China Marketing

The social values and history have shaped and formed the economical developments and the current environment of business in the People's Republic of China. They have determined the patterns for negotiation and the Chinese perceptions of business, and their feelings towards westerners. The implicit and explicit rules that the Chinese society has on the development of businesses, and the economy in general, are very important issues for any person going into China to understand and consider. In order to achieve a successful partnership between Chinese and Western cultures it is essential to have a basic understanding of history and cultural developments that have shaped the current environment of business. The three pillars of China are economy, culture, and society.

Chinese culture and society can be divided into two major periods, Imperial China and Communist China. The modern Chinese society can be defined as a combination of centuries of values and communist propaganda achievements. The imperial China had a strong class system where 90% of the people were poor and possessed limited resources to develop culturally, socially and personally. This situation led to the strength of the large family and the basis for the distinctive collectivism of China. The well being of the family and the state are the main goals for any action in society. If actions taken do not contribute to the family or the society as a whole, then the actions will not be regarded as proper. Eliminating almost any form of individualistic thinking.

The Chinese Family is the main economic unit of society. The development of the Chinese economy is based on the family. The Chinese family is the economic unit in which members produce and consume in common. Also, it is the religious unit responsible for the performing of rites required for the well being of the family. The social security of the Chinese family relies on the effective performance and interaction between religion and family.

In addition to the traditional imperial Chinese society, the Communist values shape and blend into modern Chinese philosophy. One of the early acts of the Chinese Communist party after it gained control in 1949 was to officially eliminate organized religion. Previously the dominant religions in China had been Confucianism, Taoism, and Buddhism. Most temples and schools of these four religions were converted to secular purposes. Only with the constitution of 1978 was official support again given for the allowance of formal religion in China. The constitution also stated that the Chinese population had the right to hold religious beliefs.

China has a long and rich cultural tradition in which education has played a major role. Throughout the imperial period (221 BC-AD 1912), only the educated have held positions of social and political leadership. In 124 BC the first university was established for training prospective bureaucrats in Confucian learning and the Chinese classics. Historically, however, few Chinese have been able to take the time to learn the complex language and its associated literature. It is estimated that as late as 1949 only 20% of China's population was literate. To the Chinese Communists, this illiteracy was a stumbling block for the promotion of their political programs. Therefore, the Communists combined political propaganda with educational development.

The Chinese society had become a combination of strong family and moral values and a country thriving for modernization and industrialization. This concept of stability as the highest achievement obstructed the development of China in the past, and still creates problems today. The sole concept of risks disturbs the grounds of Chinese culture in contrast to western society where risk is the main drive for development and investment.

The radical change from imperialism and strong class differences to the equality philosophy implemented by Mao Tse Tung created the modern China. Its development from feudalism to communism created a conservative China, with very few attempts to move towards capitalism. It was through the imperial years that mercantilism and trade took place, yet it never flourished, as the capitalistic model westerners know, until China's re-opening to the western world in the 70's.

China has always had the elements for development. In fact, they could very well have had an industrial revolution before England. China possessed many key elements that transformed Europe into a modernized industrial economy (compass, printing, gunpowder, etc). Nevertheless, there is much more to China than just industrial and economical development. Thus, when considering developing a business in China one should always consider the cultural factors that makes the Chinese society so strong and differentiating it from western societies.

The fact that China wants to grow, does not mean that it will do it with the western models and philosophy; rather it will be with models developed from their own culture. This is the point that can be attributed to cause most of the problems between Chinese and Western cultures, and the point to be accepted in order to be successful in developing a successful business relationship in China.

Negotiating in China can be very frustrating. Differences in decision making styles and negotiating tactics cause misunderstanding and tension. Chinese culture is based on the importance of rituals and ceremonies and so is Chinese business. Business meetings are as important as the dealings during receptions.

China's improvements over the last 14 years are overwhelming, with their Real GNP growing at a rate of 9% a year, China's economy has matched the performance of countries like Japan and Taiwan. China's standard of living has also increased, and the number of people who were considered absolutely poor decreased approximately 63%. I feel with the vast amount of people living in China, and the economic activity booming like it is, China's exports will continue to grow, as well as the standard of living. This will create more revenue, and more capital for them to produce more goods and become even larger, prospering as one of the biggest economies on the earth. I also feel that China should try to overcome its corrupt system and steadily move into a free enterprise system.

The Chinese economy has been formed as a result of centuries of history and development, which reflect the philosophy of China and its current economical position. China started as a mainly agricultural based society with the subsistence group; the family. For more than 2000 years the Chinese economy operated under a type of feudal system; land was concentrated in the hands of a relatively small group of landowners whose income depended on rents from their peasant tenants. Agricultural taxes levied by the imperial government and crop