Be prepared to negotiate, drink during dinner and hire an interpreter: Ten things you should know about doing business with China

Wenbin Wu
Wenbin Wu
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New research from reveals that Britain’s medium-sized firms expect smaller revenues from exporting to China than their French, German and Italian counterparts.

The findings from Warwick University will cast doubt on the Chancellor’s ambitions to make the People’s Republic the UK’s second largest trading partner by 2025.

But help is at hand. Wenbin Wu, the Chinese sales manager with Besbrode Pianos in Yorkshire, has provided a guide on how to do business with China.

He should know - the Leeds business exports hundreds of pianos to wealthy clients in China every year.

1. Chinese people always negotiate the price when buying things. It is almost inconceivable that first proposals will be accepted. Researching the correct price before bargaining is essential.

2. Business is often discussed during dinner, where alcohol can play a large part. It is considered impolite not to join in.

3. Status is important to Chinese people and everyone offers to pick up the restaurant bill. During a business dinner you should offer too, even though it may be declined.

4. Many Chinese executives now speak English, but you may need to hire an interpreter or translator for business meetings. Although initial contact is likely to be by email, Chinese people like to conduct business deals face-to-face. Patience is key and relationship building is important to gain trust.

5. The Chinese government controls social media. Facebook, Youtube, Twitter and Instagram sites are blocked. LinkedIn is used by English speaking Chinese business people. More than 400 million Chinese people use the internet and new digital platforms are being developed.

6. The Chinese customs has a rule that if they think the value of the product is underestimated, they can charge the tax based on their valuation, which sometimes can be 10 times as much as the figure shown on the invoice.

7. In China, there are internet platforms like eBay to sell things and they have a lot of customers. But in order to protect local business, it is almost impossible for a foreign company to have a shop there.

8. Conferences and trade exhibitions are highly valued by the Chinese business community. Huge trade fairs are held in the major cities.

9. For international business between China and the UK, the most significant challenge is transport. It could take as long as six weeks to ship the products from one country to another. So the cost in time is huge.

10. There is a growing demand for European antiques in China. The tax regulations over antiques are different from newer products. For pianos, if they are over 100 years, they can be tax free, otherwise, an 18 per cent tax needs to be paid. However it needs a specialized written authority to prove that the piano is over 100 years old.