Prior to privatization in China, business only existed in the form of State
Owned Enterprise (SOE). These were (and still are) run by people with strong
political backgrounds and relationships, usually connected by family ties to someone in the government. This sort of closed organizational structure gave no opportunity for its employees to be involved in any decision-making processes. Often leadership based on strong company ethics and principles was an important factor in decision making and staff motivation, although the extent of government financial support available meant that SOEs frequently didn’t need much in the way of business knowledge or understanding of the market. Success was based rather on good relationship building – which effectively meant getting government financial support.

With the boom of joint venture in the late 80s and early 90s, foreign investors started sending their own managers to interact with the SOE business culture. They were given great packages as incentives to compensate for hard local living conditions. In the 13 years I have been living in China, I have heard stories, too numerous to mention, of foreign managers attending hundreds of banquets and getting drunk with government officials, while the translators took over the communication channels. Most of the time they would have no idea of what was going on, other than that they were expected to drink vast quantities of alcohol, which somehow or other bridged the gap between the two cultures. The main criteria for foreigners to be successful in this business arena were knowledge of the following:

1. How to recognise who is a decision maker


2. How to impress Chinese counterparts by speaking a few Chinese phrases


3. How to use chopsticks and understand meal etiquette


4. How to ‘fake’ drinking

How to recognise who is a decision maker

All banquets are served on round tables and there is no obvious distinguishing mark, to indicate where the main guest is seated. However there are a few give-aways. Look out for these clues:
- The guest of honour is most likely to be facing the door (so they can see when the new dishes are brought in).
- Fish is the sign of prosperity and a banquet is likely to include a fish dish. The head of the fish will be placed facing the person of highest status.
- The counterpart will be seated directly opposite.
- The people seated at the right and left hand of the person of highest status are the two next most important decision makers.

How to impress Chinese counterparts by speaking a few Chinese phrases

The Chinese language consists of phrases that are called ‘chengyu’, the nearest interpretation of which, would be – proverbs. They usually have four characters and have a whole story behind them to support the meaning that you want to express. There are dictionaries with a selection of the most frequently used chengyu, an essential part of your library. Make sure you use a chengyu at the appropriate time and you will grab everybody’s attention and gain substantial respect.

How to use chopsticks and understand meal etiquette

This involves practice beforehand. Using chopsticks is the first step of eating etiquette and conveys the message to the Chinese that you are willing to learn and accept their way of living. There are two kinds of chopsticks – disposable (wooden) and those used at banquets (made of plastic, jade or polished wood). The latter are quite difficult to use to eat the peanuts and small bits, so common in Chinese cuisine, so make sure you practise with these.

When dishes are brought to the table, wait for your counterpart to start eating or at least invite you to help yourself. Fish is always taken by the highest ranking person seated at the table. They usually get the fish cheeks too – the best part of the fish.

When drinking toasts, your cup should be held at a lower level than your counterpart’s. That way you show respect. If they attempt to say cheers with their glasses held lower than yours, don’t fall for it, it is just a test.

Waitresses will keep refilling your glass while you are talking. While conversation continues, tap your index and middle finger twice on the table, which simply means ‘Thank you’. This custom is explained by the legend of an emperor, who decided to mingle with his people in disguise. He swapped clothes with his servant and watched as officials focussed all their attention on his servant, believing him to be the emperor. When the servant, dressed as emperor, was offered tea the true emperor in servant’s clothes had to serve him. To preserve the disguise, without compromising the respect due to his emperor, the servant, dressed as emperor, tapped two fingers on the table to denote bowing with respect to the real emperor.

And remember, enjoy the meal, be prepared to eat intestines, turtles, snakes and drink snake blood and bile without showing any disgust – these delicacies are believed to improve your manhood. If you are a woman, you are more likely to be forgiven the odd lapse and at least won’t be under so much pressure to drink heavily. In this case, you should make sure that you are accompanied by a Chinese person of higher position in your company, who is prepared to take over the drinking part of the evening, which is so crucial in establishing good business relationships.

How to ‘fake’ drinking (and not get drunk)

The easiest way is secretly to pour water into your cup, since you will be challenged to drink baijiu (white spirit). This lethal spirit has a strong taste and is 50%-70% alcohol. While nobody is watching fill your cup with water and make sure it is always full. Initiate constant refills of everybody’s drinks and you will soon gain the title of ‘Lao Han’ (honourable Chinese). An alternative is quickly to dispose of the contents of your cup over your shoulder as you bring it close to your mouth. Make sure there is nobody watching and that there is nobody standing behind you! Baiju is always drunk down in one go unless it is mentioned otherwise. It is a good idea to fake being slightly drunk too, in order to avoid arousing any suspicions.