Comparison of Chinese and Russian Business Cultures

Introduction
Various countries interact in business-related activities on a daily basis. However, these
countries have different cultures. These differences in culture prove to be obstacles in business
communication. Factors such as language, gestures and dress codes play a major role in business
communication. It is important to understand various cultures when participating in business-
related activities. Knowledge of cultural factors eliminates the common mistakes and
misunderstandings associated with business The purpose of this report is to examine the business
cultural factors of two countries – China and Russia – and how they affect business
communication, and also to suggest ways to overcome the possible communication barriers.
Understanding cultural factors is vital when dealing with business communication. Differences
between cultures must be respected in order to communicate clearly and effectively. While
writing this essay, we have tried to compare peculiarities of business etiquette in Russia and
China in order to reveal main differences and similarities and to give some recommendations to
those Russian entrepreneurs, who would like to do business in China.
 Comparison of Chinese and Russian Business Cultures

In our essay we have chosen 8 components of business environment, according to which

we are going to compare Chinese and Russian business cultures. These components are:
Background to Business; Business Structures; Management Style; Business Meetings; Doing
Business in Teams; Communication Style; Dress Code; Successful Entertaining.

Background to Business

China Russia
At the begining of the 21st century, the Russia is a fragmented society, undergoing a
People's Republic of China finds itself in the midst radical period of change and readjustment. The old
of social, economic and cultural transition. The old order has been swept away, leaving a political and
certainties, which epitomised the iron-tight grip of economic void. Certain universal truths do,
the Communist Party during the reign of Mao however, typify the Russian approach to business
Zedong, have been replaced by the more liberal but and life in general.
unclear policies. Firstly, it is always worth bearing in mind
The pursuit of profit is no longer “counter- that for centuries the state has always been seen as
revolutionary” and business people have long since an organ of oppression and repression. Laws and
ceased being viewed as enemies of the people. Yet statutes are therefore seen as the “enemy” and to be
the Communist Party is still in power and shows avoided and evaded at all costs. Contracts are valid
little appetite for any of the political reform so only if supported by a close personal friendship and
much clamoured for by the West. Deng himself taxes are left unpaid on both a corporate and
best described this seemingly paradoxical situation personal level.
(rampant capitalism in the midst of a communist Secondly, the only things that can be relied
country) in two oft-quoted maxims: upon are close personal relationships within the
“It doesn't matter whether a cat is black or white so business environment.
long as it catches mice” and “To get rich is Thirdly, the legal status of many Russian
glorious.” companies is very dubious, being incorporated
Thus in the new order of the PRC, what business under the old laws of the Soviet Union which no
rules apply? The answer is, of course, to fall back longer have validity. Thus, most agreements have
on traditional cultural drivers. This does not imply to be made on a trust basis - a strong element of
that modern business systems and approaches are which has to be clearly identifiable self-interest.
ignored - more that they are given a Confucian The legal basis of any arrangement will probably
twist to enable them to lie happily alongside the mean very little once the relationship breaks down.
mainstream Chinese world view.
 Business Structures

China Russia
Under the Communist regime the most Autocracy and centralised decision-
important structure to which an individual was making are synonymous with the Soviet
linked was his or her work group or dan wei. In system in many people's eyes and this
the past, the dan wei guaranteed workers approach can certainly be seen to be
security throughout their lives. In order to manifested within large Russian business
maintain the security blanket afforded by the organisations. Russian companies tend to be
dan wei and at the same time take advantage of driven by one strong central figure who will
the new opportunities arising in the “new make strategic decisions with little or no
order”, many people take on two jobs until the consultation with anyone other than a handful
new opportunities are viable enough to risk of close trusted advisors. (Indeed this
losing the traditional support mechanisms. centralised decision-making process can be
Most overseas companies who set up most clearly seen in the approach of recent
operations in the PRC do so in the form of a Russian presidents.)
joint-venture with a Chinese organisation and Therefore, when dealing with potential
there certainly seem to be manifold benefits to clients or joint-venture partners in Russia, it is
be accrued from doing so. Probably the biggest absolutely essential to make sure that the right
benefit from the joint-venture approach is that person is being dealt with. Western companies
it helps the overseas entity to establish who attempt to interface at inappropriate levels
relations - via the Chinese part of the venture - within an organisation waste massive amounts
into a complex network of Chinese of time and resource. Nowhere is the advice,
relationships. 'Go straight to the top', more pertinent.
Guanxi, or personal connections, are the The headlong rush from communism to
all-important weapon in all business situations capitalism has made people into entrepreneurs
in the PRC. As has often been said, “In China, and centralised decision-making enables
if you don't have Guanx”, you don't have organisations to grab an opportunity when it
anything.' Forming a joint-venture company arises. Thus, as in most developing economies,
would seem to be the quickest and most companies tend to have a short-term view of
effective way of developing good quality business activities and it is imperative that any
relationships in a country such as China. potential partner can see the short-term benefits
of collaboration.
 Management Style

China Russia
In Confucian philosophy, all As has been stated above, management
relationships are deemed to be unequal. Thus, tends to be centralised and directive. The boss -
the older person should automatically receive especially the 'big boss' - is expected to issue
respect from the younger, the senior from the direct instructions for subordinates to follow.
subordinate. This Confucian approach should Little consultation will be expected from
be seen as the cornerstone of all management people lower down the company hierarchy.
thinking and issues viewed by the Chinese Indeed too much consultation from a senior
bizarre Western notions. manager could be seen as a sign of weakness
Many people in China see the lack of and lack of decisiveness.
observance of hierarchical values as the root Middle managers have little power over
cause of the “problems of the West.” These strategy or input in significant strategic
problems include the twin Western diseases of decisions. The most powerful middle managers
moral degeneration and the anarchic idea that are the ones who have the most immediate
an individual is more important than the group entree to the decision-maker at the top of the
to which they belong. organisation. There is little point in wasting
Thus, in China, management style tends time debating with middle managers who do
towards the directive, with the senior manager not have an easy access to the top. The most
giving instructions to their direct reports who significant reason for delay in reaching a
in turn pass on the instructions down the line. decision in Russia is that the decision has not
It is not expected that subordinates will been put in front of the real decision-maker.
question the decisions of superiors - that would Delegation is usually in terms of
be to show disrespect and be the direct cause of managers giving precise instructions to
loss of face (mianzi) for all concerned. subordinates who are expected to perform their
The manager should be seen as a type of allocated tasks with little or no discussion.
father figure who expects and receives loyalty Many westerners complain of a lack of
and obedience from colleagues. In return, the initiative from local Russian staff, whilst
manager is expected to take an holistic interest Russian staff often bemoan the lack of clear,
in the well-being of those colleagues. It is a unambiguous advice from expatriate managers.
mutually beneficial two-way relationship.

Business Meetings
 China Russia
It is important to show respect to those to As might be expected in a country where
whom respect is due. Respect should be shown managers are autocratic in style, meetings are
to age, seniority, party membership, the history often for the purpose of information
and traditions of China, and so on. Stand up dissemination, rather than for the open debate
when a senior person enters the room, offer the of current business issues. Formal meetings are
seat of honour and be attentive. often held to ratify decisions which have been
Business cards are always exchanged on made elsewhere and to give clear instruction on
first meeting a new contact. Cards are held in key tasks to be performed.
both hands when exchanging and then Any open debate on the issues in hand
scrutinised in detail. It is best to have your card will have been undertaken elsewhere in either
printed in Chinese on the reverse and always one-to-one meetings or in smaller groups. It is
offer it Chinese-side up. Treat the card with in these 'background' meetings where much of
great respect as the card is the man. the real debate is undertaken. Without access to
Handshaking is the norm but a Chinese these meetings, it can be very difficult to
handshake will tend to be light and lingering. influence the flow of events and it is only
As it is considered impolite to look people through cultivating very close relationships that
straight in the eye, it is customary to look an outsider will ever be invited into these inner
down, lowering the eyes as a mark of respect. cabals.
It is common to be involved in a series of Formal meetings tend to be very
meetings rather than one big meeting at which structural and serious. The dour image
all major issues are disclosed and assessed. associated with many Russian negotiators
Meetings are about building relationships and stems from the belief that a formal meeting is a
exchanging information - it is rare for a serious affair and should be treated
decision to be made within the meeting. accordingly. Humour is seldom used in such
Decisions will be made elsewhere in serious situations.
consensus-style discussions, which involve all
the relevant people (including possibly the
Party.) As a result of this approach to meetings
and their serial nature, patience is very
definitely a virtue. Impatience will achieve
nothing other than delaying things even more.

Doing Business in Teams

 China Russia
Despite being highly hierarchical in Teams work best together when the
approach to structure and organisations, the relationships amongst the group are close.
Chinese remain consensus-oriented and it goes There remains a general suspicion of strangers
without saying that consensus players make in Russian society and any attempt to bring
good team members. The whole cultural together teams from different strands of an
emphasis is on group orientation with organisation can be problematic. Once a team
individual needs and desires being sublimated has been established and is working well
to the greater good of the whole. People belong together it is probably best to keep the team
to a number of groups but the ones with the intact for as long as possible. Move the team
strongest pull would be the family, the dan wei wholesale from project to project rather than
and the Party. developing a fresh team for every situation.
One of the downsides (from a Western The team leader is expected to play a
perspective) of this strong group orientation is domineering role and to issue precise detailed
a perceived lack of individual initiative. It instructions and then supervise ongoing
would be unusual for an individual to act progress. Those western managers who are
unilaterally without involving other members more used to a 'hands off' approach will
of the group. Standing out from the crowd can undoubtedly confuse local staff who will feel
be viewed as very negative and result in unsure of what is expected of them. An
personal difficulties. expatriate team leader needs to establish
credibility through being decisive, clear and
visibly in control

Communication Style
 China Russia
Unless you speak Chinese, it can be difficult English language levels vary enormously in
to do business in many parts of China without the Russia. Many younger entrepreneurs (especially in
help of a translator. English language levels are the cosmopolitan centres like Moscow and St
very patchy and although a layer of fluent English Petersburg) have a fluent command of, not only
speakers exists, the layer is quite thin and levels English, but often several other European
fall away very quickly. Communicating in China languages. Yet in other more provincial centres it is
can, therefore, be a slow, laborious activity and not unusual to meet business people who have little
fraught with constant dangers in terms of or no foreign language skills. Always check in
misunderstanding and mistranslation. Don't assume advance whether interpretation is needed. If in any
comprehension. Cover the same ground several doubt about the comprehension levels encountered
times and constantly check for understanding. in meeting situations, be sure to check and recheck
One of the reasons that communication can by asking relevant questions
be such a problem in China is that the Chinese find As with many other cultures much more
it extremely difficult to say “no”. Saying ”no” emphasis is placed upon the spoken than the
causes both embarrassment and loss of face and it written word. People believe things when they have
is therefore better to agree with things in a less than heard them from someone with whom they have a
direct manner. Thus anything other than an trusting relationship. Therefore, it is often much
unequivocal 'yes' probably means 'no'. more efficient to hold face-to-face meetings at
It is also difficult to deliver bad news and which issues can be fully explained, rather than
this is often done through the use of an sending information in a written format only.
intermediary who can soften the blow and try to There tends to be very little visual or verbal
preserve as much good will within the relationship feedback during meetings in Russia. People listen
as possible. silently and with little obvious body language being
The Chinese have a reputation for displayed. This does not, however, mean that the
'impassiveness' and this is largely based on listener is disinterested or does not understand - it is
Western misinterpretation of Chinese body merely a cultural characteristic which Russians
language. As with the Japanese, the Chinese use a share with, amongst others, the Finns and the
very limited amount of visual body language and Japanese. Russians will tend to wait and think
Westerners interpret this rigidity as a lack of before responding to a point made to them - do not
responsiveness and emotion. Lack of overt body be impatient. Allow the Russians the time and
language does not mean that the Chinese do not space needed to take part fully in the conversation
show their reactions - more that westerners are not (and remember that they are probably struggling
skilled at reading it across the cultural divide. with foreign language as well.)

Dress Code

China Russia
 One of the most visible changes to the Russians tend to dress as well as their
human landscape of China over the past ten salaries will allow. Men would tend to wear
years has been the change in dress code. Gone either a dark suit or jacket and trousers with a
is the standard unisex Mao jacket and trousers tie and women mainly wear business suits or
in blue or green and these have been replaced blouses and skirts.
by a much more western style of dress - It is important, for westerners to look
especially in the commercial and urban areas. smart and appear to be expensively dressed as
Many men now wear suits and ties and this enhances credibility. From the safety
women tend to wear skirts and blouses of a standpoint, it is probably not advisable to wear
modest cut. very expensive watches or jewellery.
It is advisable to have smart business The winters can be extreme (as can the
attire with you when visiting. Be aware of the summers) so ensure suitable clothing to meet
vagaries of the Chinese climate, which veer whatever the prevailing conditions. Be sure to
from sub-tropical to freezing and dress remember a hat, gloves and scarf in winter.
appropriately for the weather conditions.
Wealth is admired, so wear good quality
clothes, watches etc. if you want to impress -
but don't be overly ostentatious.

Successful Entertaining

China Russia
If you are invited to a banquet in China, It is difficult to know what to expect
prepare yourself for a meal to remember. The when invited out to lunch or dinner in Russia.
banquet can consist of up to thirty dishes being The event could simply be a relationship
served over a period of time and it is therefore building exercise where little if any actual
wise to pace yourself. Try to eat a little of each business is discussed but on the other hand you
dish rather than sticking to the one you can find yourself in very detailed negotiations,
recognize. with pressure being applied to complete a deal.
The seating arrangements at a banquet Whatever issues are discussed, the meal
are very complex and linked to perceptions of is very likely to be a fairly lavish and lengthy
hierarchy and status. If you are invited, you affair with more than enough food to keep you
will be shown where to sit. However if you are going for the rest of the day. Try to eat heartily
the host it is probably best to get some local and express your appreciation of the food on
advice on the best seating plan if you want to offer, as this reflects well on the host.
avoid insulting anybody. Russia has always had a reputation for
Meals can be accompanied by a great being a hard drinking culture and this has
deal of smoking — even during the courses. It traditionally been true. Many Russians insist
is acceptable to belch and slurp during the that heavy drinking sessions at business
meal as this is taken as a sign of appreciation. dinners are becoming a thing of the past, but
Alcohol will in invariably be consumed you have to expect that a good deal of strong
in quite large quantities during a formal alcohol is likely to be consumed — very often
banquet — mainly either beer or local clear during the elaborate toasting sessions that take
alcohols which can be very potent. Although it place. Favourite drinks are vodka and Russian
is not really a problem if you drink a little too champagne, although beer and wine are now
much, it is probably safest to be wary of more common than a few years ago.
unknown local liquors. Service charges are invariably added to the bill
Traditionally, tipping was unusual in but it is customary to leave an additional tip of
China, although it is starting to become more around 10%.
common in newer westernised establishments.

Some Recommendations on Doing Business in China

 Guanxi, or personal relationships are of vital importance when doing business in China.
Do not underestimate the importance of the relationship building process.
 People are comfortable building relationships with honourable people who show respect
to those to whom respect is due.
 As all relationships are unequal it is important, if you wish to appear honourable, to show
respect to age, seniority and educational background.
 Managers tend to be directive, which reflects basic Confucian concepts of the hierarchical
nature of society.
 In return for loyalty, the boss is expected to show consideration and interest in all aspects
of a subordinates' life.
 There are often close relationships between senior management of a company and local
party officials.
 It is important that you do not make people 'lose face' in front of their group. Always
respect seniority and do not openly disagree with people.
 Do as many favours for people as possible - debts must always be repaid.
 Business cards should be formally exchanged at the beginning of meetings. Treat the
business card with great respect, as the card is the man.
 Meetings are often long and seemingly without clear objectives. Very often the meeting
is an exercise in relationship-building and the aim of the meeting is to move the
relationship, rather than any specific business task, forward.
 It can take several, very long meetings before any tangible progress is made. Patience is
essential if you wish to capitalise on the situation.
 The Chinese are very interested in long-term commitment. Build long-term goals and
objectives into your proposals.
 Do not be too direct. Strive for diplomacy, consensus and harmony. Remember that this
takes time to achieve.
 Do not assume comprehension. It is often useful to go over the same point several times
from different angles in order to aid comprehension.
 It is difficult for the Chinese to say no directly. Anything other than a direct 'yes' could
mean 'no'. Be circumspect and reflect on seeming agreements reached. Has an agreement
actually been reached?
 It is difficult to read body language as, by western standards, it is somewhat muted in
China. Be very alive to any changes of posture, animation etc.
 Gift giving is an everyday part of Chinese business culture. Giving and receiving gifts
helps to cement relationships. Take gifts with you when visiting and put some thought
and effort into the gift selection process.
  Always wrap gifts before giving them. Gifts are rarely opened in front of the giver.
 The Chinese are an intensely patriotic race. Do not make disparaging remarks about
China, the political situation, human rights etc.
 Entertaining is very important in the relationship building process. If entertaining, do it
well. If being entertained at a banquet, take you lead from your hosts - they will enjoy
taking you through the process.

Conclusion
Summing up, we may say, that we have examined major differences and similarities of
Chinese and Russian business environment and have come up to a following conclusion. Though
China is on its way to some westernalization of business culture and etiquette, there still remains
a great influence of the contry’s history, traditions and specific philosophical world outlook on
the standards of doing business. Thus, being knowledgeable about these Chinese cultural
peculiarities is definitely a key to being successful in doing business with Chinese entrepreneurs.