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Business Practices in China

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If you are planning to extend your business to the People’s Republic of China (PRC), you should be well acquainted with its people, culture, etiquette, and patriotism. Here are a few tips on business etiquette in China.

People And Culture

China is unique in its culture and tradition. So, when traveling, it is important to adapt to the country’s way of life, its people, and embrace whatever it has to offer.

  • Modesty: People of China are extremely shy. Public displays of affection or even being forthcoming are never done here. However, it is common to see people of the same sex holding hands. They are not considered as a couple, rather just good friends.
  • Patience: Making decisions that would not take much time elsewhere, may just take a while in China. The people here are concerned about making everybody feel happy and comfortable with a decision, which does require a lot of patience.
  • Face value: The Chinese never like to “lose face.” In other words, if a Chinese person is humiliated in public, a fight may just break out.
  • Humor: When it comes to humor, the Chinese are at the top of their game. However, humor related to sex or politics must be avoided.
  • Hierarchy: Chinese people are particular about hierarchy and this is especially true in business dealings. Keep in mind positions held by your Chinese associates, and always remember to show respect if you are lower in position, business-wise.

While traveling, in many parts of China, especially the underdeveloped areas, be prepared to be “looked at.” As far as capturing China on camera is concerned, it is polite to get the consent of people when taking their photograph.

Dining Etiquette

Dining etiquette of the Chinese can make you feel a little uneasy at first, but once you understand their way of doing things, enjoying Chinese cuisine can be a lot of fun.

Take a note of the following:

  • Lunch and dinner at restaurants can be quite noisy, and smoking cigarettes is allowed at the table. Over time, you will get accustomed to it.
  • Knives are absent from the table. You will find chopsticks, soup spoons and bowls. While using the chopsticks, it is recommended that you do not point them in the direction of a person, nor should you keep them standing tall in the rice bowl. Such a gesture is an indicator of incense that is burned at funerals.
  • The meat of pork, poultry or fish is prepared such that it is extremely tender, and becomes easy to remove from its bones with chopsticks.
  • Serving yourself from a communal plate should be done with a clean spoon or with the end of the chopstick that does not go into your mouth.
  • As a guest at a meal, be prepared for surprises. You may notice that your host has ordered much more food than you can consume. This is only to “save face.” Another way of showing hospitality is by serving you, even though you have not asked to be served.
  • According to Chinese custom, it is the host that pays for the meal. This excludes a get-together of friends. However, it is polite to always offer to pay. It is not uncommon to find two people quarrelling to pay after a meal.
  • If you are invited for a meal, be prepared to be served as you are the “honored guest.” You should do the same if you have invited your Chinese guest over for a meal.
  • Using chopsticks is sheer delight to your Chinese host. However, if you are not comfortable using them, stick to the cutlery on the table if there is any.
  • It is recommended never to begin a meal while speaking on matters related to business. Allow your Chinese associate to bring up the subject. Talking about the country’s weather, landmarks, places of interest, your previous tours, art, and music, as well as making compliments about the food and ambience of the restaurant are topics to discuss about prior to the subject of business. Using terms like “Red China” or “Mainland China” should also be avoided.

Tipping

Tipping used to be an illegal practice prior to the 1980s. Now, things have drastically changed. Drivers, tour guides, and in hotels the bellboys and housekeeping staff do expect a tip for their good service. However, in local restaurants it is not customary to give a tip as the bill already includes a service charge of 10 to 15%.

Dress Code

When attending a meeting, men should be dressed in a suit and tie. Avoid bright and colorful ties. Loud, vivid colors indicate your disrespect for your associates. Tuxedos are unheard of in China.

Women should avoid low necklines and stick to muted colors like white, tan and brown. Flat shoes fit well for business meetings, while high heels are ideal for a formal gathering.

In terms of casual wear, jeans are acceptable for both men and women in a casual space. However, shorts should be avoided unless you are exercising.

Business Card Etiquette

While presenting your business card, remember to use both hands and bow forward slightly. Ensure that your card is also printed in Chinese, with your job title printed in the front. This implies your eagerness to carry out business dealings in China.

Giving Gifts

Presenting gifts to your Chinese business associates is customary and should not be taken lightly. Here are a few tips on gift giving:

  • Purchase gifts before entering the country, so as to not forget anybody.
  • Present the gift in front of everyone and ensure that the receiver knows it is from the company and not from you.
  • Avoid taking a photograph while presenting a gift.
  • You also need to keep in mind the type of gift being given, as per hierarchy.
  • The value of gifts should be moderate as anything above would lead to the suggestion of corruption.
  • Items like white flowers, umbrellas, handkerchiefs, knives, scissors and clocks should not be given as gifts as these are considered unlucky.
  • A pair of anything, which is an indicator of harmony, crafts or handiwork from your country or a pen, is something to consider as a gift.
  • Gifts should not be wrapped in black, white or blue paper as these are related to funerals. Yellow wrappings with black writings are a symbol of death, so this should also be avoided.
  • Gold, silver and red are lucky colors.

Communication

While communicating with your Chinese business associates, keep in mind the following:

Do Not Jump In: After you have asked a question, wait for your associate to answer. He or she may take some time. You need not fill in the gap of silence.

Do Not Bow: Bowing is an age-old tradition and is not practiced these days.

Have Your Own Interpreter: Having a private interpreter is advantageous, as you will get to know about the mistranslations or what you missed after a meeting.

Addressing Etiquette: When addressing your Chinese associate, you need to do so by calling them “Mr., Miss, or Madam” followed by their last name. When introducing themselves, their last name is usually presented first. Getting the correct pronunciation is also important. Slang and jargon should be simply ruled out while in a business meeting.

Do Not Say “No”: Saying “no” to your business associate is considered rude. It is better to say “maybe.”

Source by Jane M Dawson

Business

China Scraps Health Declaration Requirement for All Travelers from November 1

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China has lifted all COVID-19 travel requirements, including the need to fill out a health declaration form. Travelers should still report symptoms voluntarily, however.

Travelers leaving and entering China are no longer required to fill in the China health declaration form, meaning that China has now lifted all travel requirements related to COVID-19. Travelers should still voluntarily report themselves to Customs staff if they have symptoms or have been diagnosed with an infectious disease. 

China’s General Administration of Customs (“Customs”) has announced that, as of Wednesday, November 1, 2023, it will no longer require people leaving and entering China to fill in the Entry/Exit Health Declaration Card (“Health Declaration Card”). This card was implemented during the COVID-19 pandemic to screen travelers for symptoms of COVID-19 by asking them to fill out a survey on their current health conditions and symptoms. The system then generated a QR code that travelers had to show to Customs staff when leaving or entering the country.

The removal of the Health Declaration Card requirement means that China has now lifted all COVID-era restrictions and requirements for travelers leaving and entering the country. This move could help to encourage more international travel to and from China, and will further improve the travel experience for passengers.

Existing regulations on declaring possible symptoms of infectious disease when traveling will still be in place, as we discuss below.

Read the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Chinese commercial banks fear stimulus measures will do littl…

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China’s commercial banks are raising questions about whether the central bank’s recent cut to outstanding mortgage rates will be sufficient to hold back a flood of mortgage prepayments and help protect bank margins.

The People’s Bank of China (PBOC) unveiled new guidance last month requiring commercial banks to lower interest rates on outstanding mortgages for first-home loans. The new rates, which will be effective starting on September 25, aimed at stimulating consumption while also reducing the incentive for households to pay down their mortgages early, which had led to a decline in bank profits.

“Lowering outstanding mortgage rates will help alleviate the interest burden on households,” a spokesperson for the PBOC told local media on Wednesday, adding that the new rules have already led to a decline in prepayments, and will help improve household balance sheets and consumer confidence.

The measure has led at least some homebuyers to reconsider their mortgage prepayments.

Officers stand guard in front of the headquarters of the People’s Bank of China, the central bank, in Beijing on September 30, 2022. Photo: Reuters

Kang Chao, an insurance company employee in Changsha, in southeast China’s Hunan province, told the Post that a new mortgage rate of 4.2 per cent could help his family free up about 1,700 yuan (US$234) each month to cover living expenses.

“[My wife] and I both took out mortgage loans in 2018 and 2019, when the interest rates were as high as 5.15 per cent,” he said. “Each month, we need to pay about 9,800 yuan, and this leaves us no more than 3,000 yuan to spend on everything else.

“So we were under a lot of pressure to pay off our debt quickly, especially after we had a child. At one point, we were even considering selling one of our houses. Now that the new policy is out, we feel somewhat relieved.”

An estimated US$700 billion in mortgages, representing around 12 per cent of the country’s total mortgage balance, has been prepaid since 2022, according to analysts.

China property support spurs buying but sceptics warn of weak demand

Chinese commercial banks could see an earnings decline of up to 5 per cent this year if the prepayment wave persists, according to analysts’ estimates. However, if banks refinance home loans at lower rates, their net profits could also drop by 1 to 5 per cent, a report by Fitch Ratings said.

Early repayment is a behaviour driven by interest rates, and as the gap between new and outstanding mortgage rates narrows, the incentive to pay down mortgages early will start to decrease, said Gary Ng, senior economist for Asia-Pacific thematic research at Natixis.

“However, it does not mean [lowering outstanding mortgage rates] is a panacea for boosting China’s household confidence in properties,” he said. “The confidence issue is complex, and it will take more than rate cuts to repair. Although early repayment will ease, mortgage growth is not likely to see a significant jump.”

A banking analyst at the Beijing branch of a commercial bank echoed this…

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China trade: exports tumble for fourth consecutive month in A…

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China’s exports tumbled for the fourth consecutive month in August amid weak external demand and ongoing global supply chain upheaval, posing more challenges to the world’s second-largest economy as it struggles to carve out a path to a post-pandemic rebound.

Exports fell by 8.8 per cent compared to a year earlier to US$284.9 billion last month, according to customs data released on Thursday.

The decline, however, narrowed from a fall of 14.5 per cent in July, and was above the forecast by Chinese financial data provider Wind for a 9.5 per cent decline.

Imports, meanwhile, fell by 7.3 per cent last month to US$216.5 billion, narrowing from a 12.4 per cent decline in July, and exceeding the expectations from Wind for a drop of 8.2 per cent.

China’s total trade surplus in August stood at US$68.4 billion, down from US$80.6 billion in July.

“The typhoon in mid-July likely disrupted port operations in July and the normalisation of that could add to trade growth in August,” said economists from Goldman Sachs.

Improved year-over-year growth of oil prices would have also helped import growth last month, they added.

Heron Lim, assistant director and economist at Moody’s Analytics, said exports are expected to continue their retreat as weakness across the broader global economy keeps new export orders soft.

Will belt and road, Asean trade be China’s silver lining amid US de-risking?

“But as trade performance was already weakening from the second half of 2022, it will be slower,” he said.

The data showed that China’s exports to most of its major trading partners continued to shrink, although the declines narrowed from July.

Shipments to the Association of Southeast Asian Nations – China’s largest trade partner – fell by 13.25 per cent compared to a year earlier, marking the fourth consecutive monthly decline.

Exports to the European Union, meanwhile, declined by 19.58 per cent, year on year, while shipments to the United States dropped for the 13th consecutive month after falling by 9.53 per cent.

The figures still suggest the headwinds remain despite some marginal improvement

Zhou Hao

Zhou Hao, chief economist at Guotai Junan International, said while the August trade figures came in slightly better than expected, the overall momentum remains lukewarm.

“In general, the figures still suggest the headwinds remain despite some marginal improvement,” Zhou said.

“Looking ahead, whether China’s trade growth has already hit the bottom will hinge on several factors. The most important one is obviously the domestic demand where the recent property easing might provide some support in the short term.

“In the meantime, the rising oil prices suggest that the import growth in value terms might pick up somewhat in the foreseeable future.”

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