University of Rhode Island  
Textiles, Fashion Merchandising and Design

Dr Zheng makes his point

TMD 402L Made in China- Speaker Summaries

Dr. Paul Zheng: Cultural Difference - Running a Business in China

 by Katie Dolan 

            Paul Zheng, founder of PDK Regency, discussed the differences in culture and business that affect running a successful business in China in comparison to the United States.  Chinese culture and business behavior is based around the ‘keqi’ way of thinking.  ‘Keqi’ is comprised of two Chinese words which mean ‘guest’ and ‘behavior,’ and this notion suggests thoughtful, courteous, and refined behavior.  Unlike Americans, the Chinese are not graciously accepting of compliments.  Compliments are traditionally acknowledged with a “thank you,” yet the Chinese respond to compliments with “not at all” or “it was nothing” since accepting and giving direct praise is considered poor etiquette.

            One of the most significant cultural differences between China and most developed nations is the language barrier.  The Chinese language is not an alphabetic language, but a script of ideograms called ‘squared characters.’  Since China is such a large nation, there are many different dialects, yet there is only one written language.  The official language of China is standard Chinese, which is derived from Mandarin.  Not only is the language significantly different from the language of the United States and European nations, but the way Chinese is spoken and written in terms of time and location is different as well.  For example, in the English language, time and location expressions are placed after the verb yet in Chinese, the verb comes after the time and location expressions.

            When developing a business relationship in China, at least one trip to a restaurant is a necessity.  Though it is not acceptable to drink during an American business meeting, the Chinese encourage drinking to express the host’s honesty and friendship.  In fact, it is perceived as rude not to drink during a formal dinner.  As a whole, the Chinese are extremely proud of their cultural cuisine and try their best to show their hospitality and cooking skills.  Gifts are always accepted to express one’s appreciation toward the host.  Though gifts of Western origin are no longer considered a novelty because China produces or imports practically everything, gifts are still appreciated.  When giving gifts to a variety of business people, it is important to make sure that senior-level staff are given better gifts or gifts with a higher perceived value than a junior-level staff member.

            Though the Eastern culture and way of business is extremely different from the Western style of business, the outcome resulting from a mixture of the two cultures is potentially profitable.  Once the culture and business behavior has been understood, it is vital to know government regulations, policies and planning, who’s in charge of the country and companies, and how to obtain the right ‘Guanxi’ with the authorities.  The correct ‘Guanxi’ network can make or break the business venture by minimizing the inevitable risks, barriers, and set-ups necessary within China.