Doing Business in China Vol. 2: An essay on work culture

Checking your customers’ messages at 10pm or sending an invoice on a saturday morning? Sounds like a goody two-shoes outlier in Switzerland. In China, this is often expected behavior, even by non-senior employees. How does the understanding of work differ in Switzerland and China and what are the reasons for this gap?

Dall-E Prompt: A busy office full of people working in cubicles, Studio Ghibli

East Asian, especially Chinese, culture is shaped by confucianism. Confucius or Master Kong, was a Chinese Philosopher, living roughly 2500 years ago. As we are not very keen on creating lengthy reports explaining minor details (and this is a business guide not social science), let’s summarize the most important points quickly: Confucianism values filial piety (respecting elders/seniors), family loyalty and meritocracy. In a societal context, harmony is established by individuals doing their part and knowing their place in the natural order. While a lot of confucian virtues have been turned upside down in recent Chinese history, a lot of the core values are making a comeback in recent decades. 

Generally, Chinese companies follow a quite strict top-down management approach. Junior employees are expected to show respect to seniors, who are often addressed by their title (Boss, Professor etc.). Questioning superiors in a public setting or meeting is a taboo and is frowned upon, mainly due to the risk of losing reputation in front of a bunch of people. Strikingly similar to the management approach are the communication lines, which are basically vertical lines from top management to the most junior employees. Junior Employees rarely receive the full picture of decision-making or reasoning and often get direct orders only related to their particular tasks. 

For a long time, and still mostly to this day, the Chinese education system emphasizes constant competition and data-driven results, i.e. test scores. Inside school, there is little room for creativity and critical thinking skills, partly due societal values, but also due to the sheer amount of students inside the system. The yearly College Admission exam (NCEE or GaoKao 高考 in Chinese) is taken by more than 10 million students over the same 2-3 day period for the whole country. It’s practically impossible to create a testing framework which relies on soft-skills or creativity, and keep it fair across a nation of 1,5 billion people. This educational upbringing molds young employees and they take this specific skill set into their professional life. 

Dall-E Prompt: a big classroom full of chinese students, Studio Ghibli, neon lit

As a Swiss SME, most of your contacts in China will be small-sized companies as well. Chinese Statistics classify companies with a taxable income (=profit) of less than 3 million yuan and less than 300 employees as small and micro enterprises, which amounts to roughly 98% of all Chinese companies and 80% of non-government workforce. A lot of export-oriented companies producing or trading consumer goods and raw materials fall into this category, which are the most sought after products for smaller Swiss companies. So, what do you need to pay attention to when doing business with Chinese SMEs?

Swiss companies generally stick to their line of business and do what they are good at. Improvisation is usually seen as a sign of poor planning or emergency situations. Chinese companies are the masters of improvisation. During the early days of the pandemic, seemingly every Chinese SME produced or traded hand sanitizer, masks or protective gowns. While a lot of Swiss Companies take pride in their long tradition of expertise in a specific niche, many Chinese counterparts are more discretionary and willing to seize short-term opportunities. 

But, this flexibility comes with plenty of surprises and uncertainty. In a landscape, where hundreds of small companies are willing to take on the risk of hopping on short-term trends and try to be early, margins decrease and the market cannibalizes quickly. In this environment, long working hours and self-sacrifice can be the deciding factor for success. While the Chinese Tech sector has been under scrutiny for its 996 work culture (9am to 9pm, 6 days a week or 72 hours a week) and the tides seem to be slowly changing, 50-60 hour working weeks are not unusual for employees at small Chinese companies. 

Dall-E Prompt: a modern warehouse full of people working, Studio Ghibli, neon lit

By and large, the safety net or social security in China is pale in comparison to Switzerland. For a lot of company owners and employees it’s a make-or-break mindset, especially since rising costs of living and property prices are in the back of many minds. For Swiss SMEs this makes it harder to find fitting suppliers, especially if you are searching for new trends and cutting-edge consumer goods. A lot of these niches are filled with opportunists in the early stages and checking samples from a wide range of suppliers is usually the best approach to  sourcing these goods. 

To conclude, Chinese companies and their employees live by the “Hard work beats talent” mantra. Chinese society values hard work and diligence, going through hardships and making it out stronger is a common theme throughout popular culture. While the aforementioned flexibility of Chinese companies could lead to a shorter-term thinking in a business context than in Switzerland, having reliable partners in China might also lead to finding new business opportunities and staying on top of changes in consumer behavior.

Let’s have a chat and find out how we can help your company navigate the changing landscape in China! We are happy to offer a free first consultation - no strings attached - to talk about your business needs and challenges in China.