Political sensitivity in business dealings with China

Political sensitivity in business dealings with China

January 2020

It's no secret that China's economy is booming, and that is a magnet for business investment from overseas. It is the planet's most populous country and is commonly associated with ceremony, a specific etiquette and the culture brought on by thousands of years of history. Anyone wishing to do business with China must understand the importance of cultural sensitivity, or there could be misunderstandings and costly conflicts. If you are to maximise the benefits of dealing with Chinese companies, it's well-known amongst the business community that you must not ignore the cultural elements of how they operate.

But it's not just culture. Politics matters, too. And this is not just the politics of government. When Chinese national identify and pride come into play, companies can quickly fall foul of their Chinese customer base. Here are some poignant examples.

Politics

China's governing party is Communist, and its principles are present in many aspects of life in the country. There is no official religion in China, and there are certain things you might say relating to politics that could cause offence. For example, as events of recent years prove, Chinese companies, authorities and citizens tend to react badly if you comment inappropriately regarding Hong Kong, Taiwan or Tibet.

Shanghai severed its ties to Prague after just two years because the Czech capital decided to twin with Taipei. By showing such recognition of the independence of a state that China considers part of its territory, the Chinese viewed the decision as an insult and swiftly severed ties. It is damaging to both diplomatic and business relationships with the Chinese to make such a statement with your actions, so it is important to gain an understanding of this aspect of Chinese culture.

NBA controversy

The reasons to avoid making political comments that relate to China were evident in last year's controversy involving NBA team the Houston Rockets. A simple tweet prompted a severe backlash from the Chinese, as the team's General Manager posted an image with the text "Fight for freedom, stand with Hong Kong". It's not uncommon for the NBA to be a source of controversial political statements, but this incident caused a huge amount of upset among Chinese netizens.

It resulted in the Chinese state broadcaster suspending all broadcasts of NBA preseason games staged in China. Chinese sponsors halted their dealing with the Rockets, and all the team's games were removed from the Chinese broadcaster's schedule. With such an enormous population, it is unwise to make political statements about a country where general etiquette dictates that you do not do so. The loss of business from Chinese sources resulting from the ill-conceived move from the Houston Rockets is a prime example of the consequences of failing to understand Chinese culture in business.

A major insult

There was an incident in 2018 where the Marriott chain of hotels was forced to issue an apology to China after conducting a customer survey in which regions like Hong Kong, Macau, Tibet and Taiwan were listed as separate countries. Marriott backtracked and condemned so-called 'separatists' in China after the backlash against its indirect suggestion that certain Chinese regions were independent countries. The Chinese Cyberspace Administration ordered Marriott's website and booking applications to be closed for one week, which created a serious dent in the company's profits. Marriott International was very quick to issue profuse apologies and attempt to repair the damage, but this is just another example of the importance of being extremely sensitive about key political concerns when doing business with China.

Any conflict or criticism that you do choose to pursue should be dealt with in private, and it should be approached in an indirect manner. Chinese etiquette surrounding communication emphasises speaking indirectly and never causing a loss of face in a public environment. Making public statements or inferences that contradict or undermine the Chinese government's interests are likely to cause a high level of offence. And when you offend China, they will not hold back in ensuring you face consequences. The simplest solution is to develop an understanding of important Chinese cultural issues.

The bottom line

It cannot be emphasised enough how important it is to be aware of differences in political opinion when doing business with China. It's equally important to comprehend the reasons behind these cultural challenges in order to develop effective strategies. It could be beneficial to make staff aware of political and cultural differences to maximise the potential of business relationships with Chinese companies. This would also contribute to a more interculturally competent workforce, which could be a significant advantage over your competition. 

It's easy to assume that our democratised Western viewpoint is shared privately by citizens of authoritarian regimes, but as the NBA story shows, it's not always the case.

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