Westerners Doing Business With China

Westerners doing business with China

PERSONAL SKILLS DEVELOPMENT

An essay about Cross Cultural Differences

Table of Contents

1. Introduction ............................................................................................................3

2. Chinese Economy......................................................................................................4

3. Differences between Chinese and German Business Culture...................6

4. Chinese Values and Negotiation Style...............................................................9

5. Conclusion.................................................................................................................10

6. Appendix....................................................................................................................11

List of References...................................................................................................................15

1. Introduction

The remarkable economic growth makes China as a superpower in the 21st century a

credible prediction. For a long time China was a developing country. Today, its economy

is one of the fastest growing economies in the world. The economy of the People’s

Republic of China is the fourth largest worldwide when measured by nominal GDP, and is predicted to surpass Germany to assume third place in early 2008. In the recent years, leading business actors focus more and more on gaining contacts and profit from China’s growth. China is believed to have the oldest and most continuous culture. It is home to one of the world’s oldest and most complex civilizations covering a history of over 5,000 years

(Lieberthal & Lieberthal, 2004). The nation containing a large geographical region with

customs and traditions varying greatly between towns, cities and provinces.

Chinese culture is a broad notion used to describe the cultural foundation, even among Chinese speaking regions outside of mainland China. Understanding this

huge term of culture is the key for a constructive business communication. Cross

cultural communication is a major task for China and the world today. In this

age of the global economy, negotiating across cultures is a

inevitable part of doing business for firms desiring to compete

internationally. Because all aspects of consumer behavior are culture bound there

is an increased need to identify and understand this integration and its impact on global

marketing and advertising. Cross cultural research can be used to explain the

differences in negotiation and consumer behavior across countries. The

development of cross cultural exchange is essential for building business contacts and cooperation, particularly with such a diverse but rapidly emerging nation as China.

2. Chinese Economy

China is attracting enormous attention for several very good reasons. For thousands of years, the Chinese believed that they had created a perfect social system. Dynasties came and went, but China remained essentially unchanged until the twentieth century. The last one hundred years, however, have seen China embrace every possible form of social

organization and undergo enormous political and economic change. But with the new millennium, China seems to join the rest of the world as an emerging superpower.

China is at last harnessing, rather than repressing, the talents of its intelligent,

entrepreneurial and hardworking people to create prosperity and stability

(Flower,2003). The reason is not just that China is big or that its economy is the only one that has been able to sustain rapid growth over the last years. It is that China is affecting the

competitive capabilities of all multinational corporations. Companies throughout the world are influenced by the impact of low cost Chinese manufacturing on worldwide

pricing. The growth and the exploding domestic market promise huge opportunities.

China’s overall record is dazzling since reforms began in 1979, and its performance is

improving. Annual real GDP has grown about 9% a year, on average. Foreign trade

growth has averaged nearly 15% over the same period. Foreign direct investment has

flooded into the country. Especially throughout the past decade. In 2002, China became

the first nation since the 1980s to attract more FDI in a year than the United States. Led by

businesses, China has rapidly moved to take its place among the worlds largest trading

nations. Like its export base, China’s home market is growing strongly вЂ" in several segments.

Four to six million new cell phone subscribers are signing up every month. Computer use is spreading more rapidly than in any other country. The automotive market is surging, making China the one place in the coming decade where carmakers can compete for a big growing market. In the early 1990s, almost all retail outlets in China were small shops and wet markets. Now, at least in major cities, hypermarkets are common. Firms such as

Carrefour and Wal-Mart are rapidly expanding their investments to compete for this

growing Chinese market. Long-term trends in China promise continued growth.

The country has vastly improved its elite educational institutions and is quickly expanding its pool of technical talents. China graduated a

million