Doing Business With China: Small Things Matter

Current business status between India and China

In the past two decades (1991-2010) when the focus shifted from developed economies to emerging economies, India and China were in the forefront. While China grew at an average growth rate of 10.5 percent, India grew at 6.5 percent even as the world economy grew at 2.7 percent during this period.

Both the nations have common strengths like a huge domestic market, a growing middle class and growth-oriented investment policies and regulations. This is perhaps what enabled India and China to stay afloat the global crisis in 2008. Though growth slackened during this period, both the countries were quick to recover and are growing faster than the other nations. During the period 2011-15, China was expected to grow at the rate of 8.2 percent and India was expected to grow at 6.6 percent.

China already ranks as India’s top trading partner. The two-way trading between both the nations stands at about USD 66 billion. The target is to raise it to USD 100 billion by 2015. As India and China account for one-third of the world’s population, trade collaborations between both the countries can go on to make them a ‘huge trading block.’


One of the major roadblocks in trading between India and China is the disputed border issue. Like for instance, the Stilwell road which connects India, China and Myanmar begins in Assam and passes through Arunachal Pradesh and Burma to Yunnan province in China. This road is part of China’s “Gateway Strategy,” intended to connect several South Asian and Southeast Asian countries through improved air, rail and road links.

However, owing to security concerns, India is not interested in developing its portion of the road, thus closing down the possibilities of trade between the countries. Though the development of the road started a few years back, its condition in India still remains muddy and slushy, rendering it not fit to be used for commercial purposes. Once issues of this kind are resolved amicably, bilateral trade between India and China is poised to improve and will lead to a significant rise in the volume of trade.

India’s business presence in China

The strong economies enjoyed by India and China have greatly benefited the companies in both the countries. While Indian companies have gained substantially by entering into the Chinese market via joint ventures or mergers and acquisitions (M&A), Chinese companies have tapped into the potential available in India and multiplied their operations in the country. The sectors in both the countries that have collaborated to a large extent are the energy, automotive and industrial sectors.
Some of the Indian companies that have made a niche for themselves in China are:

Reliance Power

Reliance has a strong presence in China. In 2012, Reliance Power entered into a strategic partnership with China Datang Corporation for the operation and development of power and energy projects in the Indian and the overseas markets. This was hailed as the first such strategic partnership between the two countries in the power sector. Reliance had commented that it was an important milestone for them towards becoming the biggest private sector integrated power and resources company in India. Both the companies share the vision of creating value to all stakeholders through long-term relationships.

Jindal Strips Limited

Jindal Strips Limited (JSL) is the largest integrated stainless steel manufacturer in India. It ranks among top 15 global producers of steel. China is one of its prominent clients and is responsible for driving up its demand for stainless steel. JSL, which enjoys the local advantage in shipping to China, has a marketing office there.

Tata Consultancy Services

Tata Consultancy Services (TCS) has a wide representation in China. In fact, China is the fastest growing and the most localised branch of TCS and services some of the prominent multinational and local brands in China. Its focus is on developing local talent. About 97 percent of the employees in TCS China are locals. The company delivers a range of IT, outsourcing and consulting services to multinationals in China. Apart from this, TCS has also established a name for itself in the fields of banking, finance, telecom and manufacturing in China.

Things to remember while doing business in China

When one is exploring China as a business destination, here are some points that have to be kept in mind:-

How to build relationships:

• China lays lot of stress on relationships. The best approach would be to develop local contacts. This can be done via rigours networking and by taking part in various foreign delegate meets that the India industrial bodies often conduct. It is also a good idea to have contacts in the government offices of China.

Before the meeting:

• When you are blocking the calendar, refer to Chinese calendar and try to avoid all the holidays, especially the time around Chinese New Year.
• Inform well in advance the people you are meeting what all you would require for the meeting – for instance, a projector, white board, etc. Chinese value details and last minute intimations may not go down very well with them.
• Prepare well for the meeting because the host may already know a great deal about the company and the subject. One should try to incorporate a few additional points so as to ensure the host that you are well aware of what you are talking about.
• In case the people you are going to meet has an issue with English, it is advisable to arrange for an interpreter and carry Chinese version of the material that you are going to present.
• One should do a thorough research on the people they are meeting. In China, it is always best to know the complete background of the person you are meeting. That shows your genuineness and sincerity.

Reaching the meeting:

• Always be early for the meeting. Chinese value punctuality and reaching early or on time sends across a right signal.
• It is advisable to be dressed in formals as it will convey respect and express the seriousness with which you are approaching the project.

At the meeting:

• During introductions, be sure to give due respect to everyone. Chinese give a lot of importance to seniority, so please address people according to seniority and do add titles to the names. For example Chairman, and the person’s name. You have to have a prior knowledge of the seniority level and their designations.
• When one introduces, one should clearly and loudly first say the name, then the company name and the position one is at. It is preferred if you have a Chinese name. The locals can have you christened with one, but see to it that the name has a nice meaning.
• While giving out business cards, be sure to hand the first one to the senior most person.
• If the meeting goes well, there may be prolonged handshakes. Be patient about it.

How to conduct yourself at dinners:

• At business dinners, follow the seating arrangements made by the host. It will be usually based on the position you hold in the company
• Never start eating before the host. Even if food is served before you, begin eating only when the host begins.
• The menu would usually consist of variety of meats, followed by a fish course, then by rice, dumplings or noodles and end with desserts. In the due course of dinner, plates may be replaced often with clean ones. Here, it is advisable to go with the flow.
• Chinese serve a lot of food. Do not eat a lot of one dish, simply keep sampling. That way you will be able to taste everything. While you have every right to refuse food, it is considered polite if you taste a little of everything.
• Chinese alcohol may be strong, so be sure to eat well before you take on to drinking.
• In case you are using chop sticks, never drop them because it is considered inauspicious in China.
• If there is a toast, the host will toast. Then allow a few others before you toast.
• The host will be paying the dinner bill. In case you are hosting the dinner, be sure to settle the bill by sending someone because it is not a good idea to show money before the Chinese guests. It is not considered in good taste.

What to give as gifts:

• Gifting is a commonly followed practice in China and it is advisable to carry gifts.
• Gifts should not be very expensive and is preferred if it is locally made – like the handicrafts of India or something on those lines. Avoid clocks, scissors or sharp items.
• When you are wrapping the gift, use colours like red, golden or blue. Avoid white or black as they are associated with funerals in China.
• Gifts are usually given by a leader to another – meaning and Indian leader to a Chinese leader.
• Be prepared that the Chinese leader will first refuse the gift. You have to be persistent and he will finally relent and accept the gift.

(For handy details while doing business in China, go to:
Embassy of India in China
This website gives details about the Indian Consulates in China and information about visa applications, registration of Indians in China and other passport and consular services.)