T-Messe 2021 Toyama General Manufacturing Industry Trade Fair

Differences in Business Customs between Japan and China

Takatoshi Fukui, International Business Advisor,
TONIO Asia Business Promotion Center

"Toyama General Manufacturing Industry Trade Fair" will be held in October this year. At the past trade fairs, the majority of overseas exhibitors were from China. Based on my more than 20-year experience of doing business with China, I would like to review the differences in way of business between Japan and China.

1. Difference in decision-making process

It is most often pointed out that Japanese companies make decisions in a "bottom-up" manner while Chinese companies in a “top-down” manner. In Japan, an issue is first discussed at the working level, and if it is judged to be worth undertaking, it will be raised to the top management, and finally the top management makes a decision. On the other hand, in China, information is conveyed to the top management from the very beginning, and the top management makes a decision as a corporate policy. In this way, Chinese companies make corporate decisions quickly and put them into action immediately.

2. "First act and think later" vs "First think and then act"

Another view of what I mentioned above; in China, people act before they think, while in Japan people think before they act. It might sound a little exaggerated, but, in China, when they come up with an idea, they start acting immediately if such an idea looks lucrative, while in Japan, even if they think it is profitable, they first take time to examine whether it complies with all applicable laws and regulations, and then, take actions after confirming everything is OK.
I once had an astounding experience when I was in China. It was when a price of crude oil was skyrocketing and the whole world was discussing whether methanol could be used as a fuel for automobiles. I was astonished to see methanol fuel vehicles are already in use in China even though methanol had not been approved yet by that time. It was something beyond our wildest imagination. In China, it seems they create a fait accomlpi, and then, write a law.

3. "Speed" vs "Thorough consideration"

As seen above, the most important thing in China is to bring a product to market quickly, while in Japan it is important to take time to thoroughly examine whether it is saleable or not before they start moving.

4. "Good quality and low price" is important in China

The concept of "price" is also very different. In Japan, people take it for granted that good quality is never cheap in price, but in China, “good quality and low price” is customers’ demand. Chinese businessmen consider it important to sell quality products at a low price to seize the market ahead of their competitors.

5. Quality and visual appearance are both important in Japan

In Japan, visual appearance of a product is also important in addition to its quality. It may help you understand this concept if you remember how beautifully Japanese dishes are served. In China, appearance is not so important as long as quality or functionality is assured.

6. Japanese businessmen build trust first

Japanese businessmen take a step-by-step approach to reach good results because in Japan it is important to take a step to build mutual trust before getting into a business. In China, results (or profits) take a priority over trust. Chinese businessmen seem to think it will be enough if mutual trust can be developed in the process of continuing a business.

What I mentioned above is my personal impression. But there seem to be such differences to a greater or lesser extent depending on culture of a company and personality of a businessman.