Just like Confucious and Lao Tsu (who was the inspiration
for Taoism) when negotiating for new suppliers or marketing
to the Chinese you must remember that they are more conscious
of seeking 'the way' rather than the truth.
There is always an underlying need to find the Yin and the
Yang to create a better environment built on respect and morality.
It is likely that they will express their moral values in
their negotiating style. Being more concerned in finding a
means to an end, with the process, rather than defining the
goal within any negotiation discussions.
A Compromising Solution:
The best outcome is obtained through haggling, providing opportunity
for both sides to compromise, where everyone wins and no one
loses. This process cannot be cut short (haggling is a pre-requisite)
and a compromise allows both sides to hold equally valid positions.
Western business mentality tends to argue the point strongly
and get angry. The Chinese tend to haggle, in fact they believe
this is the only way forward.
The Big Picture:
Consider the Chinese Pictographic language. It is not essential
that you learn Mandarin, but because the Chinese are accustomed
to the many thousands of pictoral characters rather than letters
they tend to think more in terms of an holistic approach to
the processing of information. As a result Chinese are more
capable of seeing The Big Picture, while non-Chinese tend
to focus on details.
Xeno-cautious:
The Chinese wariness of foreigners has been learned the hard
way. Long and violant attacks over the centuries have had
their toll from abroad and even civil wars. This leads to
cynicism and contempt about the rule of law and rules in general.
It has been said that the Chinese trust only in their families
and their bank accounts.
Personal Connections (Guanxi)
To the Chinese it is about social respect. He who knows the
highest guy in the place usually wins.
The Intermediary (Zhongjian Ren)
Business deals in China don't have a chance without the Zhongjian
Ren. Suspicion will be the biggest issue you deal with on
any first meeting. Western Business people tend to trust until
we have reason not to. This is the complete opposite in China
Business. Trust must be transmitted via the Zhongjian Ren.
He must pass you along to his trusted business associates. Therefore
it is important tht you seek the person or institutions that
has personal links to your target or executive.
It is crucial that Chinese interpretors need to be native
Chinese, as only they can read and explain the moods, intonations,
facial expressions and body language during formal negotiation
sessions. As no one wishes to lose face or cause loss of face to any party, if you ask what they think of your
proposition, your opposite number is likely to come back with
kankan or yanjiu (Let us take a look - or Let us study it
- even if they think the proposal stinks.
Shedhui Dengji (Social Status)
Formality is a must. Informality will not go down well in
a country where Confucian values of obedience and deference
to one's superiors remain strong. This is especially heightened
to Westerners, so never let the formalities drop. You will
insult a Chinese Executive if you your rank does not equal
or exceed his. It raises doubts about the sincerity of the approach and may
lead to no further negotiation and any potential deal simply
dying before it could begin.
Renji Hexie (Interpersonal Harmony)
Where Western Business can take minutes to size the opposition
up, the Chinese may take days, weeks or even months getting
to know and trust you. Be patient, as in the end it will lead
to a long relationship together. It can include home visits,
invitations to sporting events or other events, and long dinners
during which everything but business is discussed. There is
just no other way to break through. A toast may include the
following "Let's drink to our friendship! We will have
a long cooperation! But if you are not drunk tonight, there
will be no contract tomorrow."
Zhengti Guannian (Holistic Thinking)
Chinese think in terms of the whole, while Western Business
processes tend to break up complex negotiation tasks into
a series of smaller issues: price, quantity, warranty, delivery
and so on. The Chinese tend to skip over them and may never
settle on any one thing. What they really want is long descriptions
of background and context and will ask a thousand questions.
Frustrating but necessary for success.
Jiejian (Thrift)
The Chinese save. They will also make their offers with more
room to manoeuver than you may be used to. Remember the focus
is ultimately on haggling and bargaining. Don't be surprised
at their base offering to any counter-proposal. It is a starting
point.
Mianzi ("Face" or Social Capital)
Reputation rests on saving face. If you cause embarassment
or loss of composure, even unintentionally, it can be a disaster,
so be careful to retain all sense of dignity and allow them
to hold their head high on any deal and not feel hard done
by.
Chiku Nailao (Endurance, Bitterness and Enduring labour)
Chinese are famous for their work ethic, but they take diligence
one step further - to extreme. While we see talent as a key
to success, they see Chiku Nailao as much more important and
honourable. Be assured that the Chinese will have worked harder
in preparing for the negotiations than you will.
Second they will expect longer bargaining sessions: throw
in jet-lag and late-night business entertainment and it can
be a very exhausting experience. The trick is to act slightly
dumb and ask questions. A useful tip is to ask the same question
again - I didn't completely understand what you meant. "Can
you explain that again?" - can expose weaknesses in the other party's
argument. Ask why a specific item is important rather than
accept that it is.
Gerard Brandon is editor of Guru
Manager Entrepreneurs' Toolkit Founder and former CEO
of Alltracel Pharmaceuticals Plc, with multiple partners and
suppliers in China. Guru Manager provides Entrepreneurs interactive
tools for building their global business. http://www.gurumanager.com/
