Hong Kong

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Negotiating International Business - Hong Kong
This section is an excerpt from the book “Negotiating International Business - The Negotiator’s Reference Guide to 50 Countries Around the World” by Lothar Katz. It has been updated with inputs from readers and others, most recently in March 2008.

Reunited with China since the British rule ended in 1997, Hong Kong is technically a Chinese Special Administration Region, not a separate country. However, its quite homogeneous culture remains distinctly different from China’s in several important areas. It would be a mistake to assume that Hong Kong and China are practically the same. One needs to prepare separately for negotiations in Hong Kong. With its entrepreneurial and intensely fast-paced business culture, Hong Kong in some ways stands in closer comparison with the United States than with China. Businesspeople in Hong Kong are generally less long-term oriented than their brethren in the People’s Republic. Hong Kong’s businesspeople, especially those among younger generations, are usually experienced in interacting and doing business with visitors from other cultures. When negotiating business here, expect most people to be flexible and open-minded as they are eager to do business with others.

Relationships and Respect
Hong Kong’s culture is generally group-oriented. Asserting individual preferences may be seen as less important than having a sense of belonging to a group, conforming to its norms, and maintaining harmony among its members. Building lasting and trusting personal relationships is therefore very important. While members of other cultures may expect this to happen gradually over the course of a business engagement, many Hong Kong Chinese expect to establish some level of relationship prior to closing any deals. Although this is gradually changing, it is still advantageous to proceed with serious business discussions only after you allowed your counterparts to become comfortable with you as a person. Once you have proven yourself a trustworthy partner, making the next deal will become much easier. Relationships are based on familiarity, respect, and personal trust. Unlike in most western countries, business relationships in Hong Kong exist mostly between individuals or groups of people rather than between companies. Accordingly, if your company replaces you with another representative, relationships need to be built anew. In Hong Kong’s culture, ‘saving face’ is also critical. Harmony must be maintained at all cost, and emotional restraint is held in high esteem. Causing embarrassment to another person may cause a loss of face for all parties involved and can be disastrous for business negotiations. Reputation and social standing strongly depend on a person’s ability to control one’s emotions and remain friendly at all times. If you have to bring up an unpleasant topic with a person, never do so in public and always convey your message in ways that maintain the other’s self-respect. The importance of diplomatic restraint and tact cannot be overestimated. Keep your cool and never show openly that you are upset. Remaining modest and doing everything you can to maintain cordial relations is crucial to your success. When receiving praise, insist that you are not worthy of it or belittle your accomplishments, but thank the other for the compliment. This should not stop you from complimenting others. While the Hong Kong Chinese view politeness and humility as essential ingredients for a successful relationship, these factors do not affect their determination to reach business goals. They are patient and persistent in pursuing their objectives. It is in your best interest to do the same. Copyright 2006, 2007, 2008 - Lothar Katz

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In Hong Kong’s business culture, the respect a person enjoys depends primarily on his or her status, rank, achievements, and education. It is also important to treat elderly people with great respect. Admired personal traits include...
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