A huge gulf exists between Chinese and UK business attitudes and practice, making business relationships difficult between the two nations, it has been claimed.
A report by financial advisers Grant Thornton has found that significant differences exist in almost every aspect of business life, creating obstacles to UK business opportunities in China.
In particular, the report found that UK and Chinese businesses have vastly different outlooks on globalisation. While 71% of Chinese business leaders thought that globalisation was an opportunity, less than half of their UK counterparts shared this view.
Stephen Weatherseed, Grant Thornton partner and head of the firm's China Group, said: “Many UK business people misjudge just how different the business landscapes are between the two nations, resulting in too many tackling the country with inadequate cultural advice, and legal and financial support.”
For example, the concept of ‘guanxi’, or building social capital to influence business deals, is key to success in China and should be worked into a firm’s business plan, Weatherseed said.
However, it wasn’t all good news for China. The research found that Chinese firms are finding it more difficult to secure both working capital and long-term finance, and that Chinese business leaders are experiencing much higher levels of stress.
Weatherseed said that the rapid expansion of the economy had meant that there were not yet enough mature financial institutions and venture capital funds in the country to back business start-ups and expansion.
He added: “The Chinese economy is playing a game of catch up, and often the most successful UK businesses in China are those that can facilitate this rapid growth through support and advisory services, while adapting to the Chinese style of doing business.”
© Crimson Business Ltd. 2007
