Doing Business in Guangzhou
China's third largest city, Guangzhou, has a vibrant business climate.
Guangzhou is a city on the make—and always has been. For nearly two millennia, the seaside port city formerly called Canton has been one of China’s busiest trade centers, thanks to its strategic placement at the mouth of the mighty Pearl River. During the Tang Dynasty, Guangzhou and the surrounding area of Guangdong served as the first stop on the Silk Road; today, the region is known as the world’s factory floor, exporting more goods and generating more revenue than any other Chinese province, making it perhaps the single most materially productive area on earth.
But superlative industrial prowess doesn’t generally translate into pleasant city living. And for much of the past several decades—during which the city’s population has ballooned to more than 11 million, placing it behind only Beijing and Shanghai in China’s list of megalopolises—Guangzhou has been dogged by a reputation for smoggy gray skies, uniformly gray architecture and traffic congestion that would make even the most seasoned Los Angeles driver become apoplectic. In recent years, though, opinions about Guangzhou have begun to change.
Glass and steel skyscrapers continue to sprout across the city, while subway and highway expansions have helped ease the streets. New five-star hotels, high-end restaurants and world-class cultural institutions launch every season. But Guangzhou’s vibrant business climate and its age-old Cantonese entrepreneurial ethic remain unchanged.
Although business development continues at a breakneck pace, and professional practices have modernized considerably since the days when contracts were won only after many drinks with the chiefs of state-run industries, a number of traditional attitudes toward business partnerships continue to hold sway here. Relationships are everything in China, and the boundary between the private and the professional is deliberately more porous than most Westerners would expect, says American-born George Wong, the international business development manager at Jinhong International, a Chinese business consulting firm that has been operating in Guangzhou for 10 years.
“In the U.S., we’re accustomed to the idea that business is business. During an initial meeting, neither party would ever make personal enquiries,” Wong says. “In China, especially in the southern provinces, people tend to want to feel that they know you a little on a personal level before doing business. So don’t be surprised if they ask some friendly questions about your background, your family and your hobbies before turning to the business at hand.” You may not have traveled halfway around the world to make new buddies, but Wong suggests that it can only help to be open and affable.
Basic knowledge of simple Chinese customs will always boost your favor, too. For instance, business cards are treated with reverence across China. You should give and receive business cards using both hands, accompanied by a slight bow. “Having a box of cards printed with your info in Chinese on one side and English on the other would also be a nice touch,” says Wong. “These initial meetings are very important.”
This sort of care and attentiveness should extend through all your business dealings in Guangdong, according to South China American Chamber of Commerce IPR Committee chairman David Buxbaum, who has been living and practicing law in Guangzhou since 1972, when he was the first American lawyer invited by China to represent U.S. business interests in the country following President Nixon’s historic visit. While your Chinese business partners will be interested in getting a feel for you on a personal level, you should be sure to do due diligence in getting to know them from a business standpoint. “Misrepresentation and duplicity aren’t as common as they once were in Guangzhou, but there are still many factories and businesses operating without a license,” Buxbaum explains. “And should you have problems with one of these factories, they are very difficult to go after legally, so make sure to see a copy of a business license at the start of every new engagement.”
The same holds true when it comes to the negotiating table: Apparent authority, which is generally sufficient at home, is not quite sufficient in China. When working with large companies, you should always make sure that the individuals you are dealing with have the authority to negotiate and sign contracts on behalf of the organization.
Buxbaum also stresses the importance of patience at all stages of negotiation. “The Chinese people, and particularly those in Guangzhou, are very astute businesspeople, and their negotiations are often long and laborious. We Americans are used to doing things quickly and expeditiously and often lack the patience to wait them out—but it’s very important to wait them out.” If you lack patience, you’re likely to undermine your ability to negotiate a good deal for your company.
“From a cultural point of view, it’s also essential never to raise your voice or become excitable, should discussions turn heated,” says Buxbaum. “It’s very important in China to be cool and collected about your negotiations.” Becoming overly forceful or excitable will diminish your esteem in the eyes of your new partners by suggesting that you’ve lost rational control—a prized quality in China.
Punctuality is also highly valued at business meetings. Given Guangzhou’s sprawling scale and its labyrinthine public transit system, this can pose distinct challenges to the busy or infrequent visitor. “If you’re here for a short time and you don’t know the city, hire a private car; it’s the only way to go,” says Wong. “Otherwise you might spend your entire three-day business trip lost somewhere in the subway system.”
Where to Stay
Crowne Plaza Hotel Guangzhou City Centre
339 Huanshi Rd., East Yuexiu District
+86 20 8363 8888, ichotelsgroup.com
Opened in April 2011, this gleaming 63-floor obelisk in the heart of the city’s commercial district still has that new hotel smell, along with stunning views of Baiyun Mountain.
3 Xing An Rd.Pearl River New City, Tianhe District
+86 20 3813 6688, ritzcarlton.com
Six superb in-house restaurants, in addition to an address right next door to the Guangzhou Opera House, Guangzhou Library and Guangdong Museum, make this a superb choice for business travelers looking to squeeze in some cultural enrichment between meetings.
1 Hui Zhan Dong Rd.Hai Zhu District
+86 20 8917 8888, shangri-la.com
Just 10 minutes by foot from the new Guangzhou International Convention Centre, with excellent views of the Pearl River, this is an excellent option for executives in town for the biannual Canton Fair.
Where to Eat
Hong Kong tends to take umbrage at this fact, but Guangzhou is routinely ranked as the world’s best place to eat traditional Cantonese cuisine. Local residents vote with their pocketbooks: A survey on national consumption habits found that Guangzhou diners spent an average of three times as much on eating out than did their counterparts in Shanghai, and seven times as much as the national average. Dim sum—or “drinking tea,” as the leisurely Chinese dumpling brunch is known in Chinese—is a must-do meal. The international dining scene has also done enough catching up in recent years to deserve your attention, thanks to the luxury hotels’ importation of top-notch French and Italian culinary talent.
Bingsheng Haixian Restaurant
2 Xiancun Rd.Tianhe District
+86 20 3803 5888, bingsheng.com
Don’t let the long lines deter you: They’re evidence of this small restaurant’s reputation as one of the city’s best Canton dining halls. When they’re in season, try the roasted pork and the crab-curry custard.
The Canton Place, Zhujiang New Town
+86 20 3836 1998, thecantonclub.cn
You’ll need a diplomat friend or a corporate associate to get in, but this elite members club’s three fine cafés and restaurants are well worth calling in the favor.
G/F, Xinghai Concert Hall
33 Qingbo Rd., Ersha Island
+86 20 8735 2222
Located in the Xinghai Concert Hall, La Seine has long been the dining destination of choice for those in need of a continental-flavored escape from the city’s clamor—plus some terrace views of the Pearl River.