China is probably the market in which companies struggle most to build a stable mental model. The reasons have to do with the nature of the country itself. China combines a millennia-old tradition — Confucianism, Taoism, an imperial history that shaped hierarchies and relationship codes for centuries — with an economic and technological transformation that is probably the most rapid and profound in modern history. The result is a market in which ancient dimensions coexist with dimensions that change from one year to the next, and in which companies must operate simultaneously in multiple temporal registers.
For Italian companies, China has represented in recent decades an opportunity of a scale different from any other market. The growth of the middle class, urbanization, the development of domestic consumption, have created dimensions of demand that have transformed entire global sectors. "Made in Italy" maintains a significant premium positioning in many categories — fashion, design, food, automotive, precision machinery. At the same time, the operational framework has progressively changed. Geopolitical tensions, the evolution of the Chinese regulatory framework, the maturation of local competitors, internal industrial policies, have made China a market more complex to tackle than it was ten or fifteen years ago.
It's worth articulating the specifics of business in China recognizing both the deep cultural dimensions and the specifics of the contemporary context, because both operate simultaneously in daily interactions with Chinese partners.
China as an economy
A first dimension that deserves to be named is the scale and structure of the Chinese economy.
China is the second largest economy in the world (in terms of nominal GDP, first by purchasing power parity), with a population of about 1.4 billion people, urbanization that has exceeded sixty percent and continues to grow, a middle class in structural expansion. Over the last forty years the country has gone through the most rapid economic transformation in modern history.
The Chinese economy has specific structural characteristics.
The country's internal diversity. China is a continent more than a country. The differences between developed coastal regions and inland regions, between north and south, between large metropolises and second- or third-tier cities, are marked. Shanghai is the international financial and commercial center. Beijing is the political capital with a significant presence of headquarters of large companies and technology sectors. Shenzhen is the technological-manufacturing center, home to tech giants like Huawei, Tencent, DJI. Guangzhou and the whole Pearl River Delta region have an ancient commercial tradition and a significant manufacturing fabric. Hangzhou (home to Alibaba), Chengdu, Chongqing, Wuhan, Xi'an, and many other cities have specific economic fabrics and significant growth. Operating in second- or third-tier cities is a different experience from operating in Shanghai or Beijing.
The mixed public-private system. The Chinese economy combines a dynamic private sector with a significant presence of state-owned enterprises (SOE — State-Owned Enterprises), particularly in strategic sectors (energy, banks, infrastructure, telecommunications). The business dynamics are different depending on the type of counterpart. Operating with a private Chinese company has different logics from operating with a state-owned one.
The dynamism of the private sector. Despite the state presence, China has developed a private sector of global scale. Companies like Alibaba, Tencent, ByteDance (TikTok), JD.com, Pinduoduo, Meituan, have transformed entire sectors. Entrepreneurial dynamism is significant, particularly in the new generations.
Sector specialization. China is a global leader in many sectors — manufacturing, consumer electronics, renewable energy (solar, wind, batteries), electric vehicles (BYD and other Chinese producers are today significant global players), e-commerce, fintech, artificial intelligence, biotechnology. In some sectors China has gone from follower to leader in a few years.
The evolving regulatory framework. The Chinese regulatory framework for foreign companies is in constant evolution. In recent years regulations have been introduced on data security (Data Security Law, Personal Information Protection Law), technology transfer, foreign investments, antitrust in the technology sectors. For Italian companies operating in China, maintaining awareness of the evolution of the framework is an important operational dimension.
The geopolitical context. The tensions between China, the United States, and progressively the European Union, influence the operational framework for international companies. Specific sectors (strategic technologies, dual-use goods, semiconductors, some categories of components) are subject to restrictions that continue to evolve. For Italian companies, particularly in sensitive sectors, understanding the framework is important.
Trade agreements. The CAI (Comprehensive Agreement on Investment) between the EU and China, negotiated in recent years, remains suspended at the ratification level. The operational framework between the EU and China operates through WTO agreements and specific bilateral agreements.
Fundamental cultural values
Some fundamental concepts of Chinese culture are reflected directly in business practices.
Guanxi. It's probably the most cited and least superficially understood concept. Guanxi — literally "relationships" or "connections" — is the system of personal relationships of mutual trust that permeates Chinese culture and that has significant operational implications in business. It isn't simple networking — it's a long-term investment in relationships that produce reciprocal obligations, support in difficult situations, access to otherwise closed opportunities. Guanxi is built over time through reciprocal demonstrations of reliability, gestures of respect, the capacity for reciprocity. For Italian companies, understanding that guanxi isn't an ornamental element of business but a load-bearing structure of commercial relationships helps to calibrate investments of time and attention.
Mianzi — face. The concept of "face" — social dignity, public respect, reputation — is central in Chinese culture. Making someone lose face (criticizing them in public, contradicting them openly, embarrassing them) produces significant relational damage that can be difficult to repair. Giving face (showing respect, recognizing status, complimenting with tact) builds relationship. For interactions with Chinese partners, care in the preservation of mianzi is an essential operational dimension.
Xinyong — reliability. The reputation of reliability — xinyong — is an asset that is built over time and that has concrete value in commercial relationships. Keeping commitments, respecting agreements, demonstrating consistency over time, builds xinyong. Once lost, it's difficult to rebuild.
Strategic pragmatism. A characteristic of contemporary Chinese culture is strategic pragmatism — the capacity to make decisions based on long-term assessments, to accept compromises when they produce overall benefits, to adapt the approach to changing circumstances. For Italian companies, recognizing this dimension helps to understand positions of Chinese partners that may appear inconsistent if read through short-term filters.
National and cultural pride. Contemporary China has a strong sense of national and cultural pride, particularly in the younger generations that grew up in the period of accelerated economic development. Recognition of the Chinese cultural heritage, appreciation for the country's successes, sensitivity toward national questions, are dimensions that the Chinese partner appreciates.
Respect for hierarchy and age. The Confucian heritage is reflected in respect for formal hierarchy and for age. Interpersonal relationships are structured by these codes with consequences on behavioral registers.
First meetings: protocols and codes
The first meetings in China have specific protocols worth knowing.
Greetings. The handshake has progressively established itself in business contexts with foreigners, generally less firm than the Western one. The slight bow of the head sometimes accompanies the handshake as an additional gesture of respect. Physical contact beyond the handshake (hugs, kisses) isn't practiced in professional contexts in China.
Chinese names. Chinese names generally follow the surname-given name structure (with the surname coming first). "Wang Jianlin" means "Mr. Wang with the given name Jianlin." In formal contexts you use the surname with the professional title ("Director Wang," "President Li"). Some Chinese who operate internationally adopt a Western name (generally English) to facilitate interaction with foreigners. In this case, the use of the adopted name is generally appropriate.
Professional titles. The use of titles is important. Zongjingli (general director), Dongshi zhang (chairman of the board of directors), Jingli (manager), Zhuren (director), and others, reflect specific positions. Before the surname in the more formal contexts.
Business cards. The exchange of business cards is a codified moment of specific importance. They're offered and received with both hands, slightly inclined. Having cards with one side in Chinese (simplified Mandarin for mainland China, traditional for Hong Kong and Taiwan) is a significant investment of respect. You read the card received carefully, showing attention to the name, the role, the company. You put it away with care — you don't tuck it into a pocket without looking.
The order of entrances and seating. In formal contexts, the order in which you enter a room or sit at the table reflects the hierarchy. The person of highest rank sits in a central or privileged position. For foreigners, waiting for indications instead of taking the initiative on these aspects is generally appropriate.
Clothing. Conservative in formal business contexts, particularly in the first interactions. A full suit with tie for men, a suit or professional dress for women. Sober colors preferred. In tech companies, in creative sectors, in dynamic SMEs, the dress code can be more flexible.
Communication: indirectness, context, signals
Chinese communication has specific characteristics.
Indirectness on delicate matters. As in many Asian cultures, in China the direct "no" is rare on delicate matters. A Chinese partner who has reservations rarely expresses them bluntly. Reservations emerge through formulas like "kaolu kaolu" (we'll think about it), "you yidian wenti" (there's a small problem), "bu fangbian" (it's not convenient), possibly through silences or changes of subject. Insisting on obtaining definitive answers when the partner is signaling reservations rarely produces honest answers.
High-context communication. Chinese communication operates in a high-context register — much of the meaning isn't made explicit verbally but is inferred from the context, the relationships, the situations. For foreigners, developing the ability to read the context requires prolonged exposure and sometimes the support of local consultants.
Preserving face in conversations. As anticipated with the concept of mianzi, Chinese professional conversations require particular attention not to embarrass the counterparts. Corrections in public, direct contradictions, highlighting of errors in the presence of others, are behaviors that significantly damage relationships. When the need for correction or disagreement emerges, the handling takes place in private, with tact, in ways that allow the other to maintain dignity.
Patience in conversation. Significant conversations in China take time. You don't get to the point right away. The initial phases build the atmosphere, explore the person, establish the connection. Trying to force the temporal efficiency of conversations is generally counterproductive.
Variable English. English is studied in China but practical skills vary significantly. The younger generations educated in the large metropolises or abroad often have excellent skills. In second- or third-tier companies, in less internationalized regions, skills can be limited. For important formal contexts, the use of professional interpreters is often advisable. Investing in learning some Mandarin expressions is appreciated as a signal of respect.
Mandarin and linguistic specifics. Mandarin is the official and most widespread language, but there are other significant Chinese languages — Cantonese (Hong Kong, Guangdong), Shanghainese, and others. For mainland China, Mandarin is generally sufficient. For Hong Kong, Cantonese has a specific presence, although Mandarin is progressively more widespread.
Hierarchy and decision-makers
Chinese companies have clear hierarchical structures with specific characteristics.
Decisions pass through the top. Particularly in entrepreneur-controlled private companies and in SOEs, significant decisions are the prerogative of the top — founder, president, CEO, general director. The intermediate figures prepare the decisions but rarely decide autonomously on matters of weight.
Identifying the real decision-maker. The person with the highest title in the org chart isn't always actually the decision-maker for a specific matter. Understanding who really influences decisions — sometimes senior figures without an equivalent formal title, sometimes advisors of the owning family, sometimes public officials for certain categories of operations — requires observation and local consulting.
Family businesses have specific dynamics. Many large private Chinese companies are family-controlled, with decision-making dynamics that include family considerations as well as strictly economic ones. The founding generation (often still active) and the second generation (increasingly present in operational roles) can have different approaches to business and to internationalization.
State-owned enterprises have different logics. SOEs operate with logics that combine an economic dimension and a national strategic dimension. Decision times can be long, processes can include the involvement of higher authorities, the considerations that weigh in decisions include dimensions that aren't purely commercial. For Italian companies that work with SOEs, understanding this context is important.
Respect for hierarchy. Even in the most dynamic companies, formal respect for hierarchy operates. Bypassing the intermediate figures to reach the top directly rarely accelerates decisions — more often it damages the relationship with all levels.
The timing of Chinese business
The timing of relationships and decisions in China has specific characteristics.
The relationship-building phase is long. Significant commercial relationships generally require months or years of building before producing substantial commercial results. Expecting short cycles is generally unrealistic, particularly for business of significant value.
Once trust is built, execution can be rapid. A characteristic of contemporary Chinese business is the combination of long building times and rapid execution times once the decision is made. Dynamic private Chinese companies are known for the speed of execution when the decision-makers are aligned.
Punctuality is appreciated. For business meetings, arriving on time is standard. Being significantly late without notice is considered a lack of respect. At the same time, programs can change with relatively short notice — flexibility on your own programs is a useful dimension.
Repeated visits build trust. Physical presence in China with repeated visits over time is an important dimension. The Italian companies that have built significant presences in the Chinese market generally have dedicated figures who travel regularly or a structured local presence (office, branch, joint venture).
The Chinese calendar. Some periods have a significant operational impact. The Chinese New Year (Chunjie or Spring Festival) is the most important holiday period of the year, substantially blocks economic activity for a week or more (generally between the end of January and mid-February, with dates that vary according to the lunar calendar). The National Day (Guoqing) on October 1 opens the Golden Week — seven days of prolonged holidays. The full-moon festival (Zhongqiu Jie) is a significant holiday in late September/early October. Knowing the local calendar is important for planning commercial activities.
Meals and business entertainment
Meals have a central role in Chinese business.
Business banquets. Banquets — jiucai — are an important practice for building the personal dimension of the relationship. They can be long, with many dishes served in sequence, accompanied by conversation that alternates professional and personal themes. For significant relationships, banquets are a moment of particular importance that deserve complete availability.
Alcohol and toasts. Drinking together — baijiu (high-proof Chinese distilled spirit), beer, wine — is an important dimension of building the relationship. Toasts (ganbei, literally "empty glass") are a codified practice. There are rules on how you toast with someone older (with the glass slightly lower than theirs as a sign of respect), on returning the toasts received, on participating in the collective rhythm of the table. Not drinking is accepted for foreigners if motivated with discretion, but participating at least symbolically is generally appreciated. Excess that leads to loss of control is generally noted negatively in the more structured contexts.
Food as a cultural dimension. Chinese cuisine is rich, regionally very diversified (Cantonese, Sichuanese, Hunanese, Shandongese cuisine, and many others), a central part of the country's cultural identity. Showing curiosity and genuine appreciation for local dishes, asking questions about typical products, exploring regional specifics, is a topic of conversation that produces connection. The comparison with Italian cuisine — both great gastronomic traditions with global recognition — is generally appreciated.
The order of dishes and table rules. The dishes are generally served at the center of the table and shared. The host or the oldest guest may serve their guests, a gesture of consideration that it's appropriate to appreciate. Chopsticks are used for personal food (always with courtesy — you don't plant them vertically in the rice, you don't pass food directly from chopsticks to chopsticks). To serve from the common dishes, there are generally dedicated chopsticks or spoons. Leaving a little food on the plate at the end of the meal is generally a signal that you're full and that the host has offered abundantly. Eating everything can be interpreted as a signal that the quantity wasn't sufficient.
Who pays. In business invitations, the one who invites pays. For business visits in China, invitations from the Chinese partner are generally hosted by the partner. Returning the hospitality on subsequent occasions is important.
Karaoke (KTV). After dinner, it can happen that the evening continues in a KTV — a private karaoke room. It's a widespread practice for consolidating the relationship in a more informal register. Participating willingly is generally appreciated.
Gifts
Gifts in China have a codified role with important specifics.
The appropriate occasions. Gifts at the first meeting are a common practice in relational contexts, although in structured business contexts with large companies they're progressively less standard for compliance reasons. Gifts on the occasion of visits, possibly on returning from trips, are natural. Gifts on the occasion of the Chinese New Year are a widespread practice.
The presentation. Gifts are offered with both hands, generally at the end of the meeting. The way they're wrapped has importance — red and gold colors are a positive omen, white and black have funeral associations to avoid.
The choice. Quality Italian products are generally well received — wines, gastronomic products, artisanal objects representative of your region. For luxury or premium-sector companies, products of your brand can be appropriate.
Quantities to avoid. The number four is considered unlucky in China (phonologically associated with the word for death, as in Japan and Korea). The number eight, on the other hand, is particularly auspicious (association with prosperity). Sets of six, eight, nine items are generally preferred.
Gifts to avoid. Clocks (the expression "giving a clock" is homophonous with "attending a funeral" in Mandarin), umbrellas (the homophony with "separation"), sharp objects like knives (association with cutting the relationship), objects in number four. These are superstitions that may appear archaic but that many Chinese take seriously.
Opening. Gifts received are generally not opened in the presence of the giver — they're opened in private afterward. Even in the case of an initial refusal (a gesture of polite modesty), measured persistence in offering the gift is generally appropriate.
Excess and compliance. In recent years, particularly in structured companies and in SOEs, anti-corruption policies have significantly reduced the practices of expensive gifts. For Italian companies that operate in structured professional contexts, understanding the partner's compliance policies is important. Excessively expensive gifts can be embarrassing or problematic, not just useless.
The specifics of Hong Kong, Macao, Taiwan
A dimension that deserves to be named is the specificity of Hong Kong, Macao and Taiwan with respect to mainland China.
Hong Kong. A special administrative region of the People's Republic of China since 1997, it operates with its own system (the "one country, two systems" principle, although the dynamics of recent years have significantly modified the framework). Historically a gateway for international companies into China, it has a specific business culture that combines Chinese elements with common law traditions and international practices. Cantonese is the main local language, although Mandarin is progressively widespread. English is widely used in business contexts.
Macao. A special administrative region since 1999, primarily known for the gambling sector (the casinos) and tourism. For Italian companies in specific sectors (luxury, food, tourism, sectors linked to the gaming industry), it can be a market of interest.
Taiwan. The Republic of China (RoC), a political entity with its own government, operational autonomy, an advanced economic system. For Italian companies, Taiwan is a separate market with specific characteristics — a business culture influenced by Confucianism with Japanese influences (from the period of historical occupation), a sophisticated manufacturing fabric (semiconductors, electronics), openness to international trade. The political sensitivity of the relationship between the PRC and Taiwan requires attention — it's a dimension to manage with tact particularly when operating with counterparts on both sides.
The operational complexity of operating in China
A dimension worth articulating honestly is the operational complexity of doing business in China.
The regulatory framework for foreign companies. Foreign companies that operate in China have several options — representation, commercial office, WFOE (Wholly Foreign-Owned Enterprise), joint venture with a Chinese partner. Each option has specific implications on operational capacity, control, administrative complexity.
The protection of intellectual property. The protection of trademarks, patents, designs in China requires structured attention. Preventive registration of the trademark in China (the "first-to-file" system), monitoring of the markets for any counterfeiting, management of possible disputes, are important operational dimensions. The regulatory framework has progressively strengthened in recent years, but it remains an area where preventive preparation makes a difference.
The data regulations. The Chinese data regulations (Cybersecurity Law, Data Security Law, Personal Information Protection Law) have significant implications for companies that operate in China, particularly for the management of personal data, cross-border data transfers, information security. Compliance requires specialist attention.
The tax framework. The Chinese tax system has its own complexities. VAT (with different rates for different categories), corporate income taxes, local taxes, excise duties, and other taxes, compose a framework that requires specific skills. Italian companies that operate in China generally need qualified local tax support.
Currency transfers. The Chinese renminbi (RMB) is a currency with restrictions on international transfers. Inbound and outbound capital follows specific procedures. For Italian companies that operate with significant financial flows, planning the transfers is an operational dimension.
Logistics and distribution. China has progressively developed logistics infrastructure but with important specifics. Internal distribution in a country of continental dimensions requires articulated strategies. Online distribution through Chinese platforms (Tmall, JD.com, Pinduoduo, etcetera) has specific logics.
Chinese digital platforms. The Chinese digital ecosystem is separate from the Western one for regulatory reasons. Google, Facebook, Instagram, WhatsApp, YouTube are not accessible in China. WeChat (Weixin) is the dominant communication and mini-app platform. Weibo is the main microblog. Douyin (Chinese TikTok), Xiaohongshu (Little Red Book), Bilibili, are significant content platforms. For Italian companies that want a marketing presence in China, understanding and operating on the local digital ecosystem is essential — presence on the Western channels doesn't reach the Chinese public.
Geopolitical tensions. For specific sectors (strategic technologies, dual-use goods, some categories of components), the framework of restrictions that crosses Western sanctions and Chinese export controls requires constant attention. Italian companies in sensitive sectors must maintain awareness of the developments.
What AI tools have changed for those operating in China
Several aspects of operations with China have been significantly transformed by AI tools in ways worth naming.
Managing communication in Chinese. Translation between Italian/English and Mandarin has improved significantly with contemporary AI tools. For technical documentation, commercial communications, marketing materials, the accessible quality is today clearly higher. For specific formal registers, cultural nuances, content that requires cultural adaptation and not just translation, a final native-speaker review remains advisable.
Specific cultural preparation. Building detailed briefings on the Chinese context — specific sectors, specific cities, types of counterparts, decision-making processes, regulatory developments — is today an activity that with AI tools requires a fraction of the time needed in the past.
Monitoring the context. The Chinese context evolves rapidly — regulations, sectors, competitor dynamics, evolutions of the geopolitical framework. AI tools make ongoing structured monitoring more sustainable.
Managing asynchronous relationships. The time-zone difference between Italy and China (six or seven hours) can be managed better with AI tools that synthesize communications, translate notes, prepare initial responses.
Market analysis. Understanding the competitive structure of specific sectors in the Chinese market, identifying positioning opportunities, mapping the main players, is today accessible with tools that have made competitive analysis more sustainable. For Italian companies without a structured local presence, it's a relevant capability.
Managing the digital ecosystem. For Italian companies that want a marketing presence in China, AI tools accelerate the production of content adapted to the Chinese platforms, the management of campaigns, the monitoring of conversations. The accompaniment of specialized local partners remains advisable for the overall strategy.
AI tools don't replace physical presence in the market, the building of guanxi over time, strategic judgment, the cultural sensitivity that develops with prolonged exposure — but they significantly reduce operational complexity and amplify the effectiveness of qualified human activities.
China is one of the most important markets for Italian companies that operate internationally, with opportunities that remain significant despite the evolution of the operational framework. The size of the market, the growing purchasing power, the appreciation for Italian quality in many sectors, the dynamism of the economy, compose a picture of opportunity that deserves serious strategic consideration.
Operating well in China requires serious investment in cultural preparation, in the long-term building of relationships, in understanding the country's specific operational dimensions, in the capacity to adapt to a regulatory and operational framework that continues to evolve. The Italian companies that have built lasting presences in China have done so through years of consistent presence, progressive development of guanxi, quality maintained over time, the capacity for adaptation to local specifics.
For Italian companies that are evaluating China as a market or that want to strengthen their presence, it can be useful to ask: which China do we want to operate in specifically — which cities, which sectors, which types of partners? Which operating model is consistent with our resources and our objectives? Do we have people with the cultural sensitivity and the willingness to invest in the timeframes the market requires? Are we prepared for the operational, regulatory, geopolitical complexity of the country? The answers to these questions, articulated honestly, orient strategic choices consistent with the specific opportunities of a market that requires in-depth preparation and long-term commitment.