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Americans Negotiating in China, Page 2

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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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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Negotiating in a Slowing China

Will weaker Chinese growth strengthen your negotiating position?

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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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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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Is it Still Worth it to do Business in China?   Part 4: Different Earnings Models, Different Bureaucratic Challenges

The Chinese bureaucracy is much more tolerant of overseas companies that spend than of overseas companies that earn in China.  That means integrated MNCs must adjust their business models – and their approach to regulators – when they are selling.

Western negotiators in China are finally coming to accept

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

that no matter what the deal on the table may be, their most significant counterparty is the Chinese government bureaucracy.  The Chinese government has a much different attitude towards international businesses coming to China to buy or manufacture as opposed to those coming to China to sell and market.  International managers are still coming to grips with this dichotomy, and it is causing problems and costing money.

Ask not what China can do for you – ask what China wants from you.

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General Principles are the Terms and Conditions page of Chinese Negotiation

In Chinese negotiation, don’t confuse polite rhetoric with concerted strategy.

American and European negotiators treat their Chinese counterparties’ “general principles” discussion like the “terms and conditions” screen – we just check the box and look for the real content. Big mistake.

General Principles Discussion can come back to haunt careless negotiators

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

Westerners in China often make important concessions without even knowing it. It’s common for Chinese negotiators to frame their position with a discussion of “general principles”. Westerners tend to shrug them off with vague agreement – particularly since these conversations tend to be phrased in vague, wooden rhetoric like “harmony and shared responsibility”. It all sounds like meaningless propaganda to us, and it mixes easily with the toasts, proverbs, unfamiliar historic references and folksy anecdotes that characterize a boozy banquet night in Shanghai or Beijing. Western negotiators tend to focus on transactions, and aggressive negotiators will make every effort to control the negotiating agenda and nail down concrete deal points – but the Chinese side never gives up on their deal points or general goals, regardless of the appearance of compromise or concession.

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Has China Inc. Been Overplaying Its Hand?

May has been another tough month for international negotiators doing business in China.

The indictment of 5 alleged cyber spies form the PLA threatened to bring US-China relations to a

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

new low.  Meanwhile, territorial disputes escalated between China and the Philippines, Viet Nam and Japan threatened to spin out of control with disturbing regularity.  That’s why there was so much headline space (though not all of it on the front page) devoted to a high profile energy deal between China and “Reliable Friend’ Russia.  What does all of this mean for Western negotiators in China?

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MicroSoft in China – Massive Schlimazel

Miscrosoft 8 Banned from Government Computers in a Surprise Announcement

According to every Yiddish speaking grandmother in the world, there are two kinds of fools  – schlemiels and schlimazels   The schlemiel walks into a busy restaurant and bangs smack into a waiter carrying a tray of hot soup, dumping it all onto a customer sitting nearby.  The schlimazel is the guy that gets dumped on.

10 China Negotiating Mistakes - Buy the eBook on Kindle
Mistake #4: Losing control of the agenda. Mistake #5: Training your own competition. Mistake #10 : Forgetting that it’s only guanxi until you get caught

Bill Gates of Microsoft is the schlimazel.

(Reuters) – China has banned government use of Windows 8, Microsoft Corp’s latest operating system, a blow to a U.S. technology company that has long struggled with sales in the country. http://www.reuters.com/article/2014/05/20/us-microsoft-china-idUSBREA4J07Q20140520

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Negotiating with (Reluctantly) First-World Chinese Managers (Part 2)

How to do business with Chinese managers who are still in denial about their changing role in the world.

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Learn from the expensive mistakes of expat negotiators who have come before you…

Forget the Financial Times headlines about China’s rising international clout, and super-lux marketing campaigns targeting elite buyers in Beijing and Shanghai.  Chinese media is still carrying the Party line about China as the struggling developing market – and your Chinese negotiating counterparty believes it to some degree.  When approaching a Chinese negotiation, you have to take into account the conflicting roles that Chinese managers are grappling with.  On the one hand they are brought up to see the Chinese Nation as  perennial victim of foreign aggression, but they are also confident about their growing economic power.

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A Cautionary Tale of Two Parties — Confirmation Bias in Your China Operation

Tea Party and the Communist Party rhetoric intersect in some strange and potentially dangerous ways.

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

Today’s Chicago Tribune carries and excerpt from former Sec of Treasury Tim Geithner’s memoir where he criticizes  “Sen. Mark Kirk of Illinois for ‘delusional’ fears when Kirk purportedly warned officials in China not to buy U.S. Treasury securities or other U.S. debt.”

The story reminded me of a recent encounter I had at prestigious NYC networking event. I was introduced to a young professional woman from Beijing who was hired right out of Columbia Business School by a prominent private banking firm. She was well-educated, well-traveled, and well connected – both in NY and Beijing. I asked about the outlook for inbound Chinese investment into US hi-tech and agri-business industries . She responded with vague anti-government complaints that private investors were willing but Washington was blocking their efforts. For a moment I was hit with that jarring feeling you get when you experience something familiar in an unexpected place – like running into an old acquaintance while travelling in a strange city.

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