Fighting Words: A glossary of conflict-laden phrases in US-China deal making.

The look perfectly innocent. They don’t seem like a lexicon of China-US business conflict:

    * Contract
    * Risk
    * Long Term
    * Truth … or truth
    * Harmony or justice.
    * Relationship
    * Transaction

But they are.

    Americans see a contract as an independent entity – external from the two counterparties. Once signed and executed, the contract becomes another party in the deal – a neutral, binding, legally significant document. It becomes both the originator of the deal and the arbitrator of all disputes. Chinese view a contract as a record of a meeting of the minds between two specific individuals at a certain time and place, under specific circumstances. It is certainly useful as a tool towards reaching an understanding – but the actual agreement is between people. From the Chinese perspective – reasonable, honest men do not try to use contract trickery to enforce agreements that are no longer relevant under a new set of conditions. To the American, the contract is the final authority regardless of what has happened since the signing. A very good recipe for business conflict.

    Risk, as used by Americans, encompasses two concepts. It includes a) possibility of loss and b) uncertainty. To Americans, these are two sides of the same coin. To Chinese, these are completely different things with wildly different ramifications. Possibility of loss doesn’t frighten Chinese deal-makers, but uncertainty drives them nuts. Confronted with an unclear or uncertain future, the wise Chinese deal-maker shuts down and waits for further information. When the American side attempts to push him into action, the Chinese side smells trouble, deception and trickery. Conflict and mistrust ensue.

    Long Term
    Research we’ve done indicates that when Chinese and Americans are involved in a negotiation, there are accusations and recriminations that one side is invariably short sighted, one-off and win lose, while the other is long-term thinking, cooperative win-win. The irony is that there is complete agreement over who is who. I am long term, cooperative and win-win – HE is short term, competitive and win-lose. Both sides saw the other as one-off cut throats. It was one of the few things both Chinese and Western negotiators agreed on. I’m long-term win-win – the other guy is just in it for the quick buck.

    Is it truth – or is it Truth?
    Truth, Justice – and the American Way. We of the Caucasoid persuasion tend to view Truth as an external, universal constant. It is bigger than we mere mortals – or at least bigger than we Westerners. Asians think that this is nuts. Everything changes. Price levels, supply chain factors, weather conditions – the world is always in flux. Yin and Yang, ups and downs. A man’s word is his bond – or it isn’t – to Americans. A man’s nature is reliable and consistent – or it isn’t – to Chinese. A righteous American feels that the words you said yesterday bind you today. A righteous Chinese feels that your intentions yesterday bind you today. Legalism died in China with Mo Zi – around 390 BC – when he and his book-burning Mohist posse got themselves bitch slapped by Confucius & the Morality Boyz (word to your Father) . For Americans, Legalism started in the Wilderness and was embodied in the US Constitution – and survived until around 2004.

    Harmony & Justice.
    China isn’t all fluidity and flux. Some things really are bigger than all of us – but it ain’t Truth and it ain’t Justice. It’s Harmony. The Chinese believe that we all gotta get along to go along. Americans like rock-hard Justice – like the kind that judges and courts can dispense. Chinese like soft, eternal Harmony – like that kind that rises from the will of the People. Both are great – but they don’t live in the same house.

    Two successful 45 year old salesmen. One is Chinese, one is American. They have exactly the same worldview – a good deal-maker makes use of his network and his product benefits to make win-win transactions. But a 25 year old Chinese and a 25 year old American have completely different notions. That’s the default setting. Chinese start with the deal-making process by building relationships – and wait for the transactions to grow from there. Americans start with the transaction (i.e.: test orders) and the relationship grows from there.

Thoughts, comments, corrections? Share your opinions.


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