Planning Your First China Negotiation

Treat your first big negotiation in China as an independent project, and you’ll be laying the base for many successful deals for years to come.

 
If the pundits are right – and heaven knows the law of averages is on their side – then there will be more and more Westerners negotiating their first business deals with Chinese counter-parties in coming years.   If, like many Westerners new to China you decide to ‘dive in with both feet’ and start ‘making things happen’ you will find yourself in a world of hurt.  Confusing, frustrating, expensive hurt.  That old folksy advice from woodshop class – measure twice, cut once – is a great idea in China.  But here we’ll say, ‘investigate twice, decide once’ instead. 
 

Don’t assume that you’ll have clear, transparent information flows.
Develop a stable, reliable, independent system for gathering information about China.  The main idea here is to avoid relying on your negotiating counter-party for basic market & economic information.  You wouldn’t do it in NY – don’t do it in Shanghai. 
 

The good news is that there are more high-quality, timely information sources about China than ever.  You don’t have to stop with the big western newspapers and magazines.  If you aren’t using basic tools like LinkedIn Groups (start with the ChinaSolved group at:  http://www.linkedin.com/groups?gid=1392417 ) and Chinalyst.net (http://www.chinalyst.net/), you should start soon. The bad news is that getting up to speed and staying current will require big investments of time and energy, so plan accordingly 

 
Re-set your China goals
Once you’ve started researching your China negotiating process, you will probably find that some of your initial assumptions about the new business need adjusting.  Developing a comprehensive goal system is such a basic task that many sophisticated Western managers ignore it until it’s too late.  If a seasoned US manager is planning to open a new business in NJ, he’ll likely be able to tell you about roll-out schedule, product development, anticipated market share, budgets, manpower plans, etc.  Ask that same guy what his goal for the new China shop will be to ‘make as much money as fast as possible’.   

 
Successful managers in China are using SMART goals (specific, measurable, actionable, realistic and timely) – just like in other places.  If you can’t articulate a comprehensive goal system for your China business, then congratulations! You now know exactly what you have to do first – research until you have good, sensible goals.

 
Develop a network of professional service providers. 
Yes, you may have to pay for advice and professional services in China.  Sorry.  Free advice is even more expensive in China than in other places.  There is a wide range of professional service providers in the major Chinese cities.  You can start researching in advance (ChinaSolved, LinkedIn, NextStep and the Chamber of Commerce  are all great places to start) – or you can ask your negotiating counter-party for his opinion.  Guess which one is the better idea?   (Hint – just like back in the US, finding a lawyer and accountant you can trust are your first steps.)

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