Doing business with China: what features you need to know

Business interest in China is growing, and parallel imports have only aggravated this situation. Trade turnover between Russia and China in 2022 increased by a record 29.3% year-on-year to $190.27 billion.

CEO of the cloud service "MoySklad" Askar Rakhimberdiev shared the experience of partners and clients who have been working with China for a long time. The company regularly conducts training webinars on foreign economic activity. Askar spoke about how entrepreneurs can work with Chinese partners, what are the peculiarities of the East Asian mentality, and how to avoid getting into trouble during negotiations.

How to check suppliers

What should those who are taking their first steps in working with Chinese partners be prepared for? Let's try to figure it out.

The first tip is very simple and obvious — work with trusted suppliers. But how can you recognize the one who has been verified? Word of mouth and a forum about business in China, for example, Sinocom, can help with this.

There is also a Chinese company verification database, Qixin — there you can find out whether the company is actually a manufacturer, how long ago it was founded, whether there are any lawsuits, and much more. To understand the database, you need at least a Chinese VPN, but it will make the work much easier.

Our clients have had stories when they entered into a contract with a manufacturing company, which in fact turned out to be an intermediary, and there were situations when there was no company at all. If you conclude an agreement remotely, then check the company in every possible way.

Should I go to China?

Is it necessary to go to China to establish relationships with suppliers? There is no clear answer here. Of course, it is better to go (as I will discuss below, it is very important for the Chinese to establish informal relationships with a partner), but the trip will cost about 300 thousand rubles per week.

Sometimes it is more effective to invest this money in a product and find a Chinese partner remotely. How? The answer is the same: proven suppliers come first. Alternatively, you can look for Russian companies that operate in China and provide guarantees for their products; this will be more expensive, but will eliminate many risks.

Negotiations in China

If you decide to travel to China, be prepared for the peculiarities of negotiations.

Personal meeting — this is importantyou will be perceived differently, they will be more willing to work with you. Spend a lot of time getting to know your Chinese partners.

Don't rush. Let’s say you should set aside one day for one meeting (at least half a day: this is if you are still in the process of choosing partners). Remember that the first hours of the meeting — these are conversations “about nothing.” Don't be embarrassed, it's customary.

And don’t try to start the meeting by talking about money and business: you will be asked about who your parents are and what you do in your free time, since personal relationships — first of all. By the way, all of the above also applies to Turkey — There, too, it is customary to do everything slowly and start with establishing informal relationships.

Be open, for Chinese partners it is important who you are, what family you are from, how long you have been doing business. They may even try to get you drunk, but it’s easy to refuse, citing the fact that you don’t drink for health reasons.

Remember that the little things matter. If you are wearing a business suit, you will be taken more seriously. Stay in expensive hotels, and if you can't afford it and are staying in a hostel, have your Chinese partners meet you in the lobby of some decent hotel in the neighborhood.

Yes, prestige is quite significant for the Chinese. If you have officials, businessmen, cultural figures in your family, — be sure to talk about it, it will give weight to your words and inspire trust.

Do not make mistakes that are unacceptable to the Chinese. Don’t refuse the offer to pay for your lunch — this will greatly offend your partners. Do not criticize any authorities, including the head of state. (It is advisable not to talk about politics at all.) Do not criticize or joke about Chinese culture.

Conclusion of a contract

In addition, I would like to give some universal tips that may be useful when communicating with Chinese partners.

The first rule of business relations with the Chinese — You shouldn’t expect too long-term cooperation from them. Yes, it’s a matter of mentality: the Chinese believe that if you’ve been working with them for some time, it turns out that you’re already somewhat dependent on them — and we can try, for example, to increase the price for you.

Do not relax when the same supplier delivered the goods on time and without defects twice: this does not mean that this will always be the case. You need to check each batch before sending and be on alert all the time.

We have a case, an entrepreneur carried laptops for many years, everything was fine, until at some point the same laptops began to arrive with a non-functioning battery. We didn’t notice this right away; there were already a lot of negative reviews, returns, and problems with the marketplace.

Another characteristic detail — In Asia it is not customary to say a firm “no”. Therefore, if you were told something like: “We need to think again, since certain difficulties are observed,” — Do not expect that someone will actually work on solving the problems voiced and will contact you later. It was a veiled Chinese “no.”.

In addition, remember that absolutely all details must be specified in the contract, even those that may seem completely unnecessary to you. Our clients have had cases when they brought a phone without a charger, lamps without a cord. It is very important to specify in the contract the contents of the product, the purpose of each button, the presence of instructions, etc.

At the same time, you shouldn’t have much hope for an agreement, because international courts — this is time-consuming and expensive, the Chinese understand this very well, you need to look for other ways to protect yourself.

Check the quality of the goods before sending them to Russia, hire a special person for this — Trust me, it will save you a lot of money. In addition, remember that even if you are not satisfied with something, you should not (as is customary in our tradition) “run into” the Chinese; it is better not to enter into an open conflict — this confrontation will not end in your favor.

Diplomacy plays an important role. Dissatisfaction should be expressed in a gentle form. Tell them that you are satisfied with everything, except for a certain shortcoming, for which you, for example, ask them for a discount on the second order. And be sure to work on prepayment: 30 to 70 or 50 to 50. Yes, it is customary to work on partial prepayment in China, so if they ask you for the entire amount at once — this is a reason to be wary.

In general, Russian entrepreneurs have learned to work successfully with Chinese ones, and many do this remotely. Chinese — The people are hard-working and punctual; doing business with them is not that difficult. It is enough to follow common sense and a few recommendations that I tried to outline in this material.