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April 13, 2009

Should you tell your Chinese negotiating counter-party that you are speaking to others?

One of the things I tell clients early and often is that they need multiple counter-parties every time they start negotiating a deal in China. Yes, I know how time consuming and frustrating it can be – but in the long run there are few negotiating tactics that will serve you better in China.

I recommend that negotiators who are new to an industry, a market or China itself to follow a simple pattern. 1) Open up negotiations with a major supplier or player – preferable one who has dealt with overseas businesses before. Learn about the market, the products and the critical success factors. 2) Based on what you have learned, open up negotiations with at 2 other counter-parties. You’ll now have at least 2 potential deals in discussion at any given time – even if one of them drops out or decides to give you the ‘now or never’ ultimatum.

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