Wining and Dining in China : How Swedish companies perceive and adapt to cultural differences when managing business relationships in China

China as an Asian country has now an ever growing importance to the world economy and Sweden as a western country is having more and more collaboration in business with China. Due to the cultural differences between Sweden and China, managing relationships in B2B market has been challenging for Swedish companies doing business in China. Our study aims to find out what cultural differences are perceived by the Swedish companies and what adaptations they have made to the cultural differences so as to manage the business relationships. This study is based on the theories of Trompenaars and Hampden-Turner’s dimensions of human relations and Marx’s cultural shock triangle. Also we have referred to theories on Chinese relationships, Guanxi. We have used deductive method and conducted seven interviews, namely five with Swedish companies that have business in China and two people respectively from the Swedish Chamber of Commerce in Shanghai and the Regional Court in Kalmar of Sweden. We have come to the result that the Swedish companies are mainly challenged by the cultural differences such as the language difficulty, time orientation of Chinese and the personal approach in business relationships management. In this case the companies have made efforts to increase knowledge in the Chinese culture but also to establish local sales offices and carry out a joint venture with the Chinese business partners