Forget Chinese tourists, it is now travel time for Chinese officials, be they representatives of CCPIT (China Council for the Promotion of International Trade) or senior directors of companies with whom you wish to do business.

Last week, we looked at protocols we are expected to follow when visiting China. This week, we consider what happens when Chinese officials visit us.

Despite sometimes casual appearances, there is a hosting protocol that applies in these visits. You get bonus points when you acknowledge this and that can give you a competitive advantage.

A visiting Chinese delegation will send a list arranged in strict order of hierarchy. This hierarchy should be observed when welcoming guests and arranging seating. Where possible, people of equal positions should be seated with each other. The general manager of the Chinese company should sit next to the general manager of your company.

However, there are many more courtesy titles in a Chinese company structure, so having information about an official’s position or designation is not always a reliable guide. It is wise to seek assistance from the Chinese side if there is any doubt. Remember, the translator is also required to sit near the person who requires translation services.

Another issue relates to conference name tags which should be available in both English and Chinese for all participants. From a Chinese perspective, the position or status of the person is just as important as the name. The impact of having this additional information is substantial as it enables networking to proceed smoothly and effectively.

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Gifts come first but are given last. They are first because much thought should be given to the type of gift, its quality and its symbolism. When possible, it is best to discuss with others on the Chinese side so that the value of the exchanged gifts is about the same. This avoids loss of face if your gift is of a lower or higher standard than the gift given to you.

Gifts fall into four main categories. The first category refers to state gifts which are representative of the country or province. The second is personal gifts. A business gift should be something suitable for public display. If your business gift also has a personal nature, then the gift may be seen as an invitation to bribery. Great care must be taken to avoid giving this impression. The third category refers to small tokens of appreciation for staff and delegation members. These include city or state lapel pins or souvenir gifts.

The fourth refers to gifts exchanged to open a business relationship. They demonstrate sincerity, intent and purpose. Where possible, work with your Chinese contacts to determine what is appropriate. They will also appreciate working with you in the same way to reach an acceptable exchange that gives face to both parties.

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Unless previously arranged, gifts are not to be opened when they are given. This is designed to preserve face. If the gift is inappropriate, then the recipient is not embarrassed. Gifts give face and may be opened in public if the type of gift is already known to both parties.

When a meeting concludes, it is respectful to walk your guests to the elevator or in the case of very important guests, walk them to the front door of the building.

You can do business without following any of these suggestions but your business relationship should greatly improve if you are able to observe these little courtesies.

Technical outlook of the Shanghai Composite

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The Shanghai index is struggling to stay afloat. It is hovering around the support level near 3,220. However, this is not a convincing test of support as it has frequent dips below this level. Neither can the index use the sideways consolidation as a base for a strong rally move towards resistance near 3,280.

There is a slight bullish bias in the consolidation pattern but this is weak and tepid. The index is waiting for a significant shock to set its new direction. There is no strong indication of what that direction might be. This indecision is reflected in the Guppy Multiple Moving Average (GMMA) indicator relationships.

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The long-term group of averages is moving down but they are not widely separated. Investors are nervous but they are not yet strong sellers. A strong rally has the potential to quickly push through this resistance feature.

The short-term group of averages is showing limited enthusiasm from traders. There is some degree of compression in this group but its weak behaviour shows there is no strong commitment driving it. Traders, like investors, are waiting for an external signal to set the market direction.

This high degree of indecision makes it easier for a strong trend to develop because it only has to overcome inertia rather than strong trending behaviour.

The Shanghai Index is dominated by long-term trading bands and these set the limits for each leg of the rally or retreat.

Two trading bands provide a wide band of movement for the index between support near 3,220 and resistance near 3,350. The middle area of the broad trading band is near 3,280 and this will be a significant resistance area for any long-term uptrend recovery.

The width of the trading band is also used to set the next downside target below 3,220 with a target near 3,150.

These target projections, which are based on the width of the trading band, provide a series of potential index targets. However, they provide no indication of how the index will travel towards these targets.

Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia-China Business Council

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Dos and don'ts when hosting official visitors from China

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