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Entertaining Clients While Doing Business in China

When Western business owners travel to China for the first time, they can underestimate the importance of meals and other social events in business customs. Often, to Westerners, business is what happens at the negotiating table; everything else is secondary. To many Chinese clients, however, meeting socially plays a crucial role in building the trust necessary to do business.

The principle of guanxi, or relationships, "is one of the pillars of Chinese culture," says Joyce Millet, president of Cultural Savvy, a San Francisco consulting and training firm that helps businesses understand the cultural practices of international clients. "Asian culture is built on the group needing to work together in order to survive."

Millet and other experts on Chinese culture recommend the following tips for entertaining clients when working overseas.

Using the client’s business title, such as “Manager Liu,” is a way to show respect.

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1. Understand that Clients Might Consider Themselves the Hosts

"The hosting duty is a strong responsibility in Chinese culture, and as a foreigner in China you are always their guest," says Stewart Ferguson, head of research and consultancy for the China-Britain Business Council, a London-based organization that helps U.K. businesses expand in China.

With this in mind, Western business owners hosting a dinner may want to arrange payment in advance with the restaurant to avoid a lengthy debate. It may also be wise to find out where the most important guest comes from in China and then choose a restaurant that serves the Chinese cuisine of that region, Ferguson says. This will make the guest feel like his or her visitors are embracing the culture and recognizing that China is not homogenous.

2. Decide in Advance How to Handle Drinking and Eating

At Chinese banquets, hosts may serve baijiu, an extremely strong, sorghum-based liquor, says Robert Collins, president of Doing China Business LLC in Chicago, which helps Westerners find investments and develop expansion opportunities for doing business in China, and co-author of Doing Business in China for Dummies.

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"Most American firms have a designated drinker - somebody who can take the hit one night so senior leadership are not hung over the next day," he says. It's acceptable to decline to participate, perhaps by saying that one must avoid alcohol for medical reasons, he adds.

Chinese hosts will be particularly concerned that their guests have enough to eat, but a visitor may cite allergies to avoid a specific dish.

If the global business owner is picking up the tab, he or she can rely on the services of a trusted online foreign exchange service to make quick, easy and convenient bank-to-bank money transfers to help pay for client dinners.

3. Be Mindful of Formalities

Chinese names are written with the family name first, Millet notes, so visitors should be careful not to accidentally call clients by the wrong name. Using the client's business title, such as "Manager Liu," is a way to show respect.

Millet advises Western business owners never to be the first ones to bring up business during a social gathering. If a Chinese client broaches a business topic, then it's acceptable to discuss it, she says.

Finally, Millet recommends that business owners prepare a brief toast: "It should be something like, 'We're looking forward to a long and prosperous relationship.'"

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