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US-China negotiation, Page 2

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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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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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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Microsoft Fails by Trying to Coast on Past Successes in China

Relationship Building Not a One-Off Activity in China

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

In ChinaSolved’s latest book, “10 Common China Negotiating Mistakes”, 3 on the least wanted is “coasting on good starts and early successes”.  While this is one of the biggest dangers that deep-pocketed MNCs (and their representatives” face in a long-term China business, it can be very hard to anticipate.  Fortunately for us (but unfortunately for them), Microsoft provides a telling case study of how the best efforts don’t always yield successful outcomes.

At the end of May, 2014, the Chinese government’s procurement office announced a ban on MS Windows 8 – the latest generation of the Redmond giant’s operating system and greatest hope of making the leap to touch-screen tablets and mobile devices.

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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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Why it’s not OK to have never heard of Alibaba.

Lack of basic business intelligence is the #1 risk facing Western negotiators in China.

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

Alibaba is grabbing headlines again for breaking new ground – again.  This week it’s a record setting IPO in NY (bigger than Facebook) — though it’s newly announced deal with ShopRunner may turn out to be even more significant in the medium-term.

Just to restate the obvious, Alibaba is already involved in a very large equity cross-holding deal with Yahoo and one of their major investors is Softbank.   The company has been around for 15 years, and for most of that time their iconic founder Jack Ma has been shuttling around the world, raising funds, making deals, and speaking at international A-list conferences.  Alibaba started out as an international B2B platform whose raison d’etre was to match Chinese sellers with international buyers.  Nowadays it is China’s most distinctive brand, responsible for selling or moving roughly half of every online transaction in China (which the World Bank just ranked as the world’s largest economy).

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We Are Not #1 !

Experienced China negotiators know why China doesn’t want the title: World’s Biggest Economy.

China is trying its best to avoid the glare of international scrutiny again – but this time it’s not about censorship, corruption, or human rights. The World Bank is trying to hang the mantle of “world’s largest economy” on China’s brawny shoulders – and Beijing is having none of it.

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

Regular readers of ChinaSolved are familiar with the successful Chinese negotiating tactic of BoPS  – or Balance of Power Shift. Chinese negotiators frequently enter a deal situation by purposely placing themselves in a subordinate position. They are known for their humility, cordiality, and polite flattery – “your company is so accomplished, your technology so advanced, your brand so famous.” You aren’t treated as an equal partner — you are “LaoShi”, the honored teacher who leads and offers guidance. Before you know it, you have guided your polite new junior partners right to your best technology, your proprietary business methods, and maybe even your customer lists. That’s when the balance of power shifts and suddenly your humble Chinese counterpart becomes a good deal more assertive. Once a Western negotiator has outlived his usefulness, the partnership either dissolves completely or becomes much more competitive in nature.

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Negotiating with Chinese in your Home Market

The Chinese are coming…to spend, partner and raise their kids in your neighborhood. Be ready.

Whenever I step foot out of the NYC area, I get questions about how American sellers should approach mainland Chinese buyers. New Yorkers think they’ve got it all figured out (though I’m Learn to negotiate in China with China Soovenot sure mainland visitors agree). That may just be part of the jaded NY passive-aggressive, semi-hostile attitude of “if you can make it here” that we show towards everyone – local and tourist alike. Mainland Chinese buyers and counter-parties, however, are becoming significant players in the mainstream US  economy. The first place we’ll see them is as spendy-vacationers and real estate buyers, but expect to negotiate with more Chinese who are buying companies, forming US-based partnership, being head-hunted by HR departments, and setting up stand-alone commercial ventures. Just because you aren’t going to China doesn’t mean you won’t be negotiating with a mainland Chinese counter-party in the future.

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Is it Better to Negotiate With a Bad China Strategy – or No China Strategy?

Adjusting your negotiating strategy too much for China is bad, but surrendering the agenda is even worse.

You have to adjust your business plan to reflect the realities of the Chinese business Learn to negotiate in China with China Sooveenvironment. If you change your negotiating strategy and business plan too much then you aren’t expanding your business to China — you’re creating a new operation that doesn’t integrate with your global operation. Change your business model too little, and your business doesn’t stand a chance in the hyper-competitive China market.

Your best course of action is to develop a plan that makes sense BEFORE you start negotiating. Good negotiators don’t talk and think at the same time. (In case you’re wondering, think first – then talk.) In the language of negotiation, you’ll create a new goal system, identify an ideal counter-party profile, and set a sensible bottom line or BATNA  . You’ll consult with experts and knowledgeable advisors – WHO ARE NOT YOUR COUNTER-PARTIES IN AN ONGOING NEGOTIATION – and do the groundwork that will give you some good insight into the Chinese business, legal and market environments. You’re entire universe of internal stakeholders will get input and buy into the new plan. Most important, you will have a roadmap of how the China business will integrate with your global operation.

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Western Strategies and Tactics in Chinese Negotiation

Western negotiators in China shouldn’t try to decide on tactical issues before they develop workable strategies.

Western negotiators in China are more successful when they fully grasp the difference between Sign up for the ChinaSolved newslettertactics and strategy – and understand how to develop and implement them in their new business environment. Unfortunately, many foreign negotiators and managers in China spend so much time thrashing out tactical details and trying to clear operational bottlenecks that thought of constructing a practical, coherent China strategy is a fantasy. Chinese counter-parties benefit from the Westerners perma-fluster, and happily add fuel to the fire in the form of new crises, obstacles, and opportunities. Western managers complain of starting hundreds of projects but completing few and accomplishing even less.

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