Respect.
The all important word.
Respect.
Countries go to war for it.
Men kill and die for it.

Anyone who has dealings, even on a very limited level, with the Chinese very quickly learns the meaning and the value of the term 「face」. 面子 (mian zi)

In business, it is not enough to have the right product, the right market, the right price, or the right contact. Sometimes, despite all logic, people form their opinions and base their decisions on nothing more than kimogi (mood, feel).

In Chinese society, there has been for millennium a very strict social hierarchy based on age, rank, social position, etc. In recent modern years some might argue that young people do not observe social customs and traditions as much as before, however it is the author's opinion that the more educated, cultured, sophisticated and 有教養 (have proper upbringing) class of society still follow many of the old customs. Of course, tolerance is exercised towards a foreigner who is most probably unaware of such customs, but you certainly would score some points with any acquaintance if you happened to know, and further observe such customs.

One very important, easy to remember and put into practice custom, involves drinking. In any social gathering, be it in business, or family and friends, there is food and drink, and in the case of business often alcohol. There is great etiquette involved in drinking, and a refusal to drink with someone is to the Chinese, the equivalent of refusing to break bread with someone in the West.

When there is a toast, regardless of who initiated it, how you clink cups with them shows the rank between you and your regard of them. If you see them as senior, or even if though equal simply wish to offer them respect, you may clink you glass/cup slightly lower than their's. If you clink cups at an equal height with them, this means you see yourself and them as equals. However even if it is truly so, it is always gratifying to be given face and makes you appear magnanimous and possessing largesse if you still toast with your cup slightly lower than their's. If on the other hand, you clink cups with them with your cup higher, this means you openly look down on them and is considered very rude and a great insult. If you truly are the senior, you should not have to do this, as they will most probably take initiative and no matter how low you place your cup they will still clink with you lower than yours, even if they suspect you may not know this custom, good etiquette and habit still stand. If you wish to openly insult them then you may lightly bash the butt end of your cup on the top or head of their cup, however you will probably henceforth be labeled as a barbarian. If you wish to openly show contempt or a challenging spirit to a competitor you may accept their toast with your glass higher than their's, however, you will be viewed stronger and more 沉的住 (steady, stable, poised, unshakeable) (chen de zhu) if you show respect to a competitor regardless. The Chinese say 先禮後兵, "first courtesy, then force" (xian li hou bing) and 驕兵必敗 "haughty and arrogant soldiers are doomed to defeat" (jiao bing bi bai). A competitor who does not openly show contempt, look down on a competitor and who shows nothing but courtesy is viewed as much more dangerous an opponent.

Also it is courteous if you take the lead and pour their next round of drink, but be careful not to pour it completely full to the brim as this is done when you don't like your guest and simply want to hurry them off; the message is "finish your business and get the hell lost". Generally 80% full is courteous and acceptable. If by accident you do pour their cup too full and it spills over, be sure to apologize and even offer to wipe it up.

Those who have some experience in this all important ritual will recall that there is also much head bowing, smiling, holding of the cup with 2 hands even if it is a very small cup and only 1 hand will suffice, and in the most formal situations or formal proper introductions, there is also standing.

It is accepted that whoever is senior will take the lead and drink first. If you are junior, or even equal but wish to give them big face, then you never drink before they drink. Usually the senior person will say 「來來來」 (lai lai lai) or 「come come come」 and then everyone will drink. In most cases, and when both parties are of equal rank, everyone drinks together. And in all cases, upon finishing you drink, or merely taking a sip, you hold aloft and present your cup to them with a slight bow, and wait until they do the same then everyone sets their cup down at the same time. To drink first, or drink without waiting for them to drink, or to refuse to drink, or to simply down your drink and then without returning or offering them a salute/bow and simply put down, set down, or even slam down your cup without waiting for them, is considered a grave offense, one that in previous times would be reason enough to demand satisfaction.

If you do not wish to drink alcohol, then you may have some trouble dealing with middle aged or younger businessmen. However older, more experienced, not to mention more health conscious, businessmen may forgo such drinking marathons and get right down to business. Often it is an open known tactic, to wear your opponent down by tag-drinking him in turns with your business associates. This is called 車輪戰 (che lun zhan) or 「cart wheel battle tactics」. The idea is to wear him out with the combined stamina and alcohol tolerance of everyone on your team against a lone individual, (similar to the tactic wolves use to wear down a stag in Yellowstone Park) and in most cases, that lone individual is the Westerner, make him exhausted after 4-5 days of such evening dinners and drinking, to get a hasty contract signed on the final day just before rushing to the airport, hangover and the whole nine yards clouding one's judgment, not to mention getting a much better price!

In any case, be it a dinner with friends, a wedding, or business dinner, if someone wants to drink with you they are giving you face, or respect, and even if you don't want to drink alcohol for health or religious reasons, or out of habit, then at least drink tea, juice, or some other beverage with them, and do make it a point to bow slightly and make momentary eye contact to return their respect and by means of body language and eye contact convey your apologies for not drinking alcohol with them. You may try the phrase 以茶代酒 "to substitute alcohol with tea" (yi cha dai jiu). If you are sincere and give them due attention, generally it will go over well.