With Chinese New Year just behind us, it’s the perfect moment to reflect on how we communicate with our clients and partners in China.
In many ways, for Western bankers or professionals in Asset Management, successfully doing business in China can be like unlocking a special set of codes. If you don’t adapt the New York, Paris or London mindset, you might find yourself frustrated or worse, losing out on important opportunities.
Due to regulations and geo-political climate, banking and investment activities by foreign investors have slowed down. However, this is the perfect time to demonstrate that you are committed to investing in China in the long-term. Templar Advisors in Asia provides an insider guide for communicating effectively with your Chinese counterparts. In China, it’s not just about making the numbers work; it’s about the way you present yourself, build trust, and navigate cultural nuances.
1. Trust First, Business Second: It’s the Secret to Everything
In China, business is secondary to relationships. A lot of business decisions and negotiations often take place in more informal settings, such as over dinner or drinks, to build relationships and establish trust. You might have the best product in the market, but if you haven’t built trust first, you’re not going to get anywhere. We’ve seen this happen with some of the biggest companies. They rush straight into transactional details, thinking that their product breadth or technological edge will speak for themselves. It won’t.
Here’s a story… In 2016, a US tech giant was in talks with China National Petroleum Corporation, trying to get a major deal off the ground. The US team was eager to contract the deal quickly and show commercial intent. But, the Chinese side felt rushed and, in turn, unappreciated. The Americans dived straight into negotiations without taking the time to develop the relationship piece. In Chinese culture, trust is built over time. The tech giant’s transactional approach backfired. They didn’t respect the pace at which guanxi (relationships) must be built. The result? The deal fell apart.
The takeaway? Slow down. Build the personal connection. Ask about family. Ask about their interests. Acknowledge Chinese New Year! Yes, it sounds basic, but it’s powerful. Take the time to build trust before jumping into the business talk. You’ll be amazed at how much this pays off.
2. Avoid Public Criticism: Saving “Face” Is Not a Cliche
Never, ever embarrass someone publicly in China—not in meetings, not in emails, and especially not in front of a group. The concept of ‘face’ is so central to Chinese culture that a loss of face can mean the end of a business relationship. Even professional feedback should be handled with tact and delicacy.
Tesla stumbled in 2018. When Tesla publicly called out its Chinese suppliers during a press event, it didn’t go down well. The company’s CEO, Elon Musk, made remarks about missed deadlines and quality issues. While the criticism might have been valid from a commercial perspective, the Chinese side felt humiliated. In Chinese culture, public criticism is a huge faux pas and can severely damage a relationship.
The secret? If there’s an issue, address it privately. Offer constructive feedback behind closed doors. If you have to critique something, do it in a way that allows your client to save face. Criticize the work, not the person.
3. Hierarchy is Real: Don’t Skip the “Pecking Order”
In China, seniority matters – meaningfully. If you’re meeting with a team, you’d better know who holds the decision-making power. And, here’s the secret: It’s often not the most vocal person in the room. It’s likely the quiet one sitting at the head of the table.
Here’s where it went wrong for Volkswagen in 2015. Volkswagen was negotiating with SAIC Motor Corporation, one of China’s largest auto manufacturers. The German team, started pushing quite directly with particular members of the SAIC team for progress towards agreement. But, they missed something crucial: they were ‘man-marking’ the wrong Chinese execs. The ones sitting quietly, and not the more vocal ‘negotiators’ had the real authority. By not deferring to them properly, Volkswagen disregarded the importance of individual status and found the deal delayed. The Chinese team wasn’t willing to stretch to make the deal work because they felt the VW team were discourteous.
The secret? Do your homework. Always know who the senior people are and give them the respect they deserve. Let the senior leaders speak first. If you’re not sure, ask diagnostic questions: “Who do we need to involve in these discussions?” “Is there anyone else who would benefit from being around the table?” It’ll pay dividends in showing that you understand and respect the “M.A.D.” structure (Money. Authority. Decision-making.)
4. The Subtle Art of Reading Between the Lines
Here’s a major clue for Western finance professionals: Chinese clients are rarely going to say “no” outright. They’re far more likely to use phrases like “We’ll consider it” or “it will be difficult,” which, if you’re not careful, you might interpret as “maybe”. More forcefully, it likely means “no.” It’s a cultural thing—there’s a real art to avoiding direct confrontation, especially in the early stages of a negotiation.
Let’s take a look at a US strategic consultancy missed a major opportunity in 2013. The Consultancy was working on a potential engagement with CNOOC (China National Offshore Oil Corporation), and when the Chinese side signalled that they, “will think about it,” The consulting team took that as a green light to push forward. But, for CNOOC management team, they were saying a very polite “no, thanks.” By not picking up on this subtlety, the US team was caught off guard and continued to invest time and resources in an ‘opportunity’ that should have been de-qualified and removed from their opportunity pipeline.
So here’s the secret: Watch your clients’ body language. Pay attention to tone and timing. If they’re being vague or evasive, it’s likely time to pivot. Don’t push; let them come to you with their decision.
5. Patience Pays Off—Big Time
Decision-making in China is slower, more deliberate, and often consensus-driven. Don’t be surprised if things take longer than you expect. When Chinese clients take their time, it’s not a sign of indecision; it’s a sign that they’re making sure everyone is on board.
Uber learned this the hard way in 2017. When Uber was expanding in China, they were in talks with Didi Chuxing, the dominant ride-sharing company. Uber was used to the fast-paced, American-style “move fast and break things” mentality. But Didi’s decision-making process was slower and more measured, with a lot of back-and-forth behind the scenes. Uber, frustrated by the slow pace, tried to rush things, and as a result, they failed to secure a long-term partnership with Didi.
The secret? Relax. Don’t pressure your Chinese clients for quick decisions. Understand that they’ll take their time, and when they do make a decision, it’ll often be a collective one. Patience isn’t just a virtue; in China, it’s the key to success.
6. Presentation Is Key: Go for Substance, Not Style
Here’s a small but powerful secret: When presenting to Chinese clients, don’t oversimplify or go for flashy style. Chinese business culture values substance, details, and data over style or slick PowerPoint slides. This means that your pitch should be thorough, well-researched, and built around strong facts and analysis.
One European Bank found this out during its early days in China. When the bank first started presenting to Chinese clients, its Western-style, high-level presentations with minimal details weren’t landing. Chinese clients expected much more depth, with clear financial analysis, data-backed projections, and a thoughtful rationale for every decision. The bank quickly learned to adapt, shifting to a more formal, detailed presentation style that appealed to the Chinese need for thoroughness.
The secret? Be prepared. Your presentation needs to show that you’ve done your homework and are ready to answer any tough questions. Think in terms of details—Chinese clients appreciate clarity and transparency in numbers.
Final Thoughts: Unlocking the Code
The secret to success with Chinese clients isn’t just about what you say; it’s about how you say it. It’s about building trust, respecting hierarchy, and understanding the subtle signals. It’s about taking your time and letting them come to you. It’s about understanding that a nod or a smile might be just as important as the numbers on your slide.
By integrating these insights into your communication style, you’ll not only avoid common missteps but also gain the respect and trust of your clients in China. They’ll feel heard, valued, and understood. And that’s the secret to building lasting, successful business relationships.
So, as you head into the 2025 Year of the Snake, remember these tips—and don’t just use them in February. Use them all year round. With a little patience, respect, and strategic communication, you’ll be ready to unlock the full potential of your relationships with Chinese clients.