Business China

Cultural Challenges Faced by Foreign Companies in China

+86-020-2917 9715
setting-up and establishing a business in China

Chinese culture is rich with history and traditional beliefs. Stretching over more than 50 centuries, its remnants are still prevalent in the country’s current social, political and economic behaviors. These beliefs and practices have heavily influenced the societal structure and China’s policies with regards to industrialization, liberalization and global expansion. From Buddhist ideology to Confucianism, the country’s culture has generated distinctive values that are not only unique to foreigners around the world but to each region in China, as well.

Foreign invested enterprises (FIEs) and entrants have faced a number of challenges when setting-up and establishing a business in China. From regulatory and environmental to innovation obstacles, let’s take a look at cultural challenges that every foreigner is likely to face when in China.

A number of researchers have studied these issues in terms of the difference between their native culture and Chinese culture; however in the international business community, the focus has been more toward how Chinese culture has had an impact on policies, decision-making authorities, regulations and business relationships that FIEs share with both Chinese consumers and local firms. Let’s talk about the most common ones.

The Collectivist Culture

Collectivism is the concept of giving priority to a group’s achievement rather than highlighting each individual’s contributions. Western and especially American firms have a hard time conforming to this, owing to the dominant individualism seen in their local culture. Collectivism doesn’t just affect the decision-making process—since every individual’s consent is important—but it also makes local organizations more competitive as a whole, making it difficult for FIEs to collaborate openly and directly.

setting-up and establishing a business in China

Confucianism and Buddhism

The belief that every individual has potential regardless of their economic background and social class comes from the Confucius school-of-thought, which promotes self-cultivation and perfection. In addition, following the Buddhist beliefs, Chinese emphasize anti-materialism as well as feelings of low-arousal such as calmness and composure over excitement and celebration—prevalent in American and western cultures. The Buddhist belief is also strongly related to respect toward seniority and hierarchy, which means that questioning authority figures—even when in a completely rational scenario—is considered disrespecting and disloyal.

Cultural conflicts can impact even the most successful businesses. In China, the stakes are even higher given the country’s strong connection to its roots and history. In that case, FIEs need to rely on additional support that can guide them through the eye of the storm and help improve the value of their business.

At Business China, we help foreign investors establish their foreign firm seamlessly and offer an expert team to help them understand the various cultural challenges and language barriers they might face along the way.

To hire our services or ask a question, get in touch with us here!
  • James Oliver "True professionals, very helpful and dedicated. Your support team is fantastic."
  • Robert Gatti "Our advisor was brilliant and we were given more help that we knew we needed. What I liked most about Business China's service was the prompt and businesslike approach.It helped us dramatically. At a...
  • Vivian Belfanti "Quality work and friendliness is why I chose to work with Business China. Business China is organized very easy to work with."
  • Tim Orchard "Thanks to Business China’s professional guiding and efficient processing about company incorporation and VAT refunding, our new entity in Guangzhou already step into a virtuous circle. I have to say...
  • Victor Declety "Business China allows us to focus on our customers instead of being tangled into enterprise level business incorporation and maintance."
  • Ben Hunter "Business China is helping people who don't necessarily know how to connect your current business with the booming Chinese market and how to lay out your 'China Dream' here specifically. It has been...
  • Daniel Wong "A great customer experience! The flexability and speed of response from the account manager, as well as the quality of the service process was exceptional."
  • Stacey Morris "Businesss China has been superb. Their customer service is great. The guys there respond very quickly and go above and beyond that help."
  • M. Salem Having real-time information allows us to deal with issues immediately before they become problems.We are satisfy with Business China.
Request a Proposal

Drop Business China a quick message to let us know about your incorporation needs.