Baijiu Means Business

A Look at Chinese Business Cultures over the infamous Chinese Drink Baijiu

First Hand Baijiu Experience

Several Chinese customs are significant when you are considering doing business with Chinese clientele. Arrive promptly to meetings, know who is in charge, bring a gift and deliver it with two hands (but be sure not to bring a clock), and know how to drink baijiu. On a recent class excursion to China, a team of us were fortunate to have the experience working in a consulting capacity with Hexin Fashion Co. Ltd. This company not only granted us insight into Chinese manufacturing and exportation methods, but we learned business in China is firmly based on relationships, most-importantly post-meeting relationship building.

Upon first meeting our client contact, Eddie, we could see his passion for his company and city of Xiamen, China, and his desire to pass along real Chinese experiences to Americans. After a morning of business with Eddie and the Hexin team, we invited Eddie to join us for a company dinner that evening hosted by Tulane. It was here that Eddie introduced us to the famous Chinese beverage baijiu. Eddie taught us to raise our cup, say ‘ganbei’, and empty our cup in one sip. ‘Ganbei’ sounds like ‘gon bay’ and translates to dry cup, for those who were wondering.

Enjoying a baijiu toast with Eddie at the Tulane Company Dinner

Baijiu Background

I want to begin with background on this infamous drink. Baijiu is a relatively strong Chinese alcoholic beverage made from grain. It usually sits at about 100-proof, or 50% alcohol by volume. People typically serve this drink from a porcelain container at room temperature into small porcelain shot sized glasses. I noticed personally during the dinner that once we ordered the bottle of baijiu, the waiter or waitress makes sure the cups stay full at all times. This step makes the drink readily available to businessmen and businesswomen who wish to make toasts during the meal. The higher the grade of baijiu, the more the aged the alcohol, the more expensive the price per bottle. Though alcohol has been in China as early as 5800 – 7000 B.C., baijiu appeared at some point between the Song dynasty (960 – 1270) and Yuan dynasty (1271 – 1368).

The four main types of baijiu that exist are strong aroma, light aroma, sauce aroma, and rice aroma. Each of these types has a unique flavor and distillation process. Strong aroma contains multiple grains and is perhaps the most popular form with a taste described as floral and licorice and strong aftertaste. Light aroma baijiu is made mostly in the north from sorghum and contains a mild flavor with some sweetness, but with a high alcohol content of about 55% ABV. The sauce aroma baijiu is fermented in brick pits and has been said to resemble the taste of soy sauce. Finally, rice aroma baijiu mainly comes from southern parts of China and with their rice ingredient. This baijiu is typically sweeter and milder in flavor, and it is common to infuse these with tea, fruit, and herbs.

Baijiu Business

When looking at baijiu as a business, this beverage currently accounts for 99% of liquor sales in China. South China Morning Post writer Viola Zhou remarks that “Baijiu makers have benefited from the rising demand for quality and brand reputation among Chinese consumers” and that net growth in the two most premium brands, Moutai and Wuliangye Yibin, will both see an increase in future years. Something the baijiu industry has to consider, however, is that the younger Chinese generation views this drinking tradition as dated. Baijiu producers are now looking at ways to specifically target Chinese young professionals born in the 1980’s and 1990’s in order to expand their current market base, as well as ensure future sales growth.

For now, baijiu remains a substantial part of business culture tied to years of tradition. My parting advice for those doing business in China is to experience the taste of baijiu before your Chinese visit to ensure you will be able to show respect, save face, and partake in an ever-important part of Chinese business culture.