International Business: Cultural Factors Affecting Global Trade

This report delves into the significant impact of cultural factors on international business, particularly focusing on China's role in global trade. It examines various cultural challenges such as language barriers, business etiquette, religious differences, traditional practices, and consumption habits, illustrating how these elements can either facilitate or hinder international transactions. The report discusses the influence of pragmatism, mental distance, and differing managerial structures on trade relations, highlighting the importance of understanding cultural nuances to foster successful business partnerships. It also explores solutions to overcome these challenges, including the use of translation services, promoting women's participation in trade, and establishing uniform business etiquette. The report emphasizes the need to embrace cultural diversity and leverage positive cultural aspects to enhance international trade, concluding that a comprehensive understanding of cultural dynamics is crucial for thriving in the global market.

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Introduction
Undoubtedly, the economic contribution of China to international trade cannot be
ignored. China global business reputation in the Brics and other regional and global economic
blocs cannot be ignored which goes to show how countries can overcome cultural constrictions
to be successful. The existence of international transactions is sufficient proof that culture
impacts trade between different countries (Soo-hoo, 2016).There are various cultural factors that
greatly impact on international trade such as pragmatism, business etiquette, religion, language
barriers, traditional practices, consumption habits based on traditions and customs. However,
with the modern technology and globalization, most of these challenges can be overcome.
Cultural Challenges
Culture plays a vital role in business, local or international.This is attribute to the fact
that business thrives on consumption of goods and services. International trade is affected by the
different cultural practices, customs and traditions of all its participating and non-participating
partners thus the need to overcome these cultural prejudices, stereotypes, and customs to grow
international trade. The fact that a country’s traditions or customs forbid the consumption of a
certain product such as meat, pornographic materials, and other products denies the country
whose export product is restricted thereby hindering international business transactions.
Additionally, Pragmatism can be a hindrance or setback to international trade. For
instance, the existence of different managerial and office etiquette might seem disrespectful or
might be misconstrued by the other foreign party. Further, the variance of the punctuality
concept among different countries differ. What one country might consider early, another might

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consider it late thus leading to unnecessary conflict and distrust.China‘s Pragmatism is
considered one of the curtailers of international transactions (Sheer, n.d).Usually, each country
has its own managerial structure and process which might be unique to it or a few other
countries.
Currently, China trade practices are feared to be sabotaging the United States of America
businesses(Marshall,2018).The allegations against China are that China ‘s trade policy and
practices are infringing the intellectual property entitlements of the American based businesses
through its technology transfer requirement for joint venture and compulsory source code
disclosure. According to the American government, this Chinese practice of trade is injurious to
its industry. However, according to China and some opinions, this move by the United States of
America is likely to hinder globalized trade between the two countries.
In addition, mental distance distorts global trade. Simply mental distance refers to
classical elements emanating from one special foreign market and controls the flow of
information. This causes distrust among possible foreign countries (Kahlor et.al, 2014).In the
event that countries develop this mental distance, there will be no global trade or agreements
between them. Mental distance creates mistrust thereby discouraging investor confidence which
is very crucial for international trade to take place. For international transactions to take place,
foreign countries require free information flow and trust in their prospective foreign trading
partner without which there is a deadlock in trade.
For instance, the American way of doing business and the Chinese way of doing business
are different which is attributed to the cultural disparities of the two economic large economies
thus the need to move past the cultural misconceptions (Xiao and Lili,2011)For Americans, their
ideas are capitalistic whereas, for the Chinese, it all about the community thus the need to

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understand the different cultures so as to foster rather than hinder global trade. Undoubtedly, the
importance of understanding one another is very key to any domestic or foreign transaction
hence the importance of common language.
Commonly, most countries use French, English, Spanish as the form of official
communication. For most Chinese people, Mandarin is their official language. However, there
are several languages spoken in China such as Cantonese, Wu Chinese among others
(Sawe ,2017)thus creating possible miscommunication and mistrust among foreign trading
partners. The fact that China is a major international trading partner for most countries in the
world raises the need for a common language for easier and effective communication. Lack of a
common dialect among international trading partners is possible to happen and generates
mistrust thereby curtailing international trading transactions and agreements.
Unlike the ancient times, barter trade which thrived on nonverbal cues cannot survive in
this globalized world of today thus this has necessitated the involvement of translators and
translation machines to bridge the communication gap between Chinese entrepreneurs and their
trading partners thus easing global transactions.
Religion.
Primarily, religion is considered a cultural institution in most societies. Noteworthy,
religion has the magnitude to affect international business transactions twofold. First, the
likelihood of two foreign countries sharing the same religious values boosts the chances of
foreign trade transactions between them as the opposite is true. Largely, China is atheist in nature
supported by Buddhism, Confucianism, Taoism, and Folklore. Essentially, shared religious
beliefs boost trust when it comes to foreign trading partners. Also, shared values and trading

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perspectives among shared religion countries is likely to boost trade thus the assertion that
religious-based values and standpoints might bar Chinese business transaction with certain
countries in the world.
For some countries, women are not considered equal business partners with their male
counterparts.For some deeply religious countries, such as Saudi Arabia, India, women are
considered voiceless thus they are denied equal empowerment and business opportunities with
their male counterparts.Such prejudices have curtailed women empowerment and participation in
world trade. Undoubtedly, religion holds a lot of power when it comes to economic relations.
Consumption traditions and customs
Notably, consumption of international goods and services can harbor international trade
between some countries. Important to say, there are some products to which specific countries
consider restricted especially for highly religious nations such as India. Particularly, India has
restricted the importation of counterfeited goods, plant produce which hinders international trade
between potential exporters (Immihelp, 2018).Additionally, cultural goods inhibit international
trade. In the sense that owing to the different cultural disparities among nations, some goods are
only consumed within a country’s pounder or region. Cultural goods could be things like films,
music expressions, antiques all emanating from a cultural –oriented creativity (Eurostat, 2018).
Solutions
Regarding Language barriers, various solutions have been put forward by both machine
and human beings. Thanks to the modern technology, there are translator machines. In addition,
there are trained persons who offer translation services to foreigners hoping to do business in
their different countries. This communication gap has created thousands and hundreds of

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translating employment opportunities all over the world. There are employment opportunities for
the manufacturers of these translation gadgets and human employment for trainers of possible
translators and translator themselves thus reducing the percentage of unemployed persons
globally. The availability of translators and translating services has boosted
understanding, trust and confidence at the international trade level (Brannen Et.al,
2014).Undoubtedly, this has promoted better communication and boosted understanding between
and among foreign speaking countries thereby facilitating global trade.
Largely, Chinese medical practices have made substantial contributions to the global
medical field and the same cannot be undervalued. Cultural practices can be both harmful and
productive. Regarding Chinese medical practices, some good has come out of it.Particularly, In
the year 2012, Chinese traditional medicine sales were worth 83billion (USD).Further, it was
estimated that Chinese herbal remedies and supplements value would be 115m US dollars by the
year 2020(Rinaldi & Shetty, 2015).The contribution of traditional medical practices to modern
medical discoveries cannot go unnoticed thus the need to incorporate and develop research.
There is a need for countries to implement policies that give women equal economic
empowerment opportunities to boost their participation in international trade. Currently, women
in few countries hold powerful, leadership or managerial roles (Gonzalez, 2015).There is need to
avail managerial and leadership slots to women so as to encourage and ensure their participation
of women in international business transactions. For cultures that limit women empowerment
opportunities, there is a need for education and respective government policy implementation to
eradicate the negative stereotyping and low opinion of women as human beings.
Also, the abolishment of education, employment discriminatory laws in countries where
women are undervalued would be a great start. Further, there should be equal employment

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promotion criteria for both genders to guarantee female participation in trade at local, national
and international trade levels. Owing to China’s massive economic contribution to the global
market, it is imperative that foreign trading partners become knowledgeable of the massive and
longstanding culture, diversity and business etiquette for a sustained and fruitful business
relationship (Kermeliotos, 2011).
Recommendations
Owing to the different cultural aspects, there is need to establish a uniform office
etiquette at the global business level. This will go a long way in facilitating smooth global
business transactions and less managerial wrangles among transnationals. A uniformed office
and business etiquette will boost confidence, trust, and teamwork among different transnationals
thus boosting international trade. Further, there is need to establish a global formality address
that is agreeable universal to avoid cultural misconceptions and disrespect to others (Hult
International school of business, 2017).
In addition, the concept of a formal address system is as important as the business itself.
That is because a potential foreign investor might feel disrespected if not addressed in a given
formal way thus the need for a unified approach to the formality of address. In addition, there is
need to fully embrace the positive effects of the different cultural practices and institutions of the
diverse countries of the world. Different cultures have different practices which are beneficial to
that community and in the event that all these cultural practices such as traditional medical
practices of many diverse countries will go a long way on revolutionizing the medical field.
Also, each culture has a different but useful element which could make the world a better
place. For Cultural goods, there should be more domestic promotion and marketing of the goods

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to attract foreign investment and foreign markets. Through domestic cultural goods, marketing
and advertising on the international platform will foster global trade. Owing to the diversity of
cultural goods among the various continents, there is bound to be market for cultural goods thus
the platform to extend global trade. Simply put, culture plays a role in international business
transactions relations.
Conclusion
China is among the largest world economies thus making its cultural practices, religion,
medicine, consumption habits and customs relevant to international trade. With technological
advances, language and other barriers are overcomed.Through translation services, women
participation, formulation of an internationally approved uniform formal and business etiquette,
cultural inhibitions can be used to boost international trade. The cultural aspects of China cannot
be ignored owing to the fact that China is an economic powerhub.Theres is need to embrace
culture as it impacts positively and negatively on global trade.

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