Entering the Chinese market offers UK companies a wealth of opportunities but also a unique set of challenges, especially in personal development and training. Based on my experience in Sino-British business interactions, I offer the following insights to help UK companies adapt and thrive in this dynamic environment.

Understanding communication styles

One of the most critical areas for personal development and training is understanding the stark contrast in communication styles. In the UK, direct communication is often valued. People tend to appreciate straightforwardness, where the message is clear and explicit. However, in China, communication tends to be more indirect. Messages are often conveyed through context, non-verbal cues and what is left unsaid.

For UK managers and employees working in China, it is essential to develop the skill of reading between the lines and understanding the subtleties of what is being communicated. Training sessions focused on cross-cultural communication can be immensely beneficial. Role-playing scenarios, workshops on non-verbal communication and lessons in Chinese business etiquette can help bridge the gap. It’s not just about learning the language but also about appreciating the cultural nuances that influence business interactions.

Navigating working styles

Another significant difference lies in working styles, particularly concerning the concepts of power and time. In the UK, the majority of companies tend to have a flatter organisational structure, with open-door policies and a more egalitarian approach. Decision-making processes are often collaborative, and time management is strictly adhered to with a focus on punctuality and deadlines.

In contrast, Chinese business culture often exhibits a more hierarchical structure. Respect for authority and seniority is deeply ingrained, and decisions may take longer due to the need for consensus and the involvement of higher-ups. Understanding this can prevent frustration and miscommunication. UK companies should train their staff to be patient and adaptable, recognising the importance of showing respect for hierarchy and the collective decision-making process.

Cultural sensitivity and adaptability

Training programmes should also emphasise cultural sensitivity and adaptability. It is crucial to cultivate an awareness and appreciation for the cultural differences that influence workplace behaviour and expectations. For example, the concept of “face” (面子, mianzi) is paramount in Chinese culture. The need to preserve the dignity of yourself and other and show respect can greatly affect business relationships and negotiations.

UK companies can benefit from training that includes case studies and real-life examples of cross-cultural misunderstandings and how they were resolved. Learning about Chinese festivals, traditions and customs can also enhance mutual respect and understanding.

Chinese companies in the UK

The flow of personal development and training isn’t one-way. As Chinese companies expand into the UK, they too need to adapt to a different business culture. For Chinese firms, training should focus on understanding the UK’s more direct communication style and the value placed on individual initiative and innovation. They should also learn about the UK’s regulatory environment, employment laws and corporate governance standards.

Creating a symbiotic relationship

Ultimately, the goal for both UK and Chinese companies is to foster a symbiotic relationship where both parties understand and respect each other’s cultural and business nuances. Investing in comprehensive, ongoing training programmes is crucial. These programmes should be tailored to address specific cultural and operational differences and should evolve as both the Chinese and UK markets continue to develop.

In my experience, companies that prioritise cultural understanding and adaptability not only navigate the complexities of international business more smoothly but also gain a competitive edge. They create work environments that are inclusive, respectful and conducive to innovation and collaboration.

By embracing these training initiatives, UK companies can confidently step into the Chinese market, and Chinese companies can seamlessly integrate into the UK business landscape, ensuring mutual growth and success.

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For businesses looking to enter the Chinese market, what are the first things they should consider when it comes to hiring?

Without a doubt, employers should ensure they have carried out a background or reference check before taking anyone on. Legally speaking, companies need to ensure they are legally able to employ staff directly in China, which, according to China’s labour law, means a fully registered legal entity in China. This could be a Wholly Foreign-Owned Enterprise (WFOE), a Joint Venture or a representative office. But, hiring staff from overseas or a UK registered firm directly is breaking the labour law. Alternatively, they can choose a licensed HR vendor to hire these staff until they have a legal entity fully established.

How easy is it to hire staff before a WFOE or other entity is established?

It’s illegal to hire staff directly before you have a WFOE or other form of legal entity but it is quite easy for a licensed third party to give support with the hiring and to organise the related paperwork. Talent Spot, as a licensed vendor, has actually helped quite a few UK brands entering the China market with this solution before they have an entity established.

What mistakes do many foreign companies make when recruiting?

Hiring staff without checking references is the most common problem. Staff are often hired directly after meeting people at events but it is essential to speak to their previous employer, especially for candidates who have not worked for international firms or who have come from state-owned companies. Also, it is worth noting that if the foreign company is new to the market they will need to pay around 20 percent above the market average to attract good talent.

Hiring staff without checking references is the most common mistake foreign companies make.

China has different HR laws, customs and cultural rules to the UK. What are the most important things to be aware of?

China’s labour law is very complicated and favours the employee. It is common for staff to have at least a three-month probation period and if the candidate doesn’t pass this probation period then the contract termination period needs to start before the period ends. Otherwise, they are classed as full-time staff and it is very challenging to terminate a full-time contract.

It is best to avoid signing an open-ended labour contract and most should have a fixed-term contract as the termination procedures are incredibly complicated once the probation period has passed. It is very difficult to sack a member of staff, unlike in the UK or US.

For example, I have a British client that had two employees causing trouble over their termination. Luckily, the employees’ labour contract was signed with Talent Spot under the contract staffing service, so Talent Spot was regarded as the legal employer and therefore we could deal with them, arrange compensation and eventually get the paperwork signed peacefully.

Ensure they have a competitive salary, provide regular training, and have transparent rewards and punishment system

What are the current HR challenges in China? 

HR in China has many obstacles but the two points that are important for newcomers to understand are the social contributions and salary management.

Unlike 20 years ago when labour costs in China were relatively affordable, today there is a completely different story. Salary levels and the cost of employment for employers is high by international standards, especially in first-tier cities, and salaries are still very much the main reason top talent will work with a company. Competition is fierce and salaries can be surprisingly high.

The cost of social contributions in China is also very high and shocks many international companies. These vary from province to province so, as the saying goes in China, treat every province like its own country.

Do you think the millennial generation has a different work ethic or expectations to the older Generation X?

The younger generation has totally different expectations than the older one. In China, the ‘born-in-the-80s’ generation, are now considered the ‘older generation’ whereas the ‘born-in-the-90s’ generation are the ones with more free will and are less interested in job security and are harder to train. They may resign at any time for any reason and expect to be promoted with a good title and high salary very quickly. The good traditional values have somehow been lost.

Therefore, recruiting and training the millennial generation is a common headache for HR and business owners – though of course there are good ones out there.

What top tips do you have to keep and retain good staff?

• Ensure they have a competitive salary and are given the opportunity for promotion regularly.
• Provide regular training to ensure the best staff can learn new skills.
• Have a transparent policy or guidelines for your rewards and punishment system.
• Always make sure to enact these policies when goals have been reached or rules have been broken.
• If staff still don’t meet their key performance indicators after a first warning them terminate their contract. Don’t keep them on, regardless of their excuses, because they will be a bad influence on the good staff and drag others down.

How much does a company succeed or fail on its staff in China and do you have any examples of this?

I believe the success or failure of any company is mainly dependent on its staff. After all, people are the major factor; your staff are the core and determining factor of your company. Neither the products or the service you provide, nor the amount of investment you receive, nor any other element is of equal importance as the staff. By hiring good staff from the beginning, you create the right working environment and work ethic, and the company will attract more good staff and grow in a healthy way.

A perfect example is Huawei. The core values and success of Huawei is totally dependent on the staff they have attracted and retained over the years by providing an above0market average pay structure and stock options for employees. The founder has a very limited number of company shares, and he has built a common interest that has united every member of staff inside Huawei to truly work as a team. The success of Huawei is not to be found primarily in their technology, their values, the founder, the products or anywhere else; it’s their staff and their HR policy that constantly attracts good staff, terminates the contracts of low performers and retains the good ones.

Previously in China companies would discuss their headcount as an indicator of size and success of a company rather than profit. Is this changing to become more about efficiency?

Yes, happily there’s a trend now towards efficiency rather than headcount after all, efficiency and profit are the key to success, not the number of staff you have. When I do recruitment for my own team, I prefer a small team with high efficiency rather than a large team with low performers doing not much all day and influencing the motivation of the good staff.

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China’s rapidly ageing population brings about plenty of challenges and opportunities. As our report on elderly care shows there is a lot of scope for companies to help in the care sector and make the most of the gradual welfare reforms that will benefit the older generations.

This article also explores how pensions are being reformed to address the shrinking number of working adults that are contributing to the social security system. Whilst there are steps being taken in the right direction there is no denying that in 1993, there were five adults contributing for every one elderly person withdrawing from it, whilst projections suggest that there may be just 1.3 contributors for every elderly person by 2050.

The population is expected to peak at 1.44 billion in 2029 before shrinking to 1.36 billion in 2050, when four in 10 Chinese people will be over 60; whilst automation and the growth of AI will also contribute to a shrinking work force. All of this is forcing China to strategically reconsider its vocational, education and training (VET) system.

Although China’s major cities have some of the best academic education systems in the world, the growing shortage of workers has seen a growth in the promotion of vocational training. The number of university graduates has risen from 6 million in 2008 to over 20 million in 2018 but VET has traditionally been seen as a lower status qualification than a university degree. There are still few organised national programmes available to those looking to train in an industry, and few national standards that are recognised from province to province. There is a marked divide between academic education and vocational training, and the links that allow students to enter into industry after VET graduation are often lacking.

There are still few organised national programmes available to those looking to train in an industry, and few national standards that are recognised from province to province

Aware of these challenges, China is hosting the WorldSkills Shanghai event in 2021 which Vice Premier Hu Chunhau has said should emphasise the sharing of professional skills, particularly amongst China’s young people. The country has also been working to create better links with international partners – including those in the UK – to try to raise standards and bring certification into line.

The University of Salford is a fine example of a UK-China partnership that trains students for the workplace. As this article shows both the curriculum and visits from Salford’s fashion department staff help students in China, who then have advantages when they go on to work in China’s fashion industry. The relationship is, of course, mutually beneficial; it also provides UK students with access, network development opportunities and solid experience in China.

In a similar fashion, through its partnership with Youjiang Medical University, the New College Lanarkshire in Scotland is providing dental nursing certification and education programmes to Chinese students, creating much needed dental nurses in a sector where previously there was very little standardised certification.

In the short to mid-term, the nature of work around the globe is likely to see significant change. Whilst also true in China, local factors such as the dramatically ageing population and the opening up of previously closed areas will see a number of uniquely Chinese opportunities present themselves.

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“Dental nursing programmes were in their infancy in China when we first started working there,” explains Hazell Scott, International Activity Manager at NCL. “They didn’t have that qualification in China.”

After the initial partnership with a university in Inner Mongolia in 2011, additional programmes have been developed with Youjiang Medical Universities for Minorities in Guangxi and with a college in Qingdao.

“There is a new innovation park in Qingdao and they’re hoping to open a dental training school that will offer a four-month programme and give nursing graduates a training centre.”

The partnerships include the joint delivery of programmes in dental nursing with the college providing online access to non-accredited dental materials, as well as offering opportunities for staff training and student exchange.

“We have a great relationship with our partners. Over the last five years we have developed an excellent face to face relationship,” explains Scott, who travels regularly to China. “We understand how much it takes to get a quality driven approach. And this would not have been possible without our agent who understands local business culture. We have developed a trustworthy professional relationship with him and he is always looking for new opportunities for us.”

NCL provides training, assessments and licenses for dental nursing courses with the partner institute. And “once or twice a year, we have a programme for lecturers and teachers to come and train on an eight-week training programme,” explains Scott. “We also work with private colleges from October to December in order to identify teacher nurses, and are also looking at student exchange programmes for an 80-week course.”

Dental nursing programmes were in their infancy in China when we first started working there

For NCL, launching in China is part of their international strategy. Whilst this does give them additional income, it is also about internationalising the campus and building an international body of students.

“China is a huge market and this has potential to give us significant income but actually the benefits are beyond financial,” says Scott. “A lot of organisations are just out to make profit but at NCL we also have the largest European commission funded programme and work a lot with partners around student mobility and on exchange programmes that are mutually beneficial.”

NCL provides training, assessments and licenses for dental nursing courses with the partner institute

“We have an incredibly supportive board of management who are not necessarily revenue-driven, but who instead have covered all our costs for partnership exchanges and visits and have allowed us to pursue our plans with the aim of developing further opportunities in the long term.”

Acknowledging the role of CBBC in the college’s ongoing development, Scott talks of how important it is that they are “joining CBBC at this time when we are in the process of opening a new training centre. There’s a lot that’s new for us and we really need sound legal advice in order to make sure everything is ok.”

NCL was also awarded a British Council grant for their work on the Belt and Road Initiative.

“It was in line with our objectives and a recognition of our partnerships’ approach to finding innovative ways of working together.” Altogether six projects were awarded funding and NCL were only Scottish company to win it. Furthermore, they were shortlisted for two British Business Awards as well as CBBC’s China-Scotland Business Award for Education.

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 Cross-cultural training is nothing new in China, but as the nature of the country’s business world evolves, it is becoming more important than ever. Chinese companies have been looking outward and internationalising at a breakneck pace, and many of the old clichés of corporate training no longer ring true.

“The emphasis for the cross-cultural training industry has changed; for several years we’ve been moving away from the traditional style of ex-pat training, where you tell a British person how to survive and do business in China, and much more into facilitating workshops where teams can understand each other better and work together better,” says Laura Mitchelson, Managing Director for Asia-Pacific at ICUnet.AG. “The days of the multinational company structure being foreigners on the top and Chinese underneath has gone – there are plenty of very senior Chinese staff and plenty of Europeans working for Chinese bosses.”

We’ve been moving away from where you tell a British person how to survive and do business in China to facilitating workshops where teams can understand each other

Many of the beliefs held by Westerners entering China – such as handing over business cards with two hands – cannot be applied universally in modern business exchanges, where contacts are as likely to scan each other’s WeChat codes as exchange cards. Nevertheless, would be businesses in China do still need to take time to understand how to communicate in China, because beyond the modern fronts of shiny new business districts, there remain many traditional attitudes.

“One of the things that’s true about any culture is that while some signs of culture change quite quickly – the fashions and outward signs of language – the underlying values like attitudes to hierarchy or risk change much, much more slowly,” says Matthew MacLachlan, Head of Intercultural and Communication Skills at Learnlight. “So if you learn the underlying values you won’t be thrown if a Chinese person just throws their business card down rather than hands it over with two hands carefully.”

When the Chinese come to Britain and realise we aren’t all white and we don’t all speak in beautiful middle-class English, it can be a shock for them

The cost of poor cultural integration across businesses can be stark – one estimate says around 30 percent of expat relocations fail in China, at large expense to their employers, while a study from consultancy Aon Hewitt found a third of companies blamed differences in culture for a lack of success after corporate mergers.

And there can still be serious embarrassment where business relations go wrong. For example, while some international businesses will have corporate policies that do not allow them to accept gifts, the giving and receiving of expensive gifts can still be common practice. One businessman remembers an example where an American executive refused an expensive gift in Hong Kong and ended up costing his company a contract worth tens of millions.

“Given the way the world has developed, it’s clear that the majority of British managers who are coming here as ex-pats are in a situation where their Chinese teams understand a lot more about the Western environment than they understand about the Chinese environment,” says Mitchelson. “So they have to get used to the idea of being on the back foot, and people who are used to talking have to get rapidly used to the idea of listening if they want to be successful.”

The cross-cultural industry is not just about training Westerners in Chinese practices, but increasingly, Chinese companies are seeking advice on how to thrive in the UK. As these companies go global, their workforce has to grapple with UK business regulations and culture too.

Business experts report difficulties for Chinese companies abroad getting to grips with practical differences, such as not being able to re-write contracts once they are signed, having to meet hiring and diversity regulations, and understanding rules around controlling shareholder stakes. A complex disciplinary process can take some understanding, including legislation around hiring and firing, as can regulation about asking potential employees about age or plans to start a family. Some media have even reported misunderstandings in which Chinese business leaders have shared hongbaos (red envelopes) of cash with government officials to ‘smooth over’ deals.

“As we have stereotypes of the Chinese, so the Chinese have stereotypes of us,” adds MacLachlan. “When the Chinese come to Britain and realise we aren’t all white and we don’t all speak in beautiful middle-class English, it can be a shock for them.

“And, although China is generally a culture that communicates indirectly, as Brits we communicate indirectly but in a very different way. We use lots of flowery, additional words when we are being rude or direct. We know, for example, that if someone says “With the greatest respect”, then they are about to be terribly rude to you.”

This kind of idiomatic language and indirect culture is even difficult for the increasingly Westernised millennial generation of Chinese, who are more likely to have studied abroad or already worked for international managers. This, says Mitchelson, emphasises the need for cross-cultural trainers to help teams trust each other, and build a corporate environment where colleagues can ask each other questions about their lives and understand each other better.

A third of companies blamed differences in culture for a lack of success after corporate mergers

Stewart Ferguson, who facilitates cross-cultural training for the China-Britain Business Council, says their emphasis has shifted from emphasising the differences of working in China to focusing on the similarities.

“People tell me they are worried about causing offence in China because they’ve read so much about how hard it is to do business in China,” Ferguson says. “I ask them, what are you planning to do in the meeting? Strip naked and run around the room? Or are you going to be an informed professional acting the same as when you do business in other parts of the world? If so, there’s no problem.

“The greatest problems are caused by a long-standing perception that China is different – but what people really mean is that the language is different. After that, fundamentally people are the same everywhere.”

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