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Negotiating Business Deals in China

            Through the rapid economic growth in China, many businessmen are waiting and seeking for the opportunities to enter China's market. Although there is a lot of information from newspapers, television and online media, it is too risky to enter an emerging market without understanding cultural differences. China represents one of five remaining communist countries in the world. The rest of them are Cuba, North Korea, Vietnam, and Laos. One of the major features of communist economy is government intervention and collective ownership of property. The government allocated goods and resources and determines prices. Except its political status, some stereotypes of Chinese people have often been assumed to be resistant to change, such as falsification, hospitable, frugal and Chinese cuisine culture. Without acquiring enough Chinese culture information, businessmen may confront many entry barriers and lose lots of opportunities. .
             Compared to the economy of democratic countries, the term of "guanxi" might be explained as an unethical business practice and connected to "lobbyist" judging by the business standard process. However, there are so many ambiguous standards existed in Chinese government dominate industries. Without establishing "guanxi," businessmen won't get the access to compete in emerging market. On the contrary, businessmen may easily make a deal and obtain the opportunity to negotiate with the key persons if they have "guanxi." In short, the core competitive advantage in China is the important of "guanxi," instead of the importance of product uniqueness. In China, normally the one who has "guanxi" would be the negotiator. They might don't have an amazing organization title, such as CEO or CFO. People usually called them laoshi 老师, means "Teacher" or "Mentor" in Chinese. Some of them are retired from an important government position, so they have many personal relationships with the government organizations.

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