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Conflict management

The New CEO in Asia

We’ve seen this before. A new CEO with limited China experience introduces himself to the international business community with tough

China policy can leave you between a rock and a hard place
China policy can leave you between a rock and a hard place.

talk and big promises about China and the rest of Asia. Then reality rears its ugly head.

The new US administration is doing what new US senior managers in China do best – sending conflicting messages, missing opportunities, and making sweeping pronouncements that are just about impossible to implement.

What can we expect moving forward?  

Expect to watch the needle swing back and forth between Partner and Competitor pretty sharply for a while yet as the new trade bosses find their footing. Here are the potential flashpoints you should be watching.

  • china businessman stressed outSouth China Seas Dumping Currency North Korea Iran Cyber spying Intellectual property protection Tariffs or “border adjustments” Christianity in China Taiwan

    Yes, the Taiwan card has been played, but you can expect to see it massively overplayed at least once again in the near future. The present administration has probably forgotten the Taiwan call & tweet , and is hoping that the tough talk on North Korea will amount to little more than a photo-op. And that’s your problem(s).

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Last Man Standing Part 3: POV Counts.

POV counts. Chinese have opinions too.

In US China negotiation, POV changes everything.
POV changes everything in negotiation

Some westerners are pushing back against the idea that we are facing the risk of rising trade barriers or a breakdown in orderly trade regimes. Their logic is that, “The US has a lot of levers, and we can assert our rights without necessarily sparking a trade war that the Trump Administration doesn’t want.” Not wrong, but it makes the dangerous assumption that trade relations are going to be something Washington stays in control of.

Trade frictions almost always take on a life of their own due to a single inconvenient point: Both sides in a dispute get an opinion. If you don’t know the other guy’s point of view (POV) then you have absolutely no control over the final result.

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Last Man Standing: China as Global Leader

Takeaway: As the US rapidly disqualifies itself from global leadership, China will find itself shoved into a role it doesn’t want it and isn’t ready for. We will almost certainly see a more China-centric world. Here’s what it may look like.  

What a difference a week makes. In my last article I spoke about 3 big issues China would face if it tried to step into the position of global leader.   In just a matter of days, however, the new US administration not only allowed it to happen, but seemed to be have been actively

Chuang Tzu and the Turtle
      Chuang Tzu tried to warn you

pushing the PRC into that role.

China went from the scrappy challenger who looked like a long-shot for the title to the last man standing in a remarkably short period of time. They’ve emerged as the odds on favorite by default.  The US has taken itself out of the global leadership game.  Europe looks fragmented and weak — and may very well end up following the US into isolationism. Russia is a military force. China is the last man standing and leads by default.

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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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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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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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China and EU Resolve Wine Dumping Charges — Just as Xi Jinping Winds Up EuroTrip

China mixes trade and politics in Europe – and underscores the futility of building win-win relationships.

The SCMP (among others) ran the headline: China, Europe reach deal to end Beijing’s anti-dumping probe of European wine just as Xi Jingping is winding up his European tour. This was a Learn to negotiate in China with China Sooveslightly less dramatic headline than “China takes firm stand against Russian land grab” which we are unlikely to see, or “Chinese economy shows new signs of weakness” – which are seeing far too much of.

If you have trouble remembering just what the China -EU Wine Dumping case was all about, think back to May and June of 2013 when the EU threatened to discuss hitting China with trade sanctions about Chinese dumping of solar panels, and China retaliated by claiming the EU was using unfair trade tactics to sell wine to China. Here’s the piece ChinaSolved ran on the subject last year: Living to Fight Another Day? China vs. EU is Bruising Loss

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Good Deal Structures Lead to Successful Chinese Negotiations

Smart Deal Structures Make Negotiating in China Much Easier (still tough though)

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Westerner negotiators with experience and a successful track record inChina structure their deals AND China business models completely differently than newcomers do. They take longer, spend a lot more time in the early stages, know a lot more about their counter-party and never try to force out-of-town rules onto a Chinese game. That doesn’t mean they do things the ‘Chinese way’ – they do it the ‘Smart-Westerner-in-China way’.

What do smart westerners in China do differently than newcomers?

1. They are in it to win it, both during the negotiation and in the all-important post deal phase.

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Cross Culture Communication vs. Cross Culture Negotiation in China

Is it more profitable to be Loved or Feared in China?

Thanks to everyone who downloaded & gave feedback on the ChinaSolved Report:  10 Common China Negotiation Mistakes.  (It will be available for free until Chinese Spring Festival – click here for download ).

One of the most common questions/comments to come back from the report about western Sign up for the ChinaSolved newsletter“worst practices” in Chinese negotiation had to do with the tension between developing good relationships with local counterparts and promoting one’s own interests.  Which is more important in China – developing good relations or maintaining control of your own assets?  While this has always been the negotiators’ dilemma (see Fisher & Ury; Lax & Sebenius; Malhotra, Bazerman or any of the other PON  authors), it is particularly troublesome in China where guanxi and harmony are watchwords of business success.

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Don’t Train Your Own Competition: Chinese Negotiation Training Topics

ChinaSolved’s Least Wanted List #5:  Training Your Own Competition

It may be true that Chinese businessmen are long-term planners, but that doesn’t mean that they intend to work with you forever.  You may be a bit player in their grand epic story – and your role could be to supply them with technology, new products or business methodology.   Know who your potential competitors are, and don’t treat them like partners.

Sign up for the ChinaSolved newsletterNegotiating in China is as much about managing relationships as constructing business plans.  Plenty of Western entrepreneurs and managers have had solid ideas that failed because they lacked suitable local partners – or had the wrong partner.    You also have to remember that in China, the practical definition of “partnership” is much broader than it is in the West.  You may run a WFOE or department of a western MNC that doesn’t have any Chinese equity partners, but from a practical operating perspective you can still be locked into a variety of exclusive partnerships or critical supply relationships.   This discussion isn’t about legal details – it’s about negotiating with Chinese counterparts.

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