Culture & Negotiation in China: Using the “R” word.

Two counter-parties can look at the same situation and draw radically different conclusions.    Negotiators, you have to remember, carry a lot of cultural and nationalistic baggage – and sometimes an innocent statement can have toxic results.

A friend of mine was in China meeting with chemical suppliers – as he has been doing once a year for a long time.  The bulk chemical business isn’t glamorous or slick – there are no showrooms or brochures.  Negotiating points tend to be confined to price, quantity, quality and freight.  Even among those who make their living from the bulk chemical business, it doesn’t inspire much passion.

That’s why this American businessman was caught off-guard when his cordial conversation with a supplier he knew well suddenly turned angry and bitter.  The American made what he thought was an innocent comment about recession in China – and his counter-party was shocked and insulted. 

  • To an American, a recession is part of a broad economic cycle characterized by several quarters of declining consumption.
  • To some Chinese, a recession is a western problem stemming from corruption, sloth and dishonest market manipulation.  Furthermore, it repudiates one of China’s greatest economic achievements and the fine work of China’s leaders. 

The American was making the common negotiating error of seeing the whole world from his one point of view.  Culture creeps into many aspects of negotiation in China, and more than a few deals have been scrapped by the simplest of misunderstandings.

It reminds me of another story told by a Chinese factory owner who made what he thought was a non-controversial off-hand comment questioning the intelligence of a certain US president.  Everyone he knows– including American colleagues and acquaintances living in China– used the same kind of language all time, but now it had gotten him in trouble and put an important relationship at risk.

Just because something is obvious to you doesn’t mean your counter-party won’t be offended or insulted.  In China, the visiting negotiator generally does better confining his small talk to discussing the best way of doing business in China.

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