There are myriad ways your business can get in trouble in China, and you don't want to learn them the hard way.

There are a thousand ways your business can get in trouble in China, and you don’t want to have to learn them the hard way. Instead, be prepared to avoid common pitfalls. Here are some of the top traps:

1. Failure to create and nurture relationships – No business results will be achieved in China without a solid personal relationship firmly in place, whether that takes weeks or years to develop. During the relationship-building process, the Chinese business associate evaluates every move of the potential new business partner, assessing his or her trustworthiness and reactions to certain situations. Once established, the personal relationship, if nurtured, can last a lifetime.

2. Displaying Western impatience – Chinese emphasize slow and well-thought-out actions. This requires Westerners to shift from their customary fast-paced, get-it-done practices to a process that can move forward only after both parties have taken time to get to know each other well. The Chinese will assess intentions or limitations and then proceed by either withdrawing from discussions or concluding an agreement.

3. Putting trust in joint ventures –  As a general position, joint ventures should be avoided, except in those few areas where Chinese law still mandates them (e.g., aviation, energy, national security and communications). No matter how attractive the joint venture might look in the beginning, priorities of the partners inevitably change over time.

4. “Just being yourself” – In nearly every component of business etiquette, Chinese culture dictates the exact opposite of Western practice. Proper presentation of business cards, what constitutes moderate or conservative dress, and engaging in appropriate business communications are just a few examples of significant contrasts to Western customs.

5. Exhibiting cultural ignorance or indifference – Americans tend to have limited knowledge of other cultures, potentially a major obstacle to concluding deals in China. It becomes worse if Americans appear not to care.

6. Causing “loss of face” – The Chinese emphasize honor and abhor losing face. They will avoid saying they don’t understand; negative answers are seen to cause disharmony and are considered rude. They dislike confrontation, preferring to circle an issue so that it can be addressed in a committee at a later time, all in sharp contrast to Western ways. Never, ever cause anyone to lose face.

7. Disrespecting signs of authority, in both directions – Chinese business conduct demonstrates the profound impact of Confucius and the resultant importance of obedience and order. Chinese businesspeople enter a room in the order of rank, and they expect counterparts to do the same, allowing both groups to immediately understand each others’ hierarchy. Only the Chinese leader speaks during meetings, and the Chinese expect the same from the visiting delegation. Satisfying this expectation can be difficult for Westerners.

8. Deferring to attorneys – Americans’ emphasis on legal contracts and frequent deference to attorneys are seen as insults in China. Do not bring attorneys to discuss business and, once the deal is signed, you cannot slip back to traditional Western ways. Continue to foster the long-term relationship.

9. Prematurely committing to Chinese facilities – A company considering a move into China often jumps to the conclusion that it needs its own manufacturing facility. In reality, this might be the last thing to which a company should allocate what can become an all-consuming investment of time, assets and people. All too often, the unwanted result is an expensive replica of the home country facility with costs not nearly as low as expected.

10. Scrimping on resources on the ground – Sourcing components and finished products in China can be accomplished with little, if any, direct investment. Through contract manufacturing and local professional sourcing firms, a company can take advantage of the lowest possible costs, often considerably lower than what would be achieved through its own Chinese manufacturing facility.

11. Abdicating oversight responsibilities to contract sources – American companies must not let recent press coverage of Chinese quality issues lead them into a trap of misplaced accountability for quality issues. A critical requirement to make contract manufacturing work in China is to develop and document a quality program that is administered with zero tolerance. Managing contract manufacturing is  a complex, never-ending responsibility.

12. Underestimating the importance and competence of Chinese government – Chinese government entities can make happen anything they want to happen. Concessions on value-added and income taxes, waivers on import duties, subsidies on direct labor costs – all can enhance a company’s competitive positioning as it enters China.

13. Overlooking issues in due diligence – This can happen when a company is looking to acquire another business that already has Chinese operations. Yet the acquiring entity doesn’t understand or misses key facts surrounding Chinese laws on value-added or income taxes, inter-company transfers, customs duties and related requirements. Failing to discover such traps can have disastrous and costly consequences.

For each highway to trouble, there is the opposite trail to success. Scores of Western companies outsource to or build their products in Chinese facilities and sell into the Chinese market, achieving world-class success every day.

Ron Norelli is a founder and chairman of The Norelli Group LLC, with offices in Charlotte, N.C., and Beijing. His founding partner, Ted Revis, contributed to this article. For more, visit www.norelligroup.com.