: Interacting effectively to achieve mutual goals. Mu, Dan Ping. East Asian Executive Reports. Mar 15, 1995. 17(3): 6, 11+.

9.	“Americans need to adapt to the distinct business culture in China”. Anonymous. Business America. Nov. 1994. 115(11): 22.

Web site:

10.	http://www.chinatoday.com/general

11.	http://china.pages.co.cn/chinese_culture