The Chinese New Year, also known as Spring Festival, is the most important of all holidays in China. During this time, the whole country shuts down for a whole week which has a big impact on global trade. It is wise to take this into account if you are in business with Chinese partners.
This year will be the year of the Tiger. In China the Tiger is known as ‘the king of all beasts’. The zodiac sign symbolizes strength and courage. With this in mind we have asked Qing Marr-Li, Project Manager Foreign Direct Investment, some questions about the business relationship and cooperation between China and Flevoland.
Qing, how well-known is Flevoland in China?
If you say 围海造田 (Man Made Land in Holland) to a Chinese person, you will see a broad smile of recognition. But if you ask a Chinese person if she or he knows Flevoland, the answer will almost always be no. So it’s crucial for us to ensure that Man Made Land and Flevoland are spoken in the same breath.
Are there many Chinese companies based in Flevoland?
From 2012 to 2017, the number of Chinese companies in the Netherlands almost doubled, from 245 at the end of 2012 to 470 in 2017. At the moment there are not many Chinese companies in Flevoland, representing only 5% of all foreign companies located here. In the coming years, we will make a strong effort to increase the exposure of Flevoland in China.
What is the contribution of Chinese companies to the Dutch economy?
The contribution of Chinese companies to the Dutch economy has almost quadrupled in the same period to more than 1 billion Euros. The number of Chinese companies based in the Netherlands is still small, but the growth potential is high.
Which cultural differences are most evident in business relations between Chinese and Dutch companies?
There is actually a lot in common between the Netherlands and China. Both countries are known as trading nations and are driven by a Can Do mentality. The pioneer spirit of Flevoland will be very appealing for a nation like China that has rapidly become a second world power. However there are also big cultural differences. In my opinion there are 3 main differences, good to know for Dutch companies doing business or planning to do business with a Chinese company.
- The Dutch directness is perhaps the greatest challenge for a Chinese person. As someone of Chinese origin, I know that from experience. What we find very normal in the Netherlands, for example a “I disagree with you” during a meeting, can come across as rude and confrontational to a person from China. Since Chinese people will never express disagreement with each other in public, conflicts are avoided and harmony is maintained. Working with Chinese partners therefore requires some extra care and understanding on the part of the Dutch person.
- For a Chinese person doing business starts with 关系 (Guanxi) relationship building: This is best done during a dinner or over drinks. It is very important for the Chinese to first build trust with a person, before getting started with going into business together. This requires some patience and flexibility and long-term thinking from the Dutch person who would prefer to get down to business more quickly.
- Hierarchy in China versus flat organizational structure in the Netherlands: In the Netherlands, it’s common for the director to grab you a coffee when you have a meeting with external parties, without a second thought. To the contrary, hierarchy is the norm in China. There is a top down culture in the organizations and when you meet your potential Chinese business partner for the first time, it is best to address him/her by title and surname. The hierarchical structure ensures that decisions are made quickly without requiring everyone to give their opinion. So when doing business with a Chinese partner, it is useful to get in touch with the person who has the authority to make a binding decision.
What opportunities does China offer for Flevoland entrepreneurs?
China is the second largest economy in the world, and one of the largest trading partners in the Netherlands. China is increasingly popular with Flevoland companies. China pays more attention to entire supply-chain solutions. You can also see that a two-way flow of goods is becoming the norm. In 2019, compared to 2018, almost 12% more was exported from the Netherlands to China and this growth is expected to continue in the coming years. For companies that want to be future-oriented, it is therefore wise to delve more deeply into doing business with China and learning the Chinese culture.
You mentioned at the beginning that from the end of 2012 to the end of 2017, the number of Chinese companies in the Netherlands almost doubled, what do you think the next five years will look like?
This year is the 50th anniversary of the diplomatic relationship between the Netherlands and China, a great milestone which we see as a new starting point for our proactive marketing of China. In the coming years we will focus on creating brand awareness of Flevoland in China and attract more Chinese companies. In five years time, we would like to see new Chinese companies having found a home in Flevoland to achieve their business ambitions, while at the same time contributing to Flevoland’s ambitions of sustainability, digitization and circular economy.