A recent addition to the Conway community can provide sage-like wisdom to Arkansas companies looking to do business in China.
The Confucius Institute opened at the University of Central Arkansas on Sept. 19 to offer cultural and language training. Spearheaded by Executive Director Hui Wu, who is also an associate professor at UCA, the institute is one of only about 40 in the United States.
While the Confucius Institute is new, doing business with China is old hat to some members of the Arkansas business community. Wu said Arkansas could rival if not trounce any other state in terms of volume of business in China, mostly because of Wal-Mart Stores Inc.
But the global behemoth from Bentonville is not the only Arkansas business already diversified in China. Tyson Foods Inc. of Springdale makes good use of the cultural differences in cuisine.
"Tyson actually exports all chicken feet to China, and wings and necks," Wu said. "These are the things Chinese people eat, but no other people eat. But they like chicken feet."
Acxiom Corp. of Little Rock also anticipates some expansion of its China venture. Acxiom acquired a data services company called China-Loop in 2004.
However, the cultural chasm between China and the United States is vast, unpredictable and not to be taken lightly, which is where the Confucius Institute comes in.
Getting Oriented
Unfortunately, cross-cultural business relations can’t be simplified to a list of dos and don’ts, which is why the Confucius Institute provides a training process.
Wu, who grew up in Nanchang City in China’s Jiangxi Province, highlighted a few cultural differences between the two countries.
For example, a handshake in China is rarely firm. However, unlike Americans, the Chinese do not draw inferences based on the strength or weakness of a handshake as it is not considered to be a reflection on the person’s character or fortitude.
The etiquette in China for business card exchange differs as well. The card-swapping should come at the beginning of a meeting and should start with the highest-ranking official and descend in order of rank.
And that’s not all. The card should be studied and then placed on the table, not in one’s pocket, which would be interpreted as a dismissive affront, Wu said. One should also acknowledge the official’s rank.
Business relationships in China are inseparably personal, Wu said, which is why one small misstep can sever a potentially lucrative tie.
Blunders in Chinese business relations are "very hard to patch," Wu said, adding that the mending process can be costly because a proper apology should include an expensive gesture such as a very nice dinner.
As part of a Confucius Institute consultation, Wu would help organize a meeting, even down to assigned seating to ensure a proper greeting process.
Bottom Up, Top Down
Negotiations in China differ dramatically from negotiations in America.
"When you start to negotiate in the United States, you start the communication directly with each other," Wu said. "You send out a direct inquiry. And people will just respond if they are interested."
The approach in the United States often tends to be bottom up, Wu added.
"But then in China, the approach is top-down. So when you negotiate, when you want to do some business in China, you need to first investigate who will make the decision about this. Sometimes a company’s decision is not made by the owner even."
Since Chinese management structures tend to be quite bureaucratic, anything but a top-down approach would likely be fruitless.
"For example, if you reach an officer, you say, ‘I need this.’ They may neglect your e-mail for days, weeks. But then if the boss says, ‘Well, you are the contact person,’ then they feel that they have the authority to do so," she said.
Also, the decision-making process for companies in China is often more group-oriented.
"In China, any hiring as a vice president you can suggest, but you cannot make the final decision."
A vice president would suggest a job candidate to a panel of upper managers, which would make the final hiring decision.
"So the decision-making process is longer," Wu said.
And while training at the Confucius Institute covers these sorts of cultural differences, it is much more comprehensive. The training sessions teach an executive about the fundamental and philosophical ideas that are at the root of Chinese business behavior. This method results in a deeper understanding and a better-trained executive, Wu said.
For example, the ever-present thread in Chinese culture is the notion of being an "exemplary person," Wu said. This fundamental idea dominates multiple aspects of the culture, especially the difficulty Chinese people have accepting criticism, Wu said.
"[T]hey are supposed to be a good person. How can a good person do bad things?"
Wu added: "And then they take blame upon themselves, personally: ‘If this happens, that’s my fault.’"
Wu contrasted the cultural behavior to the American belief that making mistakes is "human nature."
Lost in Translation
Wu strongly recommended that an Arkansas business take its own translator. "We can lose a lot during translation," she said.
As a former translator for a Chinese governor, Wu experienced first-hand just how important a good translator is.
"A lot of people can speak English in China, but a lot of people don’t have that sense, cultural sense, to do the translation," she said.
"If you rely on the other side to provide the interpreter, then you better have a sense of culture in order to talk to that interpreter. Just don’t take for granted that a Chinese interpreter knows American culture that well. What they learn about American culture is from the media, particularly these Hollywood films. They take ‘Desperate Housewives’ as real."
"That’s why I suggest that the company hire a bilingual, bicultural, capable person or people to be in their work force, so they do not need translators."
For companies that anticipate doing any consistent or long-term business with China, bringing Chinese liaisons in house can be more cost effective because pay for translators can range from between $100 and $200 per hour.
The Confucius Institute aims to grow a work force through the Chinese studies program at UCA from which Arkansas companies can recruit.
Wu has pioneered the program, which now includes a Chinese studies major that incorporates extensive cultural training along with the language.
Wu added that nine different departments at the university have developed courses related to China.
The fledgling Confucius Institute has yet to determine a cost for its services, Wu said.
A Good Rep
The Confucius Institute offers more than advice on how not to make mistakes. There are also cultural nuances that Arkansas businesses can use to their advantage, Wu said.
"China is very sensitive about their reputation in the world. So this can be a good thing," she said.
"When you discuss something, you’ll say, ‘Well, this will enhance China’s reputation in the whole world by presenting you as [this]. And then they would be very interested in the idea."
After export disasters related to toys containing lead paint and tainted food products, Chinese businessmen should be all ears, Wu said.
"And China does not want that to taint its reputation as well. So what they want is something that can present them positively toward the whole world," she said. "If we can present an idea rhetorically from that point of view, that idea would get top support."
A Package Deal
Wu and two other communications specialists at the institute, which was formed with a $100,000 grant from the Office of Chinese Language Council International, also offer executive travel training.
While much of the travel training focuses on business relations, the institute also teaches executives to read dinner menus, give directions to cab drivers and other necessities of getting around in a foreign country.
The consulting services are customized based on the length of the trip and how much an executive wants to learn, Wu said. To learn the bare minimum, a business can expect to invest about four hours of an executive’s time in the training sessions.
Jeff Standridge, the group leader for global work force management at Acxiom, said Acxiom hopes the Confucius Institute’s services can help its expansion in China.
"The opportunity really lies in smoothing the transition and in anticipating … some of the potential obstacles that occur just because of the differences in culture and language and business protocol – helping us understand those, helping us to recognize those and helping us to overcome those in anticipation of experiencing them," Standridge said.
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