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Path: Sourcing News & Advice
>> Import from
China Advice >> Negotiate like a boss in
China

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Negotiate like a boss in China

Posted: November 28, 2014

Image
courtesy of imagerymajestic at FreeDigitalPhotos.net

by Adam Gilbourne

Doing business with associates in other countries can be challenging at the
best of times. Many experts tout obvious words of advice such as carrying plenty
of business cards and wearing a conservative suit. But more tailored advice is
needed when working in a place with a completely different business culture.
China, in particular, has become such a large trading partner to many western
countries and if working there, it’s important to gain an understanding of how
they do business. Using this understanding when negotiating can help you achieve
the outcomes you’re looking for.

Personal etiquette is always an important thing
to master when doing business with other cultures. However, etiquette is not the
silver bullet – a much more important factor is knowing the true values of the
culture and where they have come from. If you understand, appreciate and respect
this, it will shine through in any business dealing or negotiation.

It’s a good idea to learn some phrases for politeness and to show that you
have made an effort. This will earn you some respect, which is a big theme in
Chinese culture. For the more detailed discussions, hiring a seasoned translator
is vital and can mean the difference between success and failure. A good
translator will ensure that your words are passed on using the appropriate
cultural context, which can make or break a relationship.

The end to end negotiation process as we know it
in the western world is very different to how it is done in China. For this
reason, it’s important to leave your preconceived notions of the negotiation
process at the door. Instead, accepting that the process is often a much longer,
drawn out affair is the first port of call. Patience is certainly a virtue. Once
you have accepted this, you can work on building trust slowly – the Chinese
don’t value paper contracts nearly as much as they value long-term
relationships, which can only be built on trust and respect over time.

Another key aspect of Chinese culture is the
issue of ‘losing face’. The Chinese do not like to lose face in public and will
always do what they can to portray themselves and even their counterparts in a
good light. This is a good quality but can also have an adverse effect if you
bank on their compliments and fall into a false sense of security. In fact, this
is often a strategy that Chinese negotiators will use when dealing with their
western counterparts. Whilst we may be used to a more direct and perhaps brash
approach, the Chinese can be much more passive at the table. The reality is that
any discrepancies or issues they have will be voiced behind closed doors so
always remember this when conducting negotiations.

In China, it is common to be negotiating with a number of parties, rather
than just one person (the key decision maker, as we would normally call them).
Decisions are often clouded in secrecy and it may take some effort on your part
to determine who is actually the real key decision maker. This is a cultural
trait but also a good tactic when it comes to negotiation. It is also one of the
reasons that negotiations can be such a drawn out process – new decision makers
and bosses will be introduced and consulted, usually objecting to previously
agreed terms in order to commence renegotiation.

Therefore, it is important that you have a clear
strategy when negotiating in China. Knowing exactly what outcome you are looking
for is the first step. Having a backup list of demands that may not be as
important, but playing to the fact that they are crucial will help you gain
leverage and also show a high level of compromise (and hence respect) when you
back down on many of these so-called high priority demands.

Exercising patience will yield the greatest
results and ensure you manage expectations along the way. When a new term is
introduced, don’t be tempted to blow a fuse, simply take it back to the team and
consider how to renegotiate. Controlling your emotions is paramount and by
playing by the same rules, you will not only save yourself the stress but also
gain a reputation as being a worthy negotiator.

This may sound
like an unnecessary complex array of games, but it is merely a different
cultural process. The more well versed you are in the Chinese negotiation
process and the more you understand how their culture dictates negotiation
tactics, the better your presence of mind and usually the better the
outcome.

Adam
Gilbourne is the founder of Easy Imex Ltd
and helps importers to source product & manage their supply chain in China.
He writes advice for importers on the Easy Imex blog. He lives full time in
Shanghai, China. You can contact him at [email-masked].

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