Intercultural Business Communication: Germans Doing Business in China

It all started out as a trial in 1978: the opening-up of China to the outside world for trade and commerce. Since then, China has emerged as an economic powerhouse, one that is increasingly exporting its ‘Made in China’ products around the world and importing foreign goods and services into the country. Increase in trade between China and the rest of the world has been accompanied by increased human contact between Chinese and Western business people. This is very much the case between China and the country which is home to Volkswagen, BMW and Mercedes: Germany.

In his first overseas tour as Chinese premier, Li Keqiang (李克强) made his only EU stop-over in Germany. “Made in China,” he said at a press conference, “is still emerging and ‘Made in Germany’ is already mature.” Combining the two, according to Li, has the ability to create a “dream couple”. During the course of this German-Chinese meeting, 17 declarations and cooperation agreements were signed, further deepening economic relations between the two countries: Volkswagen agreed to open a factory in Changsha (长沙) with the SAIC concern, its joint venture partner, by 2016. In a further agreement, the German chemical giant BASF will cooperate in two new joint ventures in Xinjiang (新疆); and both parties also agreed to strengthen investors by lending them greater support and assistance.

"CCTV Building, Beijing, China, May 24,2010-panoramio"by Randy Rambo, used under CC BY 3.0. /Cropped from original

Strengthening ties between Germany and China will undoubtedly unleash a greater need for a wider awareness and understanding of each other’s cultures. How should Germans conduct business with the Chinese? How should Germans communicate with new Chinese colleagues and business partners? What are the taboo areas when trying to seal the all-important deal? These will be some of the questions that will not just occupy Volkswagen and BASF managers on an increasingly regular basis; they will be questions that German small and medium-sized companies will have to face in doing business with China. These companies are the real bedrock of the German economy: small to medium-sized companies manufacturing high-quality ‘Made in Germany’ products that are becoming well sought after in China. These products are not necessarily from Berlin, Hamburg and Munich, but from towns and cities little known to the outside world, let alone in China.

One such town is Oldenburg located in the north-western part of Germany. So important are the ties with China, both inward and outward, that the city’s government has even launched its own “China-Initiative”. Established by the city’s mayor, Professor Gerd Schwandner, in May 2007, its aim was two-fold: to bring the Oldenburgers and Chinese people closer together; and to strengthen economic, academic and cultural ties between Oldenburg and China. Establishment of the China-Büro [Eng: China Office] in Oldenburg has created the necessary structures in local government administration to handle Oldenburg-China relations. Though the city’s China-Büro [Eng: China Office], the city has organized intercultural seminars, primarily aimed at individuals in Oldenburg conducting business in China. The most recent intercultural management seminar, delivered by Yuan Xueli (袁学礼) from the Munich-based consultancy firm Asia Contact, not only went into questions of business conduct, taboo areas as well as communicating with Chinese employees and/or customers. The seminar also underscored the challenges and opportunities that China has to offer to German small and medium-sized companies in the future.

How should Germans behave in front of Chinese business partners? The German manner, especially when communicating in spoken English, tends to take on non-Chinese traits, ones that are very direct, at times, incredibly blunt and subject to understatement. Mr. Yuan cited the example of one of his students who came to him rather distressed and said that his German boss had said his performance was “nicht schlecht” [Eng: not bad]. Such a moderately positive phrase in German and translated accordingly into English would not go down well with a Chinese colleague. Losing sleep, the student was reassured by Mr. Yuan who informed him that ’not bad’ from a German was somewhat positive. Where the German colleague went wrong was the use of a double negative: “nicht” [Eng: not] and “schlecht” [Eng: bad]. This example together with many others underscored an important factor for Germans doing business in China: the ability to praise colleagues (and, in the German sense, overly praise them) in positive terms of recognition is a more effective strategy to motivate a team of Chinese employees or business partners and get the right results.

Focussing on the positive as opposed to the negative is not just confined to the verbal; it is also expressed through body language, according to Mr. Yuan. Chinese individuals often deploy a smile, particularly in difficult situations. For Yuan, the Chinese regard it as a sign of good manners, diplomatic tact and good will. For a German, on the other hand, smiling when the situation becomes ‘ernst’ [Eng: serious] suggests something quite different: the severity of the situation is not fully understood by the Chinese business partner. Frustration is the result. Such cross-cultural occurrences can, of course, lead to severe miscommunication at best and a total lack of confidence and understanding in the other at worst. Failing to trust and understand the partner will fail to provide the conducive platform on which to do business.

Staying with language, Mr Yuan emphasised the importance of visualisation for Chinese business partners, particularly if it regards difficult processes and systems. In his opinion, abstract ideas are better served in pictorial form, because as such it taps into the ideographic nature of the Chinese language, one consisting of graphic symbols that represent ideas or concepts. As process and systems are best served in ideographic and pictorial form, numbers with many digits should be written down, i.e. visualised, to avoid confusion. Mr. Yuan remarked that Chinese business partners have difficulty with large numbers, although maths skills of the Chinese are well above average internationally. The reason lies in the fact that after 1,000 the next major division is 10,000 with Chinese colleagues placing the decimal place in the wrong position, usually providing numbers that are off by a factor of ten.

One of Mr. Yuan’s key messages during the seminar was how inexact German perceptions are of China and the Chinese. German stereotypical notions that Chinese are polite, traditionally-minded and modest may still hold true in the traditional China of the rural countryside; yet the China of the twenty-first century is much more complex and diverse. Yuan talks about three types of China, something that German business contacts need to consider when travelling and doing business in the country. ‘Traditional China’ consists of the eldest generations over the age of sixty and now in retirement. This generation may come close to these stereotypical traits. ‘Socialist China’ is aged between 45 and 60 and is the generation that lived through the Cultural Revolution and the implementation of the “Market Economy with Chinese Characteristics”. The final China is ‘Modern China’: young, dynamic, ambitious citizens under the age of 35.

Different generations’ knowledge and perceptions on Germany and on Germans may differ somewhat. The ‘Traditional China’ generation generally possesses less knowledge on Germany compared with ‘Socialist China’ and ‘Modern China’. For the latter two Chinas, Germany and its world-famous trademark ‘Made in Germany’ are not just characteristic of high quality and fine engineering, but are related to status symbols––from German fridges and fitted kitchens to cars and home accessory devices. Behind these products, according to Yuan, lie the characteristics of a people as reflected in German products which are either assembled and sold in China or imported into the country: innovative, perfectionist, exact, honest.

Despite these positive connotations, Germans are regarded in China as being inflexible. This inflexibility is illustrated in an example provided in Yuan’s course handouts: the four potential meanings of the word ‘yes’, even if uttered by a Chinese business partner in English. For Germans, as with most other western European cultures, a ‘yes’ would suggest the affirmative; it is a positive acknowledge to a question or statement. However, Yuan pointed out during the course of his seminar that a ‘yes’ has four different translations with four completely different meanings when coming from a Chinese person: firstly, there is the ‘yes’ to signal a willingness to communicate, i.e. “Yes, I hear you”. The second form suggests an intellectual and acoustic understanding: “Yes, I understand”, whilst the third takes the form of conflict avoidance: “Yes, I don’t want to have a conflict with you.” And finally, as Yuan put it, the fourth yes is similar to the German appreciation of the word: “Yes, I agree with your opinion or description.”

This latter example goes to show the multi-facetted and diverse nature of conducting business in China. It is not without its hardships and constraints, its misunderstandings and miscommunication. For Germans, as with any other Europeans, the country is wrapped up in cultural and language differences that may appear alien – or to use the German – ‘fremd’ as a first-timer in China. Companies who want to do business in and with China need to undertake considerable groundwork before departure. Such pre-trip preparation can go some way in dispelling prejudices and stereotypes towards China and Chinese people. Not only that. It can also bridge the gap between understanding and misunderstanding as well as gaining hard and soft skills to communicate and interact with Chinese partners or clients efficiently and effectively.