During the week, I had a private dinner with the Chinese owner of one of the largest Chinese investments in Australia. We had not met before, but no business cards were exchanged. Next week, I will host the Chinese Ambassador to Australia and I would expect that no business cards will be exchanged.
Greeting guests used to start with introductions, and business cards were used to start the process. All this has changed, and as China flights and meetings resume, it will be important to adjust to the new environment. Some of the changes are driven by Covid with its fear of virus transmission through touch. Other changes reflect an enhanced digital economy in China. We need to move beyond the basics of handing a business card held in both hands with the translated side up.
Cards, and the etiquette that surrounds them, are now almost a quaint artefact in modern China. They have been replaced by a QR code scan with WeChat because it is safe to assume that everybody in China has WeChat on their phone. If you do not have WeChat, then you have essentially stumbled at first base because WeChat is so ubiquitous in the modern environment.
The only reasonable excuse for not having WeChat is if you are a government official from a country where WeChat is banned from official phones. In government-to-government meetings, the tradition of exchanging business cards remains largely intact.
In a business meeting, you may be asked for a WeChat scan, or you may ask your counterpart for a WeChat scan of the QR code. Scanning, or being scanned, in a business situation is an open invitation to communicate on a much more personal level and carries with it a higher level of commitment than is implied with the exchange of name cards.
It is a good idea to practise both scanning and being scanned, so you can complete the task with the aplomb of an experienced user.
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Of course, there is a courtesy and process around scanning, just as there was, and is, around the use of name cards. In my dinner meeting, WeChat scans were exchanged later in the evening. This was a confirmation of an ongoing relationship. In the upcoming meeting, I would anticipate exchanging WeChat scans with senior support staff in just the same way.
The WeChat scan carries greater business commitment than a name card exchange. It also carries much more information than a name card, so your use of WeChat should not be the same as a free-for-all use of Facebook. The Moments function provides an insight into your business activity and into your social activity should you choose to include this. It is an ongoing, open window to you in a way that a name card can never match. Many choose to use their WeChat Moments as a deliberately and carefully curated business platform because it is a powerful business tool.
The name card still has a place and a role to play. However, it is much diminished and increasingly only used as a form of politeness in unimportant situations. Cards are simply readily accepted from less important people, and often disposed of at a later date. The really important contacts are recorded and saved by WeChat and this includes Chinese officials.
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If we request a WeChat scan and are given a name card instead, then your lower position has been politely confirmed. That’s useful to know because it provides useful information when the time comes to formalise business arrangements.
Technical outlook for the Shanghai market
The Shanghai Index is testing resistance near the value of the long-term downtrend line B. The Guppy Multiple Moving Average (GMMA) relationships suggest that a new uptrend is developing. The market will retreat from the value of trendline B near 3,130.
A bullish outcome is a small retreat and a rebound from the upper edge of the long-term GMMA near 3,090. A less bullish result is a retreat to near 3,040, which is the value of the lower edge of the long-term GMMA. A rebound from this level is still bullish.
The long-term GMMA is well separated, but it has stopped falling. The GMMA is now moving sideways, so traders look for compression to develop and the new uptrend also develops.
The short-term GMMA has moved towards the upper edge of the long-term GMMA. This shows traders are actively buying.
Investors and traders are alert for the development of a 1-2-3 GMMA pattern. This is where the market rallies but falls short of the long-term GMMA. This has already occurred.
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The next rally penetrates the long-term GMMA and then retreats. This developed in early November
A breakout above trendline A has a resistance level near 3,220. This is a strong historical resistance level. A break above this level is very bullish. The long-term upside target is near 3,400.
The third rally breaks above the long-term GMMA and is used as confirmation of a trend breakout and the beginning of a new uptrend. This is the current development.
The exhaustion sell-off created the double-bottom pattern.
Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a national board member of the Australia China Business Council. The writer owns China stock and index ETFs
