Chinese business networks are sustained by Chinese cultural values and tradition. When these values disappear, the networks will collapse. Trust, reciprocity, face, time, harmony, hierarchy, power distance, and long-term orientation have been identified as the key Chinese cultural values. China is the economic frontier of the 21st century and with that come unlimited promise, and maybe pitfalls. In order to reduce these disadvantages, western businessmen are advised to pay attention to the following while dealing with China.
Language is the biggest challenge for most foreign visitors to Shanghai—most locals know just a handful of English words. Bring a phrasebook with you (and point to the relevant words and Chinese characters), and ask staff at your hotel to write down addresses for cab drivers.
The Chinese are fiercely proud of their culture, and sensitivities can be easy to ignite. Best to stay away from Taiwan, Tibet or human rights.
Meetings and greetings
In business meetings handshakes have become popular as an initial greeting, but sometimes you’ll find Chinese skip the handshake and go straight to the swapping of business cards.
Business cards are swapped at breakneck speed. On receiving one, use both hands and read it immediately. Be sure to offer yours in return. Cards with your name and job title printed in Chinese on the reverse are useful. Ask a kind Chinese person to select a good name for you. Mainland characters are different from those used in Hong Kong and Taiwan, so be specific if you have them printed in your local Chinatown.
Business interactions between men and women are reserved. After an initial handshake, avoid body contact such as hugging or kissing on the cheek.
Do not underestimate the concept of losing face. Arriving late, causing embarrassment, behaving confrontationally, and insisting too hard on paying a bill or calling attention to a mistake can all cause loss of face. This is potentially disastrous for a fledgling business relationship. Complimenting someone on their business acumen in front of their colleagues is an easy way to win points.
If a Chinese person has misunderstood you, or cannot (or does not want to) answer a question, they may laugh to cover their embarrassment. Try not to get agitated. They may come back to you with an answer later once they’ve had the chance to think it through or find out the answer. If they don't, you’ll need to ask again—but its best not to do this in front of others so as not to cause a loss of face.
Don't be unnerved by long silences—these are an important part of Chinese communication. But note that silence can also be used to unnerve a negotiating opponent.
A Communist campaign to give women equal status to men has been largely successful. Foreign women are accepted on equal terms in the workplace.
Personal space is not highly regarded in China: expect people to stand quite close to you, and even barge into you.
Conversely, however, expansive gestures such as hugging are not acceptable.
“Dress-down Fridays” and casual office wear have not caught on in China. A suit and tie is the norm, though a short-sleeved shirt with no jacket is acceptable in the summer.
Eating and drinking
Most business entertaining is done over lunch, though a high-profile business deal may be celebrated by a large evening meal in a private room of a restaurant. Unless specifically invited, spouses typically don't attend. The western custom of after-work drinks is rare, though there is a growing trend for business colleagues to meet for coffee.
Try to master chopsticks before you arrive in Shanghai. Chinese food is eaten informally, with everyone serving themselves from several main dishes on a central turntable. You will usually be seated on the right of your Chinese host, who will always serve you first.
In all but the swankiest restaurants, messiness is perfectly acceptable. People will happily slurp their soup; toss chicken bones around their plates and spill soy sauce everywhere.
Frequent toasts are not unusual. Mao tai (or baijiu), a fiery 60-70 proof liqueur distilled from sorghum, is what you’ll typically drink. If you can’t keep up (and it's usually better not to), join in the toast with beer or a soft drink.
Drinking a lot (and even drunkenness) may earn you respect or trust, since many Chinese believe that alcohol causes barriers to come down and true intentions to be revealed.
During a meal, do not turn a fish over to get to the flesh on the underside. Superstition holds that turning a fish over will cause fishing boat to capsize.
You may be invited to eat at someone's home. Always bring a gift (fruit or flowers or something from your own country), and remember to take your shoes off at the threshold.