Chinese Negotiating Agendas Stated vs. Real (Part 2)

Uncovering the Chinese side’s true agenda.  Method 1:  Ask Them.

Chinese negotiators pride themselves on being subtle and cunning.  Military and business traditions in China extoll the virtue of misdirection and multi-faceted strategies that obscure one’s true motives.  Unfortunately for western negotiators, this makes it very difficult to craft effective deal proposals.  It’s hard to be win-win with a counter-party who won’t reveal what a win looks like.

Westerners, however, must shoulder part of the blame for the communications-gap that plagues cross-border communication.  Sometimes we don’t do the homework, our language skills are famously bad, and we have a bad habit of trying to shoehorn western business models into a Chinese business environment.

 Communication Must Be a Two Way Street

I’ve worked with many America negotiators in China who are so focused on delivering their deal Sign up for the ChinaSolved newsletterpoints and concerns that they barely make an effort to understand what the Chinese side is communicating.  In the early stages of a Chinese negotiation, it is more important to understand than to be understood.  Chinese is a “high context language” – meaning that the words that people say (and write in an email) are less important than the non-verbal cues and general context.  In China, it’s often about HOW they say it, and what they are NOT saying.

Make more of an effort to understand the Chinese side’s true agenda and motivation.  Use their written communication and background communication as a starting point – but plan on working hard to dig deep and build a foundation of trust and understanding.

You have questions.  Ask them.

Many Westerners treat the banquet and relationship-building events in China like talk shows were they are the guest – passively answering questions and making pointless small-talk.  Some operate under the misconception that Chinese negotiators don’t like discussing business in a social setting.  While it is true that Chinese don’t like making final decisions about specific transactions at a banquet or luncheon, they are most definitely working.  This is their version of due diligence – but instead of examining your financial status or asset base, they are checking you out as a person, and judging your maturity, intelligence, and character.  You should be doing the same.

Use banquets and relationship-building events to exchange views about business philosophy and future plans.

Sample big-picture questions:

  1.  Have you worked with western partners before?  What do you look for in an overseas business partner?  What do you feel is a good basis for exchanging value and assets?  What are the characteristics of a strong international partnership?  What do you want us to bring to the table?  What do you bring to the table?
  2. What are your plans for the future?  What will the Chinese operating environment look like in 5 years?  What new products or services will you offer?  What existing businesses will you get out of?  How will you expand in China?  What do you see as the opportunities?  What about challenges?
  3. What will the role be for western business and JVs in China’s future, both near term and longer out in the future?  What do you consider an appropriate planning horizon for international firms in China?  Is it reasonable for foreign companies to manage their own plants, facilities, and operations in China?
  4. Do they have plans to expand overseas?  Have they got an international presence now?  Do they have plans to enter your market?  Are there opportunities for cooperation outside of China?  Are they going to be a competitor in your own markets?
  5. What can you and I do right now to start building a successful partnership or business together?  Do you want access to our technology, business methods, capital, and clients?  What can you offer in exchange?  How can we share technology and markets in a mutually beneficial and secure way?

Your goal is to gather information about a general direction and philosophy – not specific numbers.  They key facts you want to understand are how they feel about working with westerners, do they have a long-term strategic or short-term transactional orientation, and what are their plans for expansion.  Where do they offer value, and where are they looking for you to offer value. Learn about their growth plans and share your own.  If your basic, big-picture goals are inconsistent, then you may have a problem.   If there is no basis for a partnership, then the sooner you find out the better.

Next:  Lies can reveal the real truth

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read here-smallIf you haven’t already read the report “10 Common China Negotiating Mistakes”, please download it.  We are in the process of developing an interactive online course based on the report, and are looking for 10 beta testers.  If you are interested, please get in touch.

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