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China and the Unpredictable Negotiator

Chinese negotiators tend to shift from guanxi-seeking partner to cut-throat competitor mode when confronted with an unpredictable counter-party.

Chinese negotiations usually follow one of two paths – towards long-term partnership or one-off competition.  What’s the difference?  You are.  If a Chinese counter-party feels that he can do better as a long-term partner, that’s what he’ll go after. If he feels that you won’t honor the terms and obligations of a durable & profitable relationship, he’ll go for your throat.

China and the unpredictable negotiatorChinese institutions are known for their long memories, and well after members of the new administration have forgotten their twitter tirades and decided to “move on and get on with business,” American firms will still face increased scrutiny, hostility, and non-economic barriers.

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US-China Business Negotiation 2017: Tactical Ambiguity

There is uncertainty in US-China business right now. Whatever your politics, there’s no denying that the business environment is going to shift in unknown and unpredictable ways over the next year or so. Let’s talk about how to make this work for you.

Tactical Ambiguity = Using Uncertainty as a Bargaining Chip

Strategic ambiguity is about long-term planning. Tactical ambiguity means turning an unclear situation into a valuable bargaining chip. Don’t minimize the impact of uncertainty or try to put an optimistic spin on everything. Chinese counter-parties generally fear chaos, and plan for success on global markets. Both of those buttons are lighting up bright red — so this is an opportunity to reframe your negotiations and planning sessions. You know your counter-party’s hopes and fears right now, and your job is to turn that to your advantage.

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Cross-Culture Negotiating Skills: Analyze and Adjust

Successful negotiators have to master two complementary skills – analysis and planning. The trick, however, is that you have to analyze your counter-party, and then adjust your own plans, methods, and behaviors.

Not the Way We’re Wired

Although this sounds simple enough, it is actually counter-intuitive in practice –and quite difficult. When I started my career in finance, one of the first rules I learned was “buy low, sell high”. The next thing I learned was that the vast majority of investors ended up doing just the opposite – buying at the top and selling low out of fear. Negotiators are prone to making the same sort of emotional blunder. Negotiation is a messy, emotional process, and when there is conflict or stress we revert to our base instincts.  We analyze our own agenda and try to adjust our counter-party’s behavior. This is how we humans are wired

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Lessons from the G20 for “Regular” Negotiators

China’s treatment of the U.S. delegation as President Obama arrived at the G20 conference sparked controversy and a firestorm of international criticism. There are some great lessons here for front-line negotiators involved in cross-border deals.

Barack Obama ‘deliberately snubbed’ by Chinese in chaotic arrival at G20 – The Guardian

The US president was denied the usual red carpet welcome and forced to ‘go out of the ass’ of Air Force One, observers say

China chides media’s hype of G20 spat – Global Times

Overblown reports show arrogance: foreign ministry

Lessons from the G20 “tarmac row”

The conflict may or may not have been serious – but it was real. It says a lot about both the US and Chinese cultures. The Chinese infuriated the world with their hostile behavior. (Don’t be politically correct and insist on saying “perceived hostility”. Many people were angered by the way national security adviser Susan Rice was treated on that airport tarmac, and you may have been one of them. Own it.)  We infuriate the Chinese by talking about it publicly.

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A Survival Course in Cross Culture Negotiating, with special guest Andrew Hupert

I’ll be speaking at Lohaus’ cross-culture series this coming Tues, April 7 in Shanghai.  Here are the details:

Tuesday, April 7, 2015

 to 

LOHAUS

50 Yongjia Road
Xuhui District
Shanghai (map)

A Survival Course in Cross Culture Negotiating, with special guest Andrew Hupert

Tuesday, Apr 7, 2015, 7:00 PM

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3 Signs Your Man in China Might be on the Take – And What You Can Do About it Now. Guest Post by Michael Whelan

China is a unique place with a culture, especially its business culture, that continues to confound western business people no end, and not just in obvious ways. There is nuance too.

Whatever ethical norms you’ve come to expect, they don’t apply in China. Why should they?

10 China Negotiating Mistakes - Buy the eBook on Kindle
Learn from the expensive mistakes of expats who have come before you.

This is a truly different place. The more opportunity there is to profit personally from your operations through fraud, the greater temptation there will be to take advantage of you and your company – and in ways you would never suspect. Think unbridled Wild West.

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Negotiating in a Slowing China

Will weaker Chinese growth strengthen your negotiating position?

10 China Negotiating Mistakes - Buy the eBook on Kindle
Learn from the expensive mistakes of expats who have come before you.

The Chinese economy has been slowing for the last few quarters, and whether it is a controlled application of bureaucratic brakes or the start of a skid into a recessionary ditch, some international business people see China’s deceleration as an opportunity.  International negotiators who believe that a slowing Chinese economy gives foreigners more leverage are, however, over-optimistic at best.  There may be isolated cases were individual private Chinese businesses will be motivated to sweeten their offers in the face of a domestic slowdown, but it would be unwise to assume that  Chinese counterparties are all feeling desperate.  Westerners who calculate that the bureaucracy is going to become more welcoming to foreign businesses need to realize that a couple of years of slower growth will probably make their challenges in Beijing more severe.

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Is It Still Worth it to do Business in China?  Conclusion

Is it worth the effort and investment for foreign firms to do business in China?   The answer depends on who you are and what you want from the market – and that’s a problem.

I spent a month in China trying to answer the question, “is it still worthwhile for Westerners to try doing business in China?”   The international business press has been focusing on Beijing’s prosecution of the infamous Anti-Monopoly Law  and use of national security claims   to restrict foreign firms’ access to China’s burgeoning middle-class markets.  Overseas readers of the WSJ and Forbes could easily get the impression that foreign brands are being chased out of China on a tide of xenophobic resentment and anti-foreign fervor – but it’s simply not the reality on the ground.

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China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them by Michael Zakkour and Savio Chan – an excerpt

An excerpt from China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them by Michael Zakkour and Savio Chan, published September 30, 2014 by Wiley

Michael A. Zakkour is a leading authority on Chinese consumption, consumers, branding, retail, and e-commerce as well as operations and supply chains in China. He is a principal at the global business consulting firm Tompkins International where he heads the “China/Asia Pacific Practice.  He is also a contributing writer at FORBES, CNBC and Entrepreneur magazine.

Click here to purchase China’s Super Consumers on kindle now

Contact Michael on twitter: @michaelzakkour

Orientation

 A nation’s culture resides in the hearts and in the soul of its people.

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China Business Cross-Talk:  Two Views on Doing Business in Today’s China

dialog
Take part in the constructive dialog on the ChinaSolved Linkedin group

Mario Cavolo and Andrew Hupert take two different views on China’s emerging business environment.

China’s economic and regulatory policies are a work in progress that are constantly evolving.  Lately the pendulum seems to be swinging against the interests of multinationals, but the reality defies easy answers or rash generalizations.  ChinaSolved.com presents for your consideration two different views on recent developments and future directions of Chinese economic policy:

China’s Evolving Business Environment Favorable to Some

Mario Cavolo, Vice President – Media/PR Training; Scott PR China, www.scottpr.cn and author of China: The Big Lie? published by Long River Press, North America

Mario Cavolo reminds us that not all the China business changes are negative – and some beneficiaries of recent policies are the good guys.

Any worthy China watcher has noticed the increasingly unfavorable trend toward foreign entities present here, whether it is reporting on security issues with Microsoft and Apple or the recent position papers by the European and American Chambers delivering a somber rather than upbeat view of the current business environment in terms of ease of doing business. It’s not all bad, but we wish it was better.

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