by peterpan

Created on: April 23, 2008

Chinese are known for having rich cultural heritage that had been existing eversince dynasties existed in the country. Their rich cultural traditions are very much influenced by their religion which includes Taoism and Buddhism. These cultural heritages have influenced even the businesses in China. Thus, foreign investors need to submit themselves to these beliefs and traditions in order to market themselves in Chinese communities.

Before you set up a business in China, you first have to be Chinese. I don't mean that as a foreign investor you have to change your nationality. What I mean is you have to first learn Chinese culture. You have to learn the day-by-day lives of the people and you have to learn the Chinese business etiquette to prolong the existence of your business in China.

I have come across an article that includes a list of factors that foreign investors have to consider if they are planning to do business in China. This checklist was introduced by Ronald Wombolt, VP and director of international operations of John Fluke Manufacturing Company, and I will enumerate the checklist as is and put some explanations after each one.

1. Do not always offer your most favorable price up front. The Chinese want to bargain and negotiate.

Try not to put prices that are already fixed depending on what would benefit your company. For example if you price an item putting only a very small profit in it, you could never sell it if a Chinese customer would bargain the price. Therefore make sure you price your items in such a way that bargaining the price would still give you profit.

2. Do not, without good cause, insist on selling on letter of credit terms. The Chinese are usually prompt payers.

One good thing about Chinese people is that they are very prompt payers. The reason behind this could be the influence of their religious beliefs. Therefore, giving out credit terms with Chinese customers won't be that difficult since you could be assured that they would pay it on time and that the money in your business would keep on rolling.

3. Do not make any statement you can't back up, because the Chinese record everything that you say in negotiating sessions.

Make sure that you have reviewed your business plans and proposals before presenting it to your clients. Every detail is important to them so as every cent counts in their businesses.

4. Do not offer or accept any terms or conditions that you will not want in future transactions. Although the Chinese will constantly ask

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