Business travel to China is alive and well, but the skills around organising these meetings at the official and senior company levels have remained the same.
New staff and delegates may need a better grasp of the high-level protocol surrounding these meetings with Chinese officials, whether they are representatives of CCPIT (China Council for the Promotion of International Trade) or senior directors of companies you wish to do business with. You get bonus points when you acknowledge this, so it is time to brush up on, or in the case of new staff, learn, the little courtesies that can give you a competitive advantage.
The Cultural Revolution and its aftermath did not destroy Confucian concepts of hierarchy and respect. They went underground and remained a core part of the Chinese genetic code. Who gets into an elevator first or last is not an accidental decision. It is a carefully and intuitively constructed queue thrown into disarray and confusion when a Westerner stands aside and invites ladies to enter first.
When Western delegations prepare for visits to China, they are often asked to prepare a list of participants in the delegation. The immediate Western response is to send a list showing the alphabetical order of delegation members, with one or two of the most important people listed at the top of the list. We send the delegation list to our Chinese hosts, blissfully unaware of the complications this creates.
This creates a problem because Chinese hosts also use the list as a guest list for banquets and functions. It is their key reference point for seating arrangements.
Western thinking suggests it is important the leaders of the delegation are recognised, but it is less important for other delegation members to be recognised by position. This is not the case when the hosts come to arrange banquet seating, introductions, and ceremonies. Everybody has a position and rank, and correct placement is essential.
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A guest list in alphabetical order is not helpful. You make life much easier for your hosts by arranging delegation lists in strict order of seniority.
The list is in the order of position — the most important person first, the least important person last. If it is known, give the Chinese name of each guest with the surname first.
Cards and the etiquette surrounding them are almost quaint in modern China. A QR code scan has replaced them with WeChat, and everybody in China has the messaging app on their phone. If you do not have WeChat, you have almost stumbled at first base because the app is ubiquitous in the modern environment. Your only reasonable excuse is if you are a government official from a country where WeChat is banned from official phones.
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You may be asked for a WeChat scan, or you may ask your counterpart for a WeChat scan of the QR code. It is a good idea to practice scanning and being scanned so you can complete the task with the aplomb of an experienced user.
Scanning is a step above exchanging even C-level cards. It 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. This is also why personal WeChat QR codes are not included on name cards which may be handed out to less significant people.
Technical outlook for the Shanghai market
The retreat in the Shanghai Index overshot historical support near 3,220 and has developed oscillation behaviour around this level. This has a slightly bullish bias, although the index can only consistently hold up to 3,220.
The Guppy Multiple Moving Average (GMMA) indicators confirm this is a weak support level. The index pressure continues to push below 3,220 and towards a test, the next support level near 3,150.
Traders look for consolidation in the market before it develops a base for a rally rebound. The slowdown in the momentum of the current index retreat suggests 3,220 has some potential to act as a support area. Any rebound from this will be limited by resistance near 3,280. Still, the balance of probabilities favours a continued fall towards 3,150.
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Long-term trading bands dominate the Shanghai Index. The lower edge of the upper trading band is near 3,220. The upper edge of the band is near 3,280.
The middle area of the broad trading band is near 3,280, which will be a significant resistance area for any long-term uptrend recovery. The width of the trading band is used to calculate the next downside target below 3,220 with a target near 3,150.
These target projections based on the width of the trading band provide a series of potential index targets. However, they must indicate how the index will reach these targets.
The long-term GMMA has turned down, compressed and is now beginning a slow expansion. This confirms that investors have become sellers. Further confirmation is this selling pressure comes when the long-term GMMA begins to expand more widely.
The short-term GMMA is widely separated and below the long-term GMMA’s lower edge. The weak rebound rally is insufficient to develop compression in the short-term GMMA. Traders took quick profits, but the rebound is weak.
A sustained index dip below 3,220 will test support near 3,150. A successful test of this level will build a base for a rally rebound and the development of a new uptrend.
Daryl Guppy is an international financial technical analysis expert and special consultant to AxiCorp. 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
