Business culture in India and China

China and India provide vast opportunities for trade and investments in all major sectors. In the next few decades, fueled by economic liberalization, China and India will join the U.S to become the three largest economies in the world. China and India will provide enormous upside potential for U.S. firms, as well as risks.

As a Chinese saying goes, “Know yourself and your competitors (partners), and you will never fail.” Understanding the business culture is very much the key to be successful in both countries.

Our cultures define our fundamental beliefs about how the world works and forms ways in which we interact and communicate with others and develop and maintain relationships. Doing business in a particular nation requires a focus on a multi-dimensional understanding of its culture and business practices. Understanding those differences and adapting to them is the key. The Indian economy has been booming for the past few years. The country holds great promise for the future.

The business culture of India is a reflection of the various norms and standards followed by its’ people. Indians have various cultural yardsticks, which extend to their business culture too. I have done some research regarding the business culture in India, and from my understanding, I found the following ones to be important:

1. The ‘namaste’ forms an important part of Indian etiquette and is generally used while greeting and saying good-bye. This gesture is akin to the act of genuflection in some countries and is performed by pressing the palms of both hands together (fingers up). The folded hands are placed below the chin and accompanied with a bow. However, educated Indian men and women, who are acquainted with western customs, prefer shaking hands. Moreover, while greeting any individual use his or her title (if he has any). To mark respect, you may also suffix ‘ji’ to the name of a person.

2. In India, companies follow a hierarchical system and the decision making is usually from the top to bottom. Business decisions could be at times time consuming, and International companies do show respect to this aspect. The lack of infrastructure and inadequate supply chain management can also act as bottleneck for foreign investment.

There are more useful details online, if you are interested, these websites can help you learn more about Indian business culture: Article 1 and Article 2.

Another interesting thing I found when I did the research for Indian business culture is the importance of building a good working relationship. Indians only deal favorably with those they know and trust, even at the expense of losing out on lucrative deals. It is vital that a good working relationship is founded with any prospective partner. This must take place on a business level, i.e. demonstrating strong business acumen, and at a personal level, i.e. relating to your partner and exhibiting the positive traits of trustworthiness and honor.

At the beginning of the 21st century, the People’s Republic of China also finds itself in the midst of social, economic, and cultural transition. The pursuit of profit is no longer ‘counter-revolutionary’ and business people have long since ceased being viewed as enemies of the people. “’It doesn’t matter whether a cat is black or white so long as it catches mice.’ ‘To get rich is glorious.’”

In China, relationship is everything in the business world. Chinese business contacts are mostly referrals; essentially a business relationship is struck based on another business associate’s recommendation. The best prices and deals often come through a strong recommendation. However, cold calls and direct contacts are common today, given the availability of the internet and the competitive nature of Chinese businesses. You may source from the internet, trade fairs, catalogues, brochures, and advertisements, and approach the Chinese companies directly through a call or email.

Chinese business relationship inevitably becomes a social relationship after a while. Unlike Western business relationship which remains professional and perhaps, aloof even, after some time, Chinese business relationship becomes a social one.

The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are in your business relationship. Sometimes, a lot of time is spent discussing matters outside of business, but then a lot of time, the other party is also making up their mind about your deal based on their assessment of the personal relationship you have, with them.

Reference: http://www.worldbusinessculture.com/Business-in-China.html

http://www.tradechakra.com/business-culture-india.html

http://www.kwintessential.co.uk/etiquette/doing-business-india.html