It is said that Personal connections are very important for doing business in China, is that right?
Yes. Personal connections are the key element of doing business in China and are at least as important as what you know. To succeed in China, you must cultivate close personal ties with business associates and earn their respect and trust. Any successful person in China will be a member of a loose network of personal friends, friends of friends, former classmates, relatives, and associates with shared interests. These people do favors for one another and always seek a rough balance between help given and received.
Why do Chinese people pay so much attention to establishing close personal connections?
For the Chinese, individuals are part of the collective family whole. The family is the source of identity, protection, and strength. In times of hardship, war or social chaos, the Chinese family structure was a bastion against the brutal outside world, in which no one and nothing could be trusted. As a result, trust and cooperation were reserved for family members and extremely close friends. Moreover, China was and continues to be a land ruled more by decree than by laws. A high official could act with impunity, and innocent people could get hurt unless they had powerful friends to protect them. By establishing close connections with others, Chinese could survive and perhaps even prosper.
Are there any differences in personal connections or bureaucratic meddling, among different areas in China?
In China's more open areas, such as the Special Economic Zones in the south, the problem of bureaucratic meddling by party and government officials has been minimized. But in northern and inland areas, foreign business people will often be frustrated by layers of bureaucracy. Local party bosses, municipal managers, tax officers, and the like can make establishing an operation difficult. Although there are specific guidelines for dealing with foreign businesses, China remains a country ruled by decree. For example, a local tax official can impose a tax on a company simply because the local revenues are low or, worse, because he doesn't like someone in the company. Chinese bureaucrats can engage in all kinds of intrigue, and have been known to sabotage projects for personal gain or revenge. For these reasons, having powerful local officials for friends can be a major asset. Land-use rights, tax bases and any number of regulations can be relaxed if the right people give their consent. This is especially true in more remote areas, where wages are lower, and the need for investment is greater.
What is the usual attitude of Chinese when refusing to do a favor? Will they directly say "no"?
When asked for a favor, Chinese will usually avoid saying no, as to do so causes embarrassment and loss of face. If a request cannot be met, Chinese may say it is inconvenient or under consideration. This generally means no. Another way of saying no is to ignore a request and pretend it wasn't asked. Sometimes a Chinese will respond to a request by saying, "Yes, but it will be difficult." To a Westerner, this response may seem to be affirmative, but in China it may well mean no or probably not. If a person says yes to a question and follows by making a hissing sound of sucking breath between his teeth, the real answer could be no. Unless a request is really urgent, it is best to respect these subtleties and not to press the issue.
