China is a mystery. A combination of history, economy, and socio-cultural organization can be confusing for many. So, before we dig deeper into the business culture of China, it’s important to talk about the fundamentals.
Rather than talking about cliched tourist topics, like the Great Wall of China facts, what’s more practical for business purposes is to learn about the country’s governmental organisation, philosophy, geography, and economy.
Compliment this factual introduction to China with EHLION’s cross-cultural coaching to build lasting business relationships.
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What’s the geography of China?
China, officially called the People’s Republic of China (PRD), is a unitary sovereign state in East Asia. The total surface area of 9.6 million square kilometers (or 3.7 million square miles) makes China the world’s second-largest country by land area, only surpassed by Russia. Depending on the definition of total area, China is at the same time the world’s third or fourth largest country, right after Russia, Canada, and the United States.
Apart from its size, China also outrivals many others with the number of its neighbours. There are fourteen countries that border China, and again, the only other country that can match this figure is Russia. Extending over a large chunk of the Asian continent in the Southeast China borders Vietnam, Laos, and Myanmar (Burma), in the South: India, Bhutan, Nepal, Afghanistan, and Pakistan, in Central Asia: Tajikistan, Kyrgyzstan and Kazakhstan, and in the Inner and Northeast Asia: Russia, Mongolia, and North Korea.
Speaking of maritime borders, China also neighbours South Korea, Japan, Vietnam, and the Philippines.
What’s the climate in China?
Due to the large size and varied physical geography of China, the country’s climate largely varies from region to region. Its complex topography means there isn’t one geographic zone that dominates China’s landscape. There are several types of climate in China and as many as five distinct temperature zones, with average temperatures ranging from minus 30 Celsius in the Northern regions to plus 20 Celsius in the plateaus and the mountains.
China’s climate is dominated by dry seasons and wet monsoons. What it translates to is that the temperature has a high amplitude between summer and winter. In the winter the weather is impacted by northern winds—coming from high-latitude areas that make the air cold and dry. Conversely, the southern winds in the summer bring warmth and moisture from coastal areas and lower latitudes.
What’s the population of China?
With such a vast territory, it is perhaps no surprise that China is the largest country in the world by population. It reached a billion inhabitants in the early 1980s and China’s population in 2018 stood at 1.4 billion people.
China’s population growth rate has been partially curbed with the implementation of the one-child policy. This strict family planning policy introduced in 1979 limited the permitted number of children per family to one. China’s one-child policy is said to have largely contributed to the drop of fertility rate from the average of 2.8 births per woman in the 1970s to 1.5 births in the 1990s.
Many criticisms have been raised about this form of population control, and there is no doubt the policy had a wide impact on many aspects of social life in China. In 2016 the one-child policy was replaced in favor of the two-child policy, allowing each couple to have two children—a similar policy that was in effect for a decade before 1979.
What are the ethnic groups in China?
The term Chinese people is mostly used in the West, but the Chinese people refer to themselves as Han. While China officially recognizes 56 distinct ethnic groups, the Han Chinese constitute about 91.51% of the total population of the country. They are the world's largest single ethnic group and outnumber most other ethnic groups in all China’s provinces except for Tibet and Xinjiang.
The remaining ethnic groups, 8% of the population of China, are typically concentrated in the border regions. The four largest of the remaining 55 ethnicities are the Zhuang, Hui, Machu, and Uyghur.
What language is spoken in China?
The first language that comes to mind when thinking about China is Mandarin Chinese, but there are seven other national languages spoken in the country by officially recognised minorities. China’s official language, Mandarin Chinese, also known as Standard Mandarin, is the national language of China. It is used by 70% of the population as a main language of communication across the mainland.
However, on a territory that large it would be surprising to have only eight languages spoken. Together with the national eight languages there are as many as 292 living languages in China, including indigenous languages, minority languages, regional, and signed languages.
Linguistically speaking, the most common languages spoken in China belong to the Sinitic branch of the Sino-Tibetan language family, the same language family that gave us Burmese and Tibetan. Traditionally, the Chinese languages are classified into seven broad sub-varies: Yue (which includes Cantonese and Taishanese), Wu (which includes Shanghainese and Suzhounese), Min (which includes Fuzhounese, Hokkien and Teochew), Xiang, Gan and Hakka.
The Chinese writing system is logosyllabic—each character represents one syllable or word. The characters are called hanzi, literally the “Han characters”, but if you want to learn basic Chinese you can use the romanized writing system called pinyin. You can also book a session with one of EHLION’s language coaches to help quickly build rapport with your business clients.
What type of government does China have?
China's government structure is similar to Western parliamentary systems. Both the president of China and the prime minister, known in China as the Chinese Premier, are appointed by a parliament and a semi-independent judiciary. There are many new terms to learn to be able to confidently talk about the Chinese political and judicial institutions.
The breakdown below is to serve as an introduction to China’s political system, but EHLION’s coaches will always be happy to explain it in more detail.
PRC President is the official head of state, together with the Vice President these are considered mostly ceremonial roles.
The State Council is the administrator and regulator of China’s day-to-day government functions and is headed by the Chinese Premier.
The National People’s Congress (NPC) is the China’s parliament whose role is to ratify laws, oversee the operations of the government, and appoint members for the State Council and courts.
The Chinese People’s Political Consultative Committee (CPPCC) is a parliamentary advisory body.
The above mentioned NPC and the CPPCC also serve as China’s legislative organs, and the top judicial organs are the Supreme People’s Court and Supreme People’s Procuratorate.
The founding and ruling political party of the republic of China is the CPC, the Communist Party of China. This sole governing party only permits existence of eight other parties and, together with them, forms the United Front. The National People’s Congress is Chinas highest body. It convenes annualy, and elects the president every five years. In the meantime, an institution called the Central Committee is in charge. CPC is also the organ responsible for implementing China’s censorship laws.
The chief organ of China’s military is the Chinese People's Liberation Army (PLA), the armed forces of the People's Republic of China and of the CPC. The PLA consists of four professional service branches:
the Ground Force,
With so many military organisations it’s interesting to ask: How big is China’s army? Perhaps it will be no surprise to learn that, with over two million active personnel and around half a million reserves, it’s the biggest army in the world.
What’s China’s economic system?
China’s economic system is a socialist market economy (SME), where most assets are owned by the state or public bodies representing the state or the community. the country’s GDP in 2017 was slightly over USD12,237 billion, which constituted 19.74% of the world economy and made China the world's second largest economy by nominal GDP. However, speaking about China’s GDP per capita, the country holds only 108th place, with the figure of 8,826 USD according to 2017 data.
In terms of China’s GDP growth, until 2015, China was the world's fastest-growing major economy, with growth rates averaging 10% over 30 years. A slowdown of China’s economic growth commenced in 2015-6 and it is said that the country’s GDP growth in 2018 has been weakest in 28 years.
What’s China’s economy like?
China is a global hub for manufacturing — it’s both the largest manufacturing economy, as well as the largest exporter of goods in the world. At the same time, the country is also the world's fastest growing consumer market and second largest importer of goods in the world.
The official currency of China is the renminbi (CNY, ¥), which roughly translates to “people’s money”, or “people’s currency”. The basic unit of the renminbi is the yuan and, in international business contexts, people will often speak about the “Chinese yuan” rather then the renminbi. The yuan is divided into 100 jiao, each of which is further subdivided into 10 fen.
Most of China's financial institutions are state-owned and state-governed. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The four biggest state-owned commercial banks in China are:
Bank of China (BOC)
China Construction Bank (CCB)
Industrial and Commercial Bank of China (ICBC)
Agricultural Bank of China (ABC)
Understanding Chinese economy is the cornerstone of your business success. For a smoother entry into the market, consider a consultation with our cultural coaches.
What are the components of Chinese philosophy?
The term “Chinese philosophy” comprises several schools of philosophical thought and has a history of several thousand years. The most widely known ancient philosophies of China include
Confucianism is based on the teaching of Confucius, a Chinese philosopher active in the 6th century BC. The five major Confucian concepts, also known as “The Five Constants”, include
ren (humanity or benevolence),
zhì (knowledge), and
Many countries in East Asia apart from China have been influenced by Confucianism including Taiwan, Korea, and Japan.
Taoism, which arose around the same time as Confucianism, is a philosophy that later developed into a religion. Laoze, the author of “Tao Te Ching”, a founding text of this philosophy, is often considered Taoism’s founder.
Tao literally means "path" or "way", although it’s more often used as a metaphysical term that describes the flow of the universe, or the force behind the natural order.
The basic virtues of Taoism, also called “The Three Treasures” or “The Three Jewels of Tao”, are
Legalism is a pragmatic political philosophy which gained prominence between 4th and 2nd century BC. The main motto of legalism is "set clear strict laws, or deliver harsh punishment", and its essential principle is one of jurisprudence.
Buddhism is a religion and a practical philosophy which developed between 6th and 4th Century BC in India and is based on the teachings of Buddha (Siddhartha Gautama).
Being the fourth largest world’s religion, Buddhism is divided into several major branches— two of those branches are Theravada and Mahayana Buddhism—but is practised in a wide variety of ways depending on the region.
The Chinese Buddhist tradition focuses on ethics rather than metaphysics and has developed several schools distinct from the originating Indian schools. Throughout the ages, Chinese Buddhism has also integrated some of the the ideas of Confucianism, Taoism, and other philosophical systems.
Mohism sprung up around the same time as Taoism, Legalism, and Buddhism, but, contrary to the other three, has nearly disappeared as a school of thought. It was developed by scholars studying under Mozi and was considered a school of logic and rational thought. Mohism emphasises the need for impartial caring and equality. In state organization it focuses on efficiency and meritocracy as ways to reduce conflict and systemic inefficiencies.
What should you know about transport in China?
The physical state and comprehensiveness of China's transport infrastructure tend to vary widely by geography. High-speed railway connects major cities within the country, but China’s railway also offers links with adjoining territories, such as Mongolia, Russia, Kazakhstan, North Korea, and Vietnam.
In urban areas light rail and tram, suburban and commuter rails are popular forms of transport, and in Shanghai the maglev train (magnetic levitation train) runs between the international airport and the Longyang Road Station.
The road transport in China is dominated by motor vehicles and bus rapid transit, and in many major cities there are also trolleybus systems. Another common way of transport in China are bikes—both electric bicycles and bike share schemes are widely available in the country.
Major international airports in China are the
Guangzhou Baiyun, and
All are used by major international airlines, including Chinese airlines like Air China, China Eastern and China Southern Airlines.
China has 34 major ports, mostly on the sea, and around 2000 minor ports both on the seas and in the country’s rivers. It’s been estimated that $3.4 trillion in trade passed through the South China Sea in 2016, making it a sizeable proportion of the global international trade.
Main holidays in China
Chinese culture might be hard to navigate at first, but at EHLION we have a wealth of experience in making it accessible to business people. Chinese cultural calendar is a merge of traditional and political holidays, together with some holidays “imported” from the West.
China observes several of the world-wide festivals such as the New Year's Day on January 1st, or the May Day, on May 1st. Some festivals can be seen as equivalents of Western holidays, for example “the Double Seventh”, falling on 7th day in 7th lunar month, usually in August, is called China’s Valentine’s Day.
One of the most famous Chinese festivals is the Chinese New Year. Celebrated on 1st day in 1st lunar month, it usually falls in January or February and is both the grandest traditional festival in China, as well as the longest public holiday. It’s an occasion for an annual family reunion, eating dumplings, and setting off fireworks.
Another good time for family reunions is the Mid-Autumn Day. Celebrated on the 15th day of the 8th lunar month, around September, it’s the time to appreciate the full moon, and eat many varieties of sweet moon cakes.
The Qingming Festival is time to honor one’s ancestors. Also known as Pure Brightness Festival or Tomb-sweeping Day, it falls around April 4th or 5th and is an occasion for spring outings and visit ancestors' tombs.
The 1st of October is the beginning of the nationwide travelling peak, lasting from around October 1st to October 7th. The week, also called “The Golden Week”, is holiday time that starts with China’s National Day, celebrated with a military parade and festivities on the Tiananmen Square in Beijing.
To commemorate Qu Yuan (340-278 BC), an ancient Chinese patriotic poet Chinese people celebrate the Dragon Boat Festival, on the 5th day in the 5th lunar month, usually in June. On that day people typically eat zongzi, bamboo sticky rice dumplings, and watch dragon boat races.
On the Lantern Festival, people watch lanterns, eat glutinous rice dumplings, guess lantern riddles. The festival usually falls in February, according to the lunar calendar on the 15th day of the 1st lunar month.
Other important festivals are Laba, usually in January (8th day in 12th lunar month) and Chongyang, usually in October (9th day in 9th lunar month).
We hope this brief introduction, gave you an overview of the varied and complex culture and organisation of China.
If you want to learn more, read about business communication in China, Chinese hospitaliy, and business relationships, or book a consultation with one of our advisors to ensure a smooth business relationship with your Chinese business partners.