US-China relations are clearly spiraling downward, and the ramifications for business negotiations are dire. Only a year ago the international community had reason to hope that a new US administration and a successful Chinese leadership could cooperate to lead the world out of economic crisis and environmental ruin. Now the only example of the US and China pulling together is our joint commitment to paddle directly into the whirlpool of an acrimonious trade dispute. The recent tit-for-tat blows over Taiwan and Iran are merely the latest manifestations of a competition that began in 2008 – and they are unlikely to be the last.
Dealing with the new Chinese negotiator.
If you’ve been making deals in China for a year or so, you may feel that the mood is getting frosty and a bit tense. Those that have been in the game a little longer should be familiar with the attitude since it is a return to the ‘old days’ of the mid-90s when international business in China was more exception than rule. Beijing was extremely accommodating to both domestic entrepreneurs and foreign friends for most of the last decade, but now the policy people seem to have declared victory and moved on.
China’s international negotiating style has been changing over the last 2 years, and those of us with commercial interests here have already glimpsed what the future will bring. China’s fortunes have been rising just the West’s have been falling – and in the new decade we will confront a more confident, assertive and monolithic China.
When it comes to China’s negotiating style, what’s new is what’s old. In many ways Chinese negotiating is shifting back to a more traditional style where the power of the state is paramount and the main job of rulers is to defend Chinese territory (be it physical, financial or symbolic) & keep the barbarians outside the gate. There is a new feeling in China – not isolated to Beijing – that the Deng Xiaoping’s grand experiment has accomplished its mission. International cooperation has served its purpose – now Beijing can get back to business as usual. Policymakers seem to believe that multinationals and local entrepreneurs were important steps in China’s development, but now they have outlived their usefulness. What’s good for the Party is good for China, and vice versa.
Two counter-parties can look at the same situation and draw radically different conclusions. Negotiators, you have to remember, carry a lot of cultural and nationalistic baggage – and sometimes an innocent statement can have toxic results.
A friend of mine was in China meeting with chemical suppliers – as he has been doing once a year for a long time. The bulk chemical business isn’t glamorous or slick – there are no showrooms or brochures. Negotiating points tend to be confined to price, quantity, quality and freight. Even among those who make their living from the bulk chemical business, it doesn’t inspire much passion.