YIBADA

Doing Business in China: Intensive Engagement More Effective Than Localization

| Mar 13, 2017 06:00 AM EDT

Chinese business professionals project local cultural practices in their business transactions.

China continues to attract several foreign investors, with the world's second-largest economy continuing its growth from strength to strength. However, one prominent Australian diplomat emphasized that doing business in China should take on the form of intensive engagement.

Geoff Raby, formerly the Australian ambassador to China, said in an AFR report that the current mentality of localization limits foreign businesses with Chinese operations, as it is tantamount to appointing people who are less receptive to their core corporate values by way of divergent belief systems.

Raby, currently the head of a business advisory firm in Beijing, drew parallels by saying that no Chinese companies doing business in Australia would appoint an Australian manager, and added that even the Chinese would describe their compatriots running an Australian company as someone "who lacks weight."

In place of localization, Raby emphasized that intensive engagement should be the key to doing business in China. He emphasized that having a foreigner running a foreign company in China would best suit the latter's corporate interests, given that core corporate values are fully understood and implemented.

Intensive engagement also allows foreigners to fully utilize some of the key tenets to doing business in China. Yibada reported on how to make headways in China business industry: learning the language, understanding collectivism, recognizing hierarchy, and cultivating trust.

As a trust-based society that long thrived in homogeneity, China is a country more receptive to well-established personal relations. Therefore, intensive engagement allows foreign businesses to become more trustworthy in the eyes of their Chinese counterparts through constant communication.

Over time, intensive engagement allows the inclusion of foreign businessmen within the inner circles of their Chinese counterparts, allowing them to close deals in China more effectively with due recognition to hierarchy. Language, when learned over time, serves as a valuable bonus that removes barriers.

Related News

Most Popular

EDITOR'S PICK