Business Communication
04/19/2015

How to prepare business in Saudi Arabia and China

There are a lot of elements that make life different between countries around the world, which makes it harder for people to communicate and understand each other. Elements like geography, population, features, economic systems, verbal and nonverbal languages, religions, genders and customs are common important elements that make conflicts between people around the world. Understanding and respecting these elements will make a safe life. However, the most important reason that attracts people to know more about each other is business. Countries like Saudi Arabia and China are two of the most important business countries around the world. So, learning about how to prepare international businesses in China and Saudi Arabia are necessary.

Geography

Saudi Arabia is located in the Middle East, which has very important navigational routes that connect between the east and west. That location gives Saudi Arabia an advantage when it comes to international trading. Saudi Arabia shares borders with Iraq 814 km, Jordan 744 km, Kuwait 222 km, Oman 676 km, Qatar 60 km, UAE 457 km and Yemen 1,458 km. Those countries are unstable and that makes it hard to do business and investments in such a region. Although, Saudi Arabia is on the borders of those countries, the investment still is going well. On the other hand, China stretches about 5026 kilometers across the East Asian landmarks. It is bordered in the east by the Taiwan Strait, East China sea, Korean Bay and Yellow sea. China shares borders with a total of 14 countries such as Mongolia, Pakistan and North Korea. With the total landmass with 9.6 million km², China also is the third biggest landmass country behind Russia and Canada.

Population

The population in Saudi Arabia has been increasing every year 1.49% and for now until it reached a number of 27,345,986. 90% of the population in Saudi Arabia is Arab and 10% for Afro-Asian. However, 7.2 millions are foreigners, which include workers from countries like India, Pakistan, Philippine, etc. The wages of those workers are lower than average, which creates a very comparative business environment against the international business. This will attract investors to make business in Saudi Arabia. China is the world’s most populous country, which has a 1.3 million population today. With such a large population base, China‘s GDP from 2006 and 2014 was in constant growth. GDP growth rate in China averaged 10 percent from 2006 to 2014, reaching an all time high in 2014. In 2006, 2008, 2010, 2012 and 2014, the yearly GDP of china is 2260, 3490, 4990, 7320 and 9240.27 billions of U.S dollars.

Features

There are some features that attract any one to make a successful business in Saudi Arabia such as Makkah and Madina cities. Millions of visitors come from around the world to Saudi Arabia in order to visit Makkah and Madina to perform Islamic rituals. Those people love Makkah and Madina for their spiritual position in their hearts. So, they will want to buy souvenirs for themselves and their families. So, making business there will give any investors a sure success. Areas of investments will be like Hotels, Restaurants, Transportation, Infrastructures and services like translating, touring, communication and monetary services. In addition, Since Saudi Arabia is the largest exporter of oil, this will attract many international investments in petrochemicals and all industries. This will create a high quality and low cost of primary products that are needed to make secondary products like cars, plastic products and textiles. Phosphates also use to produce aluminum and fertilizers that will create a possible area of investment like high industries and farms. So, making or investing businesses in Saudi Arabia that relate to any kind of petrochemical products or services will create a huge success. Oil is mostly located in cities like Dammam, Jubail, Al-Ahsa and the south of Saudi Arabia. However, China has a large potential market of buyers and sellers because of a large population. Otherwise, cities such as Hong Kong, Beijing and Guangzhou attract millions wealth from other countries every year. Also, the economy plays a big part in China that is considered one of the biggest countries around the world that import and export products.

Economic systems

All these kind of features have to be controlled by strong government to protect them from any type of external threats that could destroy them. Although, the government of Saudi Arabia which called Al-Saud, has a big support on the famous features of the country, it still not comfortable for most of investors to make business in Saudi Arabia. Saudi Arabia has a command system, which has been ruled by one royal family and that forced the country to be with no free trades. The government of Saudi Arabia enters and shares most of business profits with the investors, which could deport the investors from making business there. However, investors who come from countries with a market business such as United State may have a hard time trying to associate with the business life there. So, knowing more about the system in Saudi Arabia could save the business from being unsuccessful.

While China’s Community Party has been using “socialist market economy” to describe their economic system since the 1980s, China has a mixed system presenting the typical features both of market and planning economies. China used to be a closed economic country. However, since the 1979 “Open Door” policy, China has been dealing with foreign investments around 36 years. Both consumption and saving have more than doubled, and the poverty rate has declined. According to the World Bank, about 200 million Chinese who used to live in absolute poverty have been left above the minimum poverty line. In this type of system, the political authoritarianism, a closed and planned one economy, it is significant to know clearly about governmental policy. While a western business culture is transaction-based one, China’s business culture is relationship-based. A successful businessman in China would have a strong social net that could stretch in every aspect. Personal relationships are equally essential to business success here. Keeping and maintaining a good relationship with relevant officials is a key factor that a businessman can build a good business. And in China, family is the foundation of Chinese groups. Family business is a big part in economy. So, finding a local partner may be is the most effective and fast way to prepare business in China. Verbal Language

To make a successful business in Saudi Arabia you should know the official language of it, which is Arabic. Also, In Saudi Arabia the more languages you speak, the more successes you get. Knowing Arabic and other languages would make it very easy for investors to associate with people there. On other side, the official language in China is Mandarin. With about 56 different ethic groups, China has more than 200 dialects. Fortunately, there is one common written language there. So businessman from another country could use the common written language to communicate with multiple ethic groups in China.

Nonverbal Languages

Knowing the verbal language of Saudi Arabia and China may not be enough if you do not understand their nonverbal languages. Saudi Arabia is a high context culture, which means that the current environment and body language are depended more on convey information than actual spoken words. Eye contact, vocal tone, facial expressions, are examples of nonverbal languages of Saudi Arabia. Knowing these nonverbal languages would help the investors a lot to understand and get a long with the people inside and outside the business. Eye contact is a big issue in Saudi Arabia; if the investors were from the same genders they should make eye contact with each other. On other hand if the investor was a man and communicate with a woman, he should not make an eye contact with her while speaking. This may consider as disrespectful for her because of the culture or the religion of the country. Greetings is also different is Saudi Arabia from most of other countries. Men may greet each other with a handshake and a kiss on each cheek. On other hand, women generally hug and kiss close friends. The most important habit that international workers should be familiar with while doing business in Saudi Arabia that men and women would not handshake, kiss on each cheek and hug each other while greeting.

In China, when foreign businessmen meet the local businessman, nod or bow maybe the most proper way to say “hello” to the future potential partner. Today, more and more Chinese people would like to shake hands when they meet each other but shaking hands is still not the most popular way. If you really do not know how to act in a meeting, watching others how to act then repeat. Not like American people saying “How are you” or “How’s it going today” when they meet each other, in most of the time, Chinese like saying “ Have you eaten yet?” Please present your business card with two-hands and Chinese side up. When receiving a card, take a minute to look at it. If you were making a mistake, directly making an apology is understood in China.

Religion

Saudi Arabia is the biggest Islamic country in the world that 99% of people there are Muslims. Sometimes, it is hard for non-Muslim investors to associate with the traditions, habits, and the religion of the country. Saudi Arabia does not allow or restrict most of the products that may be in conflicts with the religion of the country. Anyway, Making business in Saudi Arabia should be related to the traditions of the country, which mostly stick with the religion. So, understanding and respecting the religion of the country can help investors to make a successful business there. On other hand, China has no official religion but still have some religions such as Buddhism and Christian. These religions are not getting any kind of attention from the government of China that do not make any effect on doing business there. Genders

Knowing more about the traditions of Saudi Arabia and China will also help the investors to understand how the business life is going there. However, most of companies in Saudi Arabia have two parts, one for men and the other for women. Few countries around the world have these types of countries, which may make it hard for investors who come from the first world. Although, these days Saudi Arabia started establishing mixed companies with men and women, investors still should know all rules or types of companies that they may work at or make businesses with. Gender in China used to be a big issue for Chinese society. Women should be not working outside hundreds of years ago. With the development of the thought of freedom and equality, women now working in China are most likely to share an equal footing with men, according to a gender diversity study by non-profit organization Community Business. Now, China becomes one of the most developing countries around the world that do not have gender issues that could affect doing business there. All the companies in China are a mix between men and women just like most of other countries.

Custom

One of The most important elements that workers should take care about is the official uniform that the companies prefer. For most of the companies around the world, the official clothes that workers wear are the suits but Saudi Arabia has unique official clothes for people inside or outside the business that is called Thob. Wearing Thob while working in Saudi’s companies will give workers more credits. There are some international companies that also allow wearing suits, but wearing Thobs will always give workers positive impressions. On the other hand, the custom for China’s businessmen is almost like in American. Gray or dark pants, a suits long-sleeved, buttoned solid shirt are proper for both men and women.

Taboo
China has a long bright and majestically history country. Chinese history can be found as early as 1200 BC under the Shang dynasty, which is about 5000 years from today. A plenty of traditional cultures remain in today. There are also taboos in china. It is auspicious omen that Chinese people care most in their social daily life. Chinese people like everything relative to luck. They do believe luck is the key factor that making things succeed. The word relates death and bad luck is not welcome in China. Do not prepare a clock as a gift to a China’s businessmen. Preparing a gift maybe the best way to show your respect to a business partner. But carefully, in China, a clock cannot be a gift. This is because the Chinese pronunciation of clock is nearly of the pronunciation of death. Do not use the number 4. Please do not use the number 4 in any situation such like a phone number or room number. Chinese do not like the number just like American do not like number 13. It is a bad luck number. The reason is because the pronunciation of number 4 is nearly of the pronunciation of death. Do not wear white flowers on your head. In American, people think the white represents pure and beautiful. However, in China, white represents sadness and death. Wearing white flowers on one’s head is a typically behavior like a person dressed in black for his or her relatives in America. So do not wear white flowers or use white flowers to decorate the home or offices in China. Also, Sharing nightmares in China could prevent the bad things from being happened. Talking about your nightmares will be considered as misfortune. However, In Saudi Arabia Black is the color that represents sadness and death, white and green will be considered as happiness. Anyway, if you want to make good relationships with Saudi’s people in business you can make jokes about anything but without including families and religion because these two are the most important elements in the Saudi society.

Building relationships

The formal banquet in China and Saudi Arabia is crucial in business. It's how business people measure one another up, build relationships, and get close to each other. On the table, please pay more attention to the person of highest status, and let the consumer order the food unless you have a special food requirement. Chinese and Saudi people also like to fight over paying the bill. It is kind of traditional to show your respect for your workplace friends.

In conclusion, after mentioning about all the elements that relate to preparing business in Saudi Arabia and China, it clears that the two countries are completely different on geography, population, features, economic systems, verbal and nonverbal languages, religions, genders and customs. Without knowing enough information about the two countries will make it hard for foreigner investors to prepare businesses there. So, the more you know about China and Saudi Arabia, the more successful business you will make.

Working Relevance Work place gender equality in Asian （Kit Tang,2014 ) http://www.cnbc.com/id/102134871

China GDP http://www.tradingeconomics.com/china/gdp http://en.wikipedia.org/wiki/Socialist_market_economy

http://www.career.vt.edu/JobSearchGuide/BusinessCasualAttire.html

Inside Chinese business (Ming-Jer Chen) http://www.quickmba.com/mgmt/intl/china/

How to survive a Chinese business dinner (Brut Helm)
http://www.inc.com/burt-helm/akasha-adam-kasha-chinese-business-dinners.html