Patron: Her Excellency The Right Honourable Dame Patsy Reddy, GNZM, QSO, Governor-General of New Zealand

Business Engagement with Asia: The Importance of Trust and Relationships

By Dr Anita Perkins

Aotearoa New Zealand is a nation increasingly dependent on trade relationships. As we move away from our more traditional Western trading partners and grow our ties within Asia, understanding appropriate engagement approaches is imperative to forming successful business relationships.

Becoming culturally educated can be a fine balancing act. On the one hand, people within families, cities, nations and regions are not homogeneous in their preferences and beliefs. It is important to remain open-minded and not fall into hard-and-fast stereotypes. On the other hand, attempting to enter into a business relationship with a counterpart from an Asia country without any preparation can lead to miscommunications, and therefore less chance of a successful business relationship.

One of the main areas identified as an oversight by ‘Western’ businesspeople attempting to engage with partners from Asian countries is misunderstanding the importance of building trust and the significance of long-term relationships. In the 2015 book ‘Access to Asia’, authors Sharon Schweitzer and Liz Alexander write: “Within Asia, building trust and inspiring respect are vital steps in developing business relationships that transcend basic contractual obligations.”

Below we set out three resources that provide some analysis and advice on this area. We also encourage you to learn from the experience of others who have built successful relationships in Asia.

3 Tips for Building Strong Business Relationships in Asia

Author
Ames Gross, President and Founder of Pacific Bridge Medical

Quote
“Most American executives can establish a business relationship with another American or European executive through one or several phone calls, or a meeting. This is not the case in Asia, where introductions by mutual friends or hard work building a strong relationship over a number of years are required.”

Website
https://www.pacificbridgemedical.com/ameing-for-asia/3-tips-for-building-strong-business-relationships-in-asia/

Overview
This blog post is structured into three parts:

  1. Put the Time and Effort to Form a Reliable Relationship Based on Trust
  2. Study and Understand Cultural Issues and Trends in Asia
  3. Be Sensitive to Appropriate Ways of Speech and Behavior in Each Asian Country

Building Long-Term Business Relationships in Asia

Author
David Cline Price, Cross Cultural Mentor

Quote
“Asian countries are considered to be ‘high context’ cultures. In a high context culture many things are left unsaid, letting the culture do the explaining. […] By contrast, Westerners largely come from ‘low context’ cultures. They communicate directly, get to the point and move on quickly in business so as not to ‘waste time’, even if they don’t know someone well.”

Website
https://davidcliveprice.com/building-long-term-business-relationships-in-asia-3/

Overview
This article is focused on business negotiations and the importance of investing in engagement to ensure partners from Asian countries that a long-term relationship will be formed.

Understanding the concept of ‘guanxi’

Author
Asialink Business

Quote
“The Chinese business model tends to be less contractual and more based on trust and the guanxi so there can be a sense of frustration. It’s slower to build relationships, but having said that, once trust has been established the Chinese partners and entities normally want to move very quickly.”

Website
https://asialinkbusiness.com.au/china/conducting-business-in-china/understanding-the-concept-of-guanxi?doNothing=1

Overview
This article sets out that meaning of the concept ‘guanxi’ (having personal trust and a strong relationship with someone) and goes on to suggest the ways in which guanxi can be built with Chinese business counterparts.