5 Things You Need To Know To Successfully Do Business In China, With Author Annalisa Nash Fernandez

Talk to strangers. Each one holds a lesson for you.

I had the pleasure of interviewing Annalisa Nash Fernandez, an intercultural strategist and author. She has 30 years of international experience in the financial and consumer packaged goods industries and now advises global businesses on cross-cultural communication and international marketing strategies.

Thank you so much for doing this with us! What is your “backstory”?

In my cultural lectures and consulting, I draw upon my prior work experience in capital markets, corporate finance, and sociolingistics. I spent most of my career working abroad, as an investment banker at BankersTrust (now DeutscheBank), and a financial executive at Kraft Foods (my division in Brazil is now part of Mondelez) and Philip Morris International (formerly part of the group that is now Altria). Phew — all those renamed entities are what the markets would call “resume devaluation.” Through it all, I lived, worked, or studied in nine countries. When I took a break to raise three children, I earned a master’s in world languages and translation, focusing on cultural elements in translation. Now as an intercultural strategist, I bridge the cross-cultural elements of the business world with the challenges in language and communication. I call myself a culture broker for world markets.

We know that it is not always easy for a foreigner to do business in China. Can you share an interesting story about a challenge that you faced, and how you overcame it?

My favorite story is not from one of my own clients — it’s from Ray Dalio of Bridgewater Associates. Our only connection is that we live in the same town in Connecticut — but our respective subcultures have never crossed paths!

Mr. Dalio recognized the potential of China early on, and has earned unprecedented access to its financial markets. He also recognizes how important, yet elusive, it is to truly understand the culture, and is said to be an admirer of the discipline in Chinese culture. You can read about how he sent his son, eleven years old at the time, to live with a Chinese family and attend school for a year in Beijing. Along with learning the language, according to Matt Dalio’s Linkedin page, he “fell in love with the country.” Now that’s cultural immersion, and that’s someone who is prepared to face the local market challenges better than the next guy.

I admire this immersion strategy, and it’s been the story of my own family through many generations. My advice is to save language lessons for your personal, not professional, development. To do business in Mandarin, forget classes — you would need to immerse yourself abroad, like Matt Dalio did, and suffer the daily pain of living your life in a new foreign language to achieve true fluency. I’ve done that three times, in three different languages, and they are my most valuable life experiences. But I can tell you that without this full cultural immersion, you’re not likely to master the Chinese language well enough to do business in it, and your meetings will degenerate into English within 90 seconds.

So if you can’t live in a Mandarin-speaking village in China, or work at a company in Beijing, here is what you can do from your office: learn a few phrases plus the cultural strategies to connect to the people — it’s called cultural intelligence, and it’s what global leaders need to develop to succeed on the new world stage. Cultural intelligence, or cultural training, is just as critical — or I’d say more — than sales or negotiation training and expertise to succeed in today’s world.

Are you working on any new or exciting projects now?

I’ve been travelling to Cuba and researching its culture, developing a series of lectures for two hospitality industry clients. There are very few developing countries left that have not experienced the consumer boom and multinational company influence that countries like China have. In Cuba, you see almost no advertising, with the exception of political propaganda, and most everything is made in Cuba — imported goods are rare at the consumer level. Scarcity has forced them to be extremely creative with things like making brake fluid out of tree sap and satellite dishes from garbage can lids. Internet access is a luxury that is counted by the minute.

People engage with their community: they line up for everything, talk to each other, run side enterprises from their homes, dance on the town plaza, and take evening strolls along the malecón. I love Cuba because it’s a living example of pure, unadulterated national culture, and a story that shows how culture prevails despite — or maybe even because of — extremely difficult conditions.

What advice would you give to other business owners who do business in China, to help their employees to thrive?

The Chinese are a success-oriented society, but in a very different way than in American culture. Your employees in China will most likely demonstrate a stronger work ethic, attributed to the Confucian value placed on work. The work environment is competitive and complex, but is not as individualistic as Western work environments. The Chinese value group loyalty and harmony over individual accomplishments, and as a result, negative feedback in an open setting, and even open debate in meetings, should be carefully managed.

This goes against the grain for supervisors from Western countries, who are used to more a more direct style of communication, but it is critical for doing business in China. Even more importantly, foster a holistic project approach, and ensure that employees understand their role in the context of shared group goals so that they are fully engaged and thrive.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I spent the summers in Italy when I was growing up, where my grandfather worked as an expatriate executive. He was a first-generation American of Italian descent, and when the American canning company where he worked started expanding in Europe, they discovered he spoke Italian and sent him to run the operations there.

During my summer stays, he gave me the newspaper to look at the exchange rates and decide when to cash in my weekly allowance (in dollars) for spending money in Italian lira. I became fascinated by financial markets and world currencies, and my first job after graduating with a degree in finance was in international private equity, developing financial models that incorporated currency devaluation forecasting for the emerging Latin American markets.

But even more importantly, Italy was my first cultural immersion experience. In those days, immersion language learning was much simpler. I was in Italy, and people spoke Italian — there was no other option, and no social media, or English-language media of any kind, to which to escape (we didn’t even have a phone line, because the waiting list took years). After that, I wanted to do it all over again in a new country, and eventually ended up as an expatriate corporate executive just like my grandfather had been.

I credit these early experiences for my dual passion for world cultures and financial markets! I mourn the retirement of the European currencies to the Euro by wearing a very loud, clinky, Italian Lira pendant bracelet. You can always hear me coming.

What do you think are the new untapped markets in China that may become the next “big thing”?

While the middle-class consumption boom has driven companies’ sales growth and product positioning, the segment of the Chinese population simply aspiring to be middle class is the next big thing. Take the shopping app Pinduoduo as a leading indicator. Sixty percent of its 344 million active users are from smaller cities or rural areas at the other end of the economic spectrum. You can buy a pair of jeans for 20 yuan. This is tomorrow’s middle-class market for branded products.

When I worked in Brazil, we targeted each segment of the market with different brand and product positioning, and deployed corresponding proven strategies from other markets. Value brands were stepping stones to premium brands, but even premium brands had potential independent from serving as an aspirational target. For example, the most affluent segment of Brazilian consumers represents only 5% of the market, but has the income per capita and population size similar to that of a small European country. In large markets, like Brazil, and like China, you are dealing with diverse consumer cultures, and segmentation strategy is critical for sustainable growth.

We keep hearing about the “Trade War”. What are your thoughts about it? Given the unknowns, how do you plan to pivot?

In terms of culture, we can expect that China will play the long game here. Enormous losses loom possible on both sides (US and China), and if they do indeed play out, the Chinese people will largely accept any factory closures, layoffs, and consumer disruption as part of their patriotic duty to resist overarching foreign influence — this is built in to their cultural mindset. The Chinese culture takes a pragmatic, long-term view, in sharp contrast to the short-term perspective of American culture.

These perspectives don’t only refer to corporate agendas, but to the mentality of society as a whole. The Chinese evaluate any contentious issue within a framework of situation, context and time. They are adept at adjusting to a change in conditions, and “weathering the storm” to achieve long term results. On the American side, well, let’s just say, “not so much”, and I don’t expect American labor to be so accepting. These disparate attitudes go to the heart of what is culture, and in China are shaped by ancient philosophical beliefs.

What are your “5 Things You Need To Know To Successfully Do Business In China.”

1. Go beyond translation to localize your brand content, so that it is not only meaningful at a linguistic level, but carries the same brand message in the new cultural context. There are many levels of localization, from converting the basics, such as date formats and payment gateways, to more subtle adaptations like culturally relevant colors, graphics, and concepts. For example, if you watch the movie “Zootopia” in Chinese, you’ll see that the moose character is replaced by a more culturally relevant Panda. In the West we closely associate green and red with positive and negative, respectively, but in China, the color red represents happiness, beauty, and good fortune — not bankruptcy. I won’t even get started on taboos, for instance using skeletons, that may even be prohibited by China’s State Administration of Press, Publication, Radio, Film, and Television regulations. Content localization is critical.

2. Be tech-savvy as an executive making decisions in the Chinese market. You know how widely-used social media is in China, and it’s no doubt core to your marketing strategy. But do you yourself use it? You should. Download the WeChat app on your phone and don’t only use it to text your local contacts, but scan some QR codes, add some favorites to your content, and share what you are eating or listening to through WeChat “moments.” It’s not just about “When in Rome…” but about adopting the cultural perspective of the locals, and consuming digital content with the same perspective.

3. Develop cultural intelligence. This doesn’t even have to be China-specific, although it’s always helpful to read up on the local traditions, greetings, and taboos before stepping foot in another country. Cultural intelligence is about recognizing your own cultural context, and understanding the lens through which you see other cultures. It’s about taking emotional intelligence a step further to be empathetic to other cultures. There are a wealth of business-targeted training resources to develop “CQ,” from cultural training seminars to online self-diagnostic programs. But you can do your own cultural research! Network with other executives doing business in China, read this interview series, or just watch a Chinese film to see how people live, love, and spend their leisure time.

4. Know the Key Opinion Leaders (KOLs) in your industry. Of course there are the web celebrities, or wanghong, behind social influence which may have a brand impact, but on the purely commercial influence side there are influential bloggers writing product reviews, “WeMedia,” or social media entrepreneurs publishing journalistic content on social media, and industry specific influencers or KOLs who post about everything from cars to designer clutches, driving hundreds of thousands of dollars in e-commerce with a single post. Following these influencers is another way to build cultural intelligence.

5. Build relationships … this is preached over and over to anyone doing business in China. The US and China are at opposite ends of the spectrum for the cultural dimensions of individualism and collectivism. China is a collectivist society, meaning that loyal relationships are highly valued and provide collective security. However, China is changing, diverse, and more complicated than cultural theory implies. This generation of Chinese exhibit increasingly individualistic tendencies, in contrast to the older generation leaders. This is a great example of why cultural intelligence is critical to navigate relationship-building. In terms of practical advice, leave time in your schedule on the ground in China for this navigation. Don’t hop on the next flight home after signing contracts; be available for socializing outside of the office — it is pivotal to successful relationships.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Better one times red, than 100 times pink”. It’s an old Spanish saying. To me it means, don’t skirt around the issue, do the hard part first, or if it’s all bad, get it over with all at once. Thanks for asking, because it’s my favorite piece of unsolicited advice!

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Talk to strangers. Each one holds a lesson for you.