Global Business Cultural Analysis: China

China, in recent years, is becoming a superpower to be reckoned with. China is rapidly becoming one of the most economically powerful countries in the world and will more than likely surpass the United States as the world’s supreme economic power. This Global Business Cultural Analysis will not only provide an in depth exploration of China’s culture and that of their cultural business structure, but also supply a comparison of, to that of the United States. This paper will show everyday elements of Chinese culture, how their culture is incorporated into their local business practices, a comparison of Chinese and American cultures, and provide implications for U. S. businesses who wish to conduct business in China.

Global Business Cultural Analysis: China
According to Joseph Stiglitz (2006), an American economist, a Nobel Prize Economic Science winner, and a professor at Columbia University in New York, “Globalization encompasses many things: the international flow of ideas and knowledge, the sharing of cultures, global civil society, and the global environmental movement” (p.4, para. 2).

Several reasons exist for why companies decide to expand their businesses to other countries. The idea of global expansion can deliver both enormous challenges and extensive benefits to those who wish to embark on this journey. Conducting business in countries outside a familiar zone requires extensive research, a lot of patience, and learning. By focusing on the languages, customs, culture, legal systems, and economic implications this can be successfully done.

In the past couple decades, China has become an increasingly popular country for this quest. An exploration of Chinese culture and its impact on local business structures will be discussed further in this essay. A cultural analysis of China and the United States will be provided and a discussion regarding the implications for U. S. businesses wishing to conduct business with the Chinese.
What are the major elements and dimensions of culture in this region?
Every society has its own unique culture. Their culture is be reflected in many ways and incorporated into many elements in its society. Merriam-Webster (2009) defines culture as “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization” (5d).

According to The World Fact Book published by the Central Intelligence Agency (CIA), (2009), the People’s Republic of China (PRC), more commonly known as China, ranks number one in the world in population with over one billion people. China’s total geographic area is over nine million square kilometers, which makes it the fourth largest country in the world (The world factbook, 2009).

China is comprised of several various ethnic groups. The Han Chinese, which can be found in almost all areas of China, are the largest of these groups. Some of the other larger, minority groups include: Mongol, Tibetan, Korean, and Zhuang.

The Chinese are a high-context, non-verbal society. They acquire the knowledge in their upbringing to know what to say and do even if it is not directly said to them in conversation. The Chinese rely heavily on facial expressions and voice tone to determine how someone feels. The Chinese show little or no facial expression when speaking or being spoken to. The Chinese also avoid eye contact, they feel looking directly at a person or staring is a sign of disrespect.

Written and Spoken Language
The Chinese alphabet is different. Their characters are representations of whole words, ideas, or concepts. The symbols that are used for these words are the same regardless of dialect.

Cantonese and Mandarin are the two main dialects that are spoken by the Chinese people. The Cantonese dialect is mainly spoken in the southern part of China, while Mandarin in the north. The dialect refers to pronunciation of words, not how the words are wrote. Two different people, both speaking a different dialect, would have difficulty in communicating with each other. Different tones also refer to different meanings of words. The same word said in the wrong tone can have an entirely different meaning.

Basic Etiquette
Greetings. Greetings are formalized in China. Elders are always the first to be addressed. Unless on a first name basis, each addresses the other by their title and last name. In China, the name of a person is reversed. A person with the name of “John Doe” would be referred to as “Mr. John”, instead of “Mr. Doe”. For the most part when the Chinese greet another person, they will keep their heads down. When introduced to foreigners, a handshake is appropriate.

Entertaining. When entertaining others, the Chinese would rather do so at a public place. When the Chinese invite someone to their homes, it is considered to be a great honor for those attending. Tardiness is not tolerated and shoes should be removed, as these are signs of disrespect and will dishonor the host.

Dining. When the feast begins, the host will always be the first to begin eating. The host will also be the person who proposes a toast. It is good to eat a lot to allow your host to know that you are enjoying the food. It is not out of the ordinary for a tremendous amount of alcohol to be consumed during the meal accompanied by a lot of smoking. The guest should never take the last item on a serving dish. It is not uncommon for the Chinese to slurp their dishes, or to burp or belch after consuming food or drink. Chopsticks are the traditional eating utensils used in China. When not in use, chopsticks should be set on the table or a rest. Chopsticks should never be played with, this is disrespectful to the host.

Atheism. Atheism is without religion, believing that God does not exist. Officially, the Communist Party of China are atheists. As reported by Bhattacharji, a research associate with the Council on Foreign Relations (2008), the Chinese has ordered government officials not to have any spiritual beliefs and will if any member is found practicing any type of religion, that member will be removed.

Although religious freedom is outlined in the constitution of China, many are still persecuted and harassed for religious practices. Only five religions are acknowledged by China: Buddhism, Taoism, Islam, Catholicism, and Protestantism, while those practicing any other faith are not covered under Chinese law (Bhattacharji, 2008).

Buddhism. Buddhism is the dominant religion in China. Buddhist monks were the first to bring Buddhism into China in the first century A. D. (Heirman & Bumbacher, 2007). The teachings of Buddha Siddhartha Gautama are the core concepts on which Buddhism is based. It is a philosophical system that is more a way of life involving traditions, rituals, morals, and values. Since Buddhism is non-theistic, it is considered by many, not to be a religion.

Taoism (Daoism). As stated by Hu and Allen (2005):
Taoism is essential to Chinese culture. Taoist attitudes, ideas,
and values have helped shape the minds and characters of
millions of people in China, Mongolia, Hong Kong, Taiwan, East
and Southeast Asia, Korea, and wherever Chinese communities
have become established throughout the world. (p. 3)

Taoism, along with Confucianism, are the two main religious and philosophical systems of the Chinese people. “Tao” or “the way” has been incorporated into many other things besides Taoism: Feng shui, acupuncture, martial arts and T’ai-chi to name a few (Hu & Allen, 2005). These have extended far beyond just Chinese cultures. Merriam-Webster (2009) online dictionary defines Taoism (Daoism) as a “mystical philosophy traditionally founded by Lao-tzu in the sixth century B. C. that teaches conformity to the Tao by unassertive action and simplicity”.

Islam and Christianity. Accounting for less than six percent in total (The world factbook, 2009); Islam, Catholicism and Protestantism are among the smallest practiced religions in China.

Closely resembling Christianity, Islam was founded by Muhammed in approximately 610 A. D. (What is Islam: An overview for Christians, 2005-2009). Muslims, the followers of Islam, study their religion through a book called the Quran, just as Christians study the bible. Instead of worshiping in churches, Muslims worship in mosques. Muslim beliefs are similar to those of Christians. As part of their religion, every Muslim must accept seven things: Belief in Allah, good and bad angels, the Books of God, prophets, the Last Day, eternal life, and divine measurement of human affairs (What is Islam: An overview for Christians, 2005-2009). Islam differs from that of Christianity in the fact that they do believe in Jesus, and that he was sent by God, but they believe he was only a man; not God’s son. Christianity and Catholicism differs in the fact that Christian belief is that Jesus was sacrificed for our sins: Catholics believe that forgiveness comes only after they confess their sins and repent. Muslims do not believe that Jesus was crucified for our sins.

The Chinese celebrate several holidays. Many of these are in the form of different Chinese festivals. These holidays include: New Year’s, Spring Festival, May Day, Mid-Autumn Day, National Day, Qingming Festival, Dragon Boat Festival, Women’s Day, Arbor Day, Youth day, International Nurse Day, Children’s Day, the Anniversary of the Chinese Communist Party, Army Day, Teachers’ Day, and Journalists’ Day (Public holidays in China, 2009). The Chinese receive three days off work for the Spring Festival and National Day (Public holidays in China, 2009).

Ethics and Values
Ethics are morals that a person has that help that person decide right from wrong and help guide their choices and make proper decisions in life. Values are the beliefs and attitudes that a person has which ordain their behaviors.

In China, marriage is a big part of their culture. There are many customs associated with a man and a woman being united. The union is not only between the man and woman, but also, between families. Initially, a proposal meeting will be set up. Once the bride’s family has accepted the parent’s of the bride and groom will set the wedding date. The groom’s family sends several gifts to the family of the bride. Polygamy and Incest is illegal in China. Arranged marriages are also forbidden.

Because of the huge population in China, the government has placed a limit on the amount of children that a man and a woman can have, one child is the limit. This law is strictly enforced in urban areas. A couple may petition the government for a second child for various reasons.

Confucianism is an ethical and moral system that presents the obligations of one person or persons to another which stems from teachings of Confucius, a Chinese philosopher. This system has been a part of the cultural values of many East Asian countries, including China, for thousands of years. Confucianism has a large influence on the history and culture of China and still the “dominant philosophical system of China” (Hoobler & Hoobler, 2009, p. 8).

Social structure.
There are five relationships that are based on Confucian thought: Husband and wife, father and mother and their children; brothers and sisters, ruler and subject, and a relationship between friends. Of the five, only the relationship between friends is equally based.

Confucianism is incorporated in all aspects of Chinese life. Confucius stressed the importance of “the golden rule”, do unto others as you would have them to unto you; the five virtues of courtesy, magnanimity, good faith, diligence, and kindness; and duty, loyalty, honor and respect(Hoobler & Hoobler, 2009, pp. 10-13).

Confucianism is the basis for the Chinese education system. “Confucius had said: ‘Study as if you were never to master it, as if in fear of losing it’” (Hoobler & Hoobler, 2009, p. 14). Education is very important in China. Excellent scores on state examinations can win a man an appointment to a government position. These posts not only brought status and wealth to the male appointed, but also to his family.

The children from wealthy and upper class families have advantages over those who do not come from families with money. These children have more opportunities to get a proper education and for this reason, more of these upper class students are able to take the examinations for the opportunity to receive appointments to a government post. Some families lock their children in rooms for days just for learning.

How are these elements and dimensions integrated by locals conducting business in the nation?

In recent years, corruption has been identified as an emerging threat to China. According to Pei (2007), Director of China Program, surveys conducted in China have “ranked corruption as one of China’s top political and social problems” (para. 3). Evidence has accumulated from various reports for the past ten years, suggesting that the cost of corruption has increased monetarily and mid-level and senior involvement has risen as well (Pei & Kaufmann, 2007).

The Chinese government has anti-corruption mechanisms in place, because the insufficiency of enforcement to these measures, they are not very effective. According to information received by a report from the Central Commission of Discipline, less than three percent of corrupt officials wind up in jail (Pei & Kaufmann, 2007).

Social interaction requires proper etiquette. Etiquette encompasses manners and conduct incorporated by a society based on their culture and beliefs.

Relationships and communication.
In China, businesses do not like to work with other companies that they do not know. Business materials regarding corporate history, business information, and products and services are usually sent ahead of time. All communications received and sent are official. The Chinese also prefer face-to-face interaction. In business, the role of gender does not exist. The most important aspect in Chinese business relations is rank and the respect that it deserves. The Chinese do not like to discuss business matters when meeting on social occasions.

Gift giving.
The giving and receiving of gifts is appropriate in the Chinese business world. Gifts should always be wrapped and delivered with both hands. The Chinese will not open a gift when it is received.

An appointment should always be made well in advance. The Chinese feel that punctuality is a virtue. In China, arriving late to a meeting is an insult. Each person at the meeting has his or her own agenda and can take the floor for an extended period of time, so patience is also a virtue. No talking or outside interference is allowed when another is presenting their information.

Since rank and seniority are important concepts for the Chinese, seating arrangements are made accordingly. Senior members will always sit with other senior members and those higher ranking individuals from another company.

After the initial meeting, business cards are exchanged. These cards should be very detailed. If the card is coming from a foreigner, the card should have both his native language information on one side and a Chinese translation on the other. When receiving a card from the Chinese, the card should be treated very respectful.

The Chinese are astute negotiators. Negotiations may take time; deals are more often than not made at later times than the original meeting. All negotiations are done by senior members of the firm. The Chinese do not like confrontation; they will usually just avoid this. The Chinese do not take kindly to being pressured, this will usually backfire.

When attending a business meeting with the Chinese, humble and conventional is the way to go. Dark colored business attire is appropriate for a man. Women, when allowed to participate, should wear a dress or business suit with a high neckline, and flat shoes.

Social Structure
In the Chinese business structure, a person is associated with their work group. It is a risk for an individual to depart from this group; this can leave the person and his or her family without food or shelter. If a person wants to leave their initial workgroup, they may work two jobs until they feel it is no longer risky leaving.

How do both of the above items compare with US culture and business?
In geographic area, the United States is the third largest country in the world, falling in right above China. The United States is also the third largest in population, three positions behind China.

The United States, like China, is comprised of many different ethnic groups. The largest ethnic group in the United States is white. White is a very general term, as most white people have such a mixed, complicated heritage. Their ancestors include American Indians, those from England, Ireland, Germany, and many other European nations. Hispanics and African Americans make up the majority of the minority population. Other smaller ethnic groups exist in the United States including, but not limited to, Native Americans and Asians.

Americans are a low-context, very verbal society, whereas the Chinese are a high-context, non-verbal society. What a person says is what they mean in America. If the message is unclear, an explanation is expected. Although looks and facial expressions do come into play in the United States, there is usually a straightforward verbal expression that accompanies those looks. The Chinese were raised and trained to know what is meant and to appropriately react, even if nothing, or very little has been said. The Chinese consider it insulting if asked to explain.

In America, frequent altercations occur, at the personal level and in business. If a person says or does something that offends another person, they are going to know it. The Chinese will more than likely act as if nothing has happened. The Chinese try their best to avoid embarrassing situations.

Written and Spoken Language
The English language spoken in the United States was developed in England. The language was one of cultural elements here by the early settlers. Unlike the written language in China, English is comprised of an alphabet that is used to make different words.

English is the primary language spoken in the United States, with Spanish as the second most common language. Different accents on words occur depending on which part of the country a person originates from. Unlike the Chinese with the different dialects, alternative accents are still fully comprehendible by others in America.

English is highly used by others wishing to learn a second language. It is also used in areas other than the United States, such as t he United Kingdom, and is the used in several international organizations.

Basic Etiquette
Greetings. A handshake is the most common greeting for those in the United States. Other, less common, greetings include hugs or kisses, or kissing each other on the cheek. Men should always remove their hats when indoors or when at the dinner table. When addressing others for the first time, a person should be addressed by either “Miss”, “Mrs.” or “Mr.”, and then by their last name.

It is common in the United States to entertain at home or in public. A person should never show up to someone else’s home unannounced or without invitation. If invitations are sent, it is common courtesy to reply to the host as to whether you do or do not plan to attend, even is the invitation does not include a RSVP. Invitations are for the addressee. If the invite is for a person and their spouse, these are the only two that should attend not the whole family or family friends.

When a person has received an invitation to another’s home, it is polite to ask if there is anything they can bring. Gifts are not expected when visiting with someone else, but they are acceptable.

It is inappropriate to begin eating before the meal begins. If it is necessary to leave the dinner table, a person should first, excuse themselves. Unlike China, a guest should not feel obliged to eat everything. If offered something that a person does not want, a simple “no, thank you” is all that needs to be said. It is considered rude to make comments on the meal or the selection of foods that your host has chosen to prepare. Unlike China, slurping, burping or belching is considered rude in the United States. If it cannot be avoided, a person should always cover their mouth.

The first amendment of the Constitution of the United States guarantees all Americans the right of free religious beliefs and practices. The Fourteenth amendment of The Constitution guarantees that a person cannot be discriminated against because of their religious beliefs and practices.
The majority of the population of The United States are Christians. Other religions are practiced in the United States including, but not limited to, Buddhism and Islam, which are also big religions in China. Atheism is present in the United States, but is not promoted as it is in China.

There are several “officially” recognized holidays in the United States. “Official” American holidays include: New Year’s, the birthday of Dr. Martin Luther King, Jr., the birthday of George Washington, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas. Most Americans receive the day off of work for these holidays. Different religions or ethnic groups celebrate other holidays. Other “unofficial” holidays include, but not limited to: Valentine’s Day, April Fool’s Day, St. Patrick’s Day, Good Friday and Easter, Mother’s and Father’s Day, Cinco De Mayo, Ash Wednesday, Rosh Hashanah and Yom Kippur, Halloween, Hanukkah, and Kwanzaa. Each state also has certain holiday observances as well.

Ethics and Values
Somewhat like that of the Chinese, the ethics and values that Americans hold come largely from their religious beliefs. Just as the English language was brought here by the early settlers, so was the cultural and moral customs. Ethics are incorporated into other aspects of society in the United States such as business, medical and legal ethics.

Many of the laws regarding the union of man and woman are the same in both the United States and China. Like China, Polygamy is illegal in the United States. A man or woman cannot have more than one spouse. Domestic violence is prohibited in both states. Other laws regarding personal property, equality in the relationship, and divorce laws also similar. The United States has the world’s highest divorce rate.

American pre-wedding customs differ from those in China. The process in China is very traditional and formalized. Traditions do exist in the United States, but they involve the wedding process more than the proposal. Unlike China, the United States do not have birth control laws.

Business ethics. In recent years, the fraud scandal involving Enron, and other various insider trading scandals, such as Martha Stewart, have brought a lot of attention to the corruption that goes on in The United States. The Securities and Exchange Commission (SEC) monitors markets and protects investors from unfair or illegal practices.

To aid in the fight of corruption and unethical business practices, most companies in the United States have incorporated a code of ethics for their employees to follow. These codes have been implemented to protect the businesses themselves, and to help their employees maintain ethical standards.

In the United States, education is not the underlying concept to receiving a government position. Most major government positions come from free elections and are chosen by the people of the United States. There are requirements a person must meet before being able to run for these positions, such as age (Governor and President) and citizenship (Presidential only). There are positions that come only by appointment by the president.
What are the implications for US businesses that wish to conduct business in that region?

Familiarizing oneself with the culture and customs of another country can be an educational challenge for anyone. By studying and understanding the people of China and how they relate to outsiders will help build corporate relationships.

Respect of Chinese Culture
The culture of China is very different from that of the United States, in both business and in general. The people of China are very proud of their culture, showing disrespect to them or their customs will get a businessperson nowhere.

Risks and Benefits
Individual challenges and risks that come with dealing with alternative cultures and customs can make it more difficult than a person may at first imagine. A person who decides to take on this challenge will be investing a lot of time, money and resources on their journey. Because the risks and challenges of global expansion can be complicated and demanding, it makes it harder for the competition to mirror. This competitive advantage can be a worthwhile consideration.

To avoid some of the risk in globalizing, a person may decide to enter into a joint-venture with a Chinese company. By entering into a joint venture, an American corporation can take advantage of the established relationships of the Chinese company. Once the American company becomes established and makes relationships of their own, they may then decide to go it alone.
China’s Rapidly Growing Economy. With China’s economy on the rise and the threat of China overtaking the United States as the major global economic power, taking an American business to China could pose a risk to the United States by helping them make this happen. China’s cheap labor attracts many corporations looking to globalize. These companies want to reduce their overhead costs and maximize their profits. From a business standpoint, this can be a tremendous advantage, but in the long run, and with the economy of the United States already in recession, this may eventually hurt the economy of the United States even further.

Many people do not realize the challenges and the steps that must be taken to overcome them to make globalization work. With regards to the cultures of The United States and China, a person can conclude that there are more differences than similarities. Neglecting to conduct proper research, overlooking cultural indifferences, or ignoring them can lead to tragedy.

By weighing the advantages and disadvantages of doing business with China, a person can make the determination of whether to choose China as their global destination. If the disadvantages outweigh the advantages, it does not mean that globalization is not the answer. It just means a person may have to choose an alternative country.

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