A tale of how neighboring cities differ

Updated: 2016-04-22 07:10

By Mike Bastin(China Daily Europe)

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Business cultures vary greatly even within a province, and foreign investors need to be clued in if they are to succeed

As China's economic transition continues, foreign investors need to take a much more considered, long-term perspective.

Investors also now need to pay more attention to minute, often subtle, differences in China's local business environments and business cultures.

A tale of how neighboring cities differ

Incremental commercial gains now pave the way forward for foreign investors across the Chinese mainland, where breakneck growth appears a thing of the past.

However, establishing progress with these small gains requires an almost encyclopedic understanding of each Chinese city culture and the subtle differences with other apparently similar, often nearby city cultures.

In particular, it remains apparent to me that many outside investors, even those with many years of business experience across large parts of China, are not as tuned in as they need to be.

As I complete a whirlwind, whistle-stop guest lecture tour covering most parts of China, I find myself well-placed to comment on the need for investors to sharpen their knowledge and know-how when evaluating business opportunities in many commercially attractive cities.

My lecture tour was organized by Southampton University, where I have recently been appointed course leader of the master's degree in fashion marketing and branding.

A tale of how neighboring cities differ

The trip began in one of the northernmost cities, Harbin, capital of Heilongjiang province. Famous for its ice festival and Russian cultural influence, this city represents familiar territory for many investors who feel comfortable with all aspects of doing business. But this is partly because it has become far more international, multicultural and cosmopolitan and not because of any major progress in understanding local business practices. This becomes clear when discussing differences in business culture between Harbin's major regional city rival: Shenyang, capital of neighboring Liaoning province.

Business contacts maintain that Shenyang has not been subjected to the same influx of different cultures and, therefore, doing business in this commercially attractive city requires a far more localized approach. Business negotiations will almost certainly not take place at an international, five-star hotel chain but rather in a far more discrete and inconspicuous local hotel or restaurant.

Investors should not assume that geographical proximity automatically means cultural homogeneity. This oversight is common in Northeast China, where a strong regional sub-culture exists.

My next stop was eastern China's coastal city of Qingdao in Shandong province. Famous for international beer and household appliance brands (Haier and Hisense), this city's business culture should also not be mistaken as representative of any wider regional or even provincial business culture homogeneity.

In fact, Shandong natives from outside Qingdao are united in perhaps one thing: their dislike of what they consider to be an arrogant, aristocratic Qingdao subculture. Jinan, capital of Shandong, perhaps provides another good example of a quite different business culture between two nearby cities.

In much the same way as Harbin enjoys some level of international recognition and with an internationally diverse population, Qingdao can also lay claim to be Shandong's major international city. Doing business, therefore, in Qingdao comes fairly comfortable to most investors. Jinan, on the other hand, despite being close by and part of the very same province, requires a far more localized approach, not too dissimilar to Shenyang in Northeast China.

I then fly to Nanjing, one of China's former capital cities, and then travel to the nearby city of Wuxi. Once again, these two urban neighbors require different approaches where business deals and negotiations are concerned.

Investors should not assume that Wuxi is as international and modern as its far more cosmopolitan neighbor.

Heading further south I find myself in Southeast China's beautiful coastal city of Xiamen, part of Fujian province. Breathtaking beaches and the delightful holiday, car-free island of Gulangyu immediately catch the eye and have contributed much to the international fame this city now rightfully enjoys. Foreign business dealings, therefore, proceed generally without great difficulty in this city. But the commercially attractive local rival and provincial capital Fuzhou offers a far less modern business environment, where appreciation of local lifestyles is essential if business success is to follow.

A tale of how neighboring cities differ

I then fly off to Chengdu, capital of southwestern Sichuan province, home of spicy food epitomized best by hotpot.

Foreign investment even now is focused far more on China's coastal cities and provinces so perhaps even greater attention is needed when venturing westward. Investors should, therefore, be mindful of the fact that business deals and negotiations in western China cities are likely to involve local city inhabitants only and will probably not include those from very different regions of China.

After a brief stop in Chengdu, rich in local culture, I move to the nearby municipality of Chongqing - one of four cities directly administered by the central government - an incredibly beautiful mountain city. Spicy food and other elements of popular culture are shared across these two cities but investors need to be aware of real differences in their business cultures. Doing business in Chongqing typically involves a direct and extroverted approach from the local business community. A "take it or leave it" approach is common with often quite fiery tempers on display.

In Chengdu, however, a more laid back and circuitous route to closing the deal is common, where lengthy, alcohol-fueled business dinners dominate and do not often appear to be heading anywhere near business agreement resolution. Patience is needed here.

Finally, my trip ends in Beijing, which has long been on the international business circuit and arguably sits alongside Shanghai as a key Asian, if not world, business center. But the same cannot be said of neighboring Tianjin, a municipality and northern China's major port.

It could be all too easy for investors to make the mistake of assuming that doing business in Beijing is a recipe for success in Tianjin. It is not and once again a far more localized approach is necessary.

My lecture tour ends but the search for new business opportunities across China surely continues, and investors should remain clued to China's cultural diversity and be aware of key differences in doing business between the most apparently neighborly of cities.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer at Southampton University. The views do not necessarily reflect those of China Daily.