Misunderstanding and Unseen in China’s Business Culture

January 3, 2025

1 Starting Point

Promoting Medical Innovation and Healthcare through International Partnerships was My Initial Goal when I Entered Medtech Consulting – a goal that still drives me today.

Language barriers and cultural hurdles between Western countries and China were clear challenges for companies interested in partnering with Chinese entities. However, there are many more than that… and some of the old beliefs may not be true or are outdated, at least from what I have experienced.

I have pinpointed some of my experiences to share with the community and hope these would bring some insights and support for those who are interested in working with Chinese business partners.

2 Indirect Communication Revisited: An Up-to-Date Picture of China’s Business Culture

I recall hearing that Chinese business culture often involves indirect communication – a notion that’s still widely accepted in Western businesses. However, my experiences have shown me that this is an outdated stereotype. In today’s fast-paced environment, Chinese professionals value efficiency and clear communication just as much as anyone else.

While it’s true that Chinese professionals might still be polite when dealing with foreigners, this doesn’t mean they’ll avoid directness. If you ask a colleague about the feasibility of a project, they’ll likely give you a straightforward yes or no answer. However, if there are concerns or issues, they might not always share them freely – especially if they’re trying to maintain a positive relationship.

3 Contract Signing Conundrum

From my point of view, the notion that contract signing in China is always a long and arduous process is another oversimplification. While regulatory requirements within companies can be complex, in particular large companies, contracts with SMEs and startups can be finalized relatively quickly – even within several working days of initial contact with the responsible person. I recall working on a project where we successfully signed a contract under these circumstances.

The most important thing I found is the mutual trust. It is very understandable to take time and double check all the conditions, especially for the first time collaboration.

4 The Forgotten Website and The Power of WeChat

In China, not only for medtech industry, websites are often seen as secondary to other priorities, such as technology and product quality. Many companies do not want to invest time and money in maintaining an official website. Online presence is secondary to technology. This can make it difficult for foreign companies to find and connect with potential Chinese partners.

In contrast, WeChat (a popular social media app) has become an essential tool for business communication. Unlike in Western countries where email or phone calls are preferred methods of contact, Chinese professionals often use WeChat to communicate quickly and efficiently.

For me, sending messages to my Chinese connections on WeChat usually results in an instant response – even from busy decision-makers. This level of responsiveness can be beneficial for business, but it also creates a challenge for foreign companies that are not familiar with this communication style. A clear and direct inquiry often leads successful communication.

5 The Importance of Network and Connection

Network is essential everywhere. In China, connections are even more crucial – but they must be with decision-makers, not just anyone working at the target company.

This means that foreign companies need to establish relationships with individuals who have the power to make decisions and drive change. Without these connections, businesses may find it challenging to navigate the complexities of China’s medtech market and achieve their goals.

6 Chasing Perfection in China’s Fast-Paced Market

In China, companies often announce new products or technologies only when they’re perfect, creating a perception that they’re always behind in terms of innovation. However, this couldn’t be further from the truth!

Many Chinese companies research and develop their products for many years before announcing them publicly. This is a kind of Chinese culture for perfection as students at elementary school only raise their hands when they are very sure of the question posed by the teacher.

But there’s another factor at play: Chinese consumers are notoriously demanding when it comes to product quality and price. With numerous providers of similar products available, consumers have the luxury of being very picky. This creates intense competition within the industry, where companies can only thrive by either innovating with cutting-edge technology that no others possess or by undercutting their competitors on price.

This feedback loop fuels innovation in China’s medical device market, as companies are incentivised to invest in research and development to stay ahead of the curve. The government’s pro-innovation policies also play a significant role in driving this trend, providing a supportive environment for startups and established players alike to push the boundaries of what’s possible.

7 Key Takeaway

Doing business with Chinese partners requires a deep understanding of local business culture, communication styles, and priorities. By acknowledging the importance of WeChat as a primary communication channel, adapting to the forgotten website phenomenon, and establishing connections with decision-makers, foreign companies can navigate these challenges more effectively.

Never underestimate the local competition and staying informed about China’s market trends can be a game-changer for those looking to enter the Chinese market or collaborate with Chinese companies.