Negotiation in China – Orientation vs. Tactics
Two cross currents in Chinese negotiation tend to confuse western negotiators – even those who have been around for a long time.
Chinese negotiators seem very polite and cordial to westerners – even to the point of being obsequious at times. They really seem interested in learning about you and your business and household life. They will bend over backward to try to accommodate you.
But the moment negotiations start things may suddenly turn hostile, surly and competitive. They can become be insulting and belittling and thoroughly unpleasant.
Is this a subtle form of racism or anti-western feeling? You wish. The odds are that they are even worse to other Chinese.
This is where two cultures clash – but it isn’t Chinese-Western. It’s modern Chinese vs. traditional Chinese. In the old days, deals were either done with family or friends (for no profit) or with strangers for as much as they could get. But overlaid upon this traditional negotiation mind-set is the now popular notion that modern companies conduct win-win negotiation. Since China opened to the West, experts and returning Chinese have chided and berated China organizations to pay more attention to long term relationships, brand-building and developing a positive reputation.
The result is talking win-win but walking win-lose.
In the long run, this will probably lead to a fairer, more transparent, more equitable negotiating environment. In the short-run, it leads to a confusing situation where Chinese counter-parties talk one way before the negotiation – but another way during.
Like many other things in China, this situation is complicated by success. The Chinese have noticed that talking win-win but walking win-lose can be extremely effective. That means that they’ll keep it up until something better comes along. And that’s where you come in.
Information is power – but only if you use it the right way. You know the plays but that doesn’t mean you’ll be able to block their moves. The wolf in sheep’s clothing still has claws and teeth. What can you do? Try these best practices:
- Don’t rely on your counter-party for basic information or arrangements until you know that you can trust them – usually about 6 months after you’ve retired.
- Maintain a healthy range of counter-parties. If you only have one channel of price or market information, then you are a sitting duck.
- Don’t be taken in by kind words, flattery or promises of undying love & devotion. It’s tough setting up deals in China, and we tend to cling to our hard-won progress even when we shouldn’t. These guys are in business. They don’t love you – they love your money, technology and IP.
- Control your own schedules and timetables. If you really can’t make a hotel reservation, get from the airport to downtown or hire a car, then maybe China isn’t for you. Your counter-parties are very eager to help you with arrangements – because that way they can control the timing of every aspect of the negotiating process.
- Know when to walk away. If your existing counter-party isn’t the guy for you, then keep looking. No one gets more honest after they’ve already taken you for a ride.